Argentina and Brazil propose a bizarre common currency

Argentina is running out of vaults. With annual inflation nearing 100%, as the central bank prints bills to cover the government’s fiscal deficit, local banks are making space for ballooning stocks of pesos. Officials have tightened capital controls. Imports are at a standstill. The government is going through the motions with the imf to avoid its tenth sovereign default since independence in 1816. Yet on January 22nd Luiz Inácio Lula da Silva, Brazil’s president, and Alberto Fernández, his Argentine counterpart, announced they would start preparations for a common currency, possibly leading to a full currency union, which would hitch South America’s biggest economy to one of its sickest.