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Comment by ajmurmann | Hacker News Reader

Totally not expert opinion on the Euro question: I had the same thought and as with USD there are countries that singlelateraly adopted the Euro. The Euro also seems similarly stable. The only differences I see are:

Pro-Euro: Euro already is controlled by a wider range of countries and there is some incentive to match monetary policy to accommodate those wider circumstances. So a policy is less likely to just support a single countries unique situation and conflict with Argentina's situation.

Pro-USD: USD is already more widespread in South America and actively being used in Argentina right now. This advantage is very practical and concrete right now and trump's all else

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> Pro-USD: USD is already more widespread in South America and actively being used in Argentina right now. This advantage is very practical and concrete right now and trump's all else

this needs to be repeated. USD is already the way of doing business in the ARG, and this is essentially just calling it what it is.

this is also seen as a way to stabilize the back-and-forth economic choices that make the currency terrible.

makes sense in theory, but they're an export economy, and a strong USD will make it hard sell beef and mining products.

I'd add that the US is generally quite in favour of dollarization even though the Fed only cares about the US and the EU is only in favour of countries adopting the Euro via it's accession process and adopting its macroeconomic rules. Certainly the ECB has no incentive to consider Argentina's economy when making monetary policy decisions, and if anything might take the opposite stance that it's a competitive threat to Eurozone trade.

> the Fed only cares about the US

I presume by Fed you mean the not-government 'federal reserve' which is a contractor to Congress which tinkers with monetary policy and sets the price of money. Federal Reserve quietly provided bailouts to Europe in 2008.

New York Times article,

  '“an open facility where European banks could come and get dollars.”
  So began what would become the biggest United States government bailout that most people do not know anything about.'

https://www.nytimes.com/2014/02/24/business/feds-aid-in-2008...

But they did so because the European owned banks were active in the US serving US customers (and solvent enough to repay) which is why they had the dollar obligations they needed to borrow to meet in the first place.

Argentina or Panama having a bit of an economic slowdown whilst the US is growing nicely isn't the Fed's problem: the monetary policy decisions will only take into account to the monetary policy needs of the US, and it's not particularly in the interests of the Fed to bail out Argentine bank reserve shortfalls unless the contagion is likely to hit the Us either.

At the time, the law authorizing private bank contractor 'federal reserve' didn't authorize those European actions.

There is also something to be said about who is the larger trade partner. If you do more trade with the US than the Eurozone, makes more sense to choose the dollar.

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