What Would Dollarization Mean for Expats?

[Rich One]

Politicians claim if current salaries were converted to dollars , people's salaries would be too low! Someone retorted, that's the truth face it....!
My conserje believed since he makes $200,000 pesos his salary would be $200,000 dollars ...!!
One -to -one

 

[Ronnie Hotdogs]

Politicians claim if current salaries were converted to dollars , people's salaries would be too low! Someone retorted, that's the truth face it....!
My conserje believed since he makes $200,000 pesos his salary would be $200,000 dollars ...!!
One -to -one

He’s probably not the only one.

 

[Macanudo]

Argentina Devalues Peso, Hikes Rates After Libertarian Outsider's Shock Win In Presidential Primary | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[QuilmesSlo]

My thoughts:

(1) Dollarization would raise costs for Expats materially

(2) Dollarization is simply not feasible politically

(3) Biggest risk of attempted Dollarization is instability in the streets. Not just a risk but a likelihood.

I don't see any reason to be unduly concerned at this point. I expect precedent steps will be required to cut government personnel and subsidies, and that itself will be more than a handful politically.

 

[antipodean]

The main implication is that many cost-sensitive expats who finance themselves with money from abroad would need to pay more to enjoy a similar quality of life they have been able to afford up until now. Remember, it's not just dolarization that impacts prices but also the loss of various subsidies right along the supply-chain that keep prices in Argentina artificially lower; subsidies that presumably will be done away with before an actual dolarization takes effect.

Like in other "dollarized" economies like Panama or Ecuador or Venezuela, lower prices for a lower standard of living will always be possible - as locals won't necessarily be earning any more money than they earn today - but for many expats that deletes the value proposition that Argentina currently offers (e.g. a similar or better standard of life as at "home" for a lower price) meaning I would expect to see less "digital nomads" and "pensionados" who come here in search of the good life unbeatable prices as a result.

But either way I think this shift in value proposition will happen with or without dolarization. Argentina in the 90s was definitely not known as a value for money destination and that can easily repeat itself.

 

[Rich One]

My thoughts:

(1) Dollarization would raise costs for Expats materially

I don't see any reason to be unduly concerned at this point. I expect precedent steps will be required to cut government personnel and subsidies, and that itself will be more than a handful politically.

Why would costs raise for Expats Specifically..?

I don't see that, I would transfer with WU and would receive dollars here minus the commision as usual.

 

[toongeorges]

Now that Javier Milei apparently won the primary yesterday, let me ask again.

What Would Dollarization Mean for Expats?

If Milei wins, blows up the central bank and dollarizes the economy, expect:

https://youtube.com/playlist?list=PLQYK_flETP5OVEeQWmanwx5kbo0KezRMl

 

[Jerry Nelson]

Why would costs raise for Expats Specifically..?

I don't see that, I would transfer with WU and would receive dollars here minus the commision as usual.

According to several knowledgeable websites, expats on Social Security, make up a sizable portion of the total number of expats. https://www.google.com/search?q=how...ACAA&hl=en-US&sourceid=chrome-mobile&ie=UTF-8

 

[sergio]

The main implication is that many cost-sensitive expats who finance themselves with money from abroad would need to pay more to enjoy a similar quality of life they have been able to afford up until now. Remember, it's not just dolarization that impacts prices but also the loss of various subsidies right along the supply-chain that keep prices in Argentina artificially lower; subsidies that presumably will be done away with before an actual dolarization takes effect.

Like in other "dollarized" economies like Panama or Ecuador or Venezuela, lower prices for a lower standard of living will always be possible - as locals won't necessarily be earning any more money than they earn today - but for many expats that deletes the value proposition that Argentina currently offers (e.g. a similar or better standard of life as at "home" for a lower price) meaning I would expect to see less "digital nomads" and "pensionados" who come here in search of the good life unbeatable prices as a result.

But either way I think this shift in value proposition will happen with or without dolarization. Argentina in the 90s was definitely not known as a value for money destination and that can easily repeat itself.

This seems accurate to me. I remember the 1990s here. It was not cheap. During the Menem years, especially the first term, we had quasi-dollarisation. I remember sometimes using $50 bills to pay in restaurants. It was 1-1 then. I agree that a lower standard of living will always be possible but sustaining the current priviliged status expats enjoy is not likely to go on indefinitely.

 

[John.St]

I’ll just leave this here and then show myself out.

The amount of nonsense and vitriol I’m expecting is past the roof.

In June, I asked what I thought was an innocent question: “What Would Dollarization Mean for Expats?”

I got many great responses, but I also got idiotic responses that don’t come close to answering the question.

Now that Javier Milei apparently won the primary yesterday, let me ask again.

What Would Dollarization Mean for Expats?

It all depends on exactly how the Dollarization will play out.

If it is to be a repetition of the late 1990s, I am afraid the result will be a disaster, a yet again burnt child.

If it is to be an dynamic aka adjustable and not too tight (static) attachment to the US$ it may stabilize the AR$ over a decade.