The economy will be dollarized soon... it has to be.

[Caribbean Cool]

Somebody with a Visa Card is going to stand out on the corner and make purchases with a U.S. Visa card for people who don't have one And somebody will do it for next to no premium....making very little. But rest assured...someone will do it. Net result...dollarized economy.

 

[arvest]

Somebody with a Visa Card is going to stand out on the corner and make purchases with a U.S. Visa card for people who don't have one And somebody will do it for next to no premium....making very little. But rest assured...someone will do it. Net result...dollarized economy.

Maybe I'm dense but can you explain the advantage of this? People who have dollars can convert at the cuevas and get a better rate than what Visa offers

 

[steveinbsas]

Maybe I'm dense but can you explain the advantage of this? People who have dollars can convert at the cuevas and get a better rate than what Visa offers

It's my best guess that CCool was suggesting individuals with US Visa cards could make credit card purchases for Argentines who can only make purchases in pesos at the official rate with local credit cards or cash.

While I would not consider trying to find "clients" while standing in public on a street coner (with a sign?) or at the entrance to a Coto or Carrefour, or offer to do this for anywhre near "next to no premium," I can see how this might be very lucritive for the foreigner of the US Visa credit card.

Nonetheles, I can't imagine that enough ndividuals would or could ever engage in this practice to ever "dollarze" the economy.

 

[FrankPintor]

The thing is, Argentina is already dollarized, as Cristina noted in her speech the other night. For any purchase over say USD 5000 in value, you're going to be quoted Dollars (secondhand cars, ffs). The Peso just lubricates day to day business.

Having lived in countries that dollarized, formally like Ecuador, and informally like Venezuela, I can only laugh at twits like Milei who want to take the last, most unrewarding, degrading step of actually physically using that shitty currency here.

 

[steveinbsas]

The thing is, Argentina is already dollarized, as Cristina noted in her speech the other night. For any purchase over say USD 5000 in value, you're going to be quoted Dollars (secondhand cars, ffs). The Peso just lubricates day to day business.

Good point, but I am thinking in terms of much smaller numbers, but I still have to do the math and see if my idea might work...and I would only do it with two or three Argentine freinds if it is realistic to do so.

I'll be back...

 

[gracielle]

....Net result...dollarized economy.

Automatic Google translation of entire article:
22 April 2023 by Jose Gimenez

¿Qué implica dolarizar la economía y qué diferencia existe con el 1 a 1?

En las últimas semanas se profundizó el debate acerca de la posibilidad de dolarizar la economía argentina, a partir de una propuesta del precandidato presidencial y diputado nacional de La...

chequeado-com.translate.goog

What does it mean to dollarize the economy and what is the difference with the 1 to 1?
The dollarization of the economy means the replacement of the peso by the dollar as legal tender, while convertibility establishes a parity between both currencies, but maintaining the circulation of the peso.

Specialists indicate that to carry out a dollarization with the current value of the currency, a loan of US$45 billion would be needed: otherwise, the conversion exchange rate would oscillate between $7,000 and $10,000 per dollar.

Those who defend this measure point out that the conversion could be made to the current value of financial dollars (about $400) by selling the Treasury debt bonds that the Central Bank owns. That is, converting intra-state debt into private external debt....

....In this note we will tell you what the dollarization of the Argentine economy would mean, what are the implications of taking this measure and what differences exist with the convertibility regime that operated in the country in the '90s....

 

[argentinaorbust]

Somebody with a Visa Card is going to stand out on the corner and make purchases with a U.S. Visa card for people who don't have one And somebody will do it for next to no premium....making very little. But rest assured...someone will do it. Net result...dollarized economy.

Certain sectors of the Argentine economy are already dollarized (real estate, tourism, etc) but the sectors that matter - commodities (agro, energy, minerals) - are 100% pesos & unlikely to change.

Argentina has plenty enough raw commodities for the dollar to be worth however many pesos they say it is & the Argentine police state has lot's of enforcers to make sure everyone respects their prices. The current situation can continue for a long time.

Argentina's balance sheet is still strong, they export quite a bit more than they import & their IMF/national debt doesn't matter in practice. The only relevance they have as a nation state is as a welfare provider, the agro peso allows that to happen, they aren't going to let that go.

 

[earlyretirement]

NOPE. It will NEVER happen. Anyone thinking there is a chance of it ever happening again should read this entire article. It's well written and spot on target.

This is an excellent read - https://www.thestreet.com/economoni...ization-of-argentina-revival-of-a-zombie-idea

At the beginning of each semester, the Nobel Prize-winning economist Simon Kuznets used to say to his Harvard students: “There are four kinds of countries in the world: developed countries, undeveloped countries, Japan, and Argentina.”

 

[Quilombo]

Having lived in countries that dollarized, formally like Ecuador, and informally like Venezuela, I can only laugh at twits like Milei who want to take the last, most unrewarding, degrading step of actually physically using that shitty currency here.

I'll gladly take any dollars off of anyone's hands who consider them a shitty currency. I'll even come pick them up in person

My personal guess is as follows:

Milei = Hard dollarization, rate somewhere between $1,000 and $10,000 pesos per dollar
Bullrich = Soft dollarization, or dual currency, pesos only used by the government, rate over $500 but under $1,000 per dollar
Larreta = Gradual removal of the cepo, preserving the peso, legalizing payment in USD, general mystery overall

Nobody else, imo, is going to be president so no need to cover their ideas.

My personal preference is an independent BCRA, getting rid of the cepo, positive interest rates (inflation + US prime + x basis points to encourage people to save/loan money here), tighter monetary supply/spending inline with taxes collected, and legalizing the payment of any debt in any currency, but pegging things such as tax brackets, minimum wage, taxes, etc. to the value of the CCL dollar, along with peso bills in circulation so there always has to be bills worth +/- 10% of $50 USD. If businesses/people want to accept USD, RMD, Euro, Bitcoin, gold, a song, or alfajores as payment who cares provided they pay taxes to the state.

 

[Caribbean Cool]

It's my best guess that CCool was suggesting individuals with US Visa cards could make credit card purchases for Argentines who can only make purchases in pesos at the official rate with local credit cards or cash.

While I would not consider trying to find "clients" while standing in public on a street coner (with a sign?) or at the entrance to a Coto or Carrefour, or offer to do this for anywhre near "next to no premium," I can see how this might be very lucritive for the foreigner of the US Visa credit card.

Nonetheles, I can't imagine that enough ndividuals would or could ever engage in this practice to ever "dollarze" the economy.

Well...somebody got the idea! Obviously not literally standing on a corner.....but there lies in this idea the seeds of the destruction of the peso as it exists today. Go the other extreme....hey....can I buy a Mercedes for you? But back to small margins....if people are desperate, what today is inconceivable is tomorrow's reality.