Some unpleasant arithmetic: Let's go liberty

I feel like a broken record at this point, but nobody, least of all his supporters, can demonstrate how he plans to dollarize without
throwing the country in to free fall or a 10,000/1 exchange rate.

I'll put my cards on the table, I'm not a Milei supporter nor a supporter of dollarization, and I feel like people are getting taken for
a ride because nobody is spelling out how we're going to do this, least of all for the majority of Argentines who do not have savings
or an income in dollars.

- Will it be a market driven decision? i.e. people and businesses like in Venezuela will simply stop accepting pesos for payment?
- Will it be a controlled conversion, i.e. the BCRA takes all the debt, loans, digital, and physical currency in circulation and says 1 USD = X ARS, you have until 20XX to trade it in for the new money like countries that have joined currency unions have?
- If it's the second option, where do you get the loans to do this? Everyone except the Ks agree the BCRA reserves basically don't exist, and the only organizations that have the resources to do this either don't like Milei or don't think it's a good idea, like the author said
- Ecuador is the largest economy that doesn't use it's own currency/is not in a currency union. It has a GDP of 106 Billion. Argentina has an official GDP of 487 Billion, even if it's half that due to manipulation of the dollar, we'd still be over double the largest country that does this
- Just because there are dollars in the hands of rich, or maybe even middle class Argentines, why would they enter the economy? Why wouldn't you hoard them even more, spend only what's necessary to survive, and continue keeping them outside of the financial system

Dollarization would be difficult for a normal country like Canada or Australia, but we're supposed to believe Milei is just going to clap his hands and poof, all the kinks are worked out? People are lying and it's not just "the caste" and I feel bad for those without dollars because you better buckle up for a wild ride.
 
Quilombo said:
I feel like a broken record at this point, but nobody, least of all his supporters, can demonstrate how he plans to dollarize without
throwing the country in to free fall or a 10,000/1 exchange rate.
Click to expand...
There have been many instances of currency reforms where 1 new peso/rouble/tugrik replaced 1,000 old ones. These transitions generally went smoothly. The next day, prices expressed in new units would be 1,000 times lower, just as salaries would be.

If the dollarization does occur this time, it would be pretty similar, just the new unit would be the dollar and the exchange rate would be set at 1:720, or whatever it will happen to be at that time.

By itself, this change is not so significant. The true impact comes from the fact that the government will no longer have the ability to print money, and the implications of that will probably be huge.
 
Quilombo said:
I feel like a broken record at this point, but nobody, least of all his supporters, can demonstrate how he plans to dollarize without
throwing the country in to free fall or a 10,000/1 exchange rate.

I'll put my cards on the table, I'm not a Milei supporter nor a supporter of dollarization, and I feel like people are getting taken for
a ride because nobody is spelling out how we're going to do this, least of all for the majority of Argentines who do not have savings
or an income in dollars.

- Will it be a market driven decision? i.e. people and businesses like in Venezuela will simply stop accepting pesos for payment?
- Will it be a controlled conversion, i.e. the BCRA takes all the debt, loans, digital, and physical currency in circulation and says 1 USD = X ARS, you have until 20XX to trade it in for the new money like countries that have joined currency unions have?
- If it's the second option, where do you get the loans to do this? Everyone except the Ks agree the BCRA reserves basically don't exist, and the only organizations that have the resources to do this either don't like Milei or don't think it's a good idea, like the author said
- Ecuador is the largest economy that doesn't use it's own currency/is not in a currency union. It has a GDP of 106 Billion. Argentina has an official GDP of 487 Billion, even if it's half that due to manipulation of the dollar, we'd still be over double the largest country that does this
- Just because there are dollars in the hands of rich, or maybe even middle class Argentines, why would they enter the economy? Why wouldn't you hoard them even more, spend only what's necessary to survive, and continue keeping them outside of the financial system

Dollarization would be difficult for a normal country like Canada or Australia, but we're supposed to believe Milei is just going to clap his hands and poof, all the kinks are worked out? People are lying and it's not just "the caste" and I feel bad for those without dollars because you better buckle up for a wild ride.
Click to expand...

If you want to learn more about it, you should search on YouTube for Emilio Ocampo. He will most likely be the Economic Minister for Milei.

He has many interviews about dolarizacion and the options of how to go about it, and the way that they would most likely do it.

No one is saying that they "will clap their hands and poof, all the kinks are worked out", not Milei or his advisors. Whoever is elected is going to be in a really tough situation.

In the interviews they position the proposal as the least bad option, not as a miracle that will make all the problems go away.
 
Click anywhere on the article in Spanish to open the menu. Next click on Translate to English.

18 August 2023....Opinion/Ivan Carrino, Economist
www.infobae.com

Dolarización: respuestas a siete preguntas

Es comprensible que un país que viene lidiando con una mala moneda por varias décadas esté con ganas de probar recetas nuevas
www.infobae.com www.infobae.com
Dollarization: answers to seven questions....

Ivan Carrino studied administration, receiving a degree in Administration from the University of Buenos Aires. He holds a Master's degree in Economics from the Austrian School of Economics from the Universidad Rey Juan Carlos in Madrid, having been a student of Jesús Huerta de Soto, and a Master's degree in Applied Economics from the Universidad del CEMA, in Argentina. He directs Iván Carrino & Asociados, his economic research and consulting firm, and is Deputy Director of the Master's program in Economics and Political Science at ESEADE.

He teaches International Economics at the ESEADE University Institute and History of Economic Thinking at the School of Economics of the University of Buenos Aires. He writes columns in newspapers such as La Nación, Ámbito Financiero, El Cronista and Infobae. He is also a contributor to Libertad y Progreso. He was awarded a mention in the 12th Essay Contest, organized by the Caminos de Libertad Foundation
in Mexico. His book El Liberalismo Económico en 10 Principios was also published in Spain.

I DID NOT VOTE FOR MILEI ON AUGUST 14....AND I WILL NOT VOTE FOR HIM ON OCTOBER 22.
 
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Okay, these could be famous last words but, given recent developments internationally, it's my opinion that dollarisation is completely incompatible with Bricsitisation and neither will happen in the forseeable future.
 
I stand by my call that dollarization will NEVER happen in Argentina. Some of Milei's ideas are good like pro-business stance on things. Labor reform, etc. But some of them are just whacky and will never work.

There is no magic or silver bullet for Argentina. Let's be honest. If he gets elected the odds that he finishes his term or doesn't get assassinated are probably slim.

I agree all his supporters, when I ask how dollarization would happen, no one can give a good and realistic answer how it would happen. That's because it won't happen. Look at all the major figures around the world saying this would be horrible for Argentina. Do you really think they will let it happen?
 
lunar said:
There have been many instances of currency reforms where 1 new peso/rouble/tugrik replaced 1,000 old ones. These transitions generally went smoothly. The next day, prices expressed in new units would be 1,000 times lower, just as salaries would be.

If the dollarization does occur this time, it would be pretty similar, just the new unit would be the dollar and the exchange rate would be set at 1:720, or whatever it will happen to be at that time.

By itself, this change is not so significant. The true impact comes from the fact that the government will no longer have the ability to print money, and the implications of that will probably be huge.P
lunar said:
There have been many instances of currency reforms where 1 new peso/rouble/tugrik replaced 1,000 old ones. These transitions generally went smoothly. The next day, prices expressed in new units would be 1,000 times lower, just as salaries would be.

If the dollarization does occur this time, it would be pretty similar, just the new unit would be the dollar and the exchange rate would be set at 1:720, or whatever it will happen to be at that time.

By itself, this change is not so significant. The true impact comes from the fact that the government will no longer have the ability to print money, and the implications of that will probably be huge.
Click to expand...
Precisely. This has expats scared to dreath!
Click to expand...
 
earlyretirement said:
I stand by my call that dollarization will NEVER happen in Argentina. Some of Milei's ideas are good like pro-business stance on things. Labor reform, etc. But some of them are just whacky and will never work.

There is no magic or silver bullet for Argentina. Let's be honest. If he gets elected the odds that he finishes his term or doesn't get assassinated are probably slim.

I agree all his supporters, when I ask how dollarization would happen, no one can give a good and realistic answer how it would happen. That's because it won't happen. Look at all the major figures around the world saying this would be horrible for Argentina. Do you really think they will let it happen?
Click to expand...
Which of his proposals are 'whacky'?
 
sergio said:
Which of his proposals are 'whacky'?
Click to expand...
- Downgrade ties to Brazil and China (Argentina's 1st and 2nd largest trading partners)
- Attack Chile (4th largest trading partner)
- Loosen gun restrictions
- End more of women's rights (including ability to get abortion)
- Dollarize (I'd be all for this if someone can show me a realistic pathway for this mapped out).

And I'm more pro-business than anyone but being open to selling your organs, selling your children...ha,ha. Common. That's just whacky.


There are other things. Just do a google search. I'm not even saying I wouldn't vote for him because actually I think he is a better option than status quo. It's just that much like Trump, if he showed some restraint, wasn't falling in love with himself than he would appeal to a much broader base. As it stands now, if he just showed some restraint, I'd vote for him. But the more he yells, the more I get turned off.
 
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