What Is The Purpose Of The Dollar Scheme?

[Joe]

I don't understand why the government unveiled the "Dollar Scheme" as the BA Herald calls it. It will result in the loss of foreign reserves at an even quicker pace than before. Unless more stringent measures are taken (as I have outlined elsewhere) the Blue Market will continue as before. Was it simply a stopgap measure to temporary halt the Peso Panic from last week? Has the government given a reason or purpose for their latest schemes?

What is the government trying to accomplish with the Dollar Scheme?

 

[Vermonter]

Perhaps it is a stop-gap measure looking to halt inflation long enough for revenues generated by the agricultural sector start rolling in, which should give the country some breathing room to find a more long-term fix.

It seems there were few options left to them in mitigating the current inflation dilemma.

Sadly, however, what may be necessary at this point is a clean slate.

 

[lucha54]

I'll wait until I hear that someone has actually been able to successfully change dollars via this new scheme before I chock it up to anything more than a "[background=rgb(252, 252, 252)] temporary halt [of] the Peso Panic from last week"[/background]

 

[GS_Dirtboy]

The Peso was starting a freefall on Thursday / Friday. They had to do something. What they came up with was another knee-jerk policy / policy U-turn.

The thing that is missing is a comprehensive economic plan to get the country back to good health.

The Blue Dollar / no Blue Dollar is not the most critical issue facing this government. It is runaway inflation that they seem to have no idea how to manage.

 

[syngirl]

They are desperate to create confidence in the economy before we descend into mania. The problem is Kicillof is a theorist and he's bumbling about trying to apply his academic knowledge in the real world.

 

[ajoknoblauch]

They are desperate to create confidence in the economy before we descend into mania. The problem is Kicillof is a theorist and he's bumbling about trying to apply his academic knowledge in the real world.

I actually thinks Kicillof means well, but he's out of his depth.

 

[Jaredberryman]

I think most people are out of their depth in Argentina. There's not really an easy solution for this country when you start thinking about it. There have been so many economy ministers with different theories and principals, and yet they pretty much all screwed up. The way forward is an in depth, long term plan revealed to everyone that inches things forward bit by bit. In economics, it seems like slow and steady wins the race, although I'm definitely no expert in economics.

 

[Vermonter]

Agree completely, I highly doubt most economic ministers want anything but to improve the situation in their country. Sometimes though the situation can be so complex and multi-faceted that truly digging yourself out of a hole, or a multiplicity of holes, can be an impossible task for even the most brilliant minds.

That's when external factors can have such a profound and often positive impact. Not to say it was a good thing but look at how WWII got the U.S. economy up and running.

Of course Argentina should not, and will not, start a war, but they could use a little pick-me-up from abroad (perhaps in the form of credit/investment).

Hopefully it's not too late for that as there are plenty of modern facilities and services in place and there are potentially lucrative investment opportunities, but bureaucracy almost always seems to be somewhat stifling in this respect.

 

[thorsten]

The really sad thing is that the current devaluation is the right thing to do, but its way to late. Starting it way earlier would have enabled the government to plan a controlled devaluation and implement measures to control inflation, while saving a lot of reserved wasted in the past to artificially stabilize the peso. Now its basically an emergency measure (announced when not even the head of the government knew how it will work in detail) and there are probably no ideas how to cope with increased inflation, except claiming it won't happen or blaming companies to try to make profit...

 

[Rich One]

Memorable quotes from Cristina via Twiter from Havana.!

Some want us to eat soup again but now with a fork! Who? The usual ones she noted further. The banks; only through them one can perform the speculative maneuvers in the markets.


Union Leader Moyano expressed to be confused " Macri goes to Davos, Cristina to meet Castro in Cuba...?