Steve Hanke at Cato has a good idea:
To stop Venezuela’s death spiral, it must dump the bolivar and adopt the greenback. This is called “dollarization.” It is a proven elixir. I know because I operated as a State Counselor in Montenegrowhen it dumped the worthless Yugoslav dinar in 1999 and replaced it with the Deutsche mark. I also watched the successful dollarization of Ecuador in 2001, when I was operating as an adviser to the Minister of Economy and Finance.
It is a good idea but monetary policy is not the only lever available and inflation is not the only problem in Venezuela. Dropping Chavismo,
Sidebar: WordPress really wants to convert Chavismo into Charisma. We hope that it stays as we wrote it. End Sidebar.
Venezuelan socialism, would be a great idea. The advantage of Hanke’s idea is that it is easy to implement but a real blow to the current Yankee hating administration in Venezuela. Renouncing Chavismo would be more important but way more difficult. The current state of affairs may lead to both.