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Probably not unrelated: US report: Allies of El Salvador's president deemed corrupt (last month) https://apnews.com/article/latin-america-el-salvador-1d089ae377

• kragen 5y ago
  It wouldn't be surprising if the US government were to take actions against governments that were moving away from the dollar, whether as legal tender, as foreign reserves, or for other purposes like pricing oil, but it doesn't seem likely that the USG knew about this move a month in advance. Are you suggesting that the Salvadorean president is attempting to retaliate for the report by dedollarizing?
  • cperciva 5y ago
    Nothing to do with retaliation. They just want to protect their assets from being seized by the US government.
    • kragen 5y ago
      Hmm, are you suggesting that the US could overthrow their government, either by invasion as in Panama or by funding a terrorist campaign as in Nicaragua, and that Bitcoin would be more secure than suitcases of dollar bills against such actions? Surely not that the US would dramatically devalue its own currency in order to drain El Salvador's reserves? Or are you thinking that dollar-denominated reserves held in overseas banks would be easier for the US to seize, and Bitcoin avoids the need to hold the reserves overseas? It seems to me more likely that the figures in the article amply explain the move: > roughly 70% of people do not have bank accounts or credit cards. Remittances, or the money sent home by migrants, account for more than 20% of El Salvador's gross domestic product. Incumbent services can charge 10% or more in fees for those international transfers, which can sometimes take days to arrive and that sometimes require a physical pick-up. I mean, living in Latin America, I'm well aware that the US has a long history of invading and overthrowing Latin American governments, I'm just not sure how Bitcoin reserves would protect against that.
      • TimJRobinson 5y ago
        It's Sanctions. The USA can put sanctions on anyone as they've done with Russia, Iran, Venezuela. All banks that trade with the USA must comply, and those people/places are locked out of the global financial system. There's no effort of an invasion or coup involved. It's easy for the USA to do this to pressure people they don't like and that's why so many of these countries are moving away from USD.
        • kragen 5y ago
          Oh, I see. So reserves held in overseas banks might suddenly become inaccessible, even if not actually seized, and Bitcoin (unlike, say, the euro or yen) offers a way to reduce this risk?
          • ipaddr 5y ago
            If the currency is in a bank that deals with the US it could be seized. Bitcoin doesn't allow this.
            • acdha 5y ago
              Kind of: Bitcoin doesn’t allow transactions without knowing the key but that isn’t true for exchanges and the public ledger makes it easy to block transactions using that address. If everyone subject to US jurisdiction or treaty agreements blocks transactions traceable back to tainted addresses, the value plummets.
              • ipaddr 5y ago
                In this situation you would use an exchange in a friendly country.
                • acdha 5y ago
                  … which doesn’t do any business with any entity participating in that financial regulation system … whose customers either don’t intend to ever do so or have lowered their price to reflect those restrictions Again, note that I’m not saying it’s impossible to work around the edges of the system but it will have real costs which many people aren’t interested in dealing with or will want to be aggressively compensated for.
  • CyberDildonics 5y ago
    You realize that a lot of countries actually don't use dollars and use their own currency right?
    • csomar 5y ago
      They need access to a USD settlement network for imports/exports.
      • DangitBobby 5y ago
        How does BTC change that?
        • csomar 5y ago
          Very few people are willing to accept El Salvador Sovereign currency. Many people (and maybe countries) will accept BTC.
          • indymike 5y ago
            The national currency in El Salvador is the US Dollar. They retired out their own currency in the 2000s.
    • kragen 5y ago
      The article explains that El Salvador, like Ecuador, is fully dollarized at present. Here in Argentina only the real estate market is dollarized. However, not dollarizing your domestic economy doesn't mean you can hold your central bank's reserves in your own currency; not even the US can do that.
• 6foot4_82iq 5y ago
  America extorts other nations by virtue of the $US being the world's dominant reserve currency. The federal reserve can print money unimpeded, with foreigners bearing the brunt of inflation. The math is simple.
  • nly 5y ago
    Foreigners only bare the brunt of the inflation if they own USD denominated debt or other fixed income assets. Americans suffer if the dollar inflates because imports get more expensive and rates demanded on USD debt purchased by foreigners will go up, making the loans more expensive in America.
    • IG_Semmelweiss 5y ago
      >>>Foreigners only bare the brunt of the inflation if they own USD denominated debt or other fixed income assets If the local latin currency floats freely, there is nothing stopping foreigners from buying currency ans buying up real estate. The US exports inflation in droves.
    • samatman 5y ago
      Oh word? What currency does El Salvador use now? My hint: it's not called the peso.