Anarcho-capitalism means that the rich can exploit the poor without any limits or protection. Whoever thought this was a good idea deserves to live with the consequences. The others have my sympathy.
TBF there’s a reason for the devaluation. In countries like Argentina the government sets the price of the dollar, but that doesn’t affect the real price, so in the end the government pays the difference. In the case of Argentina the government basically made the dollar half its real value, so say for every 100 dollars an Argentinian bought the government needed to pay 50.
It’s a bad situation all around and there are no good solutions, but just leaving it be is unsustainable.
Having the currency be free-floating is the best policy. The transition might be a bit too rapid, though
Yeah. That’s the challenge in situations like these: How do you get to a free-floating currency without the people starving to death.
Well, could always spend some of the money wasted on exchange rate manipulation on food subsidies instead. But I think just making the transition more gradual would be my bet
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You thought having a leftist as leader was bad, Argentina, good luck dealing with this douche in power.
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That’s helpful, but why declare a 50% devaluation? Isn’t that just determined once you peg to the dollar and float your currency?
Yearly inflation for December 2023 has been 160% (stuff that used to cost 100, now costs 260)
A 50% devaluation, is the same as a 100% inflation: stuff that used to cost 100, now costs 200.
Milei has promised a reduction in inflation for the next year, from the 160% to just 60% (stuff that used to cost 100, plus through the 50% devaluation now costs 200, will end up costing just another 60% more, or
320“160”).Meaning: instead of having to anounce a 220% inflation for 2024, he’s split it into “50% devaluation, plus 60% inflation”.
…see? He promised to reduce inflation, and he did! 🎉🤡 /s
He said he would do something abrupt to literally kill the Argentinian peso as he wants to “dollarize” the country
What does he say this achieves? What is his endgame with respect to the devaluation?
apparently abolishing the central bank and switching to the dollar
So having US cemtral bank controlling the own currency.
Very well tgought through
If they dump their currency and use USD, then as long as there arnough dollars around it solves inflation right? (Their economy is a blip to the Goliath that is USD)
But if that’s the case, then their currency is useless as everyone knows if will have zero value at all in a few months/years.
It does mean they can’t print money to get out of trouble though… Not that that was going well for them before.
The US$?
Yes
