i do remember the peso went to 50...but no one would trade dollars for it...
what are the effects on the country... please try hard not to crap all over this....
this is for peeps who know...been there...banker types...bis. owners...
i do know that w/inflation prices rise...what else?
A rising peso can be caused by many variables. Understand that a rising peso 45 to 46 to 47 is usually caused by a rising number of pesos being printed AND weaker demand for those pesos. Classic supply and demand.
So when that happens, and there is static economic growth, you have more pesos trying to buy the same amount of goods in the economy, triggering rising prices, which then triggers government to print even more pesos to keep purchasing power of those holding pesos from eroding too badly.
If the peso continues to rise and you do not have either economic austerity or an increase in the production of goods to buy.....you end up like the Weimar Republic...or bringing the example up to date...Venezuela. They currently "enjoy" 60+% inflation and a shortage of dollars.....and, as you said above "no one would trade dollars for it." Probably the single most devastating thing for all the people are shortages as people buy in bulk fearing rising prices. Venezuela is now rationing food and there are shortages of basics like cooking oil, etc.
The effects can be devastating on the locals because prices tend to front run inflation and salaries remain static or rise even slower.
No one really benefits per se...but those with other stronger currencies at least are not further impoverished.
Moral of the story, right now have as much of your money outside the peso as is possible/necessary, preferably dollars...as the Euro is also expected to weaken further.
Respectfully,
Playacaribe2