Argentina formally announces it won't join the BRICS alliance in Milei's latest policy shift
Argentina formally announces it won't join the BRICS alliance in Milei's latest policy shift
Argentina has formally announced it won't join the BRICS bloc of developing economies. Friday's announcement is just the latest in a dramatic shift in economic policy triggered by Argentina’s new far-right President Javier Milei.
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Good riddance. Can't take a country keen on dollarization into an organization who's primary goal is dedollarization.
Why doesn't south America agree on a single currency like the Euro?
The Peso. The Sol. The Amero.
Argentina and Brazil have apparently been looking at it https://www.reuters.com/markets/currencies/brazil-argentina-begin-preparations-common-currency-ft-2023-01-22/
I assume that the rest of Mercosur would be invited over time if it's successful
Some countries would need to stabilise their economies before this would be viable, Argentina in particular with the huge inflation and debt problems would be too much of a liability.
Yeah it seems an odd move from Brazil that Argentina is the one to start off with. It also feels like Brazil, being four fifths of the entire population and GDP of Mercosur, will unavoidably dominate it. But I won't pretend to know enough about South American politics to really comment further
Because the governments would no longer be able to fake the exchange rate, and their socialist policies would've been reveald as a scams they are, without the keys to the money printer.
Also, who would be in charge of the monetary union? A bunch of countries that couldn't even managed their own monetary systems?
Going with an existing foreign currency as a base is probably better until the situation stabilizes a bit.
Show me on the map exactly which policy was socialist.
Oh wait, you can’t because you’re just a conservative piece of shit 👍
I kinda like the name the Amero. Or the Merco. The Lollar (for Latino dollar) would be hilarious, but I'd support it!
If they named it lollar, I'd be willing to overlook the smaller details like political unviability, and fully embrace the project :D
Lol One can only dream!
It's the euro even a good idea? Convenient for tourism and trade sure, but according to MMT it hamstrings a countries ability to invest in it's economy and makes government loans fraught.
Uh? Who said EU countries can't contract loans or invest in its economy?
I didn't say they can't, I said it was fraught. A better phrasing is "can cause issues a non-euro country does not have." This quote explains what I mean:
So, in the eurozone a national (federal) government cannot run out of money as long as:
- tax revenues are high enough to bring the Treasury account back to zero or
- bond revenues are high enough to bring the Treasury account back to zero or
- tax and bond revenues together are high enough to bring the Treasury account back to zero.
This means that a eurozone national government does not run out of money until it has exhausted its tax revenues and bond revenues
The United States, Great Britain, Japan, and every other fiat currency country don't have this problem. They are incapable of running out of money. They are capable of making so much money it is completely debased like Weighmar Germany or Zimbabwe. However, those cases are rare and extreme. As long as they ensure the supply of goods people want to buy us sufficient they can spend as much as they want. This enables them to pay off their debts on a whim (if they want to collapse the safest store for money that investors use to outweigh risks).
Sources:
The Deficit Myth I'd give you page numbers but I listened to the audiobook https://www.intereconomics.eu/contents/year/2022/number/2/article/modern-monetary-theory-the-right-compass-for-decision-making.html
He literally said it's the MMT. Lmgtfy: https://www.investopedia.com/modern-monetary-theory-mmt-4588060 and it doesn't even say that companies can't get loans.
It just makes it harder to take on debt if you don't control your own currency as a sovereign state. EU countries are a political union but not a clear fiscal union, with their own treasuries but also the ECB calling the shots and it means that member states can have sanctions imposed on them, like Greece for example.