Re: CHAT: San Marino

On Wed, 23 Aug 2000, Thomas R. Wier wrote:

>> Ecuador did exactly that. No more sucres; only dollars. Though I've
>> never gotten a clear answer as to what they'll do about dollar
>> fractions.
>
>No, what Ecuador did, and what Argentina and actually a goodly number
>of other countries have already done, is to use the US dollar as their reserve
>currency, in exactly the same way as the US used to use gold bars.  For every
This is not my understanding. I have read that they are actually using
dollars. From BusinessWeek Online "Although the U.S. dollar became
Ecuador's official currency on Apr. 1, most Ecuadorans are finding it
hard to make the transition. Of course, street-corner money changers
in Quito can tell a Washington from a Jackson. But Ecuador is largely
rural and poor, and its people have little exposure to international
currencies. A recent straw poll showed that only 19% of the population
had ever handled the green stuff,..."

In ither words, the ragdoll is the official currency of the Rep. of
Ecuador. If we have any ecuatorianos here; perhaps they can enlighten
us?

>Argentinian peso, there is exactly one US dollar in a vault somewhere.  They
>did this to "peg" their currency to the more stable US dollar, to avoid the
>recurrent fear of hyperinflation that they have experienced in the past.  To do
Indeed. A number of countries peg their currencies to ours.

>all this, they need not sign a treaty with the US; they need only declare that the
>currency will not freely float on the open market.  What I was referring to about
>Argentina, though, was that they literally wanted to abolish the Argentinian peso
>entirely, and use the US currency as the official currency.  In doing this, they would
>be effectively ceding a significant amount of sovereignty, because they would not
>be able to value their currency to the needs of their economy.  Greenspan told
>them if they did this, they should not expect him to adjust US monetary policy
>to help out their economy.
Right! Apparently, Ecuador felt that this is allright.

>So, that was what I was asking about San Marino.  I had assumed that since
>San Marino is so very small, that they didn't even bother to print their own
>currency, with "San Marino" printed on it and all, and then peg it to the Italian
>lira.  It seemed much easier for me to see them using Italian liras outright.
Right. Different situation; and I don't know the specifics. They do
mint their own coins, though who knows how much they circulate.
It'd be "easier" if everyone just used US dollars! ;) What about
national pride? Sovereignty issues? The fact that they've been
around some 1700 years?

>[BTW, is the Italian plural of "lira"  "lire"?]
Yes.

Padraic.

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>Tom Wier   |     "Cogito ergo sum, sed credo ergo ero."
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