Steve Hanke, professor of applied economics at Johns Hopkins University, has been appointed as a special advisor to Venezuela’s National Assembly to combat hyperinflation reaching 400%. He advocates for the full adoption of the U.S. dollar, which would mean abandoning the bolivar and the central bank. The bolivar has lost 78% of its value against the dollar over the past year, and spontaneous dollarization is already widespread in the Venezuelan economy. This transition would represent the biggest switch from domestic currencies to an alternative since the introduction of the euro in 1999. Hanke estimates that dollarization would attract massive foreign investment into the oil sector, enabling the country to service its 250 billion dollar debt, equivalent to 150% of GDP.
Source: Read the original article
