Very eloquent article exposing the reality that sound money is always better, even if you have to import it from abroad. This truth is known to lay people. Only governments have a hard time dollarizing because they lose privilege. It’s time to democratize the privilege of hard currency for all Argentine citizens and reduce the “economic calculus” significantly in one blow. Dollarization is the only way.
Clear arguments. Argentina needs another monetary reform to boost confidence and growth. I believe success will depend on the details: (1) Mitigate the legal impediments, for example. dollarization of the financial system as the financial assets and liabilitis are due -rather than a sudden conversion; a stream of FX rates that incorporate the embedded inflation expectations of the previous regime could be establish, rather than applying the ecuatorian adjustement of the oringal interest rates. The contracts denominated in pesos could continue while payments will automatically be converted in dollars as credit/debit in the banking accounts (2) Delay the conversion of the pesos in circulation by setting a decreasing FX rate that reimburses the cash holder the benefit of seignorage (3) Promote a cash less economy through tax benefits for digital purchases.
Thank you for your article! I am following you in this platform because you are one of the few who can write in English about dollarization in Argentina. I am living in California and I am an accountant. I was born in Argentina. I am listening not only to your scientific debates about dollarizing Argentina but also to other professionals in the field of economics about the techniques to dollarize. I am sure that all of you know that the digitalization of the dollar is in our lives. Most of us have debit cards and credit cards. If you see the account of any american, you will notice that those are numbers, we practically do not use physical dollars. So, no need to worry about the amount of physical dollars, you need less than you think. We try to keep certain amount of physical currency at home, but to be honest, I don't think each america holds more than 200 dollars at home and some coins. But if you want to cash or deposit more than 2,000 dollars at the bank, they will ask explanations. Yes, can you believe?, even in USA, they ask explanations to the common people. So, to make it short, Please, think twice about dollarization, because the digital dollars are already here. I have gold and silver at home. There is a lot behind the dollar in USA. Next weekend you have elections. I wish Argentina a lot of blessing and to you too! Again, Thank you for your articles!
Very eloquent article exposing the reality that sound money is always better, even if you have to import it from abroad. This truth is known to lay people. Only governments have a hard time dollarizing because they lose privilege. It’s time to democratize the privilege of hard currency for all Argentine citizens and reduce the “economic calculus” significantly in one blow. Dollarization is the only way.
Never clearer. It is time for Argentina to put aside socialist ideas and begin the path to freedom.
Ecuadour and Argentina, eh? Who's next?
Good luck to Argentina.
https://pauldixon.substack.com/p/argentina-the-dollarization-debate
Emilio, Great piece and you make some very good points on the need to move away from the ARS. We have written a reply to your substack article which details some steps that Argentina can take that allows for dollarization but in way which avoids many of the hazards that Argentina experienced with the dollar peg from the Menem Presidency. https://blockchainincomereport.substack.com/i/139270682/op-ed-digitalization-vs-dollarization-an-open-letter-to-emilio-ocampo
Clear arguments. Argentina needs another monetary reform to boost confidence and growth. I believe success will depend on the details: (1) Mitigate the legal impediments, for example. dollarization of the financial system as the financial assets and liabilitis are due -rather than a sudden conversion; a stream of FX rates that incorporate the embedded inflation expectations of the previous regime could be establish, rather than applying the ecuatorian adjustement of the oringal interest rates. The contracts denominated in pesos could continue while payments will automatically be converted in dollars as credit/debit in the banking accounts (2) Delay the conversion of the pesos in circulation by setting a decreasing FX rate that reimburses the cash holder the benefit of seignorage (3) Promote a cash less economy through tax benefits for digital purchases.
Thank you for your article! I am following you in this platform because you are one of the few who can write in English about dollarization in Argentina. I am living in California and I am an accountant. I was born in Argentina. I am listening not only to your scientific debates about dollarizing Argentina but also to other professionals in the field of economics about the techniques to dollarize. I am sure that all of you know that the digitalization of the dollar is in our lives. Most of us have debit cards and credit cards. If you see the account of any american, you will notice that those are numbers, we practically do not use physical dollars. So, no need to worry about the amount of physical dollars, you need less than you think. We try to keep certain amount of physical currency at home, but to be honest, I don't think each america holds more than 200 dollars at home and some coins. But if you want to cash or deposit more than 2,000 dollars at the bank, they will ask explanations. Yes, can you believe?, even in USA, they ask explanations to the common people. So, to make it short, Please, think twice about dollarization, because the digital dollars are already here. I have gold and silver at home. There is a lot behind the dollar in USA. Next weekend you have elections. I wish Argentina a lot of blessing and to you too! Again, Thank you for your articles!