Because actually it's not the dollar. It's actually the peso in Buenos Aires. Very clever Buenos Aires street vendors decided to practice price discrimination to the detriment of any passing gringo tourists.

With imports still growing strongly and commodity prices beginning to fall as a result of the world slowdown, Argentina s large trade surplus is disappearing quickly. Fearing a weaker peso, spooked investors demand dollars.

The closest experiment along these lines is probably Argentina s exit in 2002 from its dollar exchange rate peg (embodied in its currency board) to a floating regime that depreciated the peso by 300 in the first three months.

An early warning was given by the Mexican peso crisis of 1994. However, their full force was revealed by the financial crises in East Asia (UNCTAD, 2000), a region with a long standing record of strong growth and fiscal discipline.

Thai import export firms can bet on a run on the baht by accelerating their dollar receipts and delaying their dollar payouts. Everyone can bet on a run on the Argentine peso a favorite sport of international financial speculators for a century and a half.

Do Europeans want to return to their own version of a flexible peso ? At the very least, European policymakers will need to be willing to (a) pesify contracts, (b) impose heavy restrictions on commercial banking operations, (c) restructure debts, and (d) introduce capital and exchange controls.

I favored the approach of dollarization , or replacing the Peso by the US dollar and thereby ending the fear of a future change of the exchange rate. Instead, the government closed down the banking system, so that depositors could no longer convert their pesos into dollars!

Chile s government led the way in 1967 by creating the Unidad de Fomento (UF), and other Latin American countries have followed suit. Despite the unit s technical sounding name, people in Chile seem to have learned to think in terms of the UF instead of the peso for important contracts.

As the reader may have guessed, these are real countries Mexico and Vietnam. Mexico shares a 2,000 mile long border with the United States, which provides not only privileged market access in goods and labor, but also a claim to the resources of the US Treasury (as became apparent during the 1995 peso crisis).

That is why my think tank, the Copenhagen Consensus, asked 82 of the world s top economists, 44 sector experts, and UN organizations and NGOs to evaluate which targets would do the most good for every dollar, euro, or peso spent. A team of eminent economists, including several Nobel laureates, then prioritized these targets in value for money terms.

Indexed units of account are not a new idea Chile s government led the way in 1967 by creating the Unidad de Fomento (UF), and other Latin American countries have followed suit. Despite the unit s technical sounding name, people in Chile seem to have learned to think in terms of the UF instead of the peso for important contracts.

As investors fled the country because of fear of devaluation (in a period in which the Argentine Government was promising never to devalue the peso, fixed at one to one with the US dollar), interest rates rose and bank deposits fell. This deepened the recession in 2000 and 2001 and led to a rising budget deficit because of declining tax revenues.

According to the Secretariat, additional requirements as a result of the changes with respect to the Swiss franc and the euro amount to 9.0 million and 3.4 million, respectively similar weakening of the exchange rate of the dollar to the Chilean peso, the Thai baht and the Kenyan shilling would result in additional requirements of 3.1 million, 1.1 million and 1.7 million, respectively.

The list of such currency movements which so far has included the euro's 25 fall against the dollar, a record low for the Mexican peso, and disorderly depreciations of the Brazilian real and other emerging economy currencies is getting longer by the day. Even healthy economies like South Korea are keen to weaken their currencies, leaving the US alone in its willingness to tolerate significant currency appreciation.

MEXICO CITY The last time Mexico experienced a political crisis more serious than the one it is undergoing today was in 1994, when a group of so called Zapatista guerrillas staged a semi armed uprising in the southern state of Chiapas. The president s handpicked successor was assassinated, and, as if that was not enough, the value of the peso had plummeted by nearly 70 .

Macri took over the presidency with a bang, launching an audacious and highly risky strategy that places aggressive price liberalization and the removal of quantitative controls front and center, ahead of the five measures relating to demand management and financial assistance. Already, most export taxes and currency controls have been scrapped, income taxes have been cut, and the exchange rate has been freed up, allowing for an immediate 30 depreciation of the peso.

According to Lorenzo Caliendo, an economist at the Yale School of Management, a surge in cross border trade and increases in real (inflation adjusted) wages in all three countries can be attributed to NAFTA even once other factors, like the opening of China, the peso crisis, the dot com bubble, and the Great Recession, are taken into account. In short, as former US Secretary of State George Shultz has noted, NAFTA has transformed the region.