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Inflation rates, also in the western countries, are messed up statistics. Many 'corrections' are taking place that seem pretty much unjustifiable, lowering the
by noloqy 13y ago
Inflation rates, also in the western countries, are messed up statistics. Many 'corrections' are taking place that seem pretty much unjustifiable, lowering the reported inflation rate. Governments are selling inflation indexed securities, and thus have an incentive to report lower than actual inflation rates. They can do so because the reporting institutions are often government subsidiaries. I can imagine inflation "manipulation" is going on at a scale that has far greater consequences than LIBOR gate.
- GFischer 13y agoIn Uruguay, and I imagine Argentine as well, several social security payments are directly tied to inflation. Salary increases are also inflation-adjusted, which leads to unions calling governments liars, governments calling the unions greedy and liars, etc... Inflation is a serious thing, especially in these countries.
- iwwr 13y agoIf the government is fighting to maintain a legally mandated purchasing power, that just guarantees even higher inflation. Either they are willing to suspend the guarantee, or let the currency dissolve in (yet another) hyperinflation.