Posted on 03/17/2008 3:47:03 AM PDT by BGHater
Argentina and Brazil are to scrap bilateral commercial transactions in U.S. dollars and start using their own currencies from August, an official in charge of currency settlement at the Argentine Central Bank said here Saturday.
The new payment system is aimed at reducing costs in commercial transactions and would benefit small and medium-sized enterprises, the official said.
Under the new system, there will be a unified exchange rate between the real and peso, the so-called reference rate, which will be applied by Brazilian and Argentine central banks at the end of each day.
Brazilian President Luiz Inacio Lula da Silva reached an agreement to establish a new payment system with his Argentine counterpart Cristina Fernandez de Kirchner during his visit to Argentina in February.
Technical preparations are underway for the new system, which the two countries will adopt in several steps due to the large amount of bilateral trade.
Brazil is Argentina's largest trading partner, while Argentina is Brazil's second-biggest trading partner after the United States.
Bilateral trade stood at around 23.6 billion U.S. dollars last year
More than anything else, this will cause some fiscal conservatism on the U.S.Government. With the dollar way down against other currencies, and no longer a “reserve” currency, our imports will of necessity drop and our money supply will have to tighten up.
The successive US Congresses have utterly failed in their obligation to:
Art 1, Sec 8, Cl 5:
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures
The more you print, the less it’s worth...
Yup.
And while everybody is thinking about Wall Street and their own wallet, here’s the bottom line.
WORLDWIDE HYPERINFLATION.
Read between the lines. Get out of debt as soon as practically possible. Buy Macaroni and cheese.
I’m series here folks.
This is hugh.
(I’m just jokin. Tomorrow, gas gonna be $1.17 a gallon. And bread will be .89 a loaf)
Paying back debt with devalued dollars isn’t such a bad thing as long as you can come up with them. The losers are the ones who lent the money when it was worth more.
Don’t hold your breath.
>> More than anything else, this will cause some fiscal conservatism on the U.S.Government.
I can’t decide if you’re optimistic or gullible! :-)
But I hope (against hope) that you’re right.
Paying back debt with devalued dollars...
Kinda makes a mockery of the idea of a contract don’t it?
Who is the sucker?
Who is the thief?
Actually, people who are IN debt win in hyperinflation. They can pay pack with worthless paper, while those who have saved assets will have to go to work as Wal-Mart greeters.
I second that emotion.
It's been a long time since there has been any deflation in the US dollar. So both parties knew the contract would be paid back in devalued dollars. The only question was how large the devaluation would be.
>> Actually, people who are IN debt win in hyperinflation...those who have saved assets will have to go to work as Wal-Mart greeters.
Hmmm... would that be that so-called “moral hazard” that Paulson says they’re “aware of”?
“...we’re aware of the moral hazard, but so what?”, say Paulson and Bernanke. “Suffer and die, you financially responsible chump!”
Well, then, now you see the true crisis we are facing.
Who in their right minds will write a contract and get paid back with something that is worth less?
And such must ALWAYS happen in a system that is interest based. We were warned against usury a long, long time ago.
Or it will create opportunities for ever more power grabs on the part of our betters in D.C.
But I hope you are right.
Who says the dollar is con longer a reserve currency. Not only is it still a reserve currency, but it's a de facto currency in many places.
Gold and foreign currencies kept families alive. It did not make them rich.
Then who won? The great winners were farmers. They easily paid off their pre-War debts. Even before 1923, a farmer could pay off all of his debts by the money generated by the sale of a single egg.
What counted most in 1923 was your ability to keep your job. What made jobs desirable were products to sell that everyone wanted: basic foodstuffs, coal, and liquor. People in cities sold off their prized possessions and heirlooms in order to get food. The flow of grand pianos to German farmers never again reached such a rate.
There was almost no way to get rich in cities. There was no asset, other than stored food and coal, that could have made someone rich. But rich as measured in what? The greatest urban wealth was food and coal. Holders refused to sell.
Putting it in terms of a contract of sale--someone who believes that the value of the money they receive in the future (including interest) will be more than the present value of the product they sell.
That is changing rapidly.
How so?
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