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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

#111

Post by marcosdumay »

dr_dshiv wrote: post #48

Without getting political, please, does anyone have a good argument for the expected inflationary pressures of the next year or two? Tariffs will make prices go up, investment in infrastructure will make prices go up… but on the other hand, AI & robotics seems to be a deflationary pressure… where does one go for scenario analysis of the next year or two? This article scared me a bit with the notion of banks implement…

Ok, you mean on the US...

Keep in mind that the US government (like almost the entire world) has control of inflation, and through more means than you will think of.

Anyway, all of those are real factors, but inflation is a monetary phenomenon. Those two don't need to have any kind of correlation.

Personally, I have not follow US news closely enough to understand what Trump wants to do with monetary policy.

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

#112

Post by morkalork »

guenthert wrote: post #35
Carrentt wrote: post #23

Fascinating piece of financial history I hadn't heard about. Imagine your government telling you to literally take scissors to your money, it's like a weird mix between arts & crafts hour and monetary policy. Though I suppose we're already halfway there with our modern central banks, just without the satisfying snip-snip sounds. The Finnish experiment failing because people just deposited their cash in banks first is…

Well, as fascinating as your government telling you to surrender all gold you might hold [1]. https://en.wikipedia.org/wiki/Gold_Reserve_Act

How about your puppet government colluding with the soviet union to print a new currency in secret and surprising everyone with a currency reform over night:

https://english.radio.cz/when-savings-were-lost-and-dreams-s...

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

#113

Post by mandibles »

krupan wrote: post #100

If this second thing last paragraph doesn't make your skin crawl then I don't know what will: "Cash, which is awkward to immobilize for policy reasons, will be gone in a decade or two, leaving the public entirely dependent on bank deposits and fintech balances which, thanks to digitization and automation, can be easily controlled by the authorities. To rein in a jump in inflation, central bankers will require commerc…

The quiet part is that you will not be able to spend on those necessities when your politics no longer align with the regime.

Total control over money is a guaranteed path to totalitarianism.

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

#114

Post by nostrebored »

gruez wrote: post #89
hgomersall wrote: post #67

Earlier quoted context omitted.

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.

>There's a good argument that in our high reserves world, interest is actually inflationary. How's that working out with Turkey?

It will probably work out just fine as they become a key player in European LNG.

Turkey couldn’t have serviced their debt with rising interest rates and continued government spending on expansion.

Being inflation averse makes sense when you can’t reasonably make use of funds. It’s not clear how much of that is actually related to the business cycle and how much is related to MMT, regardless of what adherents would have you believe.

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

#115

Post by sofixa »

weberer wrote: post #74
sofixa wrote: post #55

Earlier quoted context omitted.

Bad faith argument again, or at least terrible tunnel vision. So what? In the EU a lot of that money went into the Recovery fund, which released the funds in multiple steps (only the first one was in 2021), and a lot of it is still remaining in the fund. How do you explain the massive inflation in the EU then? And are you seriously that centred on "money printing" that you cannot imagine gas and oil prices raising mu…

>Bad faith argument again Stop saying this whenever somebody disagrees with you. That's not what that term means at all.

I'm not saying this because they're disagreeing with me. Inflation is probably one of the most talked about topics of the past few years, I find it impossible that people haven't heard about the multi-layered complexity of it, and thus anyone blaming it purely on "money printing" has to be acting in bad faith.

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

#116

Post by nostrebored »

ArnoVW wrote: post #29
gregman1 wrote: post #15

Earlier quoted context omitted.

Extreme hike in energy prices was about four months before the war began. It’s when EU decided to abandon long term gas contracts and turned to spot prices (~11.2021). The war started in 02.2022.

From your perspective the war started in 2022. In reality that phase of the war started before. Russia did not improvise this war. They started disrupting the supply in 2021 to ensure that Europe would not fill their strategic reserves / winter storage during the summer, thus insuring maximum leverage when they needed it. This is well documented [1] Note that this is just talking about this phase of the war. Hostilit…

Nobody has sabotaged European energy security more than European governments. The divestment from nuclear and reliance on LNG was an obvious disaster in the making. Taiwan has made a similar blunder and will pay the price at the next whiff of geopolitical instability.

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

#117

Post by dfxm12 »

dr_dshiv wrote: post #48

Without getting political, please, does anyone have a good argument for the expected inflationary pressures of the next year or two? Tariffs will make prices go up, investment in infrastructure will make prices go up… but on the other hand, AI & robotics seems to be a deflationary pressure… where does one go for scenario analysis of the next year or two? This article scared me a bit with the notion of banks implement…

In addition to tariffs, expelling millions of people out of the country will have inflationary effects as well, in many different ways [0].

0 - https://www.nytimes.com/2024/11/13/business/economy/trump-im...

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

#118

Post by theultdev »

sofixa wrote: post #115
weberer wrote: post #74

Earlier quoted context omitted.

>Bad faith argument again Stop saying this whenever somebody disagrees with you. That's not what that term means at all.

I'm not saying this because they're disagreeing with me. Inflation is probably one of the most talked about topics of the past few years, I find it impossible that people haven't heard about the multi-layered complexity of it, and thus anyone blaming it purely on "money printing" has to be acting in bad faith.

It's not really complex, GP is correct.

High energy prices cause high transportation and manufacturing costs which causes everything else to rise.

But the main cause of inflation is printing of money, especially when you introduce such a large amount in such a short time.

People used to know that, they either pretend it's not true now or they're ignorant.

And yes the "bad faith" parrot line is really annoying and doesn't contribute to the conversation. It's what people say when they don't have a rebuttal.

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

#119

Post by astockwell »

teractiveodular wrote: post #17

A recent similar example was the Indian move in 2016 to demonetize the ₹500 and ₹1,000 notes with very little notice, which is in retrospect widely viewed to have been a disaster. https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

I imagine Finland's would be similarly branded a disaster if the present-day internet/social media megaphones had existed..

History books on 1945 aggressive monetary policy change: "The public didn't like it"

History books on 2025 aggressive monetary policy change: "The public went frigging bananas, doxxed their leaders, coordinated widespread disobediance on the scale of GME, etc"

(Granted I live in the US, and that's putting it mildly how the US would react)

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

#120

Post by BJones12 »

dathinab wrote: post #34

> To our modern sensibilities, this is a wildly invasive policy. is it? not really cutting the "value" of money in half always had been a important emergency tool countries had and sometimes used and "moving" half of the value into a found which even pays out some years later is tbh. quite a fair way to do it (instead of just literally halving the money value permanently)

Yes it is. It's the biggest wage theft in history.
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