The Economic Implications of Crypto Use in El Salvador

I read up on El Salvador a bit today, and it turns out that their economy and monetary system have some interesting aspects. The first is its currency: the Salvadoran colon was officially replaced in 2001 with the US Dollar by Paco Flores. Colons are still floating around, but not many people want them (could be Gresham's Law at work?). This means that El Salvador doesn't have a central bank which can devalue their soveriegn currency anytime the economy is in a slump, as is customary in Western economies. Unsurprisingly, El Salvador has had poor economic growth since dollarization went into effect.

Dollarization also means that El Salvador suffers on the international market when the US Fed brrrrr-prints like madmen. As the USD is devalued and debased by the Fed, Salvadoran export prices drop and imports become more expensive for the citizens. Furthermore, due to the horrendous death squad government which the CIA funded through the 1990s, 20% of Salvadorans live in the United States. These expatriates send millions of US dollars home each year.

El Salvador doesn't produce much, it's an agricultural economy. They import food. The country's infrastructure was devastated by 15 years of brutal civil war. The IMF is squeezing El Salvador hard, and they are making them beg for another billion dollar loan.

What if El Salvador could:

• De-dollarize
• Hedge against USD devaluation
• Give its citizens a chance to hold a currency that gains value
• Encourage foreign investment which isn't dollar-denominated
• Undercut extortionate remittance services like Western Union
• Bypass economic sanctions and nanny-state trade deals with the US which keep it a client state

All they really need to do is accept cryptocurrency to accomplish ALL of these goals! We already know that the IMF is furious that El Salvador is going crypto.

The USA might have to launch a military coup in El Salvador to get that government under its control and shut down Bitcoin use. Because they need to send a very strong signal to other countries who are considering crypto adoption as well. Just yesterday, Iran was muttering about making Bitcoin legal tender!

P.S. Jack Mallers is a cokehead and Strike is a JOKE.