highest, not fastest: percent is not a unit of time.
Inflation means price growth. They are experiencing the fastest price growth.
Estonia clocks fastest inflation in the Eurozone at 20.1 percent
311–320 of 349 posts
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#312Estonian here, the situation is getting quite bad indeed, particularly when it comes to petrol/energy prices, which of course has the domino effect of driving up other goods and services in the mid to long term. However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it. In fact, 10 years ago, two local comedian-act…
I've personally experienced inflation of greater magnitude -- in a developing country in the 1980's. It affected behavior in ways that in hindsight were very counter-productive to economic stability: Every adult person and every business simultaneously tried to spend less, earn more, and hoard more -- which is impossible in the aggregate, because every expense by one person or business is income for another person or…
> No matter what anyone did, the currency would lose value week after week, month after month.
Cannot one convert their money to dollars or gold and start getting profit from inflation?
UPD: I forgot that in such cases governments usually impose large tax on currency conversion. Obviously you can't outsmart the government.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#313Earlier quoted context omitted.
IIUC, Russian oil is roughly the same price as it was before the invasion: https://www.statista.com/statistics/1112243/urals-crude-oil-... Other oil has gone up so much because everyone is switching off Russian oil. Russian oil is not going up. So it's actually not a bad time to be a Russian oil consumer...
Russian oil and gas should actually be cheaper because demand has dropped sharply. Anyway it's a very bad time to be a Russian oil consumer, because you'll be funding an unprovoked invasion and the countries that have sanctioned Russia may not want to deal with you.
> Russian oil and gas should actually be cheaper because demand has dropped sharply. [...] because you'll be funding an unprovoked invasion and the countries that have sanctioned Russia may not want to deal with you.
An alternative view is that Russian oil and gas is not cheaper, but that it has extra costs which are not directly reflected on its official price. If you could put a number on the "moral cost" (funding an unprovoked invasion) and the "pariah risk" (other countries might not want to deal with you anymore if you buy Russian oil), and add that number to the official price of Russian oil and gas, there's a good chance that the result is exactly the price you get for non-Russian oil and gas on the global market.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#314Earlier quoted context omitted.
It did after Finland refused to pay.
Let me complete that sentence for you.... after Finland refused to pay in rubels because the signed gas import-export contract specified other currencies.
Didn't EU freeze all Russian dollar accounts? That basically means Russia never gets those dollar payments. Why would it keep delivering gas for free? Does that "contract" even mean anything then? By switching to rubles Russia actually helped EU nations with a legal way to keep paying for gas.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#315Earlier quoted context omitted.
Spending less and saving is exactly the opposite of what is typical in a high inflation society.
As I wrote, that's what everyone tries to do (e.g., businesses lay off employees, try to raise prices, and hoard inventory), but in the aggregate it's impossible for everyone simultaneously to cut spending, increase earnings, and hoard more stuff as the currency loses value. The sum of all individual decisions, which may seem rational to each person or business, add up to aggregate behavior that in hindsight proves c…
Nope, most individual consumers and businesses spend more when inflation is unexpectedly high.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#316Earlier quoted context omitted.
As I wrote, that's what everyone tries to do (e.g., businesses lay off employees, try to raise prices, and hoard inventory), but in the aggregate it's impossible for everyone simultaneously to cut spending, increase earnings, and hoard more stuff as the currency loses value. The sum of all individual decisions, which may seem rational to each person or business, add up to aggregate behavior that in hindsight proves c…
Nope, most individual consumers and businesses spend more when inflation is unexpectedly high.
They try to reign in spending, but end up spending more (in nominal, but not necessarily real, terms).
Please don't misinterpret what I wrote!
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#317Estonian here, the situation is getting quite bad indeed, particularly when it comes to petrol/energy prices, which of course has the domino effect of driving up other goods and services in the mid to long term. However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it. In fact, 10 years ago, two local comedian-act…
Read somewhere that a litre of milk in northern Europe costs around a kW/h in energy to produce. Whatever the exact number, it should open your eyes to the importance of energy prices on all other prices. It's not "just" transports.
Money = energy (while credit being a promise on future energy).
Cheap energy is how we've created our society. The (huge) problem we're facing is that our economy is based on the (incorrect) assessment that we will have an ever-increasing supply of energy. Barring some miracle invention/discovery (like fission, or a cheap way to produce hydrogen) it's rather the opposite, at least in terms of EROEI.
The difference between the monetary economy and the real economy is becoming increasingly difficult to ignore.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#318Estonian here, the situation is getting quite bad indeed, particularly when it comes to petrol/energy prices, which of course has the domino effect of driving up other goods and services in the mid to long term. However, in true Estonian fashion, a lot of people (probably majority) might complain within their familily/friend circle, but will mostly just suffer through it. In fact, 10 years ago, two local comedian-act…
I've personally experienced inflation of greater magnitude -- in a developing country in the 1980's. It affected behavior in ways that in hindsight were very counter-productive to economic stability: Every adult person and every business simultaneously tried to spend less, earn more, and hoard more -- which is impossible in the aggregate, because every expense by one person or business is income for another person or…
Very insightful. Thank you.
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#319Earlier quoted context omitted.
> instead of giving it all to large banks and corporations, who use it for things like stock buybacks. this is nonsense and has no basis in reality, as far as I know
It's reported pretty frequently, although the Fed has put some limits on stock buybacks: Background (ABC): "The Fed has bought roughly $2.1 trillion of Treasurys and mortgage-backed securities since the pandemic intensified in March [2020] That has flooded many short-term lending markets with cash, making it easier for many banks to borrow." https://www.bankingdive.com/news/federal-reserve-stock-buyba... > "The Feder…
Yes the fed has taken actions that have suppressed interest rates. This makes it cheaper for everyone to borrow. What companies do with the money (like buyback shares, which is equivalent to a shareholder dividend) is a wholly separate issue
Re: Estonia clocks fastest inflation in the Eurozone at 20.1 percent
#320Earlier quoted context omitted.
I've personally experienced inflation of greater magnitude -- in a developing country in the 1980's. It affected behavior in ways that in hindsight were very counter-productive to economic stability: Every adult person and every business simultaneously tried to spend less, earn more, and hoard more -- which is impossible in the aggregate, because every expense by one person or business is income for another person or…
> No matter what anyone did, the currency would lose value week after week, month after month. Cannot one convert their money to dollars or gold and start getting profit from inflation? UPD: I forgot that in such cases governments usually impose large tax on currency conversion. Obviously you can't outsmart the government.
If everyone sells their currency to but dollars, the currency loses even more value faster compared to dollars, so currency controls are put in place, like Argentina did for a while:
https://en.wikipedia.org/wiki/Argentine_currency_controls_(2...