Economists warn electing Milei would spell devastation

[sergio]

What do they call what's happening to Argentina now if not devastation?

I don't know if Milei can straighten out the economy but it seems to me that as long as the government have the power to print money there will be serious inflation - and right now printing money seems the only answer to paying debts. Dollarisation would of course take away the printing power. To me it seems inevitable that pursuing the present course will lead to hyperinflation.

 

[wrangler]

In regards to social issues such as same-sex marriage, pro gay and lesbian rights, gun control, etc., the point I was trying to make is that these issues can be tied to certain aspects of the economy, so they are relevant to this discussion.

 

[sergio]

Yes, he is anti-abortion, but I have not been able to find any information suggesting he is anti-gay. Please provide any sources that would corroborate this, as I have not been able to do so thus far.

He's said he is pro same sex marriage. I don't understand how he can be anti-gay and pro same sex marriage. He's also at odds with the Catholic Church, as was clear from his Carlson interview.

 

[wrangler]

I don't know if Milei can straighten out the economy but it seems to me that as long as the government have the power to print money there will be serious inflation - and right now printing money seems the only answer to paying debts. Dollarisation would of course take away the printing power. To me it seems inevitable that pursuing the present course will lead to hyperinflation.

Dollarizing the economy, which means adopting the U.S. dollar as the official currency, could potentially address some specific issues within the Argentine economy, however, it's not a solution for all economic challenges.

Dollarization could help stabilize inflation by tying Argentina's monetary policy to the U.S. Federal Reserve's policies, which are definitely more stable.

Adopting the U.S. dollar would eliminate the problem of the Argentine Peso's devaluation against other currencies. This can bring stability to the foreign exchange market and stabilize trade with other nations.

There are trade-offs however.

Argentina would lose control over its monetary policy, including the ability to devalue its currency to gain competitiveness in exports or to adjust interest rates according to its own economic needs.

The Argentine economy would become highly dependent on the monetary policy of the United States, which might not always align with Argentina's economic interests or needs.

Dollarization wouldn't directly solve other problems like fiscal deficits, external debt, economic recession, income inequality, dependency on commodities, structural issues, political instability, or corruption.

 

[mc kenna]

It is y observation thru the years that Argentina is not and never was a country that wanted to obtain results thru rational channels and always looked for that ''short cut'' to obtain results that other nations took years to accomplish.
One thing that none of the options we face offer , is transparency which in my eye it's the foundation to create a nation that can develop , after establishing transparency, continuity , after transparency and continuity are established we move on to being seen as reliable by the rest of the world, and many moons after that we can start to see the dawn of gaining prestige which in term needs to be cared for and defended no matter who is administrating.
The powers that be , being the gov or the opposition did an excellent job at partition society so every one is only concerned with their personal interests.
The ace in Milei's sleeve is that he had no opportunity to administrate the nation as this government had in the past with the results being extremely poor eventho some of the programs were created from good intentions at the time of implementing and executing huge mistakes and malice took place giving those programs a bad name .
So, it comes down to discussing our own personal interests trying to convince each other how wrong the other person is.
BTW for those passionate enough to get pretty personal including in some cases turning into personal attacks , i say , relax, we are not all that important, what we say won't change things other than feed our egos by telling someone off....... reallly not worth it.
Nothing wrong with having your beliefs and opinions , hell, even defend them, but people, remember, this is a forum , we are not out here to preach.

 

[sergio]

Dollarizing the economy, which means adopting the U.S. dollar as the official currency, could potentially address some specific issues within the Argentine economy, however, it's not a solution for all economic challenges.

Dollarization could help stabilize inflation by tying Argentina's monetary policy to the U.S. Federal Reserve's policies, which are definitely more stable.

Adopting the U.S. dollar would eliminate the problem of the Argentine Peso's devaluation against other currencies. This can bring stability to the foreign exchange market and stabilize trade with other nations.

There are trade-offs however.

Argentina would lose control over its monetary policy, including the ability to devalue its currency to gain competitiveness in exports or to adjust interest rates according to its own economic needs.

The Argentine economy would become highly dependent on the monetary policy of the United States, which might not always align with Argentina's economic interests or needs.

Dollarization wouldn't directly solve other problems like fiscal deficits, external debt, economic recession, income inequality, dependency on commodities, structural issues, political instability, or corruption.

It seems to me that the best thing possible would be to TAKE AWAY the government's ability to print money.

 

[Big Swifty]

Dollarization is such a complex topic/mechanism that I don't think there's any one right answer to whether it's effective or not since it depends on a particular nations circumstances. I heard a story on a TED talk about how it didn't work out (from the perspective of merchants) as expected in Lebanon. I've heard ups/downs from people in Ecuador.

From what I understand everything here is based on Benjamins ($100 bills). I wonder how they're going to acquire the necessary amount of 50/20/10/5/1's and would they even bother with half-dollars, quarters, dimes, nickels, and pennies?

Is everything, even the smallest of purchases, going to be rounded up to the nearest dollar like what happens in Ecuador? That 200 peso candy bar in the supermarket - are you going to be forced to buy 4 or 5 (or whatever it would be depending on if the official rate or dollar blu is used) for a dollar, or is something that currently costs the equivalent of around a quarter now going to cost a full dollar? Penny candy/caramelitos? No more buying 1 or 3 for the equivalent of a small fraction of a dollar, you're now going to have to buy a dollar's worth? Do things currently priced just under the equivalent of a dollar (say a beer) get bumped up to just over a dollar by merchants looking to double their revenue by someone buying just one beer?

Are they going to consider the physical bills the way they do the peso? Will US currency be accepted with folds, creases, tears, tape, writing, etc., like they do with pesos, or will they only accept currency in pristine condition? If so, not only would they have to acquire all those bills in smaller currencies commonly used, but they'd have to be (and be kept in) in pristine condition for them to hold value. What other potential restrictions would they create?

And if there's one thing that probably unites the majority of people it's the belief that government is at best some degree of incompetent and inefficient - and these are the people who are going to be carrying out such a massive project as dollarization. Does anyone think they're going to do a great job at it and that this will somehow happen smoothly, efficiently, and with minimal problems?

My guess is no matter who wins, no matter if they dollarize or not, they, whoever it is, is going to f' it up big time.

 

[sergio]

Dollarization is such a complex topic/mechanism that I don't think there's any one right answer to whether it's effective or not since it depends on a particular nations circumstances. I heard a story on a TED talk about how it didn't work out (from the perspective of merchants) as expected in Lebanon. I've heard ups/downs from people in Ecuador.

From what I understand everything here is based on Benjamins ($100 bills). I wonder how they're going to acquire the necessary amount of 50/20/10/5/1's and would they even bother with half-dollars, quarters, dimes, nickels, and pennies?

Is everything, even the smallest of purchases, going to be rounded up to the nearest dollar like what happens in Ecuador? That 200 peso candy bar in the supermarket - are you going to be forced to buy 4 or 5 (or whatever it would be depending on if the official rate or dollar blu is used) for a dollar, or is something that currently costs the equivalent of around a quarter now going to cost a full dollar? Penny candy/caramelitos? No more buying 1 or 3 for the equivalent of a small fraction of a dollar, you're now going to have to buy a dollar's worth? Do things currently priced just under the equivalent of a dollar (say a beer) get bumped up to just over a dollar by merchants looking to double their revenue by someone buying just one beer?

Are they going to consider the physical bills the way they do the peso? Will US currency be accepted with folds, creases, tears, tape, writing, etc., like they do with pesos, or will they only accept currency in pristine condition? If so, not only would they have to acquire all those bills in smaller currencies commonly used, but they'd have to be (and be kept in) in pristine condition for them to hold value. What other potential restrictions would they create?

And if there's one thing that probably unites the majority of people it's the belief that government is at best some degree of incompetent and inefficient - and these are the people who are going to be carrying out such a massive project as dollarization. Does anyone think they're going to do a great job at it and that this will somehow happen smoothly, efficiently, and with minimal problems?

My guess is no matter who wins, no matter if they dollarize or not, they, whoever it is, is going to f' it up big time.

In Panama they use both US and Panamanian coins. I would expect greater use of credit card transactions after dollarisaton. Presumably this will be made easier. I suspect that small US notes will be accepted in less than ideal condition but probably not $100 notes. I believe even Milei admits that the transition will take a couple of years. Don't put the details ahead of the concept. During the Menem / Cavallo convertability period the govrnment restrianed itself from printing more pesos than it had in the Central Bank - for a while. Dollarisation would impose an impenetrable restraint on printing money to pay bills.

 

[Big Swifty]

Dollarization, or any grandiose new government program requiring massive change, is easier to sell as a concept. Like all such proposals, the devil's in the details. Ideas and concepts are great, plans to implement them even better. Otherwise you just get politicians promising to follow through on the promises they made before being elected without actually ever doing so. We've all seen that too many times to count.

The government might not be printing money anymore, but how long before the counterfeiters take advantage of a population not used to handling US currency? How many bodegas are going to be accepting genuine dollars and passing counterfeits as change to unsuspecting and unknowing customers. Nearby Perú produces and distributes around 60% of the world's counterfeit US currency.

If it happens, it's gonna be a rough transition till it all settles.

https://www.washingtonpost.com/news/post-nation/wp/2016/11/22/they-make-fake-money-worth-more-than-cocaine-the-u-s-just-recovered-30-million-of-it/#:~:text=Responsible%20for%20producing%20and%20distributing,the%20currency%27s%20rise%20since%202003.

 

[gringoexpress]

Dollarization, or any grandiose new government program requiring massive change, is easier to sell as a concept. Like all such proposals, the devil's in the details. Ideas and concepts are great, plans to implement them even better. Otherwise you just get politicians promising to follow through on the promises they made before being elected without actually ever doing so. We've all seen that too many times to count.

The government might not be printing money anymore, but how long before the counterfeiters take advantage of a population not used to handling US currency? How many bodegas are going to be accepting genuine dollars and passing counterfeits as change to unsuspecting and unknowing customers. Nearby Perú produces and distributes around 60% of the world's counterfeit US currency.

If it happens, it's gonna be a rough transition till it all settles.

https://www.washingtonpost.com/news/post-nation/wp/2016/11/22/they-make-fake-money-worth-more-than-cocaine-the-u-s-just-recovered-30-million-of-it/#:~:text=Responsible%20for%20producing%20and%20distributing,the%20currency%27s%20rise%20since%202003.

If the counterfeit is good enough that nobody catches it, all the counterfeit currency would do is increase inflation a little bit, probably less than the guys with the peso printer at the central bank are doing now. Dollars don't have any inherent value...