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JerryBaumchen

South American Currency

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Hi folks,

This will be interesting to watch as it develops; if it develops:  Brazil president proposes South America currency, as he hosts summit to rebuild regional bloc | AP News

It seems to me that the Euro is doing quite well; what it was supposed to do.  Well, other than the UK.

Thoughts?

Jerry Baumchen

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1 hour ago, JerryBaumchen said:

Hi folks,

This will be interesting to watch as it develops; if it develops:  Brazil president proposes South America currency, as he hosts summit to rebuild regional bloc | AP News

It seems to me that the Euro is doing quite well; what it was supposed to do.  Well, other than the UK.

Thoughts?

Jerry Baumchen

I have no comment on whether this would be a good or bad thing, as I haven't thought much about it.

As someone who lives in SA, what I can say, is good luck with that. The organization that it would take to make that happen, is not something that exists even within countries, much less between countries. Also, there is a very serious mistrust of government overreach down here given the history of the region. Convincing the various populations that this would not somehow cause a government takeover of "everything" would be a difficult sell to say the least.

The mentality is something that is hard to grasp if you haven't spent a fair amount of time down here. 

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1 hour ago, okalb said:

As someone who lives in SA, what I can say, is good luck with that.

As someone who has lived there (albeit as a child), and who has a decent number of Brazilian relatives and friends, both US and Brazil-based, along with a decent number in Argentina, I concur.

Wendy P.

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5 hours ago, JerryBaumchen said:

Hi folks,

This will be interesting to watch as it develops; if it develops:  Brazil president proposes South America currency, as he hosts summit to rebuild regional bloc | AP News

It seems to me that the Euro is doing quite well; what it was supposed to do.  Well, other than the UK.

Thoughts?

Jerry Baumchen

I have Euro denominated real estate investments that are recovering from two years ago.

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President Luiz Inácio Lula da Silva is a bit of a nutjob but not as bad as the last president. Countries have their own currencies because they want their own monetary and fiscal policies. Yet not have their hands tied up by currency fluctuations linked to those policies caused by other governments.

i.e. if the US used the euro fed fiscal stimulus would not be possible. Interest savings because the US dollar is the de-facto reserve currency for the world would result in higher rates.

All S. American countries would have to agree to link the currency to another or basket of currencies. Which would limit borrowing and fix interest rates, more or less. With individual currencies countries can go the route of Argentina. i.e. American republicans!

Muammar Gaddafi and other Arab leaders also had similar ideas from time to time. The lowest common denominator of the currency, i.e. country, sort of sets the standard unless all sorts of borrowing limitations and currency controls are not brought in.
 
IMO never go anywhere.
 
 
 

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