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Because you can not dismiss the URV (and the Plano Real at large) as "just creating another currency". If URV was "just another currency", then it would have f

Because you can not dismiss the URV (and the Plano Real at large) as "just creating another currency". If URV was "just another currency", then it would have failed like all the previous attempts have. But Plano Real actually controlled inflation, de-indexed the economy and public debt, etc.

matheusmoreira 6y ago
https://en.wikipedia.org/wiki/Unidade_real_de_valor https://en.wikipedia.org/wiki/Unidade_real_de_valor > Its main purpose was to establish a parallel currency to the cruzeiro real, free from the effects of inertial inflation on the latter, which exceeded 1,200% per year prior to the implementation of the new currency, the real. Seems like they didn't create one but two new currencies: URV and the real we use today. There were exchange rates and everything. Not sure what's so special about it.
- rglullis 6y ago
  > There were exchange rates and everything. So did many other economic plans and countries that tried to control inflation by keeping an artificial peg to the USD. That also didn't work. > Not sure what's so special about it. That fact that it worked. That's what it is special about it. It wasn't "just the creation of another currency". It was the fact that URV allowed to de-index the economy. It made it possible for people to separate the price from the value of things when they were spending. It made it possible for people to stop rushing to gas station or the groceries as soon as they got their paycheck, because now their salaries were nominated in URV and they didn't have to spend as possible before its value corroded. It wasn't URV by itself that solved the issue of hyperinflation in Brazil. Inflation would come back if FHC didn't continue with the budget-balancing reforms, the privatizations, the increased taxes. But it was URV that gave people some faith that things could be stable, which is an absolute requirement. If people didn't believe that the money in their pockets will hold their value, they will simply spend all of it as fast as possible, which leads to... inflation. This is why I asked about your age in the other thread. You never lived in hyperinflation, so you simply can not fathom what it was like.
  - throwaway210222 6y ago
    > You never lived in hyperinflation, so you simply can not fathom what it was like. Of course he/she can fathom what its like. You just told him/her. This you-cannot-imagine-nor-comment-on-anything-you-never-personally-experienced trope needs to stop.
    - rglullis 6y ago
      I meant it in the sense of "you are downplaying the significance of it and its difference to a simple currency change because you never experienced decades of failed attempts at fixing hyperinflation." I didn't say anything to the effect of "you can not comment on it", so save your whining for something else.
  - matheusmoreira 6y ago
    > That fact that it worked. That's what it is special about it. The fact it worked doesn't make it something more than just yet another inflationary government currency. > It was the fact that URV allowed to de-index the economy. I'm not sure what it means to "de-index" the economy. > It made it possible for people to separate the price from the value of things when they were spending. The value of things in URV is just another price quoted in a different currency. Not sure what magic they performed to convince everyone that these prices would remain stable but that doesn't mean it's anything other than a new currency. Look at real now. Look at the dollar. They print trillions of them like it's nothing. > because now their salaries were nominated in URV I suppose things like this made it easy for the population to get used to the new currency. > If people didn't believe that the money in their pockets will hold their value, they will simply spend all of it as fast as possible, which leads to... inflation. Naturally. When this happens, the solution is always to create a new currency. The old one cannot be saved without deflationary monetary policy which no country will ever adopt. I have no idea what exactly convinced the masses that real was viable. Obviously it was going to inflate just like the rest, just at different rates. To me it sounds like the government just forced it on everyone until they got used to thinking in terms of real prices. > This is why I asked about your age in the other thread. You never lived in hyperinflation, so you simply can not fathom what it was like. Not at an emotional level, no. I do understand it at an intellectual level. Just yet another stupid problem created by governments irresponsibly printing money. Why nations even insist on creating these shitcoins is beyond me. I guess they enjoy the ability to screw up the economy.

matheusmoreira 6y ago

https://en.wikipedia.org/wiki/Unidade_real_de_valor https://en.wikipedia.org/wiki/Unidade_real_de_valor > Its main purpose was to establish a parallel currency to the cruzeiro real, free from the effects of inertial inflation on the latter, which exceeded 1,200% per year prior to the implementation of the new currency, the real. Seems like they didn't create one but two new currencies: URV and the real we use today. There were exchange rates and everything. Not sure what's so special about it.

rglullis 6y ago
> There were exchange rates and everything. So did many other economic plans and countries that tried to control inflation by keeping an artificial peg to the USD. That also didn't work. > Not sure what's so special about it. That fact that it worked. That's what it is special about it. It wasn't "just the creation of another currency". It was the fact that URV allowed to de-index the economy. It made it possible for people to separate the price from the value of things when they were spending. It made it possible for people to stop rushing to gas station or the groceries as soon as they got their paycheck, because now their salaries were nominated in URV and they didn't have to spend as possible before its value corroded. It wasn't URV by itself that solved the issue of hyperinflation in Brazil. Inflation would come back if FHC didn't continue with the budget-balancing reforms, the privatizations, the increased taxes. But it was URV that gave people some faith that things could be stable, which is an absolute requirement. If people didn't believe that the money in their pockets will hold their value, they will simply spend all of it as fast as possible, which leads to... inflation. This is why I asked about your age in the other thread. You never lived in hyperinflation, so you simply can not fathom what it was like.
- throwaway210222 6y ago
  > You never lived in hyperinflation, so you simply can not fathom what it was like. Of course he/she can fathom what its like. You just told him/her. This you-cannot-imagine-nor-comment-on-anything-you-never-personally-experienced trope needs to stop.
  - rglullis 6y ago
    I meant it in the sense of "you are downplaying the significance of it and its difference to a simple currency change because you never experienced decades of failed attempts at fixing hyperinflation." I didn't say anything to the effect of "you can not comment on it", so save your whining for something else.
- matheusmoreira 6y ago
  > That fact that it worked. That's what it is special about it. The fact it worked doesn't make it something more than just yet another inflationary government currency. > It was the fact that URV allowed to de-index the economy. I'm not sure what it means to "de-index" the economy. > It made it possible for people to separate the price from the value of things when they were spending. The value of things in URV is just another price quoted in a different currency. Not sure what magic they performed to convince everyone that these prices would remain stable but that doesn't mean it's anything other than a new currency. Look at real now. Look at the dollar. They print trillions of them like it's nothing. > because now their salaries were nominated in URV I suppose things like this made it easy for the population to get used to the new currency. > If people didn't believe that the money in their pockets will hold their value, they will simply spend all of it as fast as possible, which leads to... inflation. Naturally. When this happens, the solution is always to create a new currency. The old one cannot be saved without deflationary monetary policy which no country will ever adopt. I have no idea what exactly convinced the masses that real was viable. Obviously it was going to inflate just like the rest, just at different rates. To me it sounds like the government just forced it on everyone until they got used to thinking in terms of real prices. > This is why I asked about your age in the other thread. You never lived in hyperinflation, so you simply can not fathom what it was like. Not at an emotional level, no. I do understand it at an intellectual level. Just yet another stupid problem created by governments irresponsibly printing money. Why nations even insist on creating these shitcoins is beyond me. I guess they enjoy the ability to screw up the economy.