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In his blog “Por la libre” published in [url=http://www.elfinancierocr.com/blogs/por_la_libre/solucion-sigue-dolarizar_7_227447256.html]Elfinancierocr.com[/url], Juan Carlos Hidalgo reviews the alternatives for monetary policy in Costa Rica and concludes that the only healthy and permanent solution is to dollarize the economy.
PS. Non-Spanish speakers: Don’t forget, you can always copy and paste the Spanish article into [url=http://translate.google.com/]Google Translate here[/url] to get a pretty good English version…
I would have thought the last thing Costa Rica needs is to tie itself to a rapidly depreciating currency.
[b]What do you think? [/b]
Scott
Darn right, Scott! People are moving money out of the US for safety. Dollarizing sounds like a terrible idea for CR.
I’m certainly not knowledgeable about things monetary, but Paul Krugman of Princeton and the New York Times (a Nobel Prize winner in economics, by the way) has written that a significant obstacle to Greece’s economic recovery has to do with the fact that their government cannot devalue the currency they are tied to since they have adopted the Euro.
Were they using the drachma, they would have more control over their internal economic climate.
It seems that Costa Rica is or could be in the same boat.
Or maybe I’m wrong . . .
I agree that keeping the Colon gives more control to the CR government in the short term. But in the long run, all fiat currencies are tied to the central banking system and a currency war is coming soon to be followed by a collapse of the dollar.
The problem is that you have about 1.14 quadrilian dollars of OTC derivatives floating in the markets, that are really only worth about 9 cents on the dollar.
The only country that fared well was Iceland when it all began to blow up…because they bailed out the people and put the bankers in jail.
The rest of the world bails out the bankers.
[quote=”jds6958″]The problem is that you have about 1.14 quadrilian dollars of OTC derivatives floating in the markets, that are really only worth about 9 cents on the dollar.
The only country that fared well was Iceland when it all began to blow up…because they bailed out the people and put the bankers in jail.
The rest of the world bails out the bankers.
[/quote]
never knew that information thank you.
FYI
http://www.disinfo.com/2012/07/iceland-jails-bankers-erases-citizens-debt-recovers-strongly/
This is a fascinating subject for me, so much that my family thinks I’m nuts. But thanks to the op for bringing it up.
Should C.R. Dollarize? No! It should begin by giving their citizens the opportunity to buy silver in the form of Mexican Libertades as proposed by Hugo Salinas Price, one of my heroes.Who owns the Costa Rican central bank? Costa Ricans, or foreigners? I remember when the exchange rate was 6.65 Colones per Dollar back in 1958. I remember when our coins were made of 90% silver. Now they are absolute crap, tokens! I buy the metals in anticipation of the coming Dollar devaluation. So should you.
[quote=”johnnyh”]This is a fascinating subject for me, so much that my family thinks I’m nuts. But thanks to the op for bringing it up.
Should C.R. Dollarize? No! It should begin by giving their citizens the opportunity to buy silver in the form of Mexican Libertades as proposed by Hugo Salinas Price, one of my heroes.Who owns the Costa Rican central bank? Costa Ricans, or foreigners? I remember when the exchange rate was 6.65 Colones per Dollar back in 1958. I remember when our coins were made of 90% silver. Now they are absolute crap, tokens! I buy the metals in anticipation of the coming Dollar devaluation. So should you.
[/quote]You and I are on the same page but this will not happen. For the time being, central banks run the entire circus and the ponzi scheme of fiat paper they create will have to run its course (right into the ground)
It is up to individuals to do what they can to save themselves from the absolute destitution that the coming crash will bring to all who rely strictly on paper.
[quote=”johnnyh”]This is a fascinating subject for me, so much that my family thinks I’m nuts. But thanks to the op for bringing it up.
Should C.R. Dollarize? No! It should begin by giving their citizens the opportunity to buy silver in the form of Mexican Libertades as proposed by Hugo Salinas Price, one of my heroes.Who owns the Costa Rican central bank? Costa Ricans, or foreigners? I remember when the exchange rate was 6.65 Colones per Dollar back in 1958. I remember when our coins were made of 90% silver. Now they are absolute crap, tokens! I buy the metals in anticipation of the coming Dollar devaluation. So should you.
[/quote]Just this last week Germany is making arrangments to recapture the gold stored in Ft. Knox and underground in NYC.
http://www.businessinsider.com/germany-wants-its-gold-back-2012-10
Interesting timinig on that move, another article I read this morning suggests that Germany should be just about lined up to move out of the Euro, which will undoubtley cause the Euro to crash. Once the Euro starts the freefall, the USD is not far behind, the fiat currency run is over. The only solution is to go back to an international commodity such as gold and silver. Buy all the metal you can!! Silver is poised for a run here in the next few months, should be interesting.
I wonder where Germany’s gold is.It certainly is not where they thought it was or it would not take 7 years for the US to make delivery of only 10% of the total. The FED is probably scrambling to find some replacement gold for Germany…this perhaps explains why the US is preparing to invade Mali, a tiny, defenseless African nation which has more gold in the ground than many other African countries.
I don’t see any point in worrying about which currency Costa Rica uses. It is all paper crap and in light of the above, it should be evident to even a 5 year old what is happening.
[quote=”sprite”]I wonder where Germany’s gold is.It certainly is not where they thought it was or it would not take 7 years for the US to make delivery of only 10% of the total. The FED is probably scrambling to find some replacement gold for Germany…this perhaps explains why the US is preparing to invade Mali, a tiny, defenseless African nation which has more gold in the ground than many other African countries.
I don’t see any point in worrying about which currency Costa Rica uses. It is all paper crap and in light of the above, it should be evident to even a 5 year old what is happening.[/quote]
Sprite….your optimistic view is shining through….just kidding my friend. To boot, the Fed has refused to do an audit of the US gold holdings. I am sure that they have printed trillions to offset the gold they are holding for Germany, thats gubment logic.
If anyone has any pull with Costa Rica, tell them stay away from the dollar!!
Either they aren’t “holding” enough gold or they aren’t willing to give it up because they know what is coming. All the big players are grabbing gold and silver in a quickening pace. Google any kind of search you want and you will find reports to back this up.
Possession is nine tenths of the law, as they say. And this truth holds all the way down the line to you and to me. If you do not have your wealth in your physical possession, you do not have it. Your paper and digital wealth in a bank account belongs to the bank in every legal and practical sense. The day will come when this will be proved to everyone with a bank account, It has happened many, many times already throughout history.
[quote=”sprite”]Either they aren’t “holding” enough gold or they aren’t willing to give it up because they know what is coming. All the big players are grabbing gold and silver in a quickening pace. Google any kind of search you want and you will find reports to back this up.
Possession is nine tenths of the law, as they say. And this truth holds all the way down the line to you and to me. If you do not have your wealth in your physical possession, you do not have it. Your paper and digital wealth in a bank account belongs to the bank in every legal and practical sense. The day will come when this will be proved to everyone with a bank account, It has happened many, many times already throughout history.
[/quote]@ Scott, do you know if the Colon is tied to any sort of backing, i.e. based on metal? Or is it a fiat currency?
Unfortunatley there are a whole bunch of currencies ties to the USD. I fear for those countries when the USD decides to drop. There is a lot of talk running right now about converting in Hong Kong Dollar, not so easy to do. They have pretty strict requirements to open a bank account.
[quote=”sprite”] The day will come when this will be proved to everyone with a bank account, It has happened many, many times already throughout history.
[/quote]sprite, please cite (say) the most recent five of the “. . . many, many times throughout history.” that this has occurred. Nah! tell us ten.
Specific dates and places, please.
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