Coping With Currency Restrictions

[Alicia karr]

I don't usually participate in economic discussions because I am very uneducated in economics. But I was intensely curious about how Ecuador and Ecuadoreans were doing since they started using US dollars are their currency. So during my recent three week trip in Ecuador, I asked almost every Ecuadorean I met what they thought of the move to using the dollar. Amazingly, every one I asked said they felt that it has helped Ecuador and that the economy is improving, from Correas efforts and the economic reform. But I also sensed in their voices a sense of loss of something, or apprehension about the future. I can certainly understand that also. But from my admittedly very unscientific survey, all my respondents seemed to feel having their economy be dollar based has been a help. I guess its a trade off and choices about lesser evils....

 

[internationalguy]

Sure, it would help a lot because using dollars would be more stable than using worthless Rocas. However if Argentina decided to do that they would lose their ability to print as much money as they want. The Federal Reserve still does it, but that's an entirely different subject. I don't think CFK would want to have to start making wise decisions with the economy because it would mean she could no longer be able to pay for all the handouts and silly subsidies and expenses the government has.

 

[germano]

Argentina should just go the way of Ecuador and dollarize their currency completely. The mistake that Menem and Cavallo made was still using the peso. If they had gone directly to the dollar instead of 1:1, things wouldn't have blown up like they did and there wouldn't have been a devaluation.

Just like Greece with the Euro?

 

[ARbound]

Just like Greece with the Euro?

Even though I don't think Arge can go back to pegging/dollarization I have to say this is a complete
false equivalence. The argument is that Argentina should use another nation's currency vs joining
a currency union.

 

[germano]

My brother-in-law and his family just arrived in Varas from Chiloé, before he returns to Río Negro in a couple days. This may be self-promotion, but I think his story is instructive as to how some Argentines are coping with currency exchange restrictions: http://tinyurl.com/pxs9etb

I don't know ... I would never let somebody I don't know pay with their credit card for my supermarket purchase.

 

[germano]

Even though I don't think Arge can go back to pegging/dollarization I have to say this is a complete
false equivalence. The argument is that Argentina should use another nation's currency vs joining
a currency union.

With the same result though. No or almost no direct control over the currency in their country.

 

[Rich One]

Even though I don't think Arge can go back to pegging/dollarization I have to say this is a complete
false equivalence. The argument is that Argentina should use another nation's currency vs joining
a currency union.

Complex subject deserves more than a one liner by economistas aficionadas. Can't imagine all US haters in Argentina swearing by Benjamin Franklin........ jajajjajajajjajajjajaj Same as if Cuba or Venezuela were to adopt the dollar...!!

For some reason Greece keeps threatening to leave the Euro currency sector

 

[ajoknoblauch]

I don't know ... I would never let somebody I don't know pay with their credit card for my supermarket purchase.

Why not? If the supermarket accepts the charge, it's their problem. In any event, I was primarily interested in pointing out the silliness of Argentina's currency controls, and the effort ordinary Argentines have to make to get around them.

 

[scotttswan]

Why not? If the supermarket accepts the charge, it's their problem. In any event, I was primarily interested in pointing out the silliness of Argentina's currency controls, and the effort ordinary Argentines have to make to get around them.

Venezuelans are doing just this in Montevideo according to the hotel porter. No access to cash so they do anything they can.

 

[el_expatriado]

Just like Greece with the Euro?

Exactly like this. Being on foreign currency forces the politicians to make hard choices. Fire public employees (ñoquis), kick people off the dole (planes no trabajar), shut down state companies that lose money (Aerolineas, futbol para todos, etc).

Instead in Argentina they just spin up the printing press and take the cowards way out and nothing gets fixed and we all suffer the inflation together. I'd much rather be in a Greece type situation where the politicians have to make hard choices and put things right.