What Would Dollarization Mean for Expats?

[Quilombo]

remember that trump won. everyone has a chance

I'm once bitten, twice shy after this myself, and while the PASO voting intention surveys ≠ what will happen (let alone the election itself and a ballotage scenario), the idea that Milei isn't a frontrunner is kind of silly as he at the very least has been polling in first place.



Regarding dollarization, things will be on fire for probably the first year as people adjust, but as Ronnie said, Milei comes with other problems as he wants to eliminate social plans and fundamentally change the makeup of the Argentine state which will plunge even more people in to poverty.

As to the original question, people with dollars will be fine, just like they are now.

 

[FrankPintor]

The reporter graduated from college last May. Though he has written many articles, there is little or nothing about Argentina. Obviously without an editor if they allow a report which suggests Milei is the front-runner.

Filip De Mott - Business Insider

Filip De Mott reports for Markets Insider. He graduated from James Madison University in 2022 with a BA in journalism and international affairs. After college, Filip joined the Dow Jones News Fund internship to help cover business activity in Richmond, VA.

www.businessinsider.com

Possibly he doesn't get out much, like the reporter mentioned in https://baexpats.org/threads/9-buenos-aires-surprising-things.45935/post-433188

From where does he get the idea that Dollars are used in day-to-day transactions here? My Dollars stay under the mattress, and get taken out for things like rental payment (if the agreement was in USD cash), and for big ticket items like a car or a plot of ground, just like everyone else's I imagine. There's not much day-to-day transacting one can do with the undamaged USD 100 "cara grande" notes everyone insists on.

Milei's own economic team said the idea is rubbish, I can't see how a Milei victory is going to end in anything other than utter chaos, if even before any elections his team is not in agreement. Maybe it needs to happen, just to get past this libertarian crap and be able to forget about it again

 

[GMan_27]

Yeah everyone here is saying "never"or "dumb reporter". Perhaps not so dumb when you look at the opinion polls. Looks like it goes to a runoff and then its anyone's game...

 

[chris]

I'm once bitten, twice shy after this myself, and while the PASO voting intention surveys ≠ what will happen (let alone the election itself and a ballotage scenario), the idea that Milei isn't a frontrunner is kind of silly as he at the very least has been polling in first place.

View attachment 8850

Regarding dollarization, things will be on fire for probably the first year as people adjust, but as Ronnie said, Milei comes with other problems as he wants to eliminate social plans and fundamentally change the makeup of the Argentine state which will plunge even more people in to poverty.

As to the original question, people with dollars will be fine, just like they are now.

It was relatively expensive during Menem's time. If Argentina can't devalue due to using USD, wouldn't that adversely affect people with USD?

 

[antipodean]

It was relatively expensive during Menem's time. If Argentina can't devalue due to using USD, wouldn't that adversely affect people with USD?

Regardless of whether people start transacting in dollars or keep transacting in pesos, real costs of living will get more expensive due to turning off the vast subsidies that keep the cost of living appearing lower than it is (road tolls, petrol, energy, public transport, health care and insurance, communications, education, food, production, labour, foreign exchange etc) unless/ until the economy produces more and people start to earn/ charge more so as to even be able to afford their present level of consumption. A level of consumption, which by the way, is presently a cost left sitting on the table like a check that nobody seated at the table wants to pay after enjoying their meal.

This is a tap is going to be squeezed by both of the front-runners (more than it is already being squeezed by the incumbent government as the reality of being cash poor and there being no such thing as free money pays everyone a visit).

Talk of dolarization is just a distraction from this point so each side can say "see, it could always be worse by (not) dolarizing" but it ignores the simple fact that far more goes into a price tag than just the currency it is shown in.

 

[ArgentinaVet]

Much more likely in the unlikely event of a Milei presidency is the the dollar is legalized (along with all other hard currencies ) for everyday transactions and the ley penal cambiara is suspended /repealed which would allow the $100 billion + of USD green cash in the hands of the private sector to be freely used to buy assets and invest/consume.

 

[Brian_is_here]

If the dollar is legalized for transactions... i don't see how the peso could survive. the only thing remotely keeping the peso alive is the insistence of the government demanding its use at various different exchanges for major commerce.

The second that goes away, the peso becomes even more worthless faster.

but yea, it will be way easier to use USD in argentina...

 

[antipodean]

A different country, a different crisis but the same ultimate outcome of what happens when society just gives up on its own currency as a result of hyperinflation. At the end of the day, the government doesn't need to do anything to make it happen (aside from loosing confidence) or to prevent it (aside from maintaining confidence).

 

[HectorH]

remember that trump won. everyone has a chance

Trump won the Republican nomination in a 2 party system. Milei has no chance, and all of his candidates are getting embarrassed in provincial elections on top of that. They just got 3% in Tucumán.

 

[FrankPintor]

Trump won the Republican nomination in a 2 party system. Milei has no chance, and all of his candidates are getting embarrassed in provincial elections on top of that. They just got 3% in Tucumán.

Absolutely, yes. Up to now, his underwhelming election performance confirms my view that he’s just been hyped up by the right wing pamphlets in Buenos Aires.