3 ms·

"currency you don't control, do you consider Ecuador a colony? They have debt in the sucre, which is pegged to the dollar. Is most of Europe a colony of Brussel

"currency you don't control, do you consider Ecuador a colony? They have debt in the sucre, which is pegged to the dollar. Is most of Europe a colony of Brussels?" You can make a powerful case that they are. A country that doesn't control its money doesn't control its economic policy. Is there anything more important than the economy for a country? A fair economic area need, first, a monetary and fiscal common policy, and, second, a policy choose in the interest of all the citizens in the area. The Euroarea only have a monetary common policy and I'm not the only one that think that is not run in the interest of all the Europeans. I can't talk about Ecuador, but historically, fixed exchange rates, as any fixed structure don't survive even small "earthquakes". It's even worse if it's not an fixed exchange rate, but a foreign currency. In the case of Ecuador, you can be sure that, at some point in the future, the economic policy run from Washington will be the opposite of what the country needs.

jimmywanger 9y ago
I think you're over simplifying a bit. > A country that doesn't control its money doesn't control its economic policy. Is there anything more important than the economy for a country? http://www.coha.org/examining-the-effects-of-dollarization-on-ecuador/ http://www.coha.org/examining-the-effects-of-dollarization-o... The point of the article is that the economy of Ecuador was so bad dollarization caused capital flight to stop, stabilizing the economy. I'm not an economist, but maybe the short term benefits outweighed the long term restrictions. But it did impose some amount of financial discipline on them that they never exhibited before, and would probably boost the confidence of foreign investors that they could invest and still get money out. As a counterpoint, Venezuela is not a colony, but their economy is in a shambles, they can't feed their own citizens, but they have ultimate monetary control and can do whatever they want to their economy. That's what got them in this mess in the first place. Some thing as PRK and Cuba.

jimmywanger 9y ago

I think you're over simplifying a bit. > A country that doesn't control its money doesn't control its economic policy. Is there anything more important than the economy for a country? http://www.coha.org/examining-the-effects-of-dollarization-on-ecuador/ http://www.coha.org/examining-the-effects-of-dollarization-o... The point of the article is that the economy of Ecuador was so bad dollarization caused capital flight to stop, stabilizing the economy. I'm not an economist, but maybe the short term benefits outweighed the long term restrictions. But it did impose some amount of financial discipline on them that they never exhibited before, and would probably boost the confidence of foreign investors that they could invest and still get money out. As a counterpoint, Venezuela is not a colony, but their economy is in a shambles, they can't feed their own citizens, but they have ultimate monetary control and can do whatever they want to their economy. That's what got them in this mess in the first place. Some thing as PRK and Cuba.