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I find it interesting that countries give up on their own currently, with all the power it brings, to use an external currency. I guess the dollar is the best

I find it interesting that countries give up on their own currently, with all the power it brings, to use an external currency. I guess the dollar is the best option as it’s easier to adopt than gold or whatever. Perhaps the euro, but I guess the dollar is more widely used. And the dollar is less manipulated than the Yuan. I guess the efficiency of not having to run a mint and the giving up on local corruptions and manipulations is a worse harm than being helpless against dollar inflation or whatever.

the_mitsuhiko 3y ago
> I find it interesting that countries give up on their own currently, with all the power it brings, to use an external currency. I think the financial reality of many economies limits the usefulness of what you can do with currencies. Just because you have your own currency does not mean you can maintain it without a peg and that peg comes with a cost. And then there is the political will. The British Pound for instance should have allowed the UK to fare much better than the Euro-Zone during the energy crisis, but it really did not.
grotorea 3y ago
Argentina has been having trouble with its currency for a while now. Also, I question how much power it really gives in this case. Usage of USD is already large, and the government can't really control foreign exchange already.
threeseed 3y ago
Usually the governments don't have a choice. The people simply decide not to use the local currency. And people generally care far more about stability, ease of movement and reasonably stable inflation over some control which they never experience directly. And since this ends up being a parallel grey market that is outside the taxation and financial control systems it's better not to fight.
zirgs 3y ago
If your currency regularly hyperinflates then living with dollar inflation is a huge improvement.

the_mitsuhiko 3y ago

> I find it interesting that countries give up on their own currently, with all the power it brings, to use an external currency. I think the financial reality of many economies limits the usefulness of what you can do with currencies. Just because you have your own currency does not mean you can maintain it without a peg and that peg comes with a cost. And then there is the political will. The British Pound for instance should have allowed the UK to fare much better than the Euro-Zone during the energy crisis, but it really did not.

grotorea 3y ago

Argentina has been having trouble with its currency for a while now. Also, I question how much power it really gives in this case. Usage of USD is already large, and the government can't really control foreign exchange already.

threeseed 3y ago

Usually the governments don't have a choice. The people simply decide not to use the local currency. And people generally care far more about stability, ease of movement and reasonably stable inflation over some control which they never experience directly. And since this ends up being a parallel grey market that is outside the taxation and financial control systems it's better not to fight.

zirgs 3y ago

If your currency regularly hyperinflates then living with dollar inflation is a huge improvement.