Taps Coogan – November 20th, 2023
Enjoy The Sounding Line? Click here to subscribe for free.
Steve Hanke, professor of applied economics at Johns Hopkins University and expert on emerging market inflation, recently spoke with CNBC in light of Javier Milei’s victory in Argentina. Specifically, he discusses Milei’s goal of ‘dollarizing’ Argentina: replacing the Peso with the US Dollar and eliminating the nation’s central bank to combat decades of runaway inflation which currently clocks in at 140%. Steve Hanke was formally involved in dollarizations of Montenegro (since replaced by the Euro) and Ecuador and claims to be an informal advisor to Milei.
“The key problem in Argentina since 1876 has been the peso. One currency crisis after another, one recession after another, defaults on debt – one right after another. They’ve had three defaults on sovereign debt since the year 2000 and the current inflation rate, I just measured it today, is 220% (this is Steve Hanke’s calculation not the official CPI)…”
“Milei has the right idea. You’ve got to dollarize and many of these arguments against dollarization are absolute rubbish. The idea that somehow they don’t have enough dollars to dollarize is ridiculous. There is $265 billion worth of greenback notes stashed away in Argentina. That’s right behind the US…”
There is more to the interview so enjoy it above.