Re: Imposing the US Dollar on Canada

[Christopher Niggle <niggle@xxxxxxxxxxxxxx>]

Barkley, others interested:  I should probably know the answer to this,
but how would you peg a domestic currency to two other currencies which
float against each other?  Construct a trade-weighted index?  Chris

On Sun, 22 Apr 2001, J. Barkley Rosser, Jr. wrote:

>       In the Washington Post two days ago it was
> reported that Cavallo, the new "super economics
> minister" in Argentina, has pulled Argentina back
> from dollarization.  Apparently the peso will now
> be pegged 50-50 to the US dollar and the euro.
> I do not know if they are still maintaining some kind
> of currency board arrangement or not.
>       There are some in Argentina who are upset at
> this move, fearful that it signals a return of hyperinflation,
> the defeat of which the currency board with the dollar
> was associated with.  Certainly this is a defeat for
> those who wanted full dollarization, which a major
> faction did, probably including the "comprador" elements,
> but probably not consisting only of them.
>       BTW, I think that Argentina is making a wise move
> in this regard.  Clearly the currency board has not worked
> out well for them.  I wish to make it clear, since I see below
> that I am getting bashed on this issue, that I do not in
> general support dollarization in most countries.
> Barkley Rosser
> ----- Original Message -----
> From: "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
> To: <phillp2@xxxxxxxxxxxxxxx>
> Cc: "Post Keynesian Thought" <pkt@xxxxxxxxxxxxxxxx>
> Sent: Friday, April 20, 2001 5:52 PM
> Subject: Re: Imposing the US Dollar on Canada
>
>
> > Paul,
> >       Well, it is not at all clear that the US gains
> > very much from having other countries get
> > dollarized.  Thus, although it has not fully
> > dollarized, Argentina has a currency board,
> > the next "best" thing to it.  Right now Argentina
> > is in about its third year of recession, clearly
> > not good for Argentina.  Is it good for any group
> > in the US?
> >      Well, there was a column in the
> > Washington Post a few days ago by Robert
> > Samuelson forecasting that Argentina is on
> > the verge of having a full blown foreign exchange
> > and debt crisis given its inability to service its
> > $140 billion foreign debt.  Samuelson predicted
> > that a bellyup by Argentina could trigger a full
> > scale global financial collapse.  This is in the
> > interests of US capitalists or anybody else?
> > Even without a full-blown crash, recession in
> > Argentina is not good for US capitalists because
> > their companies there are losing money and it is
> > difficult to export anything to them.
> > Barkley Rosser
> > ----- Original Message -----
> > From: <phillp2@xxxxxxxxxxxxxxx>
> > To: <pkt@xxxxxxxxxxxxxxxx>
> > Sent: Thursday, April 19, 2001 11:43 PM
> > Subject: Re: Imposing the US Dollar on Canada
> >
> >
> > > I am quite amazed at the discussion of this topic.  It could only
> > > occur on list that was dominated by  Americans who don't have the
> > > slightest knowledge of, or appreciation of, dependent economies.
> > > Poor Keynes must be rolling over in his grave in the utmost pain of
> > > despair.  Alan's post was unbelievable.  Henry did something to
> > > redress the balance but if this is the level of understanding of
> > > monetary and macro economics, we must all weep and wail.
> > >
> > > Is this really the level of economic analysis and understanding of
> > > PKT?  God!, I hope not.
> > >
> > > Paul Phillips,
> > > Economics,
> > > University of Manitoba
> > >
> >
> >
>
>