Brazil and Argentina - A Common Currency?
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- Опубліковано 30 вер 2024
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Brazil and Argentina announced last week that they are starting preparatory work on a common currency, in a move which could eventually create the world’s second-largest currency bloc. Does this move make any sense?
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Sturzenegger, that is a proper rapper name. Take notes, Patrick.
Maybe the Daily Upside could do with some Financial advise. If its totally free and they are paying you to advertise for them, then that sounds like a quick way to go out of business. Ah, I get it, they're probably selling the user data, but thats not exactly what I would call "totally" free IMO.
Or sell advertising…
Daily Upside actually turned out to be a great fit for me. I'm fairly lay but it's a great little newsletter to see what's going on in finance. Good recommend.
He Patrick, could you make an update video on the state of the russian economy?
Two stalwarts of fiscal responsibility, Brasil and Argentina.
😂😂😂
Clearly they’ve never heard the saying “two wrongs don’t make a right”
Add left wing populism to the toxic mix.
Daniel, your wit is as dry as Patrick's.
@@christofergeriel5168 Well, the current iteration of the Real startet in 1994 at $1 and is now at $0.2. The Euro startet in 1999 at $1.17 and is now at $1.08.
Argentina has since its founding defaulted on it's debt nine times. No thank you to have a common currency with them!
Watch retards in Mexico support them...
Just what I was thinking.
and it was once the richest country in the world, with mountains full of silver (hence the name Argentina). They managed to blow it all in Tango Bars.
They're still resource rich which is the idea behind pegging it against those resources.
@Richard Jackman
"interested to hear what Mr. PB thinks"
Did you watch the entire video?
I laughed at the Pele/Maradona line but then thought that could actually happen
Same! 😂 … but went from laugh to hm 🤔 to serious lol
You could have a hologram so as you move it changes between them. Or, you know, put one on each side.
@@himoffthequakeroatbox4320 but which side? Who goes on the back, who goes on the front? The real questions
@@abcdefvxyz4324i can imagine a local headline that goes “brawl in local bar - patron pays with Pele, bartender insists on Maradona”
@@abcdefvxyz4324 There won't be a backside, they will be both a frontside!
Speaking as a Brazilian who grew up close to the border with Argentina, this would probably be a godsend to border regions but I am very skeptical when it comes to the macroeconomic effects.
On a regional level, my region would probably see a massive increase in economic activities, especially when considering consumer goods, which are substantially cheaper in Argentina, but honestly, I don't know if that's a good cost-benefit when considering the risks inherent to it.
This does nothing for trade in the region, Argentina and Brazil both have some of the highest import fees in the South America. Consumer goods from other countries are not going to get to Argentina or Brazil.
I think that both countries should review their tax system, especially Brazil. They want to increase trade but still hold high taxes on consumer goods.
Thanks for the insight and sharing...
To add- this is a great step forward into the future of monetary & economic control.
Taking it out of the hands of our current system - is a must.
If governments and country leaders truly care for their people, especially the generations to come - something like this - needs to happen.
Much of your consumer goods from Asia come through Paraguay bro.
Another delusional fool that voted for the mafia thief.
I live in Argentina. Brazil joining their currency with Argentina is probably the most absurd idea they've ever had
It might sound rude but how does it feel and what happens in day to day live when inflation gets this high and your country defaults?
I've watched a few videos but they were mostly from outsiders telling their story, not really what happens to normal people that can't just leave the country.
I'm from Europe and it might get somewhat important in the next few years/decades as we age faster and faster with no problem solved since 2008.
@@xman7695 this will sound kinda funny and sad but i'm using to prices going up all the time ever since I remember. I'm from Venezuela and what's happening with Argentina is very reminiscing of what happened there.
You either get paid in USD working remotely and live very comfortably, or get a job in an industry/company that adjusts salaries according to inflation every few months or you're pretty much broke.
The sad reality is that the Brazilian economy has only ever worked when it was paired with the argentinian one, even as early as the 1600s
If Argentina had not blown its chance for the first world Brazil wouldn't be as poor as its today
I am from Brazil that what happen to your country when you elect a socialist grifter.
No es tan ridículo, peor no croe que suceda porque no tendrá una buena imagen pública en Brazil
Alejarse del real que es muy estable para unirse con el peso que es un desastre w
I like the idea of sharing a currency across sovereign nations because it forces them to be fiscally responsible. But starting a currency that is shared exclusively among countries that are the most fiscally irresponsible is pretty suicidal 😂
Within 3 weeks, they would be pressuring the central bank of their new currency to print massive amounts of money, and then either go back to square 1 or blame every economic problem they have on the neighbour and the new currency
It doesn't though. It just means that if they're not responsible the consequences will be worse and wider reaching.
Let's modify that statement into "But starting a currency that is *amongst others shared by even one irresponsible party* is suicidal".
It is suicidal to use monetary policy to put pressure to other nations to be fiscally responsible. You will upset one nation against the other.
Brazil has many constitutional clauses to stay fiscally responsible tho, despite the best efforts of our politicians
As a Paraguayan, who lives right next to these two financial disasters. I doubt any other South American country would agree to this.
You think Brazil is a financial disaster?
@@Heliojr1 this comment hurt you ? hurt me too.
What if Mexico agrees, would that attract a lot of south American countries?
If they pull it off Paraguay will have to join. Look at their international partners trade balance sheet. If China decides to push for a switch as well, you guys can start using the dollar for some decorations or something. If it was actually pretty.
Nice, as a state of Brasil, you wouldn't have to agree, it would be mandate. Remember mi hermano, your economy is highly dependent of Brasil, and when I say highly, I mean totally.
"Okay hear me out bro, let's create a club of economically unstable, export orientef countries and tie all of our currencies togeth- no, fuck it, ONE CURRENCY. And let's just see what happens? Please bro it'll work I promise."
Love your videos, just wanted to point out, there is free movement of labor from Argentina and Brazil, both are part of Mercosul, it's not as easy as in Europe, there is a visa that you need to apply for if you intend to live on the other country, but the process is very simple, it's very minimal bureaucracy specially for Brazilian standards, and it's very very hard to be denied a visa
Yes, there is a free movement of labor, but not capital...
@Dennis Patrick's point was that it was a way to gain financial independence from the US.
If you need a visa, that is not free movement.
@dennis1769 Left wing governments supporting political integration is pretty common historically speaking, at least when it comes to integration between global south nations (they tend to be very AGAINST integration when that means a rich country conquering or using imperialist measures). Examples of this include the Pan-African movements, Pan-Arabism, Mercosur, and arguably even the USSR. The typical logic is something along these lines:
1) Nationalism is a tool against imperialism and civic nationalism is better than ethnonationalism for this. Therefore constructing the most inclusive practical nationalist movements leads to the largest anti-imperialist coalitions.
2) Dependence on trade with the West is leads to neo-imperialist domination by Western companies, the more resources and labor developing nations have, the less they have to depend on western trade.
3) Practicing cross-border solidarity is infectious, if you prove it can work in one place you prove it can work elsewhere. In the very long run, humans will recognize we don't need systems of competing states to run a good society and we can get rid of those thus finally eliminating war.
Now that last part isn't something anyone anticipates being achievable within our lifetimes but moving towards in gradual steps that enable encountering and finding solutions for the inevitable challenges.
All of this is a political project of course and the hurdles to them are political questions. As the video notes, none of the economic challenges are impossible to overcome, but it does take dedicated political will over long periods of time to do so. The problem is that only the Latin American left is interested in this project. The right generally prefers the divided states, often because they have definite power bases that enables their continued power in Latin America even after losing elections. But those bases are in their countries as they currently exist and those power bases may not continue existing in a radically different landscape. So, since Latin America tends to go through cycles of right then left dominance in politics, a necessary though by itself insufficient step for this to work would be long term electoral dominance of both Brazil and Argentina's left wing parties. Which is a highly uncertain bet.
@@dddz961 tbh the visa is only if you are intending to move to the place, but we can travel around with just the driver's license, even for work related issues, and it would be easier for me to go move to Argentina than to buy a house here in Brazil for example, it's just that everything in Latin America is very burocratic
Another informative and entertaining video by Patrick Boyle. "Just like Europe, except everyone is Greece" 😂
Common currency in volatile developing economies will be very difficult to implement and maintain. Even in modern Europe, the Euro experiment has been under extreme pressure, with Greece and Italy etal. feeling the squeeze.
Greece is feeling a self-inflicted squeeze that honesty, transparency and competent government could have prevented, so I'd say they are more victim of a whole loads of craps than "the euro", and would have crumbled just as spectacularly using another currency. Italy feels like it has some of the same issues. What about France or Austria, who care more about proper management, but are not as productive or wealthy as Germany ? Do they suffer more than with an isolated currency ? As a French, I feel it helps us stay in line a little bit and not just do whatever and follow Italy down the rabbit's hole of populist debt emission. We have to ask permission to the Germans, and they don't like funny business.
It’s not because of the euro only.
all currency fails for the same reason every single time
italy does not have a problem because of euro, it is because of cheep labor from easteren europe. when they develope more italy will regain competativnes...
greece would have worse inflation than turkie today without €...
@@ypierro you clearly commented before finishing to view the video. The issue in Europe is that without fiscal union, the large transfers that in the US would happen through the federal government, don’t happen automatically in Europe.
This creates unnecessary tension since the transfers become a bargaining chip that gets quickly politicized.
Hi Patrick! Congrats from Brazil. A couple of observations. Brazil gross government debt (at 73,5% of GDP) could be considered high for a developing country. However, it is relatively low in foreign currency (17% of GDP ,in gross values). The net value, discounting FX reserves is negligeable. Consequently, Brazil does not face an FX crisis even when it undergoes an economic slowdown, like Argentina.
More important to have low unemployment, countries should be in debt in their own fx to secure employment and infrastructure for their population.
I'm not surprised that Argentina's president wants this currency. I'm shocked that Brazilian authorities are still taking about this. btw mercosul has an excellent free labor movement, the visa obstacle are relatively low.
It’s just a common talking point among left wing politicians, who sees the gringo us dollars as the sole reason they have an horrendous economy
@@elios2296 I hope this connection go beyond south america borders. I would love to see Brazil authorities more engaged with left wing politians like Olaf Scholz and Macron to make EU-Mercosul agreement happen.
This channel is very quickly becoming on of my favorite on UA-cam!
Myself as well
Pretty good! Well written, no biases and funny as always!
Never thought I'd see my East Caribbean dollar mentioned in one of your videos 😃
St. Lucia 🇱🇨🇱🇨🇱🇨 here, I am surprised too
@@savagepro9060 Vincy. Hello neighbor 🇻🇨
@@MizzRiverP Hey, I know you all eh speaking creole, buh "Sa Ka Fet?" What's Up!
@@MizzRiverP Yeah when I saw the EC Dollar, I was like . . . WOW! The Eastern Caribbean had perfected something FEW regions have ever done! Boom! They can ask us for guidance if they're they can swallow their pride!🤣
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Dude picks coffee every morning and is a patreon. A true hero.
Got your books 📚 on finance they are great. Thank you for your contribution.
I'm sure the CIA will be down there straightening that out fo rthem
"The hug between those about to drown"
Should be the video thumbnail!
I am not sure if this would be good for Brazil, Argentina does have a rather bad track record.
i live in brazil, this is being treated as a joke internally and a ton of folks sees it as financial suicide despite both countries not losing their own coin.
Simply put, this idea is similar to a relative witha bad credit score asking another to "lending" his credit score.
THe main problem is Argetina not having easy access to USD. This limits even trade with Brazil, as Argentina heavily taxes Brazilan surpluses on trade.
Argentina has easy access to the USD.....problem is the government STEALS it, so no one wants to bring a USD to Argentina.........getting paid $160 to later have to rebuy it for $400 is not a good deal in anyone's sane mind.
Taxes here in arg are absurd. The entire economy works on black market dollars, they just need to scrap the peso in its entirety and figure out a better way to obtain USD as a country.
thats is not possible even in 100 years. Argentinians goverment is a spendig machine, they love priting money, and with a common currency thats not possible, they are not going to resign printing and spending money-
Patrick is usually very sharp with his analysis but this time I'm afraid he really missed his mark as we all know that Johan Cruijff would be on the bill with the highest value...
Care to elaborate?
@@walden6272 I can just feel the loaded gun behind this comment
Buddy do you wanna cause a riot?
Cruijff will be added when the Netherlands transfer their Capital to Paramaribo and join Mercosul.
I always feel a little bit smarter after watching Patrick thanks mate
The issue is people use the dollar because it is freely traded and stable relative to other currency. Countries keep trying to replace the dollar. You will only lose trying to replace the dollar as currency works that way. The way to “replace” the dollar is to build up your own country and economy. But that would make the leadership lose power so never happens.
...and requires decades of hard work, too!
People use the dollar mainly because of OPEC
Freely trade ... stable ... LOL. when it is one hack of corrupted politics and wild swing every election, unsustainable debt, super low internal reserves, and several sectors of bubble supported by reckless borrowing and extreme low interest rate .... right. Now, it remains as the go-to currency more because of first comer advantage and historical legacy ... which is has been losing over the decades.
It won't be "replaced" by this silly attempt of a south American common currency, but it will continue to lose ground for the next few decades until it reach the tipping point.
@@clownworld5474 no they do not you lack the understanding of how currency works. OPEC isn’t even from usa why you think they want the dollar.
@@clownworld5474 Global oil trade is $5T/year but global debt is $300T and $60T gets refinanced every year. Petrodollar is not the main engine of dollar dominance since financialization ate everything
Goodness.. imagine the combined inflation..of two badly run countries.
Brazil's inflation is currently lower than those of the US and the Eurozone.
Brazil is not badly run. Good economics, horrible politics.
I’ve gotten to where I need a therapist after hearing Patrick depress the hell out of me.
I get the need for this. I also understand the desire to want to be independent from the US dollar. But it always boils down to the same issues: Corruption and regulation. Reduce the former, increase the latter with real effect and I have good hope for South America and the Sur.
Only block that can challenge US dollar seems to be BRICS...However, India will not agree for yuan trade...
And, Even if India agrees to some currency including promoting INR for Intl trade...DE-dollarization is a distant dream.... at least not in our lifetime...
The Sur currency wouldnt have the objective of challenging the dollar, it would probably only serve as a way to trade between neighboring countries without the need of buying dollar every time
@@paulos3070 issue is at what cost....
saving conversion cost at the cost of becoming second Argentina???
@@marcusaureliusanonymous For this reason, it will probably become a kind of second currency, being used only as a currency of exchange between large transaction, keeping their respective currencies in-house. Other wise I don't see brazilian economists accepting it. Maybe In the distant future this may evolve into a single currency like the Euro, but at the moment would be just a way of not having to use dollars between neighbors
It would be even worse for argentina. Similiar thing happened in baltic states after they took euro. Easy transaction and some other benefits but now...they have 20% inflation and cannot manipulate currency to lower inflation because rich countries like germany, france etc dont need to keep interest rates so high to control their inflation. Zero chance thaylt brazil will be so stupid to join argwntina in one currency. But lets not forget that it is ruled now by a guy that went to jail for corruption yet still become president😅 wenezuela 2.0 maybe?
It will be worse for Brazil, not for Argentina........when you join a bad economy with a good one (or a better one), the better one ALWAYS get's worse (which means the worse one get's even worse).....if Argentina has legal right to print the money, expect a 100% devaluation per year in any currency.
They should use Bitcoin for trading between themselve, and keep their local currencies.
In Argentina it's cheaper to take a taxi than a bus...
...that's because in a taxi you pay at the end of the trip. 🤷🏻♂️
May i laugh in spanish? JAJAJAJA. Sure, Argentina has a very long experience removing zeros from its currency. Brazil is not getting last in this matters too.
italy also had a lot of zeros in lira before adopting euro
@@Beliefish mercosur is not the euro zone, write it 100 times.
@@robertoreza7399 i know it is not. euro started a couple of decades later then free trade zone
The likelihood that a common currency between Brazil and Argentina will exist in the next decades is about the same of the U.S. launching a common currency with Mexico i.e. zero.
Countries such as Ecuador have unilaterally adopted US dollar as their sole internal currency, effectively being in a common currency to USA for over 20 years now. There are scenarios that could make Mexico try the same in the next decades and, although very unlikely, they are far from zero.
Put Messi in the highest value currency. Problem solved. Go Sur.
Who the hell would be interested in getting involved with Argentina in anything related to fiat currency? 😂
Or idiotic, illiterate, and corrupt president.
Gold is money everything else is credit…
Credit is the only way to scale payments, gold causes liquidity issues
Gold is just shiny metal, itself being worthless
@@thetaomega7816 history, central banks and governments disagree with you
Bullets are money gold is just colonial era dollar no longer needed but nice to get for the Mrs
@@thetaomega7816 until new cezar or king puts his face on the coin and adds 10% of crap, or makes a smaller coin, or both
Who ever controls monetary policy controls everything. We live in fascinating times. Dad had two great sayings:
1) Be careful what you ask for change, you might get some form that you didn’t anticipate.
2) if you’re going to be stupid…be strong.
I have visited both countries several times. The only upside I can see to the union is the combination of strong Argentinian agricultural / food production with Brazil's large industrial and banking sector. The combined currency could represent a large export-oriented block. I can also see other smaller south American economies like Chile, Bolivia, Peru joining the union if successful.
Out of curiosity, is the difference in languages ( Portuguese vs Spanish) ever a factor or obstacle in dealings between Argentina - Brazil ?
@@Iron-Bridge Not at all, both languages are very similar, to the point that we can understand each other without really knowing the other's language (similar thing happens with Russian and Ukrainian, and among Nordic languages). It's common also that at some point people of both countries knowing bits of the other language start naturally speaking "portuñol", an informal mix of Portuguese and Spanish. At formal meetings (like between state representatives or companies) of course you end up choosing one language only or just making duplicate documents, one for each language. Commercial and cultural exchange between Brazil and Argentina has been historically fluent, even before the Mercosur. That being said, a common currency is in a whole different level and I simply don't see it happening almost ever.
@@Iron-Bridge It's something like german talking to a dutch, but they're still different languages, so i guess still there will be a little problems
Wow. Patrick! Not only do I love your humor! You bring me FIN news no one else does. Thank you brother. I really appreciate you.
🤣🤣🤣 ARGENTINA COLLAPSED THEIR CURRENCY 💲💵 IT'S FALLING HARD! CHECK IT OUT 😁😁😁 those are the ones trying to make a new currency, LMFAO 🤣🤣🤣
Here in Ecuador we use the US dollar. There is a reason why we do this. We have no problem coming to terms with our past corruptions and defaults. We are still considered a "developing" country. But we don't, nor do we try to, have developed country problems. Homelessness is not a problem. Guns are not a problem. Inflation is not a thing. Mortgages are unheard of as everyone mostly pays cash for their houses. Credit is a new thing in the last few years for normal everyday people. And banks here pay a premium to borrow your money to the tune of 8-10% apy in a CD. Our average income is $450/month. This is a living wage here, that by law, employers must pay full time workers. So is Ecuador still developing? Or are we ahead of the game?
This video was posted 1 hour ago.......since then, the Argentinian Peso devaluated another 5%........tell amount another argentinian currency!!!
I'm from Uruguay (which is also a founder member of Mercosur), and I can tell you... relying on either Brasil or Argentina has been proven to be a very bad idea.
Here is the plan: Brazil goes bezerk and makes its currency as unattractive as the Argentine Peso; Brazil’s economy then becomes dollarised just as Argentina’s already is; hey presto, the two have a common currency!
The problem is not the currency or USA dollar dependency, it is the HUGE corruption in LATAM countries, which is traslated into poor infracstructures, traditional trading (raw material mostly), almost zero tech innovation, zero useful patents, etc. It is a populist and wild dream to seek for a common currency. I do not see the brazilians willing to support the economy of endless number (millions) of argentines working for the goverment, which is the most common type of job argentines can get, as it is part of a political control and status.
This is probably the only take that's not grotesquely stupid and libertarian (durr hurr fiscal policy is the only thing that matters) in nature.
Local industries got heavily defunded, unsupported and abandoned as public policy in no small part thanks to the status quo's influence throughout the decades in Argentina.
"El campo" (agro has a very well registered corruption track record of which the State seems absolutely unable (or uninterested) to do anything about. This alone is already a huge stick in the wheel, and this is just one of the many issues with corruption, clientelism, and sheer political incompetences the region suffers.
Then again, whenever a competent social leader shows up, we either murder them, "disappear them", or set up some retarded social scandal that every single piece of media attention without proper research, so it's no wonder things are the way they are.
Agriculture has been the curse of Argentina, not it's driving force. Those fuckers literally own the country though influence in the executive and judicial branches. Not unlike american corporations doing unregulated lobbying.
Any video planned about the Adani Group scandal ? Would love to hear your intakes about it
I think the common currency does not substitute the local currencies. The idea is to have a currency to be used for commerce between the two instead of using the dollar which is a different from the euro. This would be good for us given that Brazil is the main trade partner for Argentina. I also think the theory for this comes from Keynes.
So instead of converting it once you have to convert it twice?
I'm European and the Euro started like that for a couple of years (by design) and I must say I don't understand the goal, aside from setting up bank accounts etc. All EU currencies back then were pegged with each other anyway so it was like we had a common currency already. Here we're not hearing about pegging, so with Argentina's currency freefalling, having a common currency even just for trade is not just a bad idea, it's a total impossibility. After one or two months Argentina couldn't afford to use that currency and Brazil would refuse payments in "fake money".
Trader like me who come to brazil will have to go back home little Mauritius😄😄 ....Now brazil is no good to invest we can see the effect everyday...
Hong Kong's pegging of the USD allowed it to become the financial hub of Asia. The HK Money Authority does not print money. The local currency is created and printed by 3 private banks: Standard Chartered, HSBC and Bank of China.
If it is another FIAT derived currency then they will just keep printing it back to 0. This doesn't fix the money printer issue.
Hi Patrick love your shows
Don’t worry. Bitcoin will be the common currency.
Yes it will.
As Patrick said "Brazil should become a basket case economy before they can create a common currency" Lula is really forward looking as he is just getting ready to speed run Brazil's economic collapse with Venezuela style socialist policies. 😂
Don't think so.........Bolsonaro did such an excellent work, even the syndicates (who were almost demolished by Bolsonaro's law making optional to give a % of your salary to them) are against Lula......most likely he will have a presidency like the Boric one (4 years of incompetence and nothing done), or like Castillo (let's not forget HE WAS condemned for corruption, but he was freed because they declared the original judge "non competent" for that case, that means he can still be re-prosecuted and sent back to jail.......which of course, it means they had him grabbed by the balls).
Even within the UK government has historically raised interest rates to suit the economy in London and the SE of England whilst the economic conditions elsewhere, particularly northern England, northern Ireland and Scotland would, if anything, justify lower interest rates.
Such high quality writing Patrick. So appreciated. Please don’t ever stop!!
Thumbnail: "The end of the dollar?"
Me, an Argentinian: "Hahahahaha! Man, that's an even better joke than the peso."
I want to sign up for The Daily Downside.
The weekly sideways is the best
In my country we had Marx and Engels together on the banknotes, so I suppose Pele and Maradona together would be no problem. And probably similiarly successful.
Another great video Patrick. As a Brazilian this idea is absurd to me. The deal would only benefit Argentina.
Trusting southern American countries to make a stable currency challenge (impossible)
This is not a good idea
As I wrote in other video: "Well,, the Brazil's finance minister already denied that. However, never trust a Brazilian politician's word. Nevertheless, Brazil doesn't have money today (like it had 18-20 years ago) to piggyback Argentina. Unlikely this will fruition"
Additionally: you are right, it is most likely a political/politician move to get back to 18-20 y. ago when Brazil (Lula) had a major influence on the region. Doubt this will happen, b/c the "good old times" of the Commodities Boom are long past
Please make video about Adani group and Hindenburg research on Adani group.
Argentina is ready to adopt the Ruble, a stronger currency 😂
I've seen it written that adopting the Euro did nothing to boost trade in the majority of European countries. Trade did increase between European countries, but then trade with non-European countries often grew even faster without using the Euro. I'd be curious to hear Patrick's take on this.
If there's anyone I'd want to be a currency union with, it's Argentina! They are great at managing their currency :D
As a Brazilian, I find the idea of linking our currency and therefore our risk ratings to such an unstable country as Argentina simply mad, I loved to here your thoughts on it, thanks for keeping up with the good videos Patrick.
get married to a woman who is in debt and older than you and who does not want to have your children
Common currency with ARGENTINA🤣🤣🤣🤣🤣
One argument if favor from Argentina's point of view. While there could be problems from a currency union with Brazil, as you noted, just having someone else do the monetary policy so as not to cause 100% inflation could be a benefit. With the current high inflation Argentina's economy is fairly dollarized, as you noted, which kind of starts to resemble a currency union with the US and it's not clear that Argentina's economy is more aligned with that of the US than of Brazil.
LoL, so that they can default on their debts together? A currency block whose members are of the mind that debts are a choice rather than obligation is going to be hugely successful, I can already tell!
So happy to see you talking about Latin America. Greetings from Bogotá Colombia
This would be extremely dumb for Brazil to make that move.
Yeah this is like watching two sinking ships uniting to create a new ship with spare parts of their own. While making fun of a bigger ship and declaring “it’s end”
Good luck with that. Argentina keeps going thru hyperinflation. Just what Brazil needs.
I'm reminded of a couple of teenagers desperate to leave home and getting married so that they have someone else's money to spend. That never ends well.
Great analogy. Too many love children and a broken home.
That sounds awful 😖 😱. God made nations and peoples I can't imagine who this would benefit? It's like a bad cruise on the titanic ( federal reserve) 😕
Mercosur should remove all internal tariffs between nation-states and fully adopt the EU-type of free movement of people, capital, goods, and services in order for a common Mercosur currency to work out as intended. Having a common currency with Brazil leading it will be good for Argentina's economy in the long-run because Argentina's central bank cannot monetize its debt and then print money out of the thin air that causes hyperinflation right now.
Agree, but this should also include full reciprocity as in Europe in rights... Argentina has free healthcare and education (from pre-school to University), not present in other countries as Bolivia and Peru. The amount of people that come to Argentina to go to the University for free and just leave after, is huge (used to work in a National University, have seen people actually demand their diploma is given ASAP since they just want to leave the country now that they have finished). People coming for health services is huge as well...
@@andresmicalizzi5420 Peru and Bolivia are not even official Mercosul members, only associates. And Brazil does have free universal healthcare, as well as free public college.
How will they figure out the Inflation Management problem? The issue is that staving off the impacts of inflation by devaluation of one's currency is an easy strategy for national economies to use. When several nations form a Currency union, that option is removed. That's the problem with the Euro. Whilst the Germans impose their version of fiscal discipline, it still doesn't address say, Italy's stagnation, and you get differential economic growth across the Member states, causing social and political stresses. It's unlikely to happen.
Please cover adani asap.
Bitcoin obsoletes the need for this. I visited Argentina late last year and was surprised by the rate of adoption, it’s not hard to explain the value proposition of a scarce asset outside the control of any government to someone living through hyperinflation and economic collapse I suppose.
It's obvious...if you know what bitcoin is .
The US Dollar was originally a joint currency as well.
I can imagine a future where argentine Memory of their bad economy will be forgotten And some will imply that they wish for olden times Due to the fact that they have a fantasy about a good pass that was never Just like.
The civil war in america The south was not good
Incredible content. Thank you!
Lol, if Lula is invovled, what could go wrong?
European countries are also very different. Mostly split into regions - Nordics vs DACH vs BeNeLux vs West Slavic vs etc. the Eurozone helped to somewhat increase trade. but what helped increase trade the most were open borders - by far. the countries which skipped the Euro are doing the best. the biggest grower since a while now, Czech, would absolutely not grow like it is using Euro. Slovakia is evidence of this - SK is almost identical to CZ in almost every way (well different flag nowadays) - similar resources, similar development and legally almost identical. SK has the Euro and thus is extremely poor today... actually every Euro country is on the decline 🙃 perhaps Brazil and Argentina should start by opening their borders instead of going all married? Perhaps forming a South American Union?
"These types of transfers are not controversial within a country"... Quebec: LOL. Oh yes, we feel the love in every online discussion!
Because Quebec does not believe Canada is a real country? Or vice versa?
@@hjs9td It's complicated, but I'll give it a shot: equalization payments are based on GDP per capita, and most Canadian provinces are low population high resource exploitation (farming, oil etc), while Quebec is a high population, and IIRC more service based economy, more diverse, and closer to small country in mentality. In the same vein, it is government heavy with some doubling of departments between federal and provincial, and is somewhat more socialist in governance... it has a lower capital output, and in the end, it's per capita GDP falls below the "giver" provinces and is a net beneficiary, pissing off the other provinces.
@@Martin-kc1xj Sounds very European.
This is awesome. The free market at work.
Biden just tweeted recently that capitalism is all about competition. Biden must me happy as I am about this.
I would take the common currency more seriously if the Argentinian financial minister hadn't called Uruguay the "small brother" that needs "big brothers" (Brazil and Argentina) to protect them. It seems like Argentina is trying to make itself more important (and powerful) than it actually is. Other than that, I really wish I could see South America became as integrated as Europe in the near future.
I’ve been to Argentina, and it is not only for big purchases that people accept dollars. Taxi drivers, for example, would rather be paid in dollars than pesos.
I don’t know that this will happen due to the giving up of some currency manipulation power through the central banks, particularly in Argentina, since that has been used so many times in the past. I’m actually surprised Brazil is open to the idea. It’s like if Germany wanted to create the Euro but only invited Portugal, Italy, Greece and Spain. Not that Brazil is a paragon of financial stability, but they’ve arguably been more historically financially stable, even given their flaws. (I do recall one currency collapse, I believe, but I’d have to go back and look) Edited to add: I just finished watching the part where the Twitter user says its like everyone is Greece and I agree with your take that Brazil is the economy in the better spot here, as I alluded to above.
@@lg6707 yes, I agree. As long as USDs are allowed to enter the country, people will use them. I remember being there in 2006-ish (?) and the houses were listed in USD, as were many electronics like cell phones. Seems like anything imported that was somewhat pricey was, but my memory could be flawed. It was many years ago
Since Brazil adopted its modern currency in 1994, inflation was never really an issue again. Now, people complain when a year gets 10% inflation, while in the 1980's this could be a daily rate. Also, Brazil had no defaults on public debt since the 80s as well.
Argentina had both defaults and hyperinflation much more recently, with a hyperinflation in course right now. A common currency with Argentina would naturally be controlled more by Brazil than by them.
@@Igor_054 excellent summary of what has happened in the relatively recent past with both countries! 💯 agreed
This proposition could be the precursor to the formation of THE UNITED STATES OF LATIN AMERICA which is a lot more agreeable frame of reference to the adoption of one common
Currency- THE SUR. A partial integration as put forth by the brasilian president, regrettably, is not likely to provide complete solutions to any of a host of problems that plague both nations as it can only help identify roadblocks to such ambition- the incompatibility is glaring and, given the state of the world economy, the timing is outright questionable. Does anyone
Foresee USOLA with a common means of exchange named SUR?!
Thank you Patrick
If they do this, the U.S. will send their military in to give those countries some of that freedom they love to give out to countries around the world. 😁
Like they literally already did with Plan Condor
Freedom world tour 🦅
They should be so lucky.
@@HolyAvgr you still believe that BS??? HAHAHAHA, Plan Condor is from the late XX century..........Argentina's economy was already destroyed in the 40s
Glad this was covered and I'm not the only person that things this is a ridiculous proposal
The major difference between this and the setting up of the Euro is that the Euro was supported by some of the most successful economies in the world. Cemented into a strong pre-existing economic union (the EU). Argentina and Brazil are economic basket cases.
Well, Argentina certainly is.
Mutually Assured Destruction
As someone from The Netherlands, I can tell them it's a bad idea...
Different tax brackets only make it interesting for businesses, not the common people.
Food is almost half the price in Belgium, fuel is cheaper in Germany, but if we were to import it as a civilian, you'd still have to pay all the Dutch taxes.
We don't have any means our self to correct inflation by way of interest, laws get dictated from Brussels, via parties we're not free to choose (I can't vote for a Belgian politician or a Bulgarian one for example.
Housing is impossible to get into, save for lucky few who have familial money or great paying jobs (with a partner) and if you can, you're paying 3/4 of your salary for the home alone, without food, water, electricity etc.
It's just all kinds of messed up and there's no light on the end of the tunnel...
This is a very thoughtful analysis of a proposal that, on the surface, looks “What’s not to like?” PB shows that there’s a lot not to like.
(I’d’ve been harder on the Greek debt crisis - allowing Greek workers to retire in their 50s was bonkers and completely out of line with the rest of Europe. No wonder they ran out of money.)
The number of luxury cars sold was three times the number of people who could afford them according to their *declared* income.