Argentina's Milei backtracks on dollarization
Argentina's Milei backtracks on dollarization
Javier Milei has backed down on his election promise to replace the peso with the dollar to revive the flagging economy. Despite the U-turn and runaway inflation, opinion polls show strong public support for Argentina's new president.
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They're an export economy, chosing USD is basically shooting those exports in the foot.
I think his rationale is to take away monetary control from future administrations, which I think is a laudable goal. Argentina should be the richest country in South America, but its people keep getting robbed by the printing press. I wonder if going to a gold standard (or if they feel like rolling the dice, a Bitcoin standard) would be a better option.
(Cue the anti-crypto arguments because I mentioned Bitcoin)
How could such an odd choice benefit them?
Honest question.
I understand the other user's point is that repetition of this story is inevitable and any attempt is better.
Gold standard isn't an odd choice, it was used for many thousands of years. It's just odd today because no countries still use it.
And while a Bitcoin standard sounds crazy, if you lived in Argentina, you'd probably rather keep your savings in Bitcoin (despite all its problems) than in the peso.
Maybe a Swiss Franc or Japanese Yen peg might suit them better, if they could buy enough volume.