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The argentine peso inflates very rapidly, then the government slashes zeros off the end of the money. Why on earth would I work hard to exchange toil for recei
by maeon3 14y ago
The argentine peso inflates very rapidly, then the government slashes zeros off the end of the money. Why on earth would I work hard to exchange toil for receipts that don't hold their claim on human labor? If people convert the peso to the dollar then they can store wealth. What kind of monster forces people to store labor in recipts made up in diappearing ink? Isn't that watered down slavery? To toil and be unable to save any excess for later? Its a fate worse than death for me.
- batista 14y agoThe kind of "monster" that wants the country as a whole to survive, not just the few lucky ones that can "store wealth".
- ninguem2 14y agoThese monsters should then vote for someone with economic sense, not the clusterfuck of idiots that you've been putting in power since the 1940's.
- Uchikoma 14y agoStoring "wealth" is by many regarded as the most promising way for people out of poverty.
- janus 14y agoIf you can't store wealth, how are you supposed to buy something like a house if the only way you could do it is by saving for many years?
- Spooky23 14y agoI'd ask you the inverse question. What monster keeps inflation so low as to make it impossible for regular people to earn anything on modest savings, yet provides a powerful incentive for wealthy individuals and corporations to hoard capital. Right now, people and small businesses are being starved of capital, because the folks with capital have no incentive to spend it. Question: Do you think that Microsoft would make a business decision to park nearly $60,000,000,000 in cash if there were a 6% inflation rate?
- JumpCrisscross 14y agoPragmatic versus right - if inflation were 6% (which isn't so bad as long as it isn't volatile) you would simply dump the dollars for euros or francs or renminbi and invest there. So yes, it would get the capital moving, but moving out. Note that when Microsoft "parks" cash it's going into government bonds, commercial paper, and bank deposits, not a vault of cash.
- panarky 14y ago> What monster keeps inflation so low as to make it impossible for regular people to earn anything on modest savings How would higher inflation help savers earn more money? Seems like higher inflation would hurt savers, not help them.
- Spooky23 14y agoHigher inflation would lead the central banks (who want lower levels of inflation) to raise interest rates in order to control inflation. We've been living with nearly 5 years of historically low rates of interest and inflation due to fiscal stimulus measures. The nasty side effect of that is that it is nearly risk-free for people with surplus capital to hold onto that capital. Generally speaking, high inflation is bad for savers. But virtually no inflation is also bad for savers, as you get no return investment without incurring significant risk.
- anamax 14y ago> Generally speaking, high inflation is bad for savers. But virtually no inflation is also bad for savers, as you get no return investment without incurring significant risk. "safe investments" don't outpace inflation. The only meaningful ROI accounts for inflation.
- diegofr 14y agoFiat money implies inflation. Or you are so naive to think that there is no US dollar devaluation?
- JumpCrisscross 14y agoI'm Swiss and respectfully disagree.
- ef4 14y agoThe Swiss national bank has intervened repeatedly over the last year to devalue the franc. They do it for the same mercantilist reason that China does it: to subsidize export industries. So even though Swiss consumers may not be seeing nominal price inflation, they are most definitely paying higher prices than they would have otherwise been paying if the SNB really maintained a hard currency.
- JumpCrisscross 14y agoI'm disagreeing that fiat money = inflation. The Swiss franc and price levels are stable thanks to intervention - else we'd be seeing debilitating deflation.