Poverty in Argentina soars to over 50% as Milei’s austerity measures hit hard

Johnatan56 said:
He's basically destroyed wages to do so
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inflation destroys your wage's spending power anyway

the only question is whether one's wage increases faster or decreases slower than the actual (note not the BS "official") inflation or deflation of the country you live in

if South Africa could have stable deflation of -1% I'd happily accept having zero salary increases and I'd have better quality of life every year than what is the case now
 
NarrowBandFtw said:
if South Africa could have stable deflation of -1% I'd happily accept having zero salary increases and I'd have better quality of life every year than what is the case now
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but banks will fail with deflation, and we can't have banks failing
 
saturnz said:
but banks will fail with deflation, and we can't have banks failing
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No banks won't. Lol. Banks have guarantees for most of their debt and the profits largely come from fees.

You cannot set or target deflation. That's an important point people seem to miss when talking about it. Nobody willingly wants less(a smaller number) on their money. Even if it would theoretically buy more things.

Deflation just happens all the time. If you see a 50% off special. That is deflation right there. The value of things is whatever we believe it is and if the market says otherwise the price needs to co.e down. Deflation in action.
 
rietrot said:
No banks won't. Lol. Banks have guarantees for most of their debt and the profits largely come from fees.
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those guarentees, what exactly are they?

rietrot said:
You cannot set or target deflation. That's an important point people seem to miss when talking about it. Nobody willingly wants less(a smaller number) on their money. Even if it would theoretically buy more things.
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citation that a target cannot be set for deflation

rietrot said:
Deflation just happens all the time. If you see a 50% off special. That is deflation right there. The value of things is whatever we believe it is and if the market says otherwise the price needs to co.e down. Deflation in action.
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thats not deflation- thats a special

you are confusing value and price, they are not the same thing
 
saturnz said:
those guarentees, what exactly are they?



citation that a target cannot be set for deflation



thats not deflation- thats a special

you are confusing value and price, they are not the same thing
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The price is the value we pay written on a piece on paper.
 
rietrot said:
No banks won't. Lol. Banks have guarantees for most of their debt and the profits largely come from fees.

You cannot set or target deflation. That's an important point people seem to miss when talking about it. Nobody willingly wants less(a smaller number) on their money. Even if it would theoretically buy more things.

Deflation just happens all the time. If you see a 50% off special. That is deflation right there. The value of things is whatever we believe it is and if the market says otherwise the price needs to co.e down. Deflation in action.
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Theoretically you can, if you had the following conditions:
1) Banks cannot do fractional reserve banking, so they can only lend out money they actually have.
2) The government keeps its debt under control

Both of those things would cause deflation as the market efficiencies would catch up.
 
konfab said:
Theoretically you can, if you had the following conditions:
1) Banks cannot do fractional reserve banking, so they can only lend out money they actually have.
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Banks have the money they lend out.
1. Depositors deposit money. R100, Bank has that money then lends that to someone else.
2. Or Bank borrow R100 from reserve bank. At 8% So the bank has it. And leds it to someone else at 10%.

If the bank needs to keep 100% reserves banking becomes unviable and a bank can never pay you interest on your savings, because they are not allowed to do anything with it.

Fractional reserve banking(how more money is created by repeating step 1) isn't something that's wrong. The bank just needs enough reserves to cover normal operations (cash flow.)
 
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