Re: Keynesian Christmas!-- and the collapsiing international

[Alan Cibils <abcibils@xxxxxxxxx>]

Well, the way it is being presented here, it is not entirely a matter of
whether people want to hold the new currency. For example, there has been
talk of allowing people to withdraw their bank savings in the new currency,
or of paying all state employees a fixed percentage of their salaries in
the new currency. What people will do with it once they have it is a
different matter, of course. Protesters in last night's cacerolazo said
loud and clear that they don't want to be paid in argentinos and want their
bank deposits back in pesos or dollars.

I am not sure what your source is on the govt. back-pedalling on the new
currency. The government hasn't stated anything either way. Rather, Jorge
Remes Lemicov, current member of the house of representatives and one of
the economists of the peronists, stated today that he didn't think it was a
good idea to issue a third currency. It is not clear whether he is voicing
the government's opinion, or this is just his own thinking. He proposed
issuing 3 billion Lecop, in addition to the 2.5 billion currently in
circulation.

 (There has been considerable debate as to how much of the new currency to
print. The newly nominated president of Banco Nacion (a state bank, but not
the central bank) had to resign when he suggested that 15 billion
argentinos needed to be printed in order to solve what he called
Argentina's "hiperiliquidez" (i.e. hyper lack of liquidity). Most other
govt. officials were estimating printing about half that, at most.)

Alan



At 02:07 PM 12/29/2001 -0300, you wrote:
But aren't you assuming that people want to hold the currency in the first
place?
What if they just dont want the money because they know its purchasing
power will
be drven down as soon as the currency hits the street....?? FYI, the govt. is
retreating from issuing the new currency.....jj


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