It sounds a bit like being a Eurozone country. Free capital flow, fixed exchange rate, no monetary policy. It can work well if you can keep trade balance, but you will be waiting to see what the Fed does and instead of inflation you may have wage stagnation or actual cuts to services to keep a balanced budget. It all depends on being able to export enough to have liquidity to run the economy?
The EU also took option (a) it says below so you’re dead on.
He doesn’t seem opposed to large cuts on services. Issue is if they can’t produce enough goods will they eventually run out of services to cut 👀.
Also seems like stagnation is already at play:
But Argentine wages have remained stagnant or declined, with the monthly minimum wage for regulated workers just $264 as of this month, with workers in the informal economy often paid less.
It sounds a bit like being a Eurozone country. Free capital flow, fixed exchange rate, no monetary policy. It can work well if you can keep trade balance, but you will be waiting to see what the Fed does and instead of inflation you may have wage stagnation or actual cuts to services to keep a balanced budget. It all depends on being able to export enough to have liquidity to run the economy?
The EU also took option (a) it says below so you’re dead on.
He doesn’t seem opposed to large cuts on services. Issue is if they can’t produce enough goods will they eventually run out of services to cut 👀.
Also seems like stagnation is already at play:
Source