Bywarren, we have discussed this subject before, and you know we have similar ideas; but ever since I have been searching for a reason why things are the way they are in Belize. When foreigners come to Belize they always think they know everything better than Belizeans. Only after years, those who remain have to admit that Belizeans outsmart them, and lessons can be learnt here. What works anywhere else in the world doesn't always work in Belize.
We agree that the value of the Belize dollar is make believe; don't look at the economic formula, but at the story behind it. As long the Belize people have faith in the Belize dollar, it will be used on the local market in Belize, no matter what the value. The Author wrote: "The only real solidity in this economic picture, is that the Belizean public believe in the Government official rate".
Don't we already have a currency that is accepted on the international market; the US dollar? There are no foreign transactions in Belize dollars. Real estate, construction, hotel rates and most services here on the Island are already priced in US dollars. That what isn't priced in US, will, as Chris said be adjusted accordingly in about 30 minutes after the announcement of devaluation, so is there really a Belize Dollar?
Devaluating the Belize dollar or abandoning it is committing political suicide; everybody knows that. The day after December 31, 1949 when Governor Sir Roland Garvey passed the devaluation, on New Years Day, the PUP was born; it took the Belizeans a few more decades to become independent, but the devaluation was never forgiven.
The Belize Dollar really has nothing to do with the national debt; it is not collateral; and it is not the reason of this debt. In free currency exchange, the automatic adjustment of the rate will speed or slow the economy, but not here, as we have a government controlled rate, and not a free one; and more it is based on the US dollar, so it will go up and down with the US dollar.
Argentina is an entirely different country than Belize; it has got almost 40 million people, Belize has less than 300,000 - need I say more? All Belize inhabitants and the whole economy fit in an average sized city in Argentina - there is no comparison. I am not too sure that the US dollar will work out too good for them on the long run either.