Has the Time Come for Dollarization in the Americas?
Last week I did a very interesting (to me at least) panel at CATO on dollarization in Latin America, focusing on Argentina. I was with Emilio Ocampo and David Malpass and moderated by Ian Vásquez. Yes, we agreed, but why and how is subtle. Link here at Cato or click on the picture.
I would recommend to the bigger economies a true currency board (like it was in Bulgaria) backed with about 130-140% reserves within the central bank. The Bulgarian currency board worked well for about 28 years until we adopted the euro. The important thing is the central bank not to be allowed to finance government deficits at all. Direct dollarization... will spoil you, Americans. All Americans, not just your politicians. "Dollar is ours, problems are yours." This kind of mindset actually accumulates problems at your side too.
It’s been time for ages but the US may actually help it to happen.