Paypal Users In Argentina Can No Longer Make Domestic Transactions 272
another random user writes with this excerpt from the BBC: "The online payment service said that from 9 October: 'Argentina resident Paypal-users may only send and receive international payments.'
Last year the Argentine government announced restrictions on the purchase of U.S. dollars.
It has led to an increase in currency sales on the black market — but Paypal's exchange rates are better.
Locals were setting up two accounts under different email addresses and transferring money between the two, exchanging local currency pesos for dollars in the process."
A word to the wise (Score:3)
Game the system, pay the price...
Re:A word to the wise (Score:5, Insightful)
Yeah. Look at all the people on Wall Street, who went to jail.
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I seem to remember huge job losses in that industry in the wake of the breaking scandal, so yes - game the system, pay the price. The "price" doesn't always mean incarceration...
Re:A word to the wise (Score:5, Interesting)
And how many of those people who lost their jobs were the ones that actually caused the problems? I don't recall seeing the CEOs of any of the banks hurting after their incompetence and hubris led to the crisis.
Re:A word to the wise (Score:5, Informative)
I don't even recall any of the bankers themselves losing their jobs really. It was all the support staff that suffered like IT, admin, and customer facing branch staff. In this respect, and as the investment banks and customer facing banks are often different sub-companies, I'm not even sure people from investment arms of banks really paid a price at all for the most part.
Also, a year later, they were all getting hefty bonuses again to boot.
Re:A word to the wise (Score:5, Insightful)
You mean Madoff? Or would you like to talk about the mortgage meltdown stuff? Well the mortgage meltdown stuff gets interesting, because if you really want to get into that, the first thing that needs to happen is you go back to where the government forced banks into lending to people who shouldn't have gotten the loans in the first place. And when the banks said "we shouldn't have to..." the government said: "you will loan, or we'll pull your FDIC backing and launch trade and trust investigations against you."
Nothing quite like the government at work right? Might also want to look into which party was heavily involved in all of that too. But let's just say that, when changes were put forward to get it fixed back in 2002, and 2003 the "opposite party in charge" cockblocked the entire thing. Oh...if you didn't figure it out yet, it was the democrats.
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What you mean to say is that the government and the banks supported an industry in which they both feathered each others' nests for as long as it would take them to get obscenely rich.
They're bastards on both sides, and America is the slowest country in the world to realise this.
Re:A word to the wise (Score:5, Interesting)
What you mean to say is, the United States of America has been printing money and using it to make purchases from other nations, and those other nations hoard those US dollars and trade them amongst themselves rather than redeeming them for American made goods, so America basically gets a free ride on the back of everyone else and has since the 70s.
It's like if I wrote a cheque and used it to pay for groceries, and the grocer didn't cash it, but paid their power bill with it, and the power company didn't cash it, but paid their employees with it, etc, etc.
But it's going to come to an end soon... China is selling oil for Yuan, and Russia has made an agreement with them to supply them with as much oil and gas as they want.
http://www.examiner.com/article/dollar-no-longer-primary-oil-currency-as-china-begins-to-sell-oil-using-yuan [examiner.com]
So, the era of the USA is at an end, along with the ridiculous culture they've created.
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In case anyone is believing this. The government hit the banks with branch availability and willingness to consider mortgages. In real life and not republican world, having objective criteria which were clear cut and non discriminatory would have been fine if they had upped their number of minority applications.
The issue was never trying to get unqualified minorities mortgages but rather trying to get qualified minorities mortgages.
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The issue was never trying to get unqualified minorities mortgages but rather trying to get qualified minorities mortgages.
No, that was the excuse. The democrats often cry 'racism' in order to disarm the opposition to their corruption.
What were banks supposed to do, put out advertisements saying "If you are a minority and have good credit, why not buy a house?" in order to increase the number of 'qualified minority' mortgage applications? Couldn't the government have just sent in the military and made people buy houses at gunpoint?
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What were banks supposed to do, put out advertisements saying "If you are a minority and have good credit, why not buy a house?" in order to increase the number of 'qualified minority' mortgage applications? Couldn't the government have just sent in the military and made people buy houses at gunpoint?
What they would normally do to attract business
a) Open branches in minority neighborhoods.
b) Advertise in minority publications
c) Offer services designed to appeal to minority applicants. For example a
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It seems that you are looking for only one group of people to blame because of your choice of political view. I would go even further than just politic in your case. Because everyone is making money or benefits -- banks, realtors, brokers, and home buyers -- no one attempts to do anything but keep trying to take the advantage of the situation. People who want to buy a house are talked into (by realtors & brokers) buying a house because they believe they can own a house and turn it over in a couple of mo
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It seems that you are looking for only one group of people to blame because of your choice of political view.
Some of us realize that its not possible to lay blame on a single individual or single entity. However we do know that the people that actually tried to do something about it deserve absolutely no blame at all, and the people that stopped them from doing something about it most definitely deserve a lot of blame.
Not all House/Senate members tried to do something about it, but some of them did. People like John McCain and Ron Paul.
Meanwhile, not all House/Senate members worked to thwart the attempts to d
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Actually, it's more like the government forced lenders to drop their standards for certain favored groups and backed it up with federal insurance, then the lenders realized they could just drop their standards for everyone to the same level and wash their hands of its consequences. The same loopholes that allowed a struggling working-poor person to qualify for a home with zero down and an artfully-contrived assessment of his or her assets & annual income allowed middle-class wannabe-investors to buy pre
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Might want to grow up a bit and realize politics isn't a fucking sporting event between two teams. Stop your fucking useless pennant waving, remove the giant foam finger from your rectum, and start looking at and voting for or against individual politicians.
but it needs to be broadcast as a PSA once for every campaign ad that airs.
Re:A word to the wise (Score:5, Informative)
Except, it kinda does work that way.
Most people just have the teams wrong - Not red vs blue, not plebes vs silver-spoons, but rather "all of us" vs "anyone who runs for public office".
Oddly, despite having the bigger team, we usually lose.
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realize politics isn't a fucking sporting event between two teams
Except, it kinda does work that way.
Most people just have the teams wrong - Not red vs blue, not plebes vs silver-spoons, but rather "all of us" vs "anyone who runs for public office".
Oddly, despite having the bigger team, we usually lose.
Unfortunately, the competition these days makes soccer hooliganism look tame. Nothing less than the complete extermination of the other team and all its fans is acceptable. No "Well, we lost this one, so better luck next time" like in REAL sports.
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Those with the greatest numbers have the greatest potential power. Those who are more organised have the greatest actual power.
People living our lives day to day are not not coherently organised enough to make big deliberate changes to our society. That's what we have governments for - to organise us enough to make use of our potential power. How that power is used depends on the aims of the government. A government may organise the people into building great monuments, waging great wars, building a str
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That's what happens when you let Randean libertarianism take hold.
You know, it might be a good idea to actually read something on the subject before you pontificate on it. Rand wasn't a libertarian, and she was one of the strongest voices against crony capitalism.
Or, you could just continue to wallow in your ignorance, your choice.
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The name "barney frank" comes to mind. He was the driving force behind fannie mae churning out millions of subprime loans in order to "make housing more affordable". All this cheap money had the effect of creating the housing bubble, ironically making housing LESS affordable. Then, of course, the bubble burst and the people left holding the bag on upside down mortgages were the very ones frank was trying to "help". In response, the dems created the "occupy wall street" movement in order to shift blame f
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Oh, don't worry, the government is absolutely ready to try and re-inflate the housing bubble again. Federal reserve, while not technically a government agency is still acting as an arm of government, and Bernanke came out very specifically saying that he will be printing money and buying mortgages off the banks and whoever, and is absolutely dead set on having people refinance their mortgages at lower rates with ARMs (only with ARMs now, that after his QE3 announcement the 10 year bonds went down in prices
Re:A word to the wise (Score:5, Insightful)
It's the government of Argentina that is "gaming the system" by artificially increasing the price of dollars. Smart people are realizing that socialist policies are going to bring high inflation as they always do and wipe away people's life savings in the name of social justice .
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"It's the government of Argentina that is "gaming the system" by artificially increasing the price of dollars. Smart people are realizing that socialist policies are going to bring high inflation as they always do and wipe away people's life savings in the name of social justice ."
Why are you telling us? If you really think it will make a difference, say it to Obama. And Congress, of course.
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"It's the government of Argentina that is "gaming the system" by artificially increasing the price of dollars. Smart people are realizing that socialist policies are going to bring high inflation as they always do and wipe away people's life savings in the name of social justice ."
Why are you telling us? If you really think it will make a difference, say it to Obama. And Congress, of course.
What are Obama and Congress going to do about Argentina eroding its own currency with inflation?
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What are Obama and Congress going to do about Argentina eroding its own currency with inflation?
Well, if you launched a civil war against your oppressors, Obama and Congress could sit around and talk a lot about doing nothing to help you.
Oh wait, you said Argentina. I could have sworn you wrote Syria.
Re:A word to the wise (Score:5, Interesting)
"It's the government of Argentina that is "gaming the system" by artificially increasing the price of dollars. Smart people are realizing that socialist policies are going to bring high inflation as they always do and wipe away people's life savings in the name of social justice ."
Like all systems, just as over the top free market capitalism led to the banking collapse, over the top socialism can indebt a country beyond it's means too (Greece).
But what isn't true is that socialist policies in general always inherently bring high inflation. Countries like Canada, Germany, the UK, most the Scandinavian nations and so forth are good examples.
Using one failing country to push your own political ideology is stupid, especially so when there are many other countries succesfully using elements of that ideology you so sternly oppose and claim is doomed to failure.
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"Good examples in that the value of the english pound is now half of what it used to be"
Great, so what? it just means it's more competitive in the export market. I don't really understand what your point is here, a healthy currency should be able to fluctuate relative to global financial changes. It doesn't change the fact that the UK is doing fine.
If you think Germany isn't socialist, then you're simply picking and choosing what socialism is to suit your argument. You also conveniently ignore my other exam
Re:A word to the wise (Score:5, Insightful)
Game the system, pay the price...
You were referring to the Argentine authorities, right? Price-fixing/rationing has always been a disaster. But it's not just Argentina, the most important price of all--the price of money (interest rates)--is still being fixed all around the world, with nary a peep from people, or indeed economists who should know better.
If people knew what money is and saw what is passed off as "money" these days, there would be a revolution overnight.
Never works, does it (Score:3, Funny)
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>The UK had both price fixing and rationing in WW2, and we lost to the United States, which didn't.
What? Are you bloody serious?
http://www.ameshistoricalsociety.org/exhibits/events/rationing.htm [ameshistor...ociety.org]
First google link, out of thousands.
--
BMO
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Considering that the UK didn't fight the US in WWII, and they didn't actually lose WWII (despite London taking some heavy damage) - I'd have to go with "no".
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In a way, the UK did lose to the USA in WWII. The UK took on huge debts in both WWI and WWII, and also, before WWII the UK still had an empire, afterwards, it didn't, and the USA did. The UK survived WWII without being completely taken over by Nazi Germany, but they didn't really "win". The USA "won"; it suffered almost no losses (relatively; some troops, but not anywhere near as many as the other countries, some ships and a naval base in Pearl Harbor, and that's about it; no civilian infrastructure was
Re:Never works, does it (Score:5, Informative)
Furthermore
http://en.wikipedia.org/wiki/Office_of_Price_Administration [wikipedia.org]
Facts are inconvenient for some.
--
BMO
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Artificial price cielings cause shortages. There's no free lunch; you don't get to wave a pen and magically lower prices by fiat.
Econ 101
Or shortages cause people to set artificial price ceilings. Which cause people to produce less of the item or product... which causes... aw crap.
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When does a shortage of goods lead to a price cieling being initiated by the government? The only examples I can think of of price cielings are when prices rise, and people don't like it, so an opportunistic politician comes along and takes advantage of peoples' ignorance by calling for locking down prices from rising.
Rent controls in New York City? I don't know if this really qualifies as I don't know the history. I suppose this is more of a "shortage of affordable x" situation, which probably doesn't count anyhow.
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The UK had both price fixing and rationing in WW2, and we lost to the United States, which didn't.
Whoever modded this up to +3 might want to crack open a history book.
Maybe he means economically? As in the UK and Germany were world powers going into WW2 and the US and USSR were world powers at the end of WW2. But even by that metric nobody "economically won" WW2, as everyone was worse off after half a decade of war. Some were just a lot more worse off than others.
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I completely disagree. You're right, the UK and France didn't really "win" since they weren't better off, however, the USA was much better off after the war. Maybe not right on V-J day, but in the decade or so after, the US got very rich rebuilding Europe.
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No, the interest rates as such are not fixed. The interest rates you hear from the news which are set is the interest rate which banks pay for money from the central bank (Federal Reserve, ECB etc.). And since it's exactly that institution which also sets that interest rate, its in principle nothing else than if another bank sets the interest rate for money it lends. The reason why in practice it does make a difference is that ultimately all money comes from that single bank (because it has a monopoly on cr
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In practice they do pay more for your money than from the central bank, as money from the central bank is only loaned for very short periods.
Our current central bank rate is at 3.5%
Here is an example from my bank for savings account
Standard base variable interest rate 0.01%
Standard variable bonus 5.25% deposit $50 and make no withdrawals
Earn up to 5.26%
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"... with nary a peep from people, or indeed economists who should know better. "
Indeed, economists should know better. But as long as government and Wall Street insist that they must continue to spout discredited but self-serving Keynesian principles, things aren't going to get any better.
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This is where bit-coin can be a good option. Independent from the future of the currency, right now it can be used to move money around without capital controls.
If I were Argentinian and I wouldn't be allowed to exchange pesos into foreign currency, I would exchange pesos into bit-coins as soon as I get them. Better than nothing.
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Off course, after getting bit-coins I would exchange the bit-coin back into Dollars or Euros or whatever outside of Argentina. That way I woudn't need to bet on the long term viability of bit-coin.
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Same people that would give you dollars in exchange for Pesos, I guess. People is doing this right now, so they probably have some utility for Pesos.
In this particular case, it is easy. An entity sets up a bit-coin exchange outside of Argentina. A person from Argentina buys bit-coins in that exchange by transferring the Pesos where the exchange is located (this is not forbidden for now, Argentinians can buy foreign products, in this case bit-coin, using Pesos). Then since outside of Argentina there are no c
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Re: (Score:3, Interesting)
Uhm. (Score:5, Insightful)
Transferring money from one of your own accounts to another, within the same country, is "money laundering and tax evasion" now?
"Money laundering and tax evasion" clearly is the "terrorism and cybercriminality" of the financial world, it is.
Re:Uhm. (Score:5, Insightful)
Argentina is completely screwed up now. There is no logic other than figuring out strange ways for the government to steal. Oddly enough the president has a huge approval rating. It's an Economic Reality Distortion Field.
It's pretty pathetic, because Argentina has tremendous natural resources compared to its population size and an educated population and few internal ethnic problems (they exterminated their natives in the 19th century). And to the north of them, without those advantages, Brazil is leaving them far behind despite having a robust social welfare state.
Source: in-laws in Buenos Aires; reading Economist.
Beef (Score:5, Interesting)
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While I don't doubt it, it would seem to be a commodity with global appeal so they should be able to get out of it eventually...
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Provided the land has not been bought up by US business, which I suspect is the case.
http://www.propertywire.com/news/south-america/argentina-limits-foreign-buyers-201112195891.html
Stop posting. You are constantly wrong, and the few times you've attempted to support yourself with a citation you've given links which flat out contradict you.
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US doesn't import beef from Argentina, citing foot-and-mouth disease as the reason. In most areas of the country, this has been almost non-existant in over 20 years.
See when you travel overseas and they make you sterilize your shoes at the airport? Well, in some roads they built a shallow pool with disinfectant, after toll booths, so you come out slowly and have to drive throught it, and wash the underside of your car. That's how seriously we take that disease here.
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I'm in Buenos Aires (Score:5, Interesting)
And you have half of your facts right.
Brazil has very much indeed left us behind. No doubt about that. But they have problems of their own too.
The behavior of the government here can be described as "random" at best, creating policies which have no clear benefit to anyone or purpose other than "someone, somewhere is stealing a lot of money with this... but I don't quite know how". It is very infuriating. They come out with blatant lies all the time, which has made the approval rating drop to what I imagine are single digits now. I say imagine since you can't trust any news outlets. I'd say something about that, but you americans have fox news, so we're relatively tame on that score. At least for now.
It's also sad that what used to be the "good" politicians are the ones now in office, corrupted beyond recognition. They got in basically by not being part of the US-slavish mafia that had been ruling for the last 20 years. But now they made up a mafia of their own, so that's not even a selling point anymore. It's nice that they don't just bow and take it in the ass 24/7 and lay the bill on us, but who cares if they still fuck us over even worse than before in many ways.
The opposing party is pretty much an open mafia, so there is really no other choice. If there were elections today, I couldn't vote honestly for anyone, unless votes were casted with bullets. I would vote for pretty much everybody then. Many times over.
Re:I'm in Buenos Aires (Score:5, Insightful)
And of course all the Argentine government do if they feel their ratings are slipping is distract the population by bringing up the Falklands again. Then accusing Britain of being "provocative" when Britain increases the defence of the Falklands from all the belligerent talk from the Argentine government.
Whether this works or not to distract the Argentine population or rally them around the current government, I don't know (an article I saw on the Spanish TV news analysis programme, Informe Semanal, seems to suggest it no longer works)
Re:I'm in Buenos Aires (Score:5, Interesting)
The current situation in Argentina reminds me of Brazil before Plano Real [wikipedia.org] when inflation was around 60% per month and people where running for the dollar. Some years before that the government froze 80% of the bank assets [wikipedia.org] of the whole population, which was a total disaster.
In retrospect, it is amazing that Plano Real actually worked. I'm still amazed when I think about it: I was born in 1980 and in my lifetime I've seen Brazil adopt 6 different currencies! New governments would announce over the weekend that the currency have been renamed and three zeros have been cut (1000 = 1); until new banknotes were available the banks were stamping the old ones with the new name and value. Prices and contracts were frozen; it was a mess...
Even today many people still go to the supermarket and buy groceries for the whole month, out of habit. In the old times of hyper-inflation, you had to rush to the supermarket and buy everything you could because if you went in the morning and later went again in the same day but during the afternoon instead, prices would have changed already. When I was a young kid, and before we had barcode scanners and a ticket with the price was fixed in every piece of merchandise, supermarkets had full-time employees that spend their whole day attaching the new prices. I remember that I ran more than once to grab something in the end of a long corridor while the employee was setting the new prices at the other end, so I could pay the old price before he had the opportunity to change it.
If Brazil managed to fix that mess I bet Argentina can, too. It might take a while, though: it took us more than two decades.
Re:I'm in Buenos Aires (Score:4, Informative)
As a result, companies like mine are averse to doing business there as well. We do have a location down there, but we wrk in a high expense fixed asset industry. There's a predominant fear that they might de-privatize our industry and force us out, leaving us holding the bag on a multi-hundred million dollar investment. As such, we have to charge according to the risk. Its like a vicious cycle, we charge because of the volatility, they react to those prices and be more volatile.
Re:Uhm. (Score:5, Insightful)
Only if you're poor. If you're transferring funds that are only worth a day's wages, you're "money laundering and tax evading." If you're transferring sums that exceed the total lifetime earnings of an individual in the majority, you're a currency trader, and a respected businessman. Two scenarios gaming the system in exactly the same way. It's called arbitrage, if I'm not mistaken. Do it on small scales, you're a criminal. Do it at large scales, you're a pillar of the community.
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Sort of.
The problem isn't the size of the transactions, it is how many people are going to make those transactions.
A lot of people making small transactions will add up, and what's more, will be nearly impossible to regulate. A few people making big transactions will probably move less money than everyone moving smaller amounts and be much easier targets for regulation.
Of course, that doesn't mean that they will actually get regulated, but that is the theory anyway. Effective governance and regulation rel
Not mistaken (Score:2)
Let's put it in your post's terms:
A=Argentine Peso
B=Paypal $US
C=Black Market $US
According to the article:
A=B/4.7, x=1/4.7
B=C, y=1
xy=1/4.7
A=C/6.3
A!=xyC
This is exactly what arbitrage is, and the free-market solution would eventually be that the black market rate would change to 4.7Peso/dollar.
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The challenges of a global market (Score:5, Interesting)
Re:The challenges of a global market (Score:5, Interesting)
"Or, force PayPal to not do currency conversions. In the end, they will either have to give up, massively devalue the Peso or make it a non-convertablke currency."
Or -- far simpler -- just do as they did in the EU and make PayPal register as an actual bank.
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"Or, force PayPal to not do currency conversions. In the end, they will either have to give up, massively devalue the Peso or make it a non-convertablke currency."
Or -- far simpler -- just do as they did in the EU and make PayPal register as an actual bank.
Fair enough; although PayPal may decide the hassle is not worth it and simply leave the country.
Government fighting the market (Score:5, Insightful)
So people want to be able to buy something, government says: you can't. This always leads to black markets.
Inflation (money printing) in Argentina is high, their prices are going up 24% per year, which is the consequence of high inflation. Instead of stopping the inflation (stopping the money printing), the government wants to stop people from saving their purchasing power, however they do it. Apparently to the people of Argentina USD seem to be more attractive then their own currency.
In USA inflation is also high, 11-15%, but prices are not going up as quickly as in Argentina, because other countries are still willing to absorb the new dollars and exchange their goods for them, so prices are going up in other countries, who respond with their own inflation, they print their own currencies in response to USA printing and they are willing so far to exchange their own productivity (products they manufacture and make) for US dollars. This pushes prices up for those productive nations and this still acts as a price buffer for USA.
But look at this obvious response by government of Argentina: it's not that the government is plainly wrong in what it is doing, destroying the currency of the people.
The government says: it is the people, who are wrong for wanting to save their own savings, their purchasing power. Let's take the purchasing power away from the people. What it means is that the government wants to keep its high levels of spending but cannot or will not raise taxes, so it wants to steal from people. Printing money is theft of productivity and it's most obvious to the people when their prices go up.
Of-course very few people can understand the link between their prices going up and their government printing the currency, it's not a link that is necessarily very obvious directly to people, that's because people are not taught economics and the version of economics that they are taught is really not economics, it's propaganda that allows the government elite to keep people in check by denying them the real understanding of what is going on.
What is happening in Argentina is nothing new. Many countries did the same thing - printed money, set exchange controls, price controls, all it ever does is it creates black markets and very quickly creates very wide separation onto the poor and rich, even among people that maybe didn't have that huge of a separation before the gov't actions.
The newly printed money does not equal wealth. The amount of production stays the same (or it is decreased because people move their savings somewhere else and this means moving production somewhere else, so the country suffers decrease of productivity and increase of money supply), so the new money simply ends up bidding up prices for the existing assets and goods.
This is why inflation (money printing) hurts the poor much more than the wealthy, because the poor live on various fixed incomes, they are getting less and less with every check, be it a salary or a dividend or a pension check, whatever.
The wealthy end up bidding up prices for existing assets. Everything becomes a fight for a fixed or a decreasing pie, the pie is not growing. Only savings and production grows the pie, money printing destroys savings and productivity and re-allocates the pie from middle and poor to the top.
That's why there is a higher and higher wealth disparity, it's not because the 1% is stealing something, it's because the government is stealing something, the government is stealing purchasing power, it's destroying the savings, productivity, it's destroying the currency.
Of-course as people try to avoid their purchasing power from being destroyed by the government, the government sees this as something to be prevented, so it sets exchange controls, currency controls, wage and price controls. Minimum wage is just an attempt to hide levels of inflation, like many other things that gov't does it backfires and creates more unemployment and dependency and decreases productivity and standa
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In USA inflation is also high, 11-15%, but prices are not going up as quickly as in Argentina, because other countries are still willing to absorb the new dollars and exchange their goods for them, so prices are going up in other countries, who respond with their own inflation, they print their own currencies in response to USA printing and they are willing so far to exchange their own productivity (products they manufacture and make) for US dollars. This pushes prices up for those productive nations and this still acts as a price buffer for USA.
I heard someone complaining that the US caused inflation elsewhere. I told him to shut up and complain to an MP. The US didn't "force" them to print money. If everyone else stopped printing money now, then the US economy would fail. The sooner we get through that, the better off the world will be. The US is a massive anchor on the world economy. The problem is so many still think about it as the foundation (which it was, back in the 1960s with the large educated population and no damage to infrastructu
Re:Government fighting the market (Score:5, Insightful)
Well, it will come eventually. I mean Greece wasn't a problem 2.5 years ago, right? What I mean is that nobody heard of Greece as being a problem 2.5 years ago. All of a sudden it became a problem.
So did the problem happen in a few days? No, of-course not. Greece had the problem of government spending of money that it didn't have (borrowed money) for decades. Greece should never have entered the Euro zone, because Greece was fundamentally screwed up even when Euro zone was being established. Same with many other countries there.
But Greece could keep borrowing with short term papers (ARMs) and it could keep spending money it could never repay. Eventually this became obvious and now there is a depression, which is again, a way for the market to rebalance the equation. A way to allow the scarce resources to be allocated more efficiently. Companies that are inefficient and governments that spend more than they can take in, spend borrowed or stolen money, they must fail so that the credit, the money can be saved and eventually the savings can be used to restart production.
Instead the European union decides it's going to start printing more and more Euros, placing the burden on the people who still produce and pay taxes, be it in Germany or in Switzerland (now, that the Swiss committed economic suicide by hard linking their currency to the Euro). This will not solve the problem for Greece, it will only make the problem bigger for everybody else.
Same thing for USA. Since 1971, when Nixon defaulted on the dollar, the economy has been going down. If you take all sorts of graphs, that compare wealth distribution, compare wages, salaries, purchasing power, manufacturing, government spending, whatever you want, you'll see an interesting thing that happened since about 1971 - there is an edge there, and all these charts show that since then the disparity started growing, the real earning power started going down, the debt started growing much more than before, inflation really took off, all the bad things that eventually do destroy the economy started around that moment.
Of-course to lead to that moment, it took 1913, when the Federal reserve (and IRS) were established in the first place, which allowed for rapid expansion of government.
People don't realize it, but growing government is not a good thing. Government shouldn't be growing all the time, it should do a few things and stay about the same in terms of size and power. A government that is growing all the time signals that the real economy is shrinking all the time and government that is growing is gov't that is getting more powerful, it signals that individual freedoms are shrinking.
That's the combination that eventually destroys the economy, everything. The problem is the government, it's a very lucrative place to be, even if you are very mediocre or just plain stupid. I mean to grow a successful business you have to be productive, you have to work pretty hard, (maybe you have to be luckier than your average guy, but still, it takes a huge effort).
To become wealthy by working for government you have to be cunning, cheating, lying and as unprincipled as possibles - those are the qualities that get rewarded. And those people have the power in their hands. Of-course they'll abuse it for personal gain, what else is new? The problem is that they should never have had that power, they used to be constrained by the law that was set above the government - the Constitution, but they figured out how to get around the law. That's a pretty good explanation as to why so many people in government are lawyers.
Lawyers. Not engineers. Not scientists. Not real business people. Not even just plain folks without anything special about them, who are not lawyers.
I think the next crisis will force the people to review what kind of government they want, what is the function of government, what is the role?
As far as I am concerned, the time of ultra-nationalist ideas must pass, the government shouldn
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"Same thing for USA. Since 1971, when Nixon defaulted on the dollar, the economy has been going down. If you take all sorts of graphs, that compare wealth distribution, compare wages, salaries, purchasing power, manufacturing, government spending, whatever you want, you'll see an interesting thing that happened since about 1971 - there is an edge there, and all these charts show that since then the disparity started growing, the real earning power started going down, the debt started growing much more than before, inflation really took off, all the bad things that eventually do destroy the economy started around that moment."
There is no need to get that fancy. A single number, the purchasing power of the dollar (price levels), is sufficient to illustrate your point [postimage.org]. Alternatively, you can simply flip the graph over vertically, which shows the worth of the dollar over the same time period. Nobody ever shows it that way, though, because it's far too scary [postimage.org]. The latter is the very same graph, just showing the opposite side of the same coin, as it were.
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People don't realize it, but growing government is not a good thing. Government shouldn't be growing all the time, it should do a few things and stay about the same in terms of size and power.
No, ideally, it should be growing, but only at the rate of population increase. The amount of government per capita should ideally remain constant. And accordingly, the tax rates should remain constant, though revenues should rise and fall with the health of the economy and the size of the population.
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People don't realize it, but growing government is not a good thing.
Growing government isn't a bad thing, either.
To become wealthy by working for government you have to be cunning, cheating, lying and as unprincipled as possibles - those are the qualities that get rewarded. And those people have the power in their hands. Of-course they'll abuse it for personal gain, what else is new?
And you think that doesn't apply to businesses? Go read some of the many studies about psychopaths in executive positions and such.
I would much rather have people organize their governments on a local level - municipal, and leave the commerce alone, allow the businesses and people to trade as they want without federal governments, state governments interfering. This will force efficiencies into everything and efficiencies in allocating resources do lead to higher standard of living.
You sounded ultra-conservative up to that point, but what you describe is a new world order type where people govern locally, but wider policies are made at the global level, which is one of the things the conservatives state is happening and is a bad thing.
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Inflation is 11-15% in America? This is completely incorrect, inflation has never even gone above 6% in any given month/year since 1990. Inflation is also not "money printing", it is the value you lose in buying power on your currency per year. Inflation rates recently have been very low. Check the inflation calculator [bls.gov] for yourself. How did this get modded +5?
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You are the product of the propaganda machine that I am talking about. The real inflation in USA has not been reported since Nixon either, they have changed the way the inflation is counted enough times for it to mean absolutely nothing.
Same with the GDP numbers, they are completely meaningless. It's a number, it means nothing. It's reversed engineered to fit the necessary levels of propaganda. 70% of it consumption, not production. Consumption of imported goods. 40% of economy is financial manipulations
Re:Government fighting the market (Score:5, Informative)
You do know that inflation is set by the CPI, which is (wait for it) a basket of commodity prices. The basket contents change periodically, but are relatively stable. If inflation were going up 11-15% per year, I would have seen my real purchasing power go down by half in the past 6 years, and yet it hasn't been anywhere close to that. Most of the stuff I buy is probably averaging 20% higher than it was 5-6 years ago which is (surprise!) about 3.5%. If you just look at gold and gasoline, you're going to get a mighty skewed picture of what "inflation" is.
Now, if you want to talk about the purchasing power of the dollar against some foreign currencies - sure, the dollar has lost ground. I remember a dollar north of 200yen (in the 80s) and at parity with the British pound. Then again, looking over the mid term, the Euro was introduced at $1.25, fairly quickly dropped, then gained ground in the 2000s, peaking during the US financial crisis and when the congress was staring at default, and has settled back to $1.30.
(BTW - I have an old friend who does work on the CPI and PPI, and I can tell you without a doubt that there is no collusion or conspiracy going on. You're welcome to argue what "inflation" means, but I promise they are not cooking the books)
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Printing money is one thing that can cause inflation.
However, equating X with "one potential cause of X" is a bit of a stretch.
It is? I don't think my local supermarket accepts it. Maybe their [sic] part of the conspiracy too.
I always thought gold was a mineral, a commodity like many others. Care to explain what's so special about it compared to
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Gold is useful, but also has a very deflationary aspect to it. It can be an anchor that drags on an economy because once you have run out of gold, you run out of new money to pay people with. And its easy to run out of money if everyone starts hoarding it.
Yes, your purchasing power remains high, but its useless because holding on to your purchasing power, instead of using it, destroys the economy. Further, you really don't have to start hoarding to get this effect, if the economy grows at an explosive ra
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inflation has never even gone above 6%
Yeah let's believe the government's figures on how good a job the government is doing. Government has a vested interest in lying to you. Instead, why don't you do some research and try to find out what the price of some common items you use was 10, 20 or even 40 years ago, and do the math?
Either way, even a 6% inflation rate will cut your purchasing power in half every 12 years. That's the problem with percentages. People think things like 6% or even 2% is "not a lot", when actually they are all exponenti
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Inflation is also not "money printing", it is the value you lose in buying power on your currency per year.
Actually, udachny is right. He's merely using the original definition of "inflation." Some people starting using your definition of inflation once they observed that the one almost always leads to the other.
How did this get modded +5?
Well, possibly because modding is not supposed to be for whether the modder agrees with it, or even whether it's right. It's supposed to be for when something is on-top
Re:Government fighting the market (Score:4, Interesting)
Will you stop with this Austrian nonsense.
1) Inflation is the measure of price increases not the increase in base currency. If the Fed were to create tons of MZM but no increase in minted dollar we would have massive inflation. Conversely if the Fed/Treasury/Mint printed 10x as many dollar but didn't change MZM there wouldn't be any inflation.
2) Inflation generally does at least in the short term increase productivity. The lag between printing of money and raising of prices creates artificial wealth which creates artificial demand. If the economy is demand constrained, which is often the case when governments start engaging in inflationary policies, production increases.
3) "This is why inflation (money printing) hurts the poor much more than the wealthy, because the poor live on various fixed incomes, they are getting less and less with every check, be it a salary or a dividend or a pension check, whatever." In most countries at this point the fixed income is inflation adjusted. The real issue is quite a lot of the bottom 99% are net debtors while the top 1% tend to be creditors. Policies designed to shift wealth from creditors to debtors benefit the bottom not the top.
4) During the period of time prior to the 1930s where we had a lightly regulated financial system we had frequent panics. Once we had a highly regulated financial system we had few if any. As we moved back to a lightly regulated financial system we had several major panics. I'd say the correlation is not that government causes the problem.
5) If busts were just restructuring of debt we wouldn't see panics depress activity in areas of the economy with little or no debt. They would be more localized than they are. The fact that panics seem to depress activity across almost all sectors means that they just depress demand and this sets off a chain reaction.
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Austrian economics is the only economics that we know works, all other theories are used for propaganda, nothing else, they are not useful to predict economic situations and outcomes.
1. Definition of inflation has been updated in dictionaries [wsj.com] to support government propaganda. There is a reason the government doesn't publish M3 numbers anymore, they go against government propaganda.
2. Inflation only does one thing to 'increase productivity', that one thing is equivalent of a pay cut.
When the Fed's chairman
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Will you stop with this Austrian nonsense.
Yep because the Keynseian school is doing an absolutely brilliant job at the moment, isn't it? Printed trillions, nothing happened, hey I know - let's print MORE trillions! Do you really honestly think that this is going to work? Every time a new dollar bill is stamped, we move a little closer to the total collapse of the GLOBAL economic system. The only jobs that will be created by continued printing will be the job of carrying money around in wheelbarrows to burn the bills as fuel.
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I think it is working rather well. While things are very bad, they are far better in countries that used stimulus than those that used austerity. They are far better in 2012 then they were in 1933. We don't have anywhere near enough Keynesianism.
As for inflation... we are currently at 1.2%. I'd say the wheel barrel is a bit far away.
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It's a funny thing about those 500 Euro bills, I remember about a year ago I was going to UK through France and at the passport check the lady asks me why I am going there, what my citizenship is, whatever. I am asking her why? Basically the gist I got was that she was afraid I'd come to UK to stay there and collect welfare?!?:)
So I open the wallet, there are a few cards and a few 500Euro bills, maybe 6 of them. She almost falls off her chair, she is like: where did you get those? I am like: WTF? Seriously
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Those 500 EUR notes were problematic in the UK even well before they got 'banned'. I remember getting some from a currency exchange place before my trip to the UK in 2005, and upon arrival, I had a HELL of a time trying to find any store that would accept/make change for them! Damn things took a very long time to get rid of...
In your inbox soon... (Score:5, Funny)
Dear Sir
I am a successful Argentinian businessman who is in urgent need of your assistance. I have the sum of $10,000,000 equivalent in US Dollars which I need to transfer to an associate of mine in this country. Due to restrictive government policy, we require a 3rd party intermediary located outside the country. If you are willing to provide your services for this task, we will compensate you the sum of $5,000 USD. Please contact me as soon as possible, urgency is high in our minds to accomplish this transaction.
Our email address is: 9racdge82@mailvault.com
Sincerely,
Your Future Associates
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"... now that there are some nice official media reports from third parties to lend some credence to the scam."
No... now that there are some nice official media reports that indicate that it's not a scam, but a potentially legit investment.
Its draconian (Score:2, Informative)
Our goverment thinks that because they got 54% last elections, they have absolut control. Having more than 54% means they have quorum in the senate, they can move forward anything our president want. That also means that they don't have to explain anything to anyone. They subsidize poverty (if you worked all your life and you got fired, you are screwed. But if you are poor and don't have a job, you will get money. And more money for each of your sons), so (most) poor people don't want to work anymore. All h
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It seems to be slowly starting to happen [huffingtonpost.com]. As an Argentinian myself last week made me proud - something i really haven't felt in years.
This is interesting (Score:2)
I wonder what (or who) made Paypal cancel domestic transactions in Argentina. If anything, they were making a lot of money out of this.
This is very likely due to the increasing restrictions on Argentina's exchange market. I live there, and the past years have gotten increasingly worse - the Argentinian peso has an inflation of nearly 25% but the government insists on keeping an (almost) fixed exchange rate with the dollar. A lot of people perceived, correctly, that the USD became a cheap way to protect thei
Re:Just wait (Score:4, Informative)
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Seeing as how Romney is more hesitant about QE3 and further stimulus, I don't see how saying he'll bring about devaluation more quickly than Obama is in any way Informative. With each additional QE venture, the US increases the risk of destroying one of the pillars of its strength -- its status as a reserve currency -- since with these stimuluses, the US is essentially picking itself up by putting an arm on the shoulder of every other economy in the world. While a softer kind of currency manipulation compar
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Sarcasm?
People's access to an open market, where they can seek the best exchange for their earned labor is a human right.
Everyone is entitled to exploit government-subsidized industries
Put another way: Everyone is entitled to bypass the national version of a company store [wikipedia.org] where some corrupt politicians seek to prop up their cronies in business (often themselves) by locking their populace into an overvalued national currency.
in a way specifically prohibited by the government
So, are we advocating rule of law or justice here?
to support development of a healthy and safe development of economy!
Healthy and safe for who? Members of the government and their business-owning buddies? Why not ju
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Paypal disagrees [paypal.com]...