Shuttering their central bank and converting to dollars… Meaning they aren’t actually getting rid of a central bank, but are rather converting to a foreign central bank.
No it’s worse than that. How are they going to purchase enough dollars to replace their own currency? No one is going to give Argentina a loan to do this.
This project is doomed before it starts.
You don’t get it! Whenever they need Dollars, they just buy them with their old currency and without a central bank, the government can just decide how much Pesos they have.
It’s a self sustaining economy!
The gang solved the Argentinian inflation… music starts
Also, Bitcoin!
Good ol’ Mac with the plan!
The idea is that since the government can’t run a surplus by itself, he will break the capacity of running into deficit and making it so they don’t have any other choice.
It’s a nice-looking, simple idea that some countries try here and there and never work on practice.
never work on practice
There are several countries that use the dollar, including, in Latin America, Ecuador and Panama. They are doing fine.
More pertinently, Zimbabwe’s famous hyperinflation was ended by dollarizing.
So it’s not an outright crazy idea. I think the doomposting is mainly due to “right-wing therefore bad”.
It seems the whole point is adopting a currency they can’t print more of. Because of the ‘print more money’ thing doesn’t seem to be solving their inflation issues.
For some context, during the last 4 years the quantity of money our governemnt needed to print* was so high that our printers weren’t enough and we had to pay other countries to print more pesos.
For some context, during the last 4 years the quantity of money our governemnt needed to print* was so high that our printers weren’t enough and we had to pay other countries to print more pesos.
Usually in modern language “printing money” is simply the central bank moving a numbers on a spreadsheet, not necessarily creating new currency notes. This is especially true if the newly “printing money” is being used to repay foreign debts.
Are you saying Argentina is actually running out of currency? If so, where is it all going?
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The goverment spends more than it can, so to pay it’s debts, the goverment print more and more money. This makes each bill to have less and less value generating inflation.
That’s a good explanation about how a government can cause rapid (or even hyper)-inflation, but most of this impact isn’t felt with people handling currency as far as number of bills they have to carry.
A government devaluing its currency usually prints larger denomination notes. As an example:
If a home appliance like a stove costs 100 Argentinian Pesos it might be paid for with ten 10 Peso notes for a total of 100 Pesos.
After a couple of years of rapid inflation the same stove might cost 2000 Argentinian Pesos. While someone buying a stove could technically still use two hundred 10 Peso notes for a total of 2000 Pesos, that’s a lot of currency to carry. Instead government print larger denomination notes. A quick look at the wikipedia page on the Argentinian Peso confirms what I’m talking about. In May of this year, they started printing a 2000 Peso note. So that stove from the example could be paid with a single note, not two hundred.
I would guess usually when these larger notes are being printed the same number of notes in circulation doesn’t need to change that much because the new notes are worth exponentially more than the old notes they would have produced in the same amount of time. In May of 2017 the smallest denomination note was 20 Pesos. However, in May 2023 the smallest denomination note is 100 Pesos.
If that is the case, where is the need to increase the number of notes in circulation, when the value of each note has gone up so much more?
To be fair, Argentina was never really self-sufficient in money-printing. Brazil has so much volatility on the usage of the printers that it’s always cheaper for other countries in South America to import.
But yes, the amount they have been importing recently was completely out of the norm.
I wonder how long it will be before I can point to this as yet another example of why libertarian policy is absolute bullshit.
My guess is not long.
From the moment he opened his mouth
Have to wait for the bears first.
i can usually understand most political views, but libertarians just make me confused
You are still not half as confused as the average libertarian.
I can almost understand the Personal Liberties Libertarian, which I think is what the philosophy was originally supposed to be about. But we often see Corpo-National Libertarians or Totally-Not-An-Anarchist-I-Swear Libertarians, and both of those are baffling to me.
Yea, the only brand I ever sympathized with was the “Hey man, just let me smoke weed”-bertarians… but all those guys jumped ship a long time ago.
Now it’s mostly just “I don’t want to pay for schools”-bertarians… and that’s ironic because those assholes really need an education.
I’ve meet way too many libertarians who don’t want their taxes to go fund cycle lanes because they don’t ride a bicycle. “it does not benefit me” they say while they fail to see that people in bicycles mean fewer people in cars clogging up traffic.
Libertarian world view cannot even see past their nose
It always seems like “common sense” (short-sighted and moronically simplistic) solutions to problems they don’t understand but waffle on about something tangentally related to make it sound like they do.
I don’t think most of it is common sense. I’m a voluntarist, which is an ethical position for me.
it’s like I’m always with them for the first few seconds, then they just go way off base out of knowhere at some unexpected point in time
just make me confused
It’s very simple. They incorporate as a superperson. You’re a human, somewhat rich. You get a corporation. You put it on like a magic suit and you have super-immunity (impunity) from laws, you can do anything.
The freedom that they want is the freedom to exercise their power (money) with no bad consequences for them.
It’s a simple theology: “Me first. Fuck you. Every man for himself.”
While it fits great on a bumper sticker, it’s a suboptimal strategy to build an economy, nation-state, or anything really.
It’s neoliberalism
Oh yeah, a bank shutdown turned out great for Argentina the last time they did it.
I missed that previous time, I did a quick Google search but I’m not getting results. Would you know roughly when that happened?
In 2002, there was a major bank freeze overnight in Argentina. They reopened months later, and because of how they now pegged to the dollar, the value of the accounts were functionally cut in half. In those months, many local neighborhoods invented their own bartering systems and it was a whole mess.
This was around the time the USA invaded Afghanistan, which explains why most people don’t know about it, but it was obviously a major event for Argentina.
That was a freeze of citizen’s personal accounts, not a shutdown. People were not allowed to access and retrieve their own money from their personal bank accounts. This is different. This is the Central (National) Bank, and a shutdown at it. Not individuals bank accounts, if I understand what’s going on correctly.
El Corralito
I’m really interested to see how this plays out. If history plays out that country is headed almost immediately for a recession that may or not be purposefully engineered.
Never attribute to malice what can be explained by dumbass political philosophy.
Oscar Wilde
“Regulate money? Amid out of control inflation? Nonsense!”
The market will regulate itself /s
