Unions are meeting to discuss their response to an adjustment plan whose burden, they warn, will fall on the working class: ‘A total social tsunami is coming’
TBF there’s a reason for the devaluation. In countries like Argentina the government sets the price of the dollar, but that doesn’t affect the real price, so in the end the government pays the difference. In the case of Argentina the government basically made the dollar half its real value, so say for every 100 dollars an Argentinian bought the government needed to pay 50.
It’s a bad situation all around and there are no good solutions, but just leaving it be is unsustainable.
Well, could always spend some of the money wasted on exchange rate manipulation on food subsidies instead. But I think just making the transition more gradual would be my bet
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TBF there’s a reason for the devaluation. In countries like Argentina the government sets the price of the dollar, but that doesn’t affect the real price, so in the end the government pays the difference. In the case of Argentina the government basically made the dollar half its real value, so say for every 100 dollars an Argentinian bought the government needed to pay 50.
It’s a bad situation all around and there are no good solutions, but just leaving it be is unsustainable.
Having the currency be free-floating is the best policy. The transition might be a bit too rapid, though
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Yeah. That’s the challenge in situations like these: How do you get to a free-floating currency without the people starving to death.
Well, could always spend some of the money wasted on exchange rate manipulation on food subsidies instead. But I think just making the transition more gradual would be my bet