Should Jamaica adopt an international currency

[niceniss]

Re: Should Jamaica adopt an international currency

[ QUOTE ]
seems to me ppl get caught up when they hear dollar and see the big numbers.

[/ QUOTE ]

maybe because it relates directly to the lowered VALUE of the dollar...

[RichD]

Re: Should Jamaica adopt an international currency

[ QUOTE ]
[ QUOTE ]
seems to me ppl get caught up when they hear dollar and see the big numbers.

[/ QUOTE ]

maybe because it relates directly to the lowered VALUE of the dollar...

[/ QUOTE ]

dis is what im trying to get to...



suposed i said...we chaing di name of di currency..we goignto call it the jammy


and the new jammy is worth JAD$100....so if you earn JAD$100,000 a month today ...you will earn $1000 jammys a month

all prices salries will be adjusted accordingly.


what diffrence has this made in yout daily life?

[niceniss]

Re: Should Jamaica adopt an international currency

inflation(i.e. increase in money supply) and instability goes hand in hand, RichD. Inflation drives down the value(and cost) of the dollar...

[RichD]

Re: Should Jamaica adopt an international currency

[ QUOTE ]
inflation(i.e. increase in money supply) and instability goes hand in hand, RichD. Inflation drives down the value(and cost) of the dollar...

[/ QUOTE ]

or is it the other way around?

what are the primary inflationary drivers inthe jamaican economy?

[niceniss]

Re: Should Jamaica adopt an international currency

high interest rates to mop up liquidity (over supply of dollars)...

[RichD]

Re: Should Jamaica adopt an international currency

high intrest rates are used as a tool to control inflation

[niceniss]

Re: Should Jamaica adopt an international currency

my statement implies that.
high interest rates have a side effect separate and apart from the obvious; instability of the dollar...

[RichD]

Re: Should Jamaica adopt an international currency

[ QUOTE ]
my statement implies that.
high interest rates have a side effect separate and apart from the obvious; instability of the dollar...

[/ QUOTE ]

but even in the recent jamaica experience the high interest rates had the efect of bringing inflation down from a high of 80% to single digits.

high interes rates also had the effect of stabilizing the currency since it increased demand for the jamaican dollar.

[niceniss]

Re: Should Jamaica adopt an international currency

[ QUOTE ]
[ QUOTE ]
my statement implies that.
high interest rates have a side effect separate and apart from the obvious; instability of the dollar...

[/ QUOTE ]

but even in the recent jamaica experience the high interest rates had the efect of bringing inflation down from a high of 80% to single digits.

high interes rates also had the effect of stabilizing the currency since it increased demand for the jamaican dollar.

[/ QUOTE ]
oh? but u forget the other factor: the increased cost of goods and services that the Jamaican earner will have to bear when borrowing capital becomes more expensive because of the interest rates while his salary remains as is...

[niceniss]

Re: Should Jamaica adopt an international currency

you also havent factored in the fact that trading in papers rather than production will(and has in Jamaican experience)become more attractive to investors...

[RichD]

Re: Should Jamaica adopt an international currency

you see di cause an effect is not clear.

because of the rapid devaluation ( the instability due to loss of confidence and shortage of hard currency)of the jamaican dollar there was hyper inflation. as a response to this the gov choose a high interest rate apporach to slow inflation ( make it less attractive to borrow for anything) as well as stabilize the currency by increasing demand for Jamaican dollars.

so once inflation is under control and the currency stabilized saliries have tobe given time to adjust to the new levels.( this is waht we are slowly seeing now)

without stability in the currency salaries will never catch up.

[RichD]

Re: Should Jamaica adopt an international currency

[ QUOTE ]
you also havent factored in the fact that trading in papers rather than production will(and has in Jamaican experience)become more attractive to investors...

[/ QUOTE ]

but as you can see whe have reached a point where they are able to move interest rates to level where that is not the case

[Tuff Gong]

Re: Should Jamaica adopt an international currency

[ QUOTE ]
yes...but in terms of day to day operation/living...if the converasion rate remains stable and allows salries to adjust to this rate ( whichis what has been going on over th past 5 or so years) what effect does it have on a person if somthing cost him 20% of his pay ..does it matter that that 20% is denoted as $30,000, $3000 or $300? all that matters is that its not changing from day to day..and he can plan for and afford it.

seems to me ppl get caught up when they hear dollar and see the big numbers.

[/ QUOTE ]

Rich what I am about to say is not the antitheses of your arguments. On any given day all that you have said would be correct, but you cannot make such a sterile argument without taking into the unique situation of Jamaica.

A large percentage of Jamaicans are involved in daily importation for their daily survival, not so in the USA, not so in Italy, not so in Japan and not so in China.
In these countries the ordinary man in the street is insulated from this venture, they by sell and trade one to one locally.

In defense of stability Jamaica also imports other countries inflation and cost of production that is again transferred to joe public in Jamaica, much more than it would in the countries I mentioned.

[RichD]

Re: Should Jamaica adopt an international currency

and i agree with you there ...which comes back to my point about stability. stability stability.

since almost every thing we use daily has to be imported it is doubly important that we can predict from day to day what that is going to cost us.

so dat when you work for a wge that can buy your grocery this month..the same wage can buy it next month (whatever that number is)

[niceniss]

Re: Should Jamaica adopt an international currency

sounds like you have confidence in the policies that have misgoverned the country for the past 17 years...

I put it to you that the factors that have caused the instability of the dollar are not simply investor confidence and such to which you have pointed. I put it to you that factors such as crime, govt unpredictability (as in making fiscal policies[that affect investors], without viable opposition, at whim ),high overhead of utilities(caused by monopolies such as JPS),Public(govt) Corruption, lack of security and the attractiveness of buying govt papers at high interest rates(caused by govt printing excess dollars for election purposes [img]/forums/images/graemlins/smirk.gif[/img]) are the reasons for the instability and weakening of the Jamaican dollar and those factors are yet to be removed or even threatened...