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Comment by defgeneric | Hacker News Reader

> The Bitcoin decision is single handedly marching San Salvador into a currency crisis

This is an extreme oversimplification. The issue is that decision to make Bitcoin legal tender has put El Salvador at odds with the IMF. Arguably they would have been at odds anyway, and the IMF is simply using this issue as leverage (as well as to foment internal political divisions). The issue is primarily political (not economic!), especially considering the small amount of money invested in relation to the country's overall finances.

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> that decision to make Bitcoin legal tender has put El Salvador at odds with the IMF

It also prompted downgrades from ratings agencies, credit spreads to widen in the international bond markets, took bilateral bailouts from e.g. the World Bank or the U.S. (its primary remittance and export provider) off the table, et cetera.

> small amount of money invested in relation to the country's overall finances

$100mm in a $29bn economy is a lot. Scaled to America's $24.9tn [1] GDP, it's $85bn. It's also something like 4% of their FX reserves and close to 10% of the money they're asking the IMF for.

[1] https://www.bea.gov/sites/default/files/2022-07/gdp2q22_adv....

When your lender of last resort tells you to jump, you say “how high?” or starve. El Salvador needs the IMF more than the IMF needs El Salvador.

It’s political in the sense that the IMF doesn’t want to throw fiat at an irresponsible government that is gambling away sovereign dollars. Good money after bad and all that.

"Appease the moneyed classes or starve" doesn't seem like a very just way to run the world. Granted, the IMF isn't the arbiter of justice, but punishing the PEOPLE of El Salvador for the actions of the local ruling classes is just cruel. Even if the "financial trouble" could lead to "regime change", we're obscuring the horrors for the citizenry behind some smarmy journalism words.

So stage a coup and put adults in charge instead of a crypto bro gambling away a nation’s sovereign funds. I agree the IMF should assist the El Salvadoran people, but that’s not currently an option being presented.

> So stage a coup

Have you ever stayed a coup? It is very very difficult. And historically, the consequences of coups have been mixed.

It's like people saying the Russians should just overthrow Putin...

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