The main American Export and Argentina’s problem

Wednesday, 23 August 2000

Hugo Salinas Price

The main export of the U.S., is paper. It’s very fine stuff, made by a famous papermaker.

Last June, the U.S. again exported an important amount of this paper, as they have been doing every month for many years. It appears that this year, exports of paper may amount to $400 billion, perhaps more. The paper is very valuable; June’s exports amounted to only about 392 cubic yards in volume, but worth about $30 billion.

This paper is exported in small rectangles. Each one is engraved and says: “One Hundred Dollars”. A cubic yard holds about 765,000 pieces.

So, June’s export of paper of 392 cubic yards amounted to about $30 billion.

The whole world loves these pretty papers, so they have been going up in value.

The U.S. exchanges these papers for cheap goods all over the world. Every time the papers go up in value, the U.S. gets more stuff in exchange. The U.S. doesn’t have to worry about exporting other stuff; if they want more foreign goods, they just export more paper.

Argentine has a Currency Board, so their money is really these pieces of paper. To buy things outside Argentine, they have to use the papers exported by the U.S. to their country; but of course, when they buy things, quantities of papers leave Argentine and business falls off. Unemployment spreads as the economy contracts.

Argentine cannot export papers like the U.S. – it doesn’t have the paper concession – it has to export things; and since it is using a currency that is going up in value on world markets, well, of course Argentine costs go up, too, with regard to people who would like to buy stuff from Argentine. This is an uncomfortable position for the Argentinians. They have to lower prices, lower costs, lower wages, fire workers, or close down businesses.

But, the Americans are having a great time! A wonderful thing it is, to export engraved paper.  There seems to be no end to the world’s desire to own these engraved bits of paper.  In the meantime, the Argentinians are having second thoughts about using U.S. papers as their money.

Those who dream of dolarizing Mexico, please take note!