What is your take on the stability of the Argentine peso????
If the 1:1 ratio Dollar/peso can survive the coming fire-sale offerings of the elections I would be surprised... I am now thinking that the "powers that be" will utilize this crisis (via the media), to stop the Fed from actually increasing interest rates... however, I do not know exactly who, these powers that be are... <g> (if you do, please let me know, I suspect, the "market bulls" and its advocates, have something to do with it).
I personally hope that they dollarize the Argentine economy... it would be a great start to impose a more strict discipline on the politicians, since, as I understand it, they would be limited in what they could do to continue with unsound fiscal policies.
The free market would take over, I assume, in the pricing of all assets, therefore, providing with an incentive for enterprises to become more efficient... It is true that without a formal trade agreement, local governments would still have the power to tax import/exports, or would come up with some scheme to penalize the successful enterprises... still a risk.
Informally, the entire Latin American region is a sub-state of the US, this step would (to a degree), begin to formalize a "trade agreement" region that eventually, and hopefully, include the entire American continent.
If Argentina takes this step, I believe other countries would follow, Brazil, Mexico, Chile, Venezuela... to name the main ones.
Looking to the future.... I think that a Latin American/US partnership would be more feasible as a currency block than the Euro, since the American region would be more homogeneous in its character than the European version.... at least there is only two languages to deal with..... (well, may be three... Italian... oops <g>, sorry French... those Quebecoise, and a few, uninhabited islands in the Caribbean !!!) <g>
Starting around this post (more or less), there is a discussion on Dollarization....
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