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To: BfloGuy; Uncle Slayton

Ecuador still uses the US dollar; no mas Sucres(?).


38 posted on 05/20/2012 5:44:24 PM PDT by kearnyirish2
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To: kearnyirish2
Ecuador still uses the US dollar; no mas Sucres(?).

They do so at their peril. Traditionally, countries with a history of currency debasement would peg to the dollar. But, as Argentina learned the hard way, when the dollar soared in the late nineties due to Greenspan's inflation-caused stock bubble, Argentinian raw materials became uncompetitive and the economy tanked.

At the moment, Ecuador (which also depends on exports of raw materials) is probably doing alright because a dropping dollar is making its products attractive. But a Republican presidential victory coupled with a Euro collapse could drive the dollar high enough to make them regret their decision.

These small countries should forget the politically-driven American dollar and go on a gold standard.

46 posted on 05/21/2012 3:16:29 PM PDT by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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