Could new currency be in the pipeline for South America?
The New American reports that leaders gathering for the Bolivarian Alliance for the Peoples of Our Americas, or ALBA, conference agreed to create a new currency for the region.
The flat money will be used instead of American Federal Reserve Notes and called the "sucre" to honor Jose Antonio de Sucre.
The BBC also has a story on their Latin American pages.
The ALBA conference in Cochababa, Bolivia, is the seventh meeting.
Will this be an effective attack on the U.S. dollar?
Source and Photo: The New American
Alison asked :
ReplyDeleteWill this be an effective attack on the U.S. dollar?
No, this will be 100% ineffective, because the economies to enter this project are sheer Populism and Demagoguery. And they are all very poor, including Venezuela.
Venezuela is a "Santa Claus" economy, "The three kings of the orient" economy, or a "Child Jesus" economy, where the chavistas and redshirts are given a lot of money and things for being chavistas.
The heroes of Chavez are Fidel Castro and Colonel Ghadaffi of Lybia, recently condecorated by Chavez.
The billions of dollars of oil revenues are squandered in useless chavista ( corrupt ) projects.
It is a "free lunch" economy to buy the lowest and poorest classes.
This type of Economy produces the most scary scarcity and shortages of foods. So Meat, Beans, Milk, Rice, etc ... may be impossible to get and have to be imported, and you have to go to the black Market, where the chavista profiteers sell what they have grabbed from Papa Noel.
These foodstuffs are imported from countries that have no oil, but where people are hard working and organized in a Free Market Economy, and where private property is respected, so farmers have private initiative and incentive.
Venezuela is Oil Rich, perhaps richer than Saudi Arabia, and Chavez has squandered ten Marshall Plants.
Chavez hates free market economics and he tries to control all prices.
He constantly closes TV Stations, Radio Stations, Newspapers that don't follow his line.
And he showers millions of dollars on the Media that is his Megaphone.
The other Chavista Nations ( his client countries ) try to follow these stupid guidelines.
Prophesizing.com
Vicente Duque
from Clermont:
ReplyDeleteTo summarise the previous blog comment (and I agree the basic message) the reason the Sucre would not help displace the US$ is that the combined economic power of the ALBA nations is de minimus. To put it allegorically, could 4 flies and 1 queen bee displace a car tire? Additionally, their combined political influence is insufficient. As an example, for Venezuela to be able to forge any "meaningful" ties Ego Chavez is relegated to do so with mostly rogue autocracies. And the last thought is, will they ever really implement the Sucre? As is said in Spanish, entre el dicho y el hecho hay mucho trecho. This could also be another PR scheme by los 3 Chiflados - Ego, Correa y Morales.