[katamarimambo]

In the 90's both Brazil and Argentina pegged their currencies to the Dollar in some way to control inflation. In Argentina the peg was an 1 to 1 conversion. In Brazil, the Central Bank would define a band in which the Dollar would float and the band would be periodically changed like the interest rates.

But the main difference was that in Brazil it was just a Government policy that could be removed in a whim, while in Argentina it was a law, enshrined by Congress vote. When the Mexican crisis hit in 1994, it was clear that such measure had limited effect and would become poisonous to the nation's economy. But the Argentinian middle class went balls-deep into the illusion of a cheap dollar (unlike their Brazilian counterpart) and any depegging suggestion was political suicide. Brazil eventually depegged (later than they should, also for political reasons, but it was an obvious decision). Argentina depegged too, but only after the whole nation imploded.

Nostalgia for that illusion is one of the things fueling this vote.

[piva00]

Brazil depegged quite quickly given the economical environment. I lived in Brazil at the time, in 1994 the Real was introduced as another set of monetary measures to control hyperinflation and from what I remember even gained value against the dollar, then up to 1998 it was tightly controlled by the Bacen and in 1999 it was already a floating rate.

It might not have been the absolute best approach in hindsight (or even at the time, I don't recall the discussions, I was also in my teens) but at least the Real did end up controling the spiraling hyperinflation of the late 80s-early 90s.

My memories from that time are pretty bleak, grocers would have people working the whole day at stores remarking prices on the shelves (once in the morning, once in the afternoon and sometimes in the evening), my family would go all together on payday to grocery stores and fill up carts and carts with everything we needed for the month because money would be less valuable in a few hours... It was quite fucked up.

[katamarimambo]

Real never really gained value this way, the government defined the value of the bands. It floated up and down inside the bands, but the government was acting behind the scenes to keep the bands (essentialy a peg), mostly burning reserves, selling companies and cutting programs. It helped controlling inflation and was a good approach even in hindsight, the duration of the measure is the problem. In 1997 it was clear to everyone that the peg was not sustainable and should be removed, but the government postergated until past the (re)-elections. But that's Brazil, and then there's Argentina...