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Worrell Recommends Dollarization

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Thanks to fellow blogger at caribbeansignal.com for reminding the BU blogmaster to continue focus on the economy. The controversial former Governor of the Central Bank continues to push a line of argument about the advantages of dollarizing the economy. Discuss for 10 marks

– David, blogmaster

DeLisle Worrell: Sovereignty and the US Dollar


Source: DelisleWorrell.com

Reproduced with permission, the full text of Dr. Delisle Worrell – former Governor of the Central Bank of Barbados – July 2019 newsletter – caribbeansignal.com:

The one question which always surfaces in response to my lecture “The time has come to permanently retire all our Caribbean currencies”  – Dr. DeLisle Worrell Says Time to Jettison Caribbean Currencies  – (search for this title on Youtube) is about national sovereignty. Most people seem to believe that sovereignty is “lost” with the retirement of the local currency. On the contrary, replacing domestic currency and deposits with US currency and deposits gives everyone in the country wider access to goods and services. With domestic currency you can buy only local goods and services; with US dollars you can purchase from anywhere in the world, wherever you can get the best value for your money.

The fact of the matter is that the US dollar is sovereign in international transactions, and there is nothing than can be done about that. Even China, the world’s second largest economy, with 15 percent of global GDP to the US’s 24 percent, accepts payments in US dollars. A Jamaican travelling to Haiti, a Guyanese to Suriname, a Dominican to Guadeloupe, a Trinidadian to Barbados, all take US dollars with them. All hotel rates and oil and commodity prices are quoted in US dollars.

Ironically, having a domestic currency in today’s digital world may make a country more susceptible to US sanctions than a fully dollarised country would be. Iran and Cuba, countries which are currently subject to harsh US sanctions, both have domestic currencies. The sanctions are effective because Cubans and Iranians earn in a local currency whose value continues to fall because the country’s access to US dollars is limited.

The US reaps tremendous benefit from the fact that its currency is in universal use. Countries which have their own currencies all maintain a reserve of foreign exchange at their central banks with which to protect the value of domestic money. Those reserves are mostly held in US treasury securities, and constitute a loan to the US Government. However, a country like Panama which has no currency of its own does not have that problem. Such accounts as the Panamanian Government may hold with the US Federal Reserve are solely for the purposes of facilitating payments with foreign countries. Dispensing with an own currency means the government no longer has a reason to make a substantial contribution to the financing of the US Government’s deficit.

The bottom line is that rather than impairing national sovereignty, replacing the domestic currency empowers the country and its citizens by giving access to the world’s goods and services, to the full extent of their incomes. Moreover, the country has no need to offer credit to the world’s wealthiest nation, in order to maintain the value of domestic financial assets.

Source: http://www.DeLisleWorrell.com

 

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116 responses to “Worrell Recommends Dollarization”

  1. fortyacresandamule Avatar
    fortyacresandamule

    I was once ambivalent on this issue, but after deep reflection and new insight, I agree with the former governor.Some might argue for a caricom currency, which is reasonable, however, dollarising would be a better choice in my opinion.

  2. David Avatar
    David

    The president of the Barbados Economic Society Mr. Simon Naitram promised to examine this issue in a Barbados context. The blogmaster is disappointed we have had to wait so long.

  3. ks Avatar
    ks

    Dr. Worrell is 100% correct……. it must cost us a ton of money to maintain our Central bank and all the high paid employees…….. far less paying to ‘manufacture’ the coins and bills! Imagine if there was no Central bank…. Sinckler would not have been able to print money and help put us in the mess we ended in….

  4. fortyacresandamule Avatar
    fortyacresandamule

    Panama, El Salvador, Ecuador, Timor Leste, Palau, Federated state of Micronesia, Marshall Island, BVI, and, Turks and Caicos all use the US$ as a legal tender. Ecuador, a member of OPEC and the world’s largest banana exporter ditched their currency in favor of the green back some years ago. As a result, volatile commodity shocks and debt service is greatly reduced.

    The pros of dollarisation for small island development states outweigh the cons. The most important of which is to eliminate the printing of money. On the issue of banking collapse, the IMF or even the FED could act as bank of last resort.

  5. David Avatar
    David

    @fortyacresandamule

    Small islands in the region manage dual currency like St. Marten and Anguilla. Is there anything we can learned from them?

  6. John A Avatar
    John A

    As I said before when this point was raised I agree 100 percent with going to the US dollar. It will ensure the nonesence that sinkler did with his paper printer could never occur again. It would also do away with the prehistoric controls we have on foreign currency. We would then only be able to spend what we can generate hence make the politicians adjust their spending to suit our income.

    For the above reasons though it will probably never happen as it will take money supply out the politicians hands hence weakening their control.

    So yes let’s go green but don’t let’s hold our breath!

  7. Georgie Porgie Avatar
    Georgie Porgie

    re The president of the Barbados Economic Society Mr. Simon Naitram promised to examine this issue in a Barbados context. The blogmaster is disappointed we have had to wait so long.

    wait SO SIMON HAS NOTHING ELSE TO DO BUT WRITE ARTICLES TO PLEASE THE BU blogmaster
    SHOULD HE NOT ALSO BE SPENDING SOME TIME AT CHURCH WITH HIS DADDY………OR EVEN VISITING HIS UNCLE ON THE MISSION FIELD? MURDAH

  8. Poorpeacefulandpolite Avatar
    Poorpeacefulandpolite

    Formal dollarization may not be palatable to some, but it may gradually be introduced by allowing citizens to hold foreign currency deposit accounts. This will show the extent to which Barbadians are really loyal to the local dollar and we need not completely surrender our sovereignty. The reserves will also certainly receive some additional support.

  9. fortyacresandamule Avatar
    fortyacresandamule

    In today’s geo-ploitics,the concept of sovreignity,especially when it comes to small and weak states is a big joke.You could even argue that the only true sovreign nation right now on this earth the USA. The extrordinary privilege that the US$, as the world reserve currency, bestowes upon the USA, is one of the reason for its economic might.

    By adopting the US currency as a legal tender, we would get rid a lot of wasteful time, energy, and resources in maintaining a central bank. Not to mentioning those grossly overpaid staff members.

  10. John A Avatar
    John A

    @ forty

    We would also do away with balance of payment issues and the need to ever hire White Oak again too!

  11. John A Avatar
    John A

    Basically as sad a statement the below is it is a reality.

    ADOPTING THE USD WILL PROTECT US FROM OURSELVES IN THE FUTURE.

  12. Pachamama Avatar
    Pachamama

    These oft repeated mantras by Delisle Worrell are representative of a most perverse form of neoliberalism; exchanges one set of fiat currencies (in the Caribbean) for a single one (the US dollar) which itself is on the verse of collapsing; serve the purposes of American financial imperialism; are disingenuous about the role of national currencies; opens up Caribbean countries to an orgy of uber consumerism without a corresponding level of production. We will frontally engage Worrell, point by point.

    ”’Most people seem to believe that sovereignty is “lost” with the retirement of the local currency. On the contrary, replacing domestic currency and deposits with US currency and deposits gives everyone in the country wider access to goods and services. With domestic currency you can buy only local goods and services; with US dollars you can purchase from anywhere in the world, wherever you can get the best value for your money.”””

    We are disappointed that a man of high intellect would make such an imprecise statement. Here he basically admits that demand for local goods and services will be reduced with the further imposition of US dollar hegemony.

    He equates a lost of currency sovereignty to a perceived need to purchase foreign goods and services. This to us has a ring of economic prostitution to it. Is this the kind of analysis we have come to expect from ‘one of our best thinkers’?

    ”””””””The fact of the matter is that the US dollar is sovereign in international transactions, and there is nothing than can be done about that. Even China, the world’s second largest economy, with 15 percent of global GDP to the US’s 24 percent, accepts payments in US dollars. A Jamaican travelling to Haiti, a Guyanese to Suriname, a Dominican to Guadeloupe, a Trinidadian to Barbados, all take US dollars with them. All hotel rates and oil and commodity prices are quoted in US dollars.”””””””’

    The assumption about the ‘sovereignty of the US dollar in international transactions’ and that ‘there is nothing that (sic) can be done about that’ is not true at all! People are doing a wide range of things about it and what extra-territorial ‘sovereignty’ there might be is eroding daily.

    Worrell refuses to engage the worthlessness of this printed paper in the first place. He ignores that countries like China, Russia, Venezuela, Iran, Turkey, are more and more, making contracts in their national currencies precisely to bypass US dollar hegemony. That countries are using barter arrangements and pricing their oil in non-US dollar currencies to achieve that objective.

    That China, Russia and even the European Union have developed alternatives to the SWIFT to avoid US dollar paramountcy. That many countries have dumped their treasury holdings. Russia has entirely and China is now drastically reducing hers.

    That the world is on the threshold of the end of the domination by the US dollar as countries are made to assume the cost of American’s illegal wars against the rest of the world.

    ”””””””””’Ironically, having a domestic currency in today’s digital world may make a country more susceptible to US sanctions than a fully dollarised country would be. Iran and Cuba, countries which are currently subject to harsh US sanctions, both have domestic currencies. The sanctions are effective because Cubans and Iranians earn in a local currency whose value continues to fall because the country’s access to US dollars is limited.””””””””’

    Worrell now ceases to be a ‘professional’ economist and now becomes an agent of the CIA or the American state department. It is precisely because of this level of unwarranted power given to the fiat and valueless US dollar that we must avoid it.

    Both Iran, forty years under illegal sanctions, and Cuba, 60 years under an illegal blockade, have struggled mightily but are still able to resist this American imperialism which Worrell, their newly minted mouthpiece, is now championing. But that is not the whole story.

    America has sanctioned Russia. Has a trade war with China. Is threatening to sanction countries of the EU. Is threatening to sanction Turkey. May indeed be sanctioning Barbados because of our recognition of international law relating to the territorial integrity of all nations and specifically Venezuela.

    Instead of suggesting we seek an alternative to American financial imperialism, this Worrell has the temerity to suggest that we bow to it. In doing so he singlehandedly reverses the collective thinking, work, of Caribbean economic geniuses of the past – Demas, George, et al

    Fundamentally, there is nothing about a digital world which does not still require a real currency at the end of the day. It matters not how much bit-this and bit-that we pretend to be dealing with, at the end of the day we need real value as a store of wealth. That cannot be a fiat currency on the verge of collapse.

    The value of the US dollar has been falling as well. But the most recent sanctions on the IRI (Iran) have had the affect of raising its rial viz a viz the US dollar. Go figure!

    ”””””””””””””””””””””’The US reaps tremendous benefit from the fact that its currency is in universal use. Countries which have their own currencies all maintain a reserve of foreign exchange at their central banks with which to protect the value of domestic money. Those reserves are mostly held in US treasury securities, and constitute a loan to the US Government. However, a country like Panama which has no currency of its own does not have that problem. Such accounts as the Panamanian Government may hold with the US Federal Reserve are solely for the purposes of facilitating payments with foreign countries. Dispensing with an own currency means the government no longer has a reason to make a substantial contribution to the financing of the US Government’s deficit.”””””””””””””””””””””””

    We have dealt with most of this above.

    Central banks reserves being held in US treasuries are primarily a function of the post 1945 architecture and the removal of the gold standard by the Americans in 1971.

    Worrell did not mention that the US government is by far the largest debtor nation. It owes so much that only the most loyal of adherents would ever expect it to repay, thus making this fiat currency inherently unstable.

    Panama may not have the perceived problem of needing to have foreign balances to settle accounts and thereby contributing to America as a lender. However, Panama, with the absence of a national currency is in effect totally controlled by the Treasury Department of the US government.

    For an economic, we are surprised that a man who spent his life regaling us about monetary and fiscal measures available to Caribbean governments, why would Worrell now be seeking to remove 50% of the economic weapons in countries’ arsenals?

    The underlying problem is not whether we should consider making contributions to the US government’s deficit. The problem is the absence of real value of the US dollar and the worthless of treasuries so issued.

    ””””””””””””””’The bottom line is that rather than impairing national sovereignty, replacing the domestic currency empowers the country and its citizens by giving access to the world’s goods and services, to the full extent of their incomes. Moreover, the country has no need to offer credit to the world’s wealthiest nation, in order to maintain the value of domestic financial assets.””””””””””’

    Worrell concludes by reaffirming his commitment to the religion of empire. His whole thesis is wrongly based. His fatally flawed assumption rests on access to goods and services and the inexhaustibly of needs.

    In the end, Worrell is more of a marketer for American imperialism than an economist worthy to stand on the shoulders of those coming before him.

    And within all of this pseudo-intellectual distraction instead of us being any wiser about the financialization of economy and how it will continue to effect us we are asked to double down into the abyss by a man who himself has no understanding whatsoever as to how financialized markets operate.

  13. Heather Avatar
    Heather

    It would be a sound monetary investment. The constant threat of devaluation will disappear. Perhaps we will see the inflated prices on goods as they really are.

  14. fortyacresandamule Avatar
    fortyacresandamule

    @David. The dual currency situation in Anguilla or St Marteen is not unique. Even right here in BIM, a lot of transaction especially in the financial, real estate and tourism sector are transacted in USA dollar.

  15. Tron Avatar
    Tron

    I hope you are aware of what the USD would mean for Barbados:

    We could only spend as much money on the hungry and helpless mouths of the public service as the tourism industry earns. Since Barbados has been spending more foreign currency than it receives for decades, the government would have to fire a considerable proportion of the lazy masses from public service because it cannot pay more. Likewise, there would be no money left to feed the state enterprises.

    That’s why Worrell´s Plan is not so bad. We would cut off the rotten flesh from the state organism, which has been poisoning the latter for many years.

  16. fortyacresandamule Avatar
    fortyacresandamule

    @John. Yep. Balance of payment issue would be trivial matter. I agree with your sentiment, the politicians won’t go for it.

  17. Tron Avatar
    Tron

    @ fortyacresandamule July 13, 2019 10:01 AM

    A dual-track currency would have the effect that no businessman would sell anything for Barrow Dollars any more and no landlord would rent anything for Barrow Dollars any more. Everyone would want the “right” dollar as a means of payment.

    So the state could continue to pay the masses of civil servants with Barrows from the inflationary press, but they could no longer buy anything for their income. In other words, you then pay either 1 US-Dollar or 20 Barrows for a litre of milk.

    If I remember correctly, Sinckler already wanted to set up business zones in which you can pay tax-free with foreign currency. As you know, this plan failed. Not least because it would have demonstrated the total worthlessness of the Barrow dollar.

    Devaluation, double currency or US-Dollar only. In the end, the locals have to pay a bitter price for the mistakes of the past and for the bloated state apparatus. It can no longer be denied that the low productivity and the local mentality require a currency correction. The 1:2 exchange rate is intended for the naïve masses in their dull patriotism, not for stimulating the economy.

  18. John A Avatar
    John A

    @Tron

    Yes and they would be no austerity program or BERT as there would be no case for it. There will be no over supply of local dollars chasing too few USD either, hence no such attempts at controlling supply and demand would occur.

    Lord but what we would do with all the central bank regulators and those that keep all the red tape in place? Plus the ministry of finance would then need a trimming too. Plus I would got less forms to fill out at the bank when I want $10USD.

    Yes we have a dinosaur in need of burying for sure.

  19. Tron Avatar
    Tron

    @ Pachamama July 13, 2019 9:58 AM

    In fact, with the adoption of a foreign currency, the question arises why the locals started the whole circus with the Declaration of Independence in 1966.

    Barbados could just as well turn to the USA and subordinate itself to the USA as a banana colony.

  20. John A Avatar
    John A

    @ forty

    It is a step that they will fight for every reason possible. It will weaken their power and control dramatically and when you think of it in applied terms, remove their control of the economy as demand will be limited by supply and free movement of currency would become a daily activity.

    For us as a people it would be our best Guarantee against future mismanagement of reserves and devastating economic policies as we witnessed in the past.

    It got my vote!

  21. Tron Avatar
    Tron

    @ John A July 13, 2019 10:19 AM

    From an efficiency point of view, I agree with you. Currency controls are a major obstacle to international investment in Barbados and interaction within the CARICOM.

    The effect of adopting the USD would be similar to a strong devaluation of the local dollar. You first have to find the politicians who will go along with it: Fire 15,000 public servants or de facto pay them only half. I have the feeling that after DLP and BLP the list of alternatives will be very short. GP for example? 😉

  22. Pachamama Avatar
    Pachamama

    Tron

    Precisely!

    You have been much more insightful, using fewer words, than we could.

  23. John A Avatar
    John A

    Look at the Bahamas for example. Their dollar is tied to the USD at a rate of 1 to 1. You know all the times I have been there I have never seen a Bahamian dollar. The currency in actual circulation is the USD. after all Miami is only a few minutes away. It’s all about freedom of movement and the need for no conversion.

    You also realise if we adopted the USD prices would drop. Why you ask, well we take the USD At $1.98 but when businesses buy a draft they pay roughly $2.06 for the same dollar. Who you think ends up paying for that other than the consumer?

  24. John A Avatar
    John A

    @ Tron.

    When you think about it in terms of what’s better for the people there is little negative one can find it doing it. If you are a politician however you could think of nuff.

    A simple example is that if you getting a salary of $4000 a month and paying $1000 in house rent from day X your salary would be $2000 USD and your rent become $500 USD.

    The item you paying $2.06 would drop to $ 1Usd. It’s a simplistic example but shows the advantages. Plus we will only spend what we generate so the old saying of ” living beyond your means” would he a thing of the past.

    Oh and all them foreign bank charges when you use the credit card to buy a pants at Amazon them gone too!

  25. Hal Austin Avatar
    Hal Austin

    @ Heather

    Dr Worrell’s proposals presumes a number of decisions, which ordinary Barbadians may find difficult to swallow. Firsts, it raises questions about our sovereignty: can a country that has lost control of its monetary policy, including money supply, be called independent?
    Although dollarization might have its appeal to technocrat s and mentally lazy politicians, is it the magic bullet for an economy bleached of any dynamism?
    At present the Greenback accounts for about 60 per cent of foreign exchange reserves, foreign currency and bank deposits. International economists are divided over dollar dominance in the near and medium future, so, at best, dollarisation will be a gamble.
    The current trade and digital war between China and the US, and the conflict between the US and EU, do not bode well for any such belief.
    Although emerging economies have large levels of dollar-denominated reserves (and debt), which fosters the notion of dollar dominance, in reality the Chinese and other Asian economies are slowly offloading their dollar reserves.
    The Russians have also reduced their dollar reserves from just over 46 per cent to just over 24 per cent. The US market accounts for less than 2 per cent of Russian trade, even if 54 per cent of commercial debt is denominated in dollars (most commodities are billed in dollars), so that is not a surprising decision. The current chief economist of the IMF, a former Harvard professor, thinks the dollar is on a ‘sticky’ wicket.
    So at best, Dr Worrell is taking a firm position on a policy issue that is not binary, not black and white. Dr Worrell’s position also ignores, or does not give enough consideration, to the growth of cryptocurrencies, including Facebook’s Libra (which, by the way, Trump has recently attacked).
    Although Dr Worrell’s suggestion merits serious debate, in reality it has no merits and diverts attention from the more intellectual challenge of designing a macro-economic policy for a small, proud and ambitious economy. But it is a start.

  26. Pachamama Avatar
    Pachamama

    Sir William Skinner

    We await your attempts to put lipstick on this pig. LOL

  27. Hal Austin Avatar
    Hal Austin

    @John A

    I also had that experience in the Bahamas, mainly Nassau, until I demanded that I be given change in Bahamian dollars. They thought I was strange. I also had to ask for the night spots that local people go to, and not just tourist spots, for night outs. It was a problem I never had in Grand Bahama. At the time locals were barred from the casinos, which I thought was dreadful..

  28. John A Avatar
    John A

    @Hal.

    I even asked an old taxi guy there if he could get a Bahamian dollar for me to see. His reply made me laugh when he said to me ” boss you know they can’t spend in Miami right?”

    Basically he had a point though in that the opportunity to use an island currency was not there in the larger markets so why worry with it at all.

    As for our local currency let’s be honest and admit we have lost total control of it all together already. Based on circulation what you think the Barbados dollar is worth when you take the amount printed recently against what we hold in hard currency?

    We need to stop fooling ourselves that our dollar has all this value. It no longer does and that is a fact. We have even today a false economy based on the madness that took place over the last few years when the paper copier was flying! Of course the birds have now come home to roost.

  29. William Skinner Avatar
    William Skinner

    @ Pacha
    Both you and Hal have made very points. You better than most would know that I cannot support the American dollar becoming my country’s currency. As you have often said I am an old outdated regionalist.
    So the good Doc and I part company on this one.
    I remain committed to One Caribbean currency and the development of an economic strategy for our Caribbean nation.

  30. John A Avatar
    John A

    @Hal

    You got me studying some of that fish chowder now from just below the bridge to Paradise Isle. Thing was so thick the spoon would stand up in it! Anyhow I will make do with a sandwich seeing that we in recession!😊

  31. Hal Austin Avatar
    Hal Austin

    John A

    I am a big conch man. We must bring it back to Barbados.

  32. David Avatar
    David

    @John A

    Are you aware of any countries where dollarization is implemented that have escaped being a booming economy?

  33. fortyacresandamule Avatar
    fortyacresandamule

    @David. Dollarisation in itself is not a panacea. However, it will surely solve the problem of fiscal indiscipline. Panama has been one of the fastest growing economy (avg over 5%) in latin america and the caribbean for nearly a decade now.

  34. John A Avatar
    John A

    @ David.

    Dollarisation alone will not do it, what must accompany it is policy. Growth policies for example must be implemented. What dollarisation will do is stop politicians tampering with money supply while ensuring business doesn’t have all the restrictions that stand in our way. It would also mean a considerable drop in the cost of doing business too as is evident in the example I will use below.

    Let’s take one of the easiest islands in our region to do business in which is Dutch St Maarten. No customs and although their currency is the Antillean guilder, they too are seldom seen. It’s all about USD there and talk all we want duty free retailers here will never be able to compete with St Maarten for these reasons. So even though they have not officially dollarised, for purposes of commerce they have unofficially done so.

    What I like with dollarisation is that you can only spend what you can generate, you can not create a false economy by printing money and most importantly foreign investors know they can come in and their investments will not be threatened by devaluation. The fact politicians can’t mess with the reserves or create balance of payments problems is just another bonus.

  35. Hal Austin Avatar
    Hal Austin

    John A

    The idea of dollarisation can be misleading. The Greenback is already the unofficial currency of Barbados. There are about US$70bn in circulation globally outside the US. The Barbados government has no control over how much of this can end up in Barbados; we can only hope and pray.
    Dr Worrell’s suggestion has legitimacy as a debating point, but no merit as policy. It is the sort of topic debated in a classroom. As I have sad before, a more practical idea s a Federation of the West Indies with its own central bank and currency and a common fiscal and monetary policy.
    Without this we will be wiped out as a sovereign state in about 30-50 years. This is what the president should be doing to concentrate minds, instead of flying all over the world talking about climate change. Task the economics department at Cave Hill to come up with ideas for the future of the Bajan dollar.

  36. fortyacresandamule Avatar
    fortyacresandamule

    Appealing to sovereignty can be cringy at times. On paper we might be sovereign, but in the bigger scheme of things it doesn’t count. Even Germany, an export-centric economy and europe’s largest gave up its monetary sovereignty to the ECB.

  37. John A Avatar
    John A

    @ Hal.

    Yes in an ideal world that would be a excellent idea but we couldn’t even get all the islands to participate in LIAT even though it was delivering passengers to their doorstep. What chance you think we will ever have of one currency and central bank in the region?

    The USD has its drawbacks but for now it’s the best bet. It will give foreign investors comfort to know their money can be moved freely without fear of devaluation and as I said remove it from being tampered with by politicians. I heard all the arguments from the basket of currencies to one regional currency. You know what the problem is with them? It takes several island leaders to agree on it. So we back to the Liat scenario. We as a country can decide on dollarisation, we don’t need our neighbours to agree.

  38. David Avatar
    David

    This is a useful link.

    https://www.piie.com/commentary/speeches-papers/dollarization-does-not-make-sense-everywhere

  39. Hal Austin Avatar
    Hal Austin

    Germany gave up its SOVEREIGNTY not just monetary sovereignty. We are in the early stages of the death of the nation state. A little micro state on the edges of the Caribbean Sea and Atlantic ocean, with fantasies of punching above its weight, will be swept away by history. The mental disease of loyalty will take us to our collective grave.

  40. John A Avatar
    John A

    @ David.

    Let’s do a very simple exercise and it will show you why I say based on our actions that dollarisation would protect us. Let start by asking why are we here today?

    Sinkler opened the printery and sent too many bajan dollars to chase too few USD creating havoc in the economy.

    Mia came and said let’s cut back on the amount of bajan dollars chasing the USD, so let’s drop interest rates on deposit and pelt some more taxes in dem ass. So economy contracts bajans suffer and cuss because things tight, but the peg is protected and the ratio of bajan dollars chasing USD is somewhat restored.

    You realise if we were dollarised neither of the 2 above scenarios would ever of happened? We can’t print USD and as a result we would not have to safe guard any ratio.

    In a country that had clearly proven it is incapable of acting correctly and is willing to ravish an economy for political gain, I say never again. Take the currency manipulation option away from them all together. I don’t care what promise any party makes going forward, if we dollarised not a man or woman can touch the currency supply ever again!

  41. fortyacresandamule Avatar
    fortyacresandamule

    @ John. A lot of countries in region have unofficially dollarised. What % of commercial banks deposit in BIM are in US currency? This will give you a good indication of the level of dollarisation.

  42. John A Avatar
    John A

    @ forty

    Good point not only banks even our NIS holds US investments managed by Oppenheimer.

    Not that we have heard recently how they fearing though. I would still say better than the useless local paper that was forced on them, based on the performance of the major foreign markets.

  43. fortyacresandamule Avatar
    fortyacresandamule

    @Hal . ” We are in the early stage of the death of the nation state”. A very profound and true statement.

    Although my preference is for dollarisation, your argument put forth on the subject is quiet reasonable and measured.

  44. David Avatar
    David

    @John A

    You are making a case to join the OECS?

  45. John A Avatar
    John A

    No not at all what I am saying is we make a decision that is best for us. We did it already for the last 50 plus years with out Barbados dollar. What the past 10 years have shown us though is that we did not have the framework in place to protect its value. Hence a desperate MOF was able to destroy in 5 years what took 50 years of discipline to build. I think it’s time to move to a currently that is globally accepted and not subject to tampering locally. It is also one of the most investment friendly currencies and God knows we need foreign investment worst now than ever.

  46. John A Avatar
    John A

    @David.

    What I am saying is it’s time to stop trying to defend our currency and simply adopt theirs and call it a day.

  47. Hal Austin Avatar
    Hal Austin

    @ Forty

    Thanks.

  48. NorthernObserver Avatar
    NorthernObserver

    @HA
    “As I have sad before, a more practical idea s a Federation of the West Indies with its own central bank and currency and a common fiscal and monetary policy.”
    Beyond the WI cricket team, and its path over time, how often have the regional bodies been able to get together and agree on anything? And then STICK to what was agreed? A common fiscal and monetary policy? Individually, having fiscal and monetary policies which are in snyc has been an issue, now you expect a sovereign nation to subordinate its decision making power, and get them as a group to agree?
    I think the concept is theoretically valuable, but will be practically near impossible to implement. You need a “HAVE” who is willing to play for the greater good. The region’s only “have” is oil rich countries. The rest are competitors in tourism or financial services. And the pols egos are too big.

  49. Ping Pong Avatar
    Ping Pong

    Channeling the Cement Man who use to promote bull fighting as the panacea for Barbados: Barbados needs to join the OECS which together will adopt the US dollar as its currency or the Euro, join the European Economic Area and establish a free trade and free movement of people treaty with Guyana and Suriname.

    Wunnuh could laugh but what other ideas wunnuh got?

  50. Ping Pong Avatar
    Ping Pong

    As I get older I realise this “sovereignty” thing is for young giddy head people who have not achieved anything. I readily admit that I would rather be a fed, watered, housed, clothed and medically cared for “colonial” than a hungry, starving, homeless, unclothed, sick, poor-as-ass independent “citizen” punching above my undernourished flyweight!

    Now this jackass government who can’t pay its bills wants to increase the cost of government by introducing local government i.e parish assemblies.

    Wunnuh hear how Facebook get fined $5 BILLION and people saying this is too little since Facebook made $15 BILLION in the first 3 months of this year? Wunnuh ain’t realise how puny Buhbados is?

    The British trick Barrow in 1966 and we mek he a national hero! Wuhlah.

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