Dollarization seems to be closer than close

[ERICKXSON]

Before Hippo leaves the office we will have the mighty Green Giant running all over the place in the Dominican Republic, this seems to be a done deal.

I HATE HIPPOLITO!!!!!!!!!!!!!!!!!!!!!

[NALs]

Here is what is good and bad about the Dollars become legal tender in Dominicana.

Good:
1. Dominicans will stop dreaming. Most of them think that if they only had dollars, things would be much better. That is true as long that the legal tender is Pesos, not Dollars.

2. American tourist will have one less thing to complain about when visiting the DR - the exchange rate.

3. I will allow for American companies to move into the DR much easier and help the local economy expand. Some people see it as an invasion of economy freedom but hey, much of the stuff in Dominican economy originates in the hands of Americans anyways, and making the dollar legal would just facilitate the cicle's rithims.

4. Interest rates might or will collapse from the mind boggling levels they are today to more "humane" levels. That would make lending much easier, especially for dominicans with entrepreneural spirit but no capital to start. Notice I said easier to lend, not necessarily that Dominicans will pay back what ever loan they borrow - I got family members that borrow borrow borrow and they never have money to pay people back. However, somehow they got money to go to Santo Domingo from NYC for months at a time, go figure!!!

BAD:
1. Interest rates will collapse. No more getting rich off your interest deal anymore.

2. Heavy unemployment once most Dominicans working in Free-Zones realize the cents they are being paid in. It's one thing to see your paycheck in worthless pesos with numbers in the hundreds, its another thing to be paid in centavos. The feeling of worthlessness prevails, people demand more pay, and the factories will cross over the mountains into economic disaster Haiti. (That's good news for Haitians though, they don't have to put up with cutting Sugar Cane in the DR)

3. Everything will go up in price. Everything will match american prices.

4. The sense of being in a foreign country will be gone. At least every time you pull your wallet and you see Benjamins, Washingtons, and Lincolns while in a colmado in Jarabacoa, a department store in Santo Domingo, or simply paying the "Limpia Botas" kids a few dollars. Man, even that sounds expensive, a few dollars to a swiggy kid, I like to say a few pesos. Oh yeah, and one more legacy of the hispanic heritage evident in this country. Pesos are (or can be said to be) direct descendants of the Spanish Pesetas - thus the most hispanizes latin countries have pesos as their currency.

I do wonder something. Will dominicans get used to saying Dollars or Dolares. I mean, dominicans that live in the US refer to the Dollars as pesos also. I wonder?

Anybody have anyother ideas of the pros and cons this dolarization could mean for this Paradise?

[gringo in dr]

This country does not have the capital to switch to the dollar. Pesos will be here for a long time to come.

[mondongo]

Dollarization is fools' gold. It has ZERO basis for optimism. It is nothing more than a placebo. Forget it, people. You're better off still believing that the Earth is the center of the solar system.

The only predictable outcome of Dollarization is that Mejia (or whoever is the next president) will be able to borrow even more money. Is that what you want?

[Escott]

Originally posted by mondongo
Dollarization is fools' gold. It has ZERO basis for optimism. It is nothing more than a placebo. Forget it, people. You're better off still believing that the Earth is the center of the solar system.

The only predictable outcome of Dollarization is that Mejia (or whoever is the next president) will be able to borrow even more money. Is that what you want?

Why will he/they be able to borrow more money? What are you using for a reference for this or just out of the thin air? **** ass credit rating cant borrow money in dollars, pesos, or freakin green stamps.

It aint happening because they do NOT have the reserves so it isn't a possibility.

[mondongo]

This is what Ecuador and the IMF agreed to when they Dollarized..



VIII. FINANCING OF THE PROGRAM


44. Taking account of already committed net external financing, the need to clear official external payments arrears, the need for additional reserves to build up the bank liquidity support facility, there could be an external financing gap of about US$1.5 billion (13.7 percent of GDP) in 2000. To meet this gap, the government is to seek exceptional financial support, from the official international community and an orderly resolution with private external creditors to achieve a more sustainable debt and debt service position.

45. Projected new lending from multilateral institutions includes an additional program of US$600 million over the next 12 months from the World Bank, the IDB, and the Andean Development Corporation (CAF) to support bank recapitalization and improvements in the bank supervisory and regulatory structure, or other quick-disbursing assistance.



This is the lengthy link:

http://www.imf.org/external/NP/LOI/2...u/01/INDEX.HTM

[Conchman]

Politicians will never allow dollarization to happen. It takes away their tools to steal from the public. Takes away their means to print money for the debts they make. They will never allow it to happen.

[Camachosoft]

So.... what is best????

1.- Dollarization

or

2.- 100 pesos for 1 dolar in the next two or tree years???

The good or the bad things of dollarization depend on HOW THE LOCAL GOVERMENT IS.

[santobonao]

camachosoft,
if they come the dollarization to dr its can be more worst and the country will go down just like ecuador. or its can be better.

maybe dollarization will be good to dr or worst.

[adrianb]

santobonao, whats your point?

The world might end, and it might not, too.