Isn't that kind of what Brazil did in 1994 with URV?

From Wikipedia: "URVs were quoted in cruzeiros reais and its intrinsic value was pegged to three price indices and had a fixed parity of 1-to-1 to the daily U.S. dollar exchange rate."

It was the 1991 Cavallo Plan in Argentina that tied the local currency to the U.S. dollar:

https://en.wikipedia.org/wiki/Convertibility_plan

The Real Plan in Brazil created a three month period with a combination of the old currency (Cruzeiros Novos) and a new virtual one (URV - Unidade Real de Valor) with an official daily exchange rate between them. This rate was selected to keep the URV at almost exactly 1 U.S. dollar but when both were replaced by a new actual currency (the Real), that was officially allowed to float relative to the dollar.

The real did initially get slightly valued relative to the dollar (an exchange rate of 1 R$ = 0.85 US$, for example) but floated slightly up and down until the end of 1998 when it suddenly jumped to 2 R$ = 1 US$ in order to block a huge wave of speculative money that was destroying economies around the world (having previously hit Russia, then the Asian Tigers).

You would like to listen to / read this planet money episode: https://www.npr.org/sections/money/2010/10/04/130329523/how-...

>t the end of the day it’s a conflict of interest: the people want a stable medium of exchange and the government wants to finance its activities without balancing its budget.

This still holds for USD

If you're willing to put it in basically "god's hands" (hope America keeps it stable), why not pick something like a commodity money (metals or basket of commodities for instance) that at least somewhat mitigates this conflict of interest. Using _someone else's fiat_ seem like you're keeping all the downsides of fiat but only some of the upsides.

This is not a solution. What you need is a negative interest rate on cash to abolish inflation and currency speculation. Once that is done the central bank can control the money supply directly and the government can pay off its debts.

> The solution seems so simple to me: drop the ARS and use USD as the national currency

Actually, once the US hits hyperinflation, the US may want to consider using ARS as its national currency

The US is at no serious risk of hyperinflation in the foreseeable future, barring unknowable events / disasters.

Because doubling the amount of dollars in the past year or so is not at all worrying for "transitory" inflation. Dont be naive, it's coming. The politicians have kicked the can down the road for decades and had they not bailed out the bigs in 2008 and during this past 2 years we would be bankrupt. Its a house of cards. They are going to push us into a war to escape the inevitable.

Governments go to war to stop deflation, not inflation.

As you lower the interest rate below liquidity preference people will simply hold onto their money because they are speculating on higher interest rates.

No no no! You see velocity of money has decreased and productive output has increased. People don't like to spend the new money. Therefore inflation is low, do not be fooled by the Austrian tricksters suggesting otherwise.

You mean the monetarist tricksters. They assume the velocity is constant.

If hyperinflation is a knowable event, you'll already be in it. People would instantly spend their money if they knew hyperinflation was coming, making it a self fulfilling prophecy. It's really meaningless to make such statement about any currency that isn't already in hyperinflation.

You can see the future, impressive