|| -----Original Message-----
|| From: Vikash Yadav
|| The US does not have a history of caring for countries that are
|| linked to
|| the dollar. In the Bretton Woods system, the US did not care
|| about the rest
|| of the world when it inflated the dollar during the Vietnam War & War on
|| Poverty, so I am not sure I follow how the dollarization of Central Asia
|| poses any particular obligations on the US.
Well yeah, I don't see why Afghanistan should be the US's "responsibility" either. It's a strange idea. The US uses dollarization - as in Argentina - to its own advantage. Dumping the gold standard when everybody was holding dollars was a smart move for the US and bad for everyone else.
But the important point is not the protectorate angle, it's the dollarization and exclusion of the Euro angle IMO.
|| The turn toward the
|| dollar may simply be a desperate attempt to curb hyperinflation
|| and rampant
|| counterfeit currency practices.
Last I heard the Afghani was way overvalued; can't figure out why it went down so much while it's still raining 100-dollar bills. Counterfeiting has to be the reason.
||
|| The only other country that I can think of which uses another country's
|| currency as its official currency is Kirabati, which relies on the
|| Australian dollar. Does anyone know of other cases in the
|| post-WWII era?
Sure, Kosovo. It's switching from the Mark to the Euro now.
|| As for the Gulf States mentioned in the article, does anyone
|| know if they
|| have officially pegged their currencies to the dollar?
Yes. The GCC is talking of maybe moving to a basket including the Euro, but notime soon. BTW the rumors I once mentioned that Saudi was thinking of pricing its oil in euros proved to be unfounded.
Hakki