6 ms·

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of eco

by cs702 4y ago

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." - John Maynard Keynes, The Economic Consequences of the Peace, 1919. Keynes wrote that to warn about the risk of inflation in Germany and its potential consequences -- years before high rates of inflation led to the failure of the German mark, the collapse of the Weimar republic, the rise of dangerous ideologues (the Nazis), and ultimately, World War II. If Turkey doesn't get inflation under control, it will implode.

dgellow 4y ago
As far as I understand Erdogan created the situation himself and fired everybody who would disagree. I don’t think he plans to get the inflation under control.
- cs702 4y ago
  I never said he does. In fact, I have no insight into what he is thinking or doing. My comment is only pointing out how destructive high inflation is. Please don't attack a straw-man.
  - tux3 4y ago
    I did not read GP as attacking a point you (haven't) made. It's merely extra information. Please assume good faith, otherwise discussions escalate into accusations.
    - cs702 4y ago
      Good point. Apologies to the author of the grandparent comment if I misinterpreted it!
      - dgellow 4y ago
        Thanks, I didn’t mean to attack you
- imtringued 4y ago
  In theory lowering interest rates is a good idea if you want to implement a debt brake but so far Erdogan never stopped deficit spending.
durnygbur 4y ago
> If Turkey doesn't get inflation under control, it will implode. Their geopolitical significance and NATO membership will prevent this from happening even at the cost of cementing Erdgodan's power. There is also sizable community of Turks economically anchored in Germany.
mda 4y ago
Not saying that it will be the same this time, but Turks lived with similar high inflation rates for more than 30 years from 1970s to 2000s.
lynguist 4y ago
Big big nope. Argentina is in hyperinflation mode for over 30 years. It didn’t implode. Economists don’t know everything. Their analyses are too mechanical.
- walkhour 4y ago
  The world is extremely complex and it's very hard to model in a lab or a computer. Economists due to this have a very hard job. Sometimes they get it right but it's not surprising their models have high errors of margin.
- supernova87a 4y ago
  There is a saying, "There are four kinds of countries: developed countries, underdeveloped countries, Japan, and Argentina." Japan — nobody knows why it grows, and Argentina — nobody knows why it doesn't.
  - Mikeb85 4y ago
    > Japan — nobody knows why it grows Productivity https://tradingeconomics.com/japan/gdp-per-capita-ppp https://tradingeconomics.com/japan/gdp-per-capita-ppp > Argentina — nobody knows why it doesn't I mean, Argentina's economy has grown a lot since 2002. But for the most part, they've been hurt by a large debt burden and financial mismanagement.
- j8hn 4y ago
  With Argentina having hyperinflation for so long, how have they avoided a worse fate similar to Venezuela?
  - petronio 4y ago
    Venezuela is not only almost completely dependent on oil exports (extreme price fluctuations) but it's also not agriculturally self sufficient. It's not the only country with those problems, and they're not insurmountable problems, but it requires good economic planning to be able to handle downturns in those conditions, something Venezuela didn't have. Argentina, on the other hand, has somewhat more varied exports (though soy and corn products are a large portion) and is agriculturally self sufficient. Unlike Venezuela, which had a "export oil, import everything else" mentality, Argentina has a large degree of economic protectionism and so they do have other sectors to help supply domestic demand to some degree. There's obviously many other factors, but those are the largest ones in my opinion.
FollowingTheDao 4y ago
As will the U.S.
TMWNN 4y ago
>Keynes wrote that to warn about the risk of inflation in Germany and its potential consequences -- years before high rates of inflation led to the failure of the German mark, the collapse of the Weimar republic, the rise of dangerous ideologues (the Nazis), and ultimately, World War II. >If Turkey doesn't get inflation under control, it will implode. As others have told you, Turkey and other countries have seen very high inflation rates for years/decades without collapsing. Your history of Germany isn't correct, either. The hyperinflation that afflicted Germany in the early 1920s did hurt the Weimar Republic and caused a lot of chaos, but it didn't collapse. Yes, the Nazis were born during the chaotic years, but it remained insignificant as the Weimar government reined in inflation. By the late 1920s Germany was growing again and showed every sign of again becoming Europe's industrial leader. The Nazis took power in 1933, during the worldwide economic depression.

by cs702 4y ago

dgellow 4y ago

As far as I understand Erdogan created the situation himself and fired everybody who would disagree. I don’t think he plans to get the inflation under control.

cs702 4y ago
I never said he does. In fact, I have no insight into what he is thinking or doing. My comment is only pointing out how destructive high inflation is. Please don't attack a straw-man.
- tux3 4y ago
  I did not read GP as attacking a point you (haven't) made. It's merely extra information. Please assume good faith, otherwise discussions escalate into accusations.
  - cs702 4y ago
    Good point. Apologies to the author of the grandparent comment if I misinterpreted it!
    - dgellow 4y ago
      Thanks, I didn’t mean to attack you
imtringued 4y ago
In theory lowering interest rates is a good idea if you want to implement a debt brake but so far Erdogan never stopped deficit spending.

durnygbur 4y ago

> If Turkey doesn't get inflation under control, it will implode. Their geopolitical significance and NATO membership will prevent this from happening even at the cost of cementing Erdgodan's power. There is also sizable community of Turks economically anchored in Germany.

mda 4y ago

Not saying that it will be the same this time, but Turks lived with similar high inflation rates for more than 30 years from 1970s to 2000s.

lynguist 4y ago

Big big nope. Argentina is in hyperinflation mode for over 30 years. It didn’t implode. Economists don’t know everything. Their analyses are too mechanical.

walkhour 4y ago
The world is extremely complex and it's very hard to model in a lab or a computer. Economists due to this have a very hard job. Sometimes they get it right but it's not surprising their models have high errors of margin.
supernova87a 4y ago
There is a saying, "There are four kinds of countries: developed countries, underdeveloped countries, Japan, and Argentina." Japan — nobody knows why it grows, and Argentina — nobody knows why it doesn't.
- Mikeb85 4y ago
  > Japan — nobody knows why it grows Productivity https://tradingeconomics.com/japan/gdp-per-capita-ppp https://tradingeconomics.com/japan/gdp-per-capita-ppp > Argentina — nobody knows why it doesn't I mean, Argentina's economy has grown a lot since 2002. But for the most part, they've been hurt by a large debt burden and financial mismanagement.
j8hn 4y ago
With Argentina having hyperinflation for so long, how have they avoided a worse fate similar to Venezuela?
- petronio 4y ago
  Venezuela is not only almost completely dependent on oil exports (extreme price fluctuations) but it's also not agriculturally self sufficient. It's not the only country with those problems, and they're not insurmountable problems, but it requires good economic planning to be able to handle downturns in those conditions, something Venezuela didn't have. Argentina, on the other hand, has somewhat more varied exports (though soy and corn products are a large portion) and is agriculturally self sufficient. Unlike Venezuela, which had a "export oil, import everything else" mentality, Argentina has a large degree of economic protectionism and so they do have other sectors to help supply domestic demand to some degree. There's obviously many other factors, but those are the largest ones in my opinion.

FollowingTheDao 4y ago

As will the U.S.

TMWNN 4y ago

>Keynes wrote that to warn about the risk of inflation in Germany and its potential consequences -- years before high rates of inflation led to the failure of the German mark, the collapse of the Weimar republic, the rise of dangerous ideologues (the Nazis), and ultimately, World War II. >If Turkey doesn't get inflation under control, it will implode. As others have told you, Turkey and other countries have seen very high inflation rates for years/decades without collapsing. Your history of Germany isn't correct, either. The hyperinflation that afflicted Germany in the early 1920s did hurt the Weimar Republic and caused a lot of chaos, but it didn't collapse. Yes, the Nazis were born during the chaotic years, but it remained insignificant as the Weimar government reined in inflation. By the late 1920s Germany was growing again and showed every sign of again becoming Europe's industrial leader. The Nazis took power in 1933, during the worldwide economic depression.