It is coming to the USA. It is called the SDR.
How Fake Money Saved Brazil
131–136 of 136 posts
Re: How Fake Money Saved Brazil
#132Earlier quoted context omitted.
...except too many levels of indirection.
I think you can solve that, to some degree, with a cache (if it's performance that's troubling you) or a simplified facade (if it's the complexity of the deep stack). Yes, those are indirections.
Then you have cache invalidation problems (one of the two known hard problems in CS), as well as impedance mismatch issues with your facade.
Re: How Fake Money Saved Brazil
#133I don't understand something about this story. Hyperinflation is primary caused by government printing money right? So if switching to another currency helped stop this...I get how it could help people changing their perceptions, but wouldn't the root cause be that the government stopped printing money with the new currency? It seems like it would have been almost as effective if they had simply stopped printing more…
I had the same question. The Wikipedia article on the URV lead me to "Inertial inflation." In the medium-to-long term, economic agents begin to forecast inflation and to use those forecasts as de facto price indexes that can trigger price adjustments before the actual price indices are made known to the public. This cycle of forecast-price adjustment-forecast closes itself in the form of a feedback loop and inflation…
Interesting, thanks for posting that (it is probably what the author is basing it on)...although it's probably more accurate to call this one theory of how it could happen.
The reasoning behind it doesn't fully make sense to me.
Simple reason: people spending money as fast as they can (the shot in the arm that can accelerate hyperinflation) has a natural limit: when people have no more savings! So I don't think it's correct to call this a positive feedback loop. It has a natural limit that could be reached quite quickly under hyperinflation.
Indexes can only takes things so far too - if you (as a business owner) follow them and nobody can afford your products, you'll quickly figure it out and drop prices. So it seems weird to say indexes could cause hyperinflation over any medium-long time frame.
Re: How Fake Money Saved Brazil
#134Re: How Fake Money Saved Brazil
#135Earlier quoted context omitted.
Of course there is no "real value". However, inflation is not solely the result of the government's wishes to inflate the currency (as examples of hyper-inflation obviously show). Inflation is also simply in the minds of the people using the currency. If everyone expects high inflation, and keeps raising their prices to match their expectation of inflation, then inflation will happen - the raising of prices will ensu…
No, inflation is not only in people's minds, it's a real measurable monetary phenomenon. Sellers can raise prices but if there is not enough money to pay the price then no transactions occur, The sellers would then have to lower their price to sell the items. In other words an increasing rate of inflation throughout the economy can only occur if there is enough money/credit available to pay the higher prices. You nee…
What debt default idea?
Re: How Fake Money Saved Brazil
#136Earlier quoted context omitted.
It's also valid to mention that the impeached president also ended up helping out in one way: he froze the saving accounts, since one way to stop inflation is to cut down the buying power of the population.
That is what classic theory says and, in truth, for a brief period of time, inflation receded when Collor (the impeached) froze savings. However the fact is that it recovered back again to high levels during Collor's mandate. The cut down in buying power was achieved mostly through fiscal policy, not consumption restriction.
Well, I was 7 back then, so I really said what someone else explained to me. That was my bad.