“The initial focus will be on how a new currency, which Brazil suggests calling the ‘sur’ (south), could boost regional trade and reduce reliance on the US dollar, officials told the Financial Times. It would at first run in parallel with the Brazilian real and Argentine peso.”
USAGOLD note: The dollar rebellion gains new adherents – the two largest economies in South America, and that makes for an interesting headline. That said, Argentina might find it difficult to give up its money printing ways – something that will no doubt be required in a monetary union along the lines of the European Union. In short, discussions about a currency union at some point will necessarily get down to the nitty-gritty of government spending, deficits, money printing – and most importantly, monetary sovereignty. Austerity has never been one of Argentina’s strong suits, and that fact of life, in our view, is likely to keep this new currency union in the discussion stage for a long time to come.