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Setelinleikkaus: When Finns snipped their cash in half to curb inflation

jpkoning.blogspot.com

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Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#61

Post by K0balt »

ajsnigrutin wrote: post #22
jb1991 wrote: post #9

Earlier quoted context omitted.

As someone who knew a few people under age 35 who died from Covid, I find this comment offensive.

In my ~2mio pop country, by the end of restrictions, we had (iirc) 5 people in the "below 35" age group what died 'with covid' (not necessarily because of it). For comparison, that's way less than traffic deaths. Even way less than suicide rates in that age group (and we all know how bad the lockdowns were for many peoples' mental health). We also had a 20yo girl die because of vaccine-induced clots. She got vaccinat…

Count yourself fortunate. Your country probably avoided the much more dangerous first wave that I assume was intentionally spread by China as part of their strategy to reduce the economic impact of the epidemic.

As an unfortunate anecdote that formed this rather bold and controversial opinion , I had the misfortune of being of a plane literally full of wuhan residents flying to the USA (strangely via the Dominican Republic) in December.

I was curious and asked my seat mate what was the big event, and he explained to me that (some organ of government that I didn’t understand) had created an incentive for companies in Wuhan to send people to conferences in the USA that included paid travel and accommodations, and made the companies that participated eligible for some other program that I also did not understand (my new friends English was not great and at the time I was only mildly curious).

At any rate, according to my companion there was social media buzz among the travelers complaining about weird routing of their flights through other countries and long layovers, speculation that it was an example of government cost aversion or something.

I didn’t think much of it at the time.

Within days of landing, I had the worst “flu” of my life with the signature COVID symptoms. A few days later the epidemic started to hit the news in earnest, and people around me started dying. The early versions of COVID were much more aggressive.

Should be fun to watch Chinese social media agents vote this down into invisibility lol. But I saw what I saw, I’m not going to pretend I didn’t.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#62

Post by _hl_ »

Cumpiler69 wrote: post #52
sofixa wrote: post #46

Earlier quoted context omitted.

Utter nonsense, and I say this as nicely as I can. Check the price of Russian gas before and after the invasion, and the resulting price of electricity: https://ec.europa.eu/eurostat/statistics-explained/index.php... Combine with the fact that Russia and Ukraine are some of the biggest exporters of many critical raw materials, like importantly, foodstuffs (wheat, sunflower oil, etc), and steel, aluminium, oil, gas. H…

Bruh, 80% of all USD in existence was issued during the pandemic alone. How the hell can you tell me with a straight face that that didn't cause the inflation? I feel like I'm taking crazy pills. https://fred.stlouisfed.org/series/M1SL

Read the notes in the link you posted. I don’t think it says what you think it says.

In May 2020, the definition of M1 (monetary supply in “cash”) was changed to include savings deposits. They changed this not due to some conspiracy, but because savings accounts were deregulated to remove withdrawal limits, effectively rendering them cash-equivalent, and thus necessary to include in M1 metrics.

I.e. the 80% spike has nothing to do with money being printed.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#63

Post by K0balt »

71bw wrote: post #14
skynet97 wrote: post #8

Earlier quoted context omitted.

[flagged]

I thought we are in a place where people seem to express some sort of intelligence, and yet, reality always finds a way...

Ignorance. Ignorance always finds a way. Also, HN is rife with political trolls from China, Russia, the USA, and other countries that fund state-sponsored social media programs.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#64

Post by gostsamo »

thaumasiotes wrote: post #20
gostsamo wrote: post #3

Earlier quoted context omitted.

The article talks about history of alternatives to the interest rates, mainly controlling the currency supply and how it might be implemented in the future. How you discovered price control as the solution in there is still a mystery to me.

Yes, the solution he advocates is "we freeze your assets, allot you a certain basket of consumer goods, and take what we consider the appropriate price out of your frozen assets". If you'd rather describe that as "communism" than "price controls", feel free. The theme of the whole piece is that, if you don't allow people to pay more for things, then the price of those things won't rise, and that this is some sort of…

price control would be if they forbid some goods to be paid beyond certain price where the goal is to regulate the distribution of those goods. Currency supply control is a general policy targeted at the total of goods one can pay for in order to maintain the overall economic activity. This is the difference between heating certain rooms in the house and causing global warming.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#65

Post by riffraff »

Cumpiler69 wrote: post #37
pjc50 wrote: post #4

Mentioning the war on COVID but not the actual war between Russia and Ukraine that caused a huge spike in European energy prices is a big omission, since that caused a lot of global inflation.

False. Inflation was mainly caused by the central banks(especially the US FED but also the ECB who followed suit) devalued the currency by over-issuing it during the pandemic, not due to the post pandemic high energy prices which are not that high when you adjust for the crazy Inflation the excessive money printing generated. In short, they barrowed money in your name with you as a guarantor and now you're paying for…

Do you think that since M1 is down 13% since peak we should be seeing deflation right now, or does M1 growth only impact inflation one way?

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#66

Post by _heimdall »

Cumpiler69 wrote: post #37
pjc50 wrote: post #4

Mentioning the war on COVID but not the actual war between Russia and Ukraine that caused a huge spike in European energy prices is a big omission, since that caused a lot of global inflation.

False. Inflation was mainly caused by the central banks(especially the US FED but also the ECB who followed suit) devalued the currency by over-issuing it during the pandemic, not due to the post pandemic high energy prices which are not that high when you adjust for the crazy Inflation the excessive money printing generated. In short, they barrowed money in your name with you as a guarantor and now you're paying for…

While I would also lean towards blaming the US Fed, how can you be so confident in precisely what caused inflation?

One of my big issues with economics as a "science" is that they try to boil down massively complex systems into a handful of numbers. When it comes to global economics and geopolitics the system is even more complex. How would we ever be able to say any particular time of inflation was causes by exclusively, or primarily, any one factor?

At best looking at historic data and seeing graphs that move together show correlation, they will never show causation.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#67

Post by hgomersall »

pjc50 wrote: post #56
hgomersall wrote: post #47

Earlier quoted context omitted.

We don't control inflation with interest rates; we do some economic theatre with interest rates that some people believe controls inflation in a predictable way.

The evidence is very strong that we do actually control it, because in many countries you can see in the historical data when central bank targeting was introduced that the inflation rate drops fairly rapidly into the target band. It's not a perfect control system because the cost is "NAIRU": non accelerating rate of unemployment. That is, economic growth and wage growth are constrained to avoid a wage-price spiral.…

Please do show this very strong evidence that the effect is any more than the supply chains sorting themselves out. Even some within the CBs are doubting the causality.

Japan had the lowest inflation of any major economy post COVID, and yet persisted with essentially a ZIRP. There's a good argument that in our high reserves world, interest is actually inflationary.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#68

Post by _heimdall »

mock-possum wrote: post #5

The convenience of cutting paper money in half is a really anachronistic element of this tale - I’ve got a fair amount of money saved up, and approximately none of it exists as paper, so much as it exists ‘on paper’ - that is, as figures marked in a bank’s digital ledger, somewhere in a server farm. How would an effort like this be handled today? … a new crypto currency?

That is basically one of the conspiracy theories I have heard related to central bank digital currencies.

As the tale goes, eventually major banks will run into another financial crisis (possibly intentionally if you really like conspiracy theories). The government will say they have no choice but to step in, and their solution will be to open the federal reserve to the public as a government-run bank. All funds lost in the crisis would be covered under an extended FDIC program and the money would be waiting for you in your new Fed bank account, denominated in the newly created CBDC.

---

In no way am I vouching for the theory, just sharing it as it is very relates to you question of how it could be handled.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#69

Post by nabla9 »

>Today, we control inflation with changes in interest rates, not changes in the quantity of money.

That's not full truth. In the last 20 yeas central banks do their big and sudden moves using "Open Market Operations". They buy or sell money like assets in market and effectively increase or limit the quantity of money.

Re: Setelinleikkaus: When Finns snipped their cash in half to curb inflation

#70

Post by atq2119 »

nabla9 wrote: post #69

>Today, we control inflation with changes in interest rates, not changes in the quantity of money. That's not full truth. In the last 20 yeas central banks do their big and sudden moves using "Open Market Operations". They buy or sell money like assets in market and effectively increase or limit the quantity of money.

Open market operations are the mechanism by which the interest rate is controlled.

Basically, the central bank sets an interest rate target and then performs open market operations until the interest rate matches the target.

That obviously affects the quantity, but the point is that the target is the interest rate. The quantity just ends up being whatever happens to be necessary to hit the interest rate.

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