Hypothetical situation regarding dollar vs peso

soulskier

Registered
I have been wondering, if the US Dollar does tank as many analysts predict, what does that do to the Argentine Peso? Is Argentina a "free agent". Can they find another currency to work with? Any thoughts from the peanut gallery?
 

soulskier

Registered
Seriously, I wonder if ARG can switch currencies they are connected to? I know there was recently a 10 billion swap with China.
 

perry

Registered
The Argentine Peso has been devalued recently as part of a government policy to make it exports competitive against other Latin American countries ie Brazil. Will it continue I believe not and the recent comments by government ministers confirm this.

Currencies are manipulated by governments as seen with the Dollar to Peso one to one which was artifically mantained by Menem either though Argentina was in much worse shape than it is today.

The American Dollar is another case in point and it certainly in Obamas best interests to weaken its value due to the incredible debts incurred by the USA state. They will aim for a controlled devaluation of the USA dollar as not to scare the public as occured in Argentina in those last fateful days of 2001
 
B

Bianca

Guest
pericles said:
The American Dollar is another case in point and it certainly in Obamas best interests to weaken its value due to the incredible debts incurred by the USA state. They will aim for a controlled devaluation of the USA dollar as not to scare the public as occured in Argentina in those last fateful days of 2001
I think that weakening the US dollar under the Bush administration was a huge error that led the US financial state to where it is now. I am far from being an economist, however a few key points I took from a lecture given by Steve Forbes:
1. Reducing the dollar reduces the real spending power of Americans.
2. A weaker dollar means less investors and central banks investing in US assets.
3. A weaker dollar increases the cost of imports, causing inflation in the US.

I think we should be strenghtening the US dollar, not weakening it... and I'm sure the same principles apply to the Argentine peso as well.
 
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