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I'm an old Argentinan and lived through many inflation and hyperinflation cycles already. The cause is trivial: Governments are given the 'infinite money' mach

I'm an old Argentinan and lived through many inflation and hyperinflation cycles already. The cause is trivial: Governments are given the 'infinite money' machine and they abuse it. They abuse it like if they were primary school kids, thinking printing money to pay for stuff is a valid solution, its unbelievable but they truly did this for decades. Then you think, if this is true, do they print money to pay themselves and become millionaires? answer is incredible: Yes, they do exactly that, and if you visit the house of any politician in Venezuela or Argentina, you see that they live like Silicon Valley Billionaries, next to the slums they have created. If they need money for anything they just add it in the budget and at the end of they year they just print it! I know it seems crazy but they do exactly this, since 1970. The results are obvious. In our case is a little more sinister because its not enough to print money, they have to make all other money illegal, or else people would just stop using the fake currency. TLDR: They did exactly that, any currency except the one they print is illegal. USA did this in the pandemic, and now you have the consequences. You can't print money from nothing, its that simple.

xadhominemx 5y ago
The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semiconductors, slots at ports, oil, etc is outstripping supply, causing prices to go up. It’s possible that the situation will devolve into a wage-price stagflationary cycles similar to what Argentina and other emerging markets have experienced over the decades, but that is not what is happening now.
- aortega 5y ago
  I'm not and economist, but I think its quite obvious that there is a difference between a localized price spike from a particular asset, another is all assets increasing in price uniformly. The second is not all assets becoming scarce at the same time, but the devaluation of the currency used to measure the assets' price.
  - xadhominemx 5y ago
    No, what’s happening now is that real demand is higher than supply across many supply chains. If it was just money supply, there wouldn’t be widespread shortages across virtually every supply chain.
    - leereeves 5y ago
      It doesn't have to be one or the other. It's quite possible to have inflation along with the shortages that are causing price spikes for particular products, like GPUs and cars.
      - xadhominemx 5y ago
        Inflation starting showing up when the supply shortages arose, well after the major waves deficit-funded stimulus ended.
        aortega 5y ago
        You can't explain inflation as the widespread shortage of everything at the same time.
        xadhominemx 5y ago
        Aggregate demand is very high due to 1) global shift of consumer spend from services to goods, 2) global fiscal stimulus, 3) wealth effect from booming asset valuations (though this should be fading). Global supply is lower than it should be due to 1) low levels of capital investment over the past 3-5 years in several key industries (eg, semiconductors, US shale oil) for idiosyncratic reasons, 2) COVID-related reduction of port and air-transit capacity, 3) overall low levels of commercials capital investment in 2020 due to COVID-related financial prudence, 4) impact of the Ukraine invasion on oil and gas supply
    - aortega 5y ago
      It might be. But also its the same excuse our government gives for prices increases: it's always 'external factors' and never 'we just printed a huge bunch of pesos'. What I think is happening is that there are virtual price-controls and if you implement price-controls to fight inflation, there is only one outcome since it first was done by the Hammurabi code 4000 years ago in Babylon: shortages.
- walkhour 5y ago
  You are simply stating something without backing it by any evidence. How exactly do you know all the money pumped during the pandemic hasn't contributed to the price spikes and that the sole reason is real demand for semiconductors, oil, ... .
  - xadhominemx 5y ago
    There is no controversy regarding shortages of semiconductors, logistics capacity, and more recently oil and gas. It’s hard to imagine anyone could be unaware of these issues.
    - walkhour 5y ago
      I'm not denying this, I think supply side shortages tend to produce inflation. Please see my response again. But to clarify, you said: > The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semiconductors, slots at ports, oil, etc is outstripping supply, causing prices to go up How do you know the money pumped into the economy hasn't contributed(I'm not saying it's the sole cause) to the price spikes?
      - xadhominemx 5y ago
        Because money supply had the big upward adjustment in 1H2020 and inflation kicked in in 2H21 (same time as the supply shortages), and wage growth is not very high. Money supply growth probably has some impact on deflation not happening two years ago.
        walkhour 5y ago
        The sum of the money supply in 2H2020 and 1H2021 is similar to the money supply in 1H2020, so I don't think the fact that inflation kicked in 2H2021 makes your case. Also note the money supply was higher in 2H2020 and 1H2021 than in the semesters previous to 1H2020. Besides there's no contradiction in inflation lagging an increase in money supply. In addition, wage growth not being high doesn't prove money supply didn't contribute to inflation. Inflation and wage stagnation can happen. > Money supply growth probably has some impact on deflation not happening two years ago Similarly to my first comment, this needs to be backed, you're simply stating it.
systemvoltage 5y ago
> USA did this in the pandemic, and now you have the consequences. You can't print money from nothing, its that simple. When it was going on, you couldn't speak against it. Every single comment on HN or otherwise, that brought up inflation was being casted as right-wing or consipiratory, and therefore flagged. If you tried to speak about inflation just in last year, March 2021, you wouldn't be able to on HN. Why did we do this?
- WaxProlix 5y ago
  Here's a search for comments with 'inflation' in them between feb and may of '21. https://hn.algolia.com/?dateEnd=1621296000&dateRange=custom&dateStart=1613088000&page=0&prefix=false&query=inflation&sort=byPopularity&type=comment https://hn.algolia.com/?dateEnd=1621296000&dateRange=custom&... There seem to be plenty of comments discussing inflation in the first ~10 pages which are not flagged/dead/downvoted to oblivion. Was there maybe some other reason the posts you're thinking of could have been cast as right-wing or conspiratorial?
  - systemvoltage 5y ago
    It was very difficult to say anything. I’m surprised you found some exceptions, I was just going by the memory. I distinctly remember it was such a struggle to express. Even the mildest comments about inflation were straight out flagged as it was against helping the struggling lower-middle class. I think HN is still better, it was far worse anywhere else (Reddit).
    - aortega 5y ago
      I think its explainable because back then you were in the part of fuck around, and now you are in the part of find out.
      - systemvoltage 5y ago
        I reluctantly admit, I laughed pretty hard at this.
teeray 5y ago
> they have to make all other money illegal, or else people would just stop using the fake currency See: efforts to ban crypto
ephbit 5y ago
> The cause is trivial: Governments are given the 'infinite money' machine and they abuse it. They abuse it like if they were primary school kids, thinking printing money to pay for stuff is a valid solution, its unbelievable but they truly did this for decades. Primary school kids? I disagree. As I wrote above, they know exactly what they're doing. It's just the easiest way for politicians, as long as citizens don't demand honest policies. Honest policies means: ressources can only be allocated once. So because they're scarce, politicians (would ideally) have to decide where to cut allocation and where to increase. But cutting allocation gets them bad rep, so they avoid it. So instead they borrow/print money and spend it as they promise prior to elections. Which does exactly the same thing under the hood. Printing money allocates _less_ ressources to everything _but_ those things where the printed money goes. It just dilutes the value, so the amount by which the whole pool was diluted can be freely allocated. It's relatively easy to do. Currently, because people have difficulties arguing against it and there's a deeply ingrained culture that justifies it, there's not much opposition. That's why they do it.

xadhominemx 5y ago

The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semiconductors, slots at ports, oil, etc is outstripping supply, causing prices to go up. It’s possible that the situation will devolve into a wage-price stagflationary cycles similar to what Argentina and other emerging markets have experienced over the decades, but that is not what is happening now.

aortega 5y ago
I'm not and economist, but I think its quite obvious that there is a difference between a localized price spike from a particular asset, another is all assets increasing in price uniformly. The second is not all assets becoming scarce at the same time, but the devaluation of the currency used to measure the assets' price.
- xadhominemx 5y ago
  No, what’s happening now is that real demand is higher than supply across many supply chains. If it was just money supply, there wouldn’t be widespread shortages across virtually every supply chain.
  - leereeves 5y ago
    It doesn't have to be one or the other. It's quite possible to have inflation along with the shortages that are causing price spikes for particular products, like GPUs and cars.
    - xadhominemx 5y ago
      Inflation starting showing up when the supply shortages arose, well after the major waves deficit-funded stimulus ended.
      - aortega 5y ago
        You can't explain inflation as the widespread shortage of everything at the same time.
        xadhominemx 5y ago
        Aggregate demand is very high due to 1) global shift of consumer spend from services to goods, 2) global fiscal stimulus, 3) wealth effect from booming asset valuations (though this should be fading). Global supply is lower than it should be due to 1) low levels of capital investment over the past 3-5 years in several key industries (eg, semiconductors, US shale oil) for idiosyncratic reasons, 2) COVID-related reduction of port and air-transit capacity, 3) overall low levels of commercials capital investment in 2020 due to COVID-related financial prudence, 4) impact of the Ukraine invasion on oil and gas supply
  - aortega 5y ago
    It might be. But also its the same excuse our government gives for prices increases: it's always 'external factors' and never 'we just printed a huge bunch of pesos'. What I think is happening is that there are virtual price-controls and if you implement price-controls to fight inflation, there is only one outcome since it first was done by the Hammurabi code 4000 years ago in Babylon: shortages.
walkhour 5y ago
You are simply stating something without backing it by any evidence. How exactly do you know all the money pumped during the pandemic hasn't contributed to the price spikes and that the sole reason is real demand for semiconductors, oil, ... .
- xadhominemx 5y ago
  There is no controversy regarding shortages of semiconductors, logistics capacity, and more recently oil and gas. It’s hard to imagine anyone could be unaware of these issues.
  - walkhour 5y ago
    I'm not denying this, I think supply side shortages tend to produce inflation. Please see my response again. But to clarify, you said: > The money supply-driven inflation you saw in Argentina is nothing like what developed nations are seeing now. Prices are spiking because real demand for semiconductors, slots at ports, oil, etc is outstripping supply, causing prices to go up How do you know the money pumped into the economy hasn't contributed(I'm not saying it's the sole cause) to the price spikes?
    - xadhominemx 5y ago
      Because money supply had the big upward adjustment in 1H2020 and inflation kicked in in 2H21 (same time as the supply shortages), and wage growth is not very high. Money supply growth probably has some impact on deflation not happening two years ago.
      - walkhour 5y ago
        The sum of the money supply in 2H2020 and 1H2021 is similar to the money supply in 1H2020, so I don't think the fact that inflation kicked in 2H2021 makes your case. Also note the money supply was higher in 2H2020 and 1H2021 than in the semesters previous to 1H2020. Besides there's no contradiction in inflation lagging an increase in money supply. In addition, wage growth not being high doesn't prove money supply didn't contribute to inflation. Inflation and wage stagnation can happen. > Money supply growth probably has some impact on deflation not happening two years ago Similarly to my first comment, this needs to be backed, you're simply stating it.

systemvoltage 5y ago

> USA did this in the pandemic, and now you have the consequences. You can't print money from nothing, its that simple. When it was going on, you couldn't speak against it. Every single comment on HN or otherwise, that brought up inflation was being casted as right-wing or consipiratory, and therefore flagged. If you tried to speak about inflation just in last year, March 2021, you wouldn't be able to on HN. Why did we do this?

WaxProlix 5y ago
Here's a search for comments with 'inflation' in them between feb and may of '21. https://hn.algolia.com/?dateEnd=1621296000&dateRange=custom&dateStart=1613088000&page=0&prefix=false&query=inflation&sort=byPopularity&type=comment https://hn.algolia.com/?dateEnd=1621296000&dateRange=custom&... There seem to be plenty of comments discussing inflation in the first ~10 pages which are not flagged/dead/downvoted to oblivion. Was there maybe some other reason the posts you're thinking of could have been cast as right-wing or conspiratorial?
- systemvoltage 5y ago
  It was very difficult to say anything. I’m surprised you found some exceptions, I was just going by the memory. I distinctly remember it was such a struggle to express. Even the mildest comments about inflation were straight out flagged as it was against helping the struggling lower-middle class. I think HN is still better, it was far worse anywhere else (Reddit).
  - aortega 5y ago
    I think its explainable because back then you were in the part of fuck around, and now you are in the part of find out.
    - systemvoltage 5y ago
      I reluctantly admit, I laughed pretty hard at this.

teeray 5y ago

> they have to make all other money illegal, or else people would just stop using the fake currency See: efforts to ban crypto

ephbit 5y ago

> The cause is trivial: Governments are given the 'infinite money' machine and they abuse it. They abuse it like if they were primary school kids, thinking printing money to pay for stuff is a valid solution, its unbelievable but they truly did this for decades. Primary school kids? I disagree. As I wrote above, they know exactly what they're doing. It's just the easiest way for politicians, as long as citizens don't demand honest policies. Honest policies means: ressources can only be allocated once. So because they're scarce, politicians (would ideally) have to decide where to cut allocation and where to increase. But cutting allocation gets them bad rep, so they avoid it. So instead they borrow/print money and spend it as they promise prior to elections. Which does exactly the same thing under the hood. Printing money allocates _less_ ressources to everything _but_ those things where the printed money goes. It just dilutes the value, so the amount by which the whole pool was diluted can be freely allocated. It's relatively easy to do. Currently, because people have difficulties arguing against it and there's a deeply ingrained culture that justifies it, there's not much opposition. That's why they do it.