[Marxism] ALBA attempts to create Latin Am. currency for regionaltransactions

nada dwaltersMIA at gmail.com
Sun Apr 19 14:37:11 MDT 2009


A big "hmmmmmm" on this discussion. I'm not 100% sure S. Artesian is 
correct here. You don't absolutely need the US to give it's "OK" to the 
new currency. Countries just don't 'switch' like that. It can be a slow 
process. It's also not up to the US, it is up first and foremost to the 
countries that agreed to trade in any new currency, thus attaching value 
to the currency, rather a  representation of value to the currency in 
question.

For examlee, th Euro. The Euro is not tradable for oil. It's trade for a 
lot things, but not that. The Iranians have had a rather large empty 
building in downtown Tehran called the "Tehran Oil Exchange" or some 
similar name. It's modeled on the Chicago Mercantile Exchange and is 
supposed to be where *anyone* can come and place orders for Iranian oil, 
the only caveat is that it has to be in Euros. There are no buyers. Er, 
traders. So the building is a little bit of a dinosaur. Chavez has made 
utterances in this regard as well. Empty rhetoric obviously. But there 
is nothing really stopping anyone from buying oil in Euros. You only 
need a few countries to break the ice, those with some reserves in 500 
Euro notes. It can happen. But people are afraid, very afraid, because 
no one, simply no one, wants a run on Euros that would ipstofacto drop 
the value of the USD. Especially as those countries with Euros usually 
have more USD. Like China. Like Saudi Arabia. Like Kuwait, Inc.

So, if the Sucre gets going, I suspect it will be limited to some common 
commodities traded by the Andean countries interested in it and for a 
limited amount for a test amount of time. It will be a currency not 
unlike the now defunct $1,000 USD bill that was used exclusively for 
moving large amounts of cash around between banks but would not really 
be accepted for anything in person-to-person or business-to-business trade.

The idea would then be to make the currency in smaller, more usable 
denominations and given to gov't institutions for them to buy this or 
that supply of goods or services, mandated by law but not out in general 
circulation. Slowly, over years, the currency could be then 
exchangeable, even floatable but it will only work, at the end of the 
day, if the national currency becomes the Sucre. If it doesn't, it's 
value will be retarded to specific forms of trade, in the same way the 
old USD $1,000 or treasuries are today. It would have no impact.

The key, of course, is oil. If oil can be traded in this future 
currency, even among a few countries...say Nicaragua, Venezuela, Cuba 
and Ecuador, it could make for some interesting developments as actual 
value comes with the currency. The key would come when the participating 
countries start *demanding* the new Sucre currecny for oil (or anything 
else) and NOT to accept USD. That would be interesting. The Sucre would 
then be in demand and there would be this rush to acquire them by 
trading and selling items FOR the Sucre.

But there is still all these USD around. What to do, what to do?

David




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