Monday, May 11, 2009

In Spanish, Peso Means Weight

In the 1970s, as many South American countries suffered under military dictatorships, they also endured hyper-inflation that, in some cases, reached 50 percent per month. In some cases, the military regimes inherited the problem, in others they caused it, and in yet others they threw fuel of fire.

In dealing with the problem, they often found their currencies unwieldy - Argentina, for instance, once had to issue a million-peso banknote. As the situation stabilized, currency reforms cut zeros to make calculations more manageable. New banknotes and coins came into circulation, but Augusto Pinochet’s Chilean regime was the only one to use them as a blatant propaganda tool - issuing 10-peso and 100-peso coins showing Libertad (“Freedom”) breaking the supposed chains of Salvador Allende’s constitutional government in Pinochet’s coup of September 11, 1973.

For 16 years, until Chile returned to constitutional government, its citizens literally lugged their unhappy reality around in their pockets and faced it every time they purchased candy or ice cream. On taking office in 1989, though, the new Concertación government changed the face of the coins and, in the interim, these ugly reminders of dictatorship have nearly disappeared from circulation.

In recent years, Chileans’ biggest monetary problem has been the sheer weight of coins that accumulate in their pockets as the peso - about 35 per US dollar in the 1980s and nearly 600 per dollar now - has depreciated over the decades (in the last few years, though, it's shown remarkable strength). Recently, the government has announced that, for the country’s bicentennial in 2010, it would mint new coins of 20 and 200 pesos. This will reduce the cost of minting and, at the same time, it should reduce the burden of coins on Chileans’ pockets, if not their pocketbooks.

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