The debate around the dollarization makes no sense under the costs that carries and the diffuse benefits that are intended to be installed.
The reality of Ecuador, Panama and other countries with similar experience determine that it is neither a panacea nor the solution to our problems.
The reality is superior to the idea, maintains Pope Francis.
The reality indicates that factually the monetary regime of the Argentine Republic is dual. Transactions in pesos are carried out in a current way, but the dollar is used with various functions of money.
Adopting the dollar as a currency must also presuppose the existence of the issuing country that has the following characteristics:
- sustained fiscal deficit of around 5% of GDP,
- equivalent current account deficit,
- sustained increase in public debt from 30% of GDP to 138% in the last 50 years,
- liquidation of the debt with the manipulation of interest rates and inflation,
- unilateral attitudes such as the declaration and inconvertibility of the dollar and other extreme and compulsive measures of a historical nature.
The issuing country should not be excluded from certain reputational aspects.
The most appropriate proposal for the Argentine Republic is to simultaneously adopt four decisions framed in a holistic, systemic and comprehensive economic plan.
1.1. Externalization of financial and real assets with modifications in the tax procedure laws 11683 and modifications to allow a general forward laundering and elimination of the DDJJ backwards only available to those taxpayers who voluntarily want to do so.
1.2. Adoption of the Argentine peso as a digital currency of obligatory legal tender for all transactions in the area of goods and services and unification of the exchange rate in a MULC based on a floating exchange rate of a basket of currencies in order to have traceability of each operation registered in the system, eliminating tax evasion and/or avoidance.
1.3. To establish a multi-currency regime with a currency swap agreement with all the countries of the world through fiduciary accounts with 100% reserve requirements (Simons Bank) for the circulation of transactions in the country and a penalty of 30% direct exit tax on foreign deposits. This implies that money laundering makes it possible to have savings coins for economic transactions without any impediment, but with registration and traceability subjecting purchases abroad through a SIRA in order to avoid alteration in the domestic market through exporter CUIT without intermediation using artificial intelligence for authorizations, but noting its progressive deregulation with the normalization of the process.
1.4. Arrangement of the BCRA monetary liabilities with an investment mechanism in the production of goods and services, infrastructure works with financial flow securitization to reorganize the financial system.
The execution of these measures with modifications of laws and decrees of the PEN implies an extraordinary impact on the increase in GDP, the drastic reduction of the formal and informal unemployment rate, the abrupt reduction of the interest rate, of the inflation rate, country risk and debt relative to GDP.
A GDP outside the formal circuit is estimated. Including it implies a high impact. Not allowing the circulation of multiple currencies and traceability with digital currency presumes the existence of a bi-monetary regime with high informality.
It is not possible to have a macroeconomic order without fiscal, monetary, and exchange rules with high labor informality and structural imbalances.
No one is willing to declare non-usable financial assets in the same currency, for which the use of the same for transactions constitutes a clear incentive.
No one can blindly trust the financial system, for which the perfect substitute for a safe deposit box is a 100% reserve deposit in an individual and collective trust account.
No country can embark on an adventure to renounce its monetary sovereignty without first verifying the change that the world of international transactions is undergoing.
Neither currency nor the use of crypto assets can be excluded.
It is a practical and simple design.
A person A can dispose of 1 M of unreported dollars. It includes it in the tax DDJJ. You deposit it into your bank trust account. Use for payments in the same currency. If you decide to promote a financial imposition, it must be framed in the BCRA regulation.
You can make a payment to person B for the purchase of a durable good. Person B pays person C in the same currency and is recorded.
But transactions in pesos are recorded in digital currency, in the same way as transactions in foreign currency.
No one can fail to observe that the world is heading towards a regime of digital transactions that tend to replace paper money. Nor can anyone ignore the fact that there is a rearrangement of the different currencies in the international monetary system.
And finally, no one can fail to analyze that the coexistence of a factual bi-monetary regime with high informality generates a constant tension between Gresham’s law and Thiers’ law.
The deterioration of the macroeconomic order in a bi-monetary regime is directly proportional to the external indebtedness that subtracts degrees of freedom in the model of accumulation in foreign currency and the imbalance in the productive structure by virtue of the demand for dollars to finance imports.
The only way to solve all the problems simultaneously is by applying all the measures comprehensively. With the balance of the current account balance is not enough. Nor with direct foreign investment.
The crisis is much more structural and denser. It’s a cultural problem and people solve it every day.
Governor of the province of Chaco
Source: Ambito
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