Peso-Dollar rate allowed to float

E

Escott

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Jan 14, 2002
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www.escottinsosua.blogspot.com
mondongo said:
The data show that Dollarization does not matter in the long run. Economies that have Dollarized do not show statistically significant GDP growth variance from similar non-Dollarized enonomies.
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Hahaha what data is this that you are referring to? Turning to Dollars is stablizing because the countries can't go and print any more of them. It wont depreciate againt other currencies because of what they are doing any longer. Psssst. that is why they switch.
Originally posted by mondongo Ecuador, I believe, is the largest economy to attempt to Dollarize. Arngetina did not Dollarize, they just pegged their currency.
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How do you peg? What does that mean and how do they do this and keep it that way?
Originally posted by mondongo Countries that Dollarize are typically very small, have economic performance worse than that experienced now in the DR. Just like IMF intervention, Dollarization typically improves matters over the short term. These countries already have a majority of deposits in the US$. I dont think this is the case in the DR.
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Where do you get this info? It isn't/wasn't true in Ecuadors case.
Actually the economic performance crashed instead short term in Ecuador and then after the people got use to the new currency and the ensuing panic subsided it improved. Same thing happened with Real Estate values. Crashed and then recovered. Ecuador did NOT have a majority of deposits in US$. It had the majority of deposits in their currency. The dollars were taken partially and the balance was converted to long term government bonds which paid off and the people who lost their money came out whole.
Originally posted by mondongo The good/bad "thing" about Dollarizing is that capital becomes easier to borrow (interest rates go down). Now imagine Mejia in power with an ability to borrow even more money.
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Man, one thing has NOTHING to do with the other. It is no easier to borrow since the loans in dollars have to be repaid in dollars anyway. Why say this stuff?
Originally posted by mondongo If the people in power (govt, business) don't change their modus operandi (sp), you can use cow chips for currency.....it does not matter. In the end, crooks will be crooks. The data is there to support my conclusion.
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Now this is funny. WHAT DATA? You are just saying stuff that isn't true. NOTHING SUPPORTS YOUR CONCLUSIONS.

Why do you post such outright falsehoods and then claim the data supports BS without even putting a link to support what you say?
 
M

mondongo

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Lets take my claims one at a time:

1) Countries that Dollarize are typically small: US$100. You in?
 
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mondongo

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2) When countries attempt to Dollarize, they do it out of desperation....usually borne out economic troubles worse than what the DR is experiencing. This applies to Ecuador when they dollarized......US$200. You in?
 
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mondongo

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3) Dollarization makes capital (hard currency) easier to obtain, especially for the govt.....US$name-your-price....You in?
 
M

mondongo

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PS Hint: make sure you understand the term "Dollarization". It is not the same as a country having lots of US$ in their system.
 
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Porfio_Rubirosa

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Apr 26, 2002
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Why does dollarization arouse such strong emotions, leading otherwise level-headed economists to compare it to witchcraft or arsenic, or to call it a 'scam'? It is because debate over dollarization is a conflict of economic and political visions rather than just a debate about technique.

Yea, I just made that one up myself.
 
M

mondongo

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For those of you living in the DR that think the IMF gives a flying fart about your standard of living, read the following exerpt from the IMF proposal to DR authorities:


"(IMF) Directors urged the authorities (DR) to advance approval of a tax reform to broaden the base of consumption and income taxes (sock it to you any way they can), and to seek prompt
approval of budgetary reforms to improve the efficiency of public
spending (re-arrange the spending deck chairs). They also noted that the sale of public assets (are there any left?) could contribute to the reduction of public debt over the medium term."

Words in parentheses were added by mondongo for illustrative purposes. Above quote was obtained form the document referenced on DR1 News.
 
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