Galloping Inflation 2

[steveinbsas]

Not one of the suggestions "curb" inflation. They are only actions one can take to "cope" with inflation...by curbing personal spending. All of CABJ's ideas except # 5 (which is just common sense) can be summed up in one word: sacrifice. They will do nothing to curb inflation. These sacrifices will only lower the individual's standard of living, which is the inevitable consequence of inflation.

Individual consumers are not responsible for inflation. Their sacrifices won't stop it. I wonder what sacrifices the big (government) spenders in Argentina are making to "cope" with inflation. (In the US they vote themselves big increases in pay....and then increase taxes...and still spend much more than that. Sound familiar?) The equivocation of "coping with" inflation and "curbing it" is frequently embraced by those who are responsible for it...as they call for greater sacrifices. (Remember the Carter years in the US...and the "misery" index?)

As usual, I appreciate BBW's humor, but I imagine most Argentines sold their yachts after losing most of their money in banks in 2002. I'm not sure how many are still eating caviar or enjoying the other luxuries. Ironically, there wasn't much inflation in the decade prior to the banking crisis. It wasn't so easy for the government to inflate the currency while it was pegged one to one with the dollar. Instead, the government borrowed and spent over 100 billion (dollars) it could not repay. Forcibly converting dollar accounts to pesos at a devalued rate of well over 3 to 1 was far more efficient way of confiscating wealth than inflation. Of course that is no longer an option. Inflation is back. Only government has the power to "curb" it.

 

[bigbadwolf]

Not one of the suggestions "curb" inflation. They are only actions one can take to "cope" with inflation...by curbing personal spending. All of CABJ's ideas except # 5 (which is just common sense) can be summed up in one word: sacrifice. They will do nothing to curb inflation. These sacrifices will only lower the individual's standard of living, which is the inevitable consequence of inflation.

There are winners and losers in a period of rapid inflation. Judging by the comments, most posters here are humble wage earners whose pay has not kept abreast with inflation. So then who are the winners? And winners there must be, as Argentina's commodity-exporting economy has been doing well. It could be the state itself, which can indulge in even more spending than usual (and by implication, the various constituencies that are clients of the state must be doing better). Extra spending could stoke inflation in an economy with production bottlenecks. Other winners could be private interests, whose wealth and earnings have shot up. I have no idea. If a large group of people is becoming impoverished, someone else must be getting richer in an environment where the economy is doing at least as well (if not much better) than it was previously.

Incidentally, not trying to hijack the thread, but high inflation -- caused by fuel, food, and commodity costs -- is now a global phenomenon. The true rate of inflation in the US is now 9% (www.shadowstats.com), and though this pales besides Argentina's 30%, it does suggest the Argentinian government is not entirely culpable for what is happening with prices.

 

[RWS]

Quoting "bigbadwolf": ". . . . high inflation -- caused by fuel, food, and commodity costs -- is now a global phenomenon. The true rate of inflation in the US is now 9% (www.shadowstats.com), and though this pales besides Argentina's 30%, it does suggest the Argentinian government is not entirely culpable for what is happening with prices."

I think you're right, BigBad: it's a worldwide phenomenon, caused chiefly by the very rapid rises in wealth of the world's two most populous states, India and China, together with a quickly expanding population of the world as a whole.

 

[CABJ]

Not one of the suggestions "curb" inflation. They are only actions one can take to "cope" with inflation...by curbing personal spending. All of CABJ's ideas except # 5 (which is just common sense) can be summed up in one word: sacrifice. They will do nothing to curb inflation. These sacrifices will only lower the individual's standard of living, which is the inevitable consequence of inflation.


Individual consumers are not responsible for inflation. Their sacrifices won't stop it. I wonder what sacrifices the big (government) spenders in Argentina are making to "cope" with inflation. (In the US they vote themselves big increases in pay....and then increase taxes...and still spend much more than that. Sound familiar?) The equivocation of "coping with" inflation and "curbing it" is frequently embraced by those who are responsible for it...as they call for greater sacrifices. (Remember the Carter years in the US...and the "misery" index?)

As usual, I appreciate BBW's humor, but I imagine most Argentines sold their yachts after losing most of their money in banks in 2002. I'm not sure how many are still eating caviar or enjoying the other luxuries.
Ironically, there wasn't much inflation in the decade prior to the banking crisis. It wasn't so easy for the government to inflate the currency while it was pegged one to one with the dollar. Instead, the government borrowed and spent over 100 billion (dollars) it could not repay. Forcibly converting dollar accounts to pesos at a devalued rate of well over 3 to 1 was far more efficient way of confiscating wealth than inflation.
Of course that is no longer an option. Inflation is back. Only government has the power to "curb" it.

I am hoping for your sake that government is not going to curb inflation, because you would soon have to leave because you can´t afford it anymore

 

[DA]

CABJ, what is up with all this weird answers on intelligent posts? Are you trying to increase your number of postings?

 

[CABJ]

No