[HN Gopher] The Hyperinflation Gallery
___________________________________________________________________
The Hyperinflation Gallery
Author : classichasclass
Score : 113 points
Date : 2022-09-18 19:03 UTC (3 hours ago)
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| eth0up wrote:
| I think this could be solved with a hard liquor backed currency.
| Not some boring metal or fiat hypnosis, but something of
| intrinsic, unwavering value. It would put things in perspective.
| And the sense of security from knowing you've got twenty bottles
| of whiskey in your pocket would assuage the anxiety of knowing
| you'll never retire or own a house.
|
| It might also give us an excuse for our society, which would have
| some real value too.
|
| ONE DOLLAR IN LIQUOR POURABLE TO THE BEARER ON DEMAND
| forinti wrote:
| I recall reading somewhere that the price of wine in gold is
| pretty much the same it was in Roman times, so this might
| actually be a good idea.
|
| Maybe we could adopt a basket of different spirits as a metric
| so that one bad harvest of a specific crop doesn't affect the
| currency so much.
| 20after4 wrote:
| I've heard from first-hand account that during Serbian
| hyperinflaction in the early 1990s, the value of a bottle of
| vodka was the common denomination of exchange.
| nostrademons wrote:
| Small bottles of alcohol have historically become currency
| during instances of war and/or hyperinflation - there are
| reports of this during both the Bosnian war and WW2.
|
| The problem with it long-term is that it's a deflationary
| currency. Liquor gets consumed; once you pay a drunk with a
| bottle of alcohol, he tends to drink it and take it out of
| circulation. This means the value of alcohol goes up as the
| crisis continues, which means people have an incentive to hoard
| rather than circulate it, which means that it eventually loses
| its utility as a currency.
| xani_ wrote:
| If value grows, acquiring materials to make it gets cheaper
| and cheaper so it would be self-regulating.
| SkyMarshal wrote:
| I'm not sure about that. It's relatively easy to make and
| doesn't require any particularly scarce materials. It just
| takes some time to ferment. But the alcohol industry is very
| good at supplying as much as people will buy. Seems more
| equilibritory than either deflationary or inflationary.
| ravenstine wrote:
| Not for brews like beer and cider, but special materials
| and skill _are_ required for distilled spirits, especially
| steel and copper, the latter of which already having a low
| level of scarcity. If Boozecoin mining rigs become popular
| (again), the price of pipe at Home Depot would at least
| quadruple.
| nostrademons wrote:
| That's another problem for it: for a functioning currency,
| you really don't want something that's easy for people to
| "counterfeit" (make themselves). The ideal currency has a
| stable supply; can only be minted by a monetary authority
| that does not have a vested interest in spending it itself;
| is very difficult to destroy; is not perishable or hard to
| store; and can easily be exchanged in variable
| denominations. Alcohol is relatively good at the last two
| points, which makes it attractive during times of crisis
| when the central monetary authority breaks down, but it's
| not really durable as a currency.
| iseanstevens wrote:
| But isn't it its own mineable (fermentable) currency?
|
| Perhaps that it has intrinsic value, can be consumed, and
| more can be made would cancel out inflation/deflation at some
| equilibrium point?
| eth0up wrote:
| Well I was almost finished designing the base note featuring
| a florid faced, beaming Nixon for the obverse and parachuting
| dodo bird clutching a bundle of wilting tulips on the
| reverse.
|
| If not alcohol, what then?
| revolvingocelot wrote:
| Don't throw that design out, we're, uh, _still_ on for
| this. I 've got some good news regarding the production of
| alcohol -- I suspect that the government will actually find
| this easier than printing money.
|
| The challenge will be in how to ensure that all that new
| alcohol doesn't end up in the already-well-stocked liquor
| cabinets of the rich.
| 13of40 wrote:
| Seems like you could map it to something that expires on its
| own, like beer, to prevent hoarding.
| block_dagger wrote:
| Is that you, Bukowski?
| forgotmypw17 wrote:
| This was one of the most stable currencies in USSR and early
| post-USSR.
| christophilus wrote:
| Prohibition II brings about a deflationary spiral and ushers
| the world into Great Depression II.
| revolvingocelot wrote:
| "I do not know with what weapons World War III will be
| fought, but World War II-II will be fought with ballerinas
| and hangovers." - Albert Einstein
| cm2187 wrote:
| The beauty of all money being electronic is that it will make it
| practical to have an hyper-inflation. Which given how
| irresponsible the central banks and governements are is only a
| matter of time.
| messe wrote:
| Only as long as the central banks don't run into integer
| overflow (or poorly implemented bigint algorithms bringing
| trading to a near standstill)
| cm2187 wrote:
| Well, we all know it's all COBOL. I was born too late to know
| the answer, I am only in my 40s.
| mtoner23 wrote:
| Are they really so irresponsible? the past 50 years has been a
| period of incredible competence in central banking all things
| considered.
| cm2187 wrote:
| The first 30 of the past 50 years you mean.
| ur-whale wrote:
| > All but one of the documented episodes of hyperinflation
| occurred in the last 100 years.
|
| But fear not, many more episodes are being produced as we speak,
| the story is alive and well.
| dvh wrote:
| Was Poland ever part of Soviet?
| fennecfoxen wrote:
| Not _officially_. In practice, it might as well have been.
| Likewise East Germany.
| varjag wrote:
| While they certainly were dominated and dictated by USSR,
| neither belonged culturally. Neither was as stiff with
| sexuality for instance; they didn't have collectivization in
| the earnest and understandably there was no cult of war in
| DDR other than in token solidarity with occupying Soviet
| troops.
| Turing_Machine wrote:
| > While they certainly were dominated and dictated by USSR,
| neither belonged culturally.
|
| Hmm... that seems more like a distinction without a
| difference.
|
| Though dominated by Russians (mostly... Stalin was a
| Georgian), the USSR was made up of over 100 different
| nationalities with widely varying languages and cultures.
| varjag wrote:
| Yes and you couldn't use all those fine languages for
| anything else than attending a folk festival. It was
| Russian-language monoculture in every aspect of your
| living (source: lived there). Certainly not so in
| satellite states. Besides you waved off my examples and
| these already were enormous cultural distance.
| hef19898 wrote:
| No, not even close. Those were sovereign countries under
| communist single party rule and allied with the USSR.
| Ukraine, for exampke, was a sovereign Soviet Republic as part
| of the USSR, just as Russia was.
|
| Totally different things.
| badpun wrote:
| > Those were sovereign countries under communist single
| party rule and allied with the USSR.
|
| They were countries conquered and occupied by USSR troops,
| with USSR military bases in them to guarantee obedience.
| There were local rulers, sure, but major decisions were
| consulted with Moscow. Many decisions just were out of
| question, because it was obvious that Moscow would not
| approve and it may end in a military intervention (as in
| happened in Hungary and Czech Republic). So no, I would not
| describe them as "sovereign countries". The proper term is
| something like "puppet state".
| fzzt wrote:
| "Allied" in the sense of having a USSR-installed puppet
| government propped up by the massive presence of Soviet
| troops. This was a part of the concessions made by the West
| to Stalin, not an expression of the will of Polish or
| German people.
| KaiserPro wrote:
| I'm not sure if you are being factious or not.
|
| I know its not trendy, but its probably easier to think of
| the eastern bloc countries as colonies of the USSR, just as
| india, egypt, and the african nations were to the UK.
|
| Sure, on paper they were sovereign, and they certianly had
| a government made up of people from that country. But they
| were a colony.
| yongjik wrote:
| Interesting, I wonder how many of those 100,000 $(currency) bills
| are associated with hyperinflation vs. regular run-of-the-mill
| inflation over a very long time.
|
| South Korea has 50,000 KRW bills (= about $36 these days), but
| its currency has been pretty stable in the past 40+ years.
| llanowarelves wrote:
| And each time they think (or get the citizens to think) they can
| escape the natural laws of the universe, money printing causing
| no inflation.
|
| "It won't happen here!"
|
| It's not us doing money printing.. it's uh.. COVID, uh.. the war,
| uh.. Climate change, uh.. corporate greed.
| pessimizer wrote:
| They should have learned from the hyperinflation in the US that
| resulted from the vast money printing that happened after the
| 2008 property bubble burst. I know that inflation for the next
| decade was sub-2%, but if you think that's low, you're just
| showing your privilege. You can't dodge gravity.
| hef19898 wrote:
| Hyperinflation is at least double digits month over month for
| a considerable stretch of time, arguably even more than that.
| Turkey comes to mind. The Western world is incredibly far
| from that and was nowhere close to it in 2008.
| pessimizer wrote:
| /s
| poisonarena wrote:
| what makes hacker news appealing is the very few reddit
| style, low effort comments. You should explain your
| viewpoint instead of this cringy /s business, everyone
| would be richer for it
| pessimizer wrote:
| You mistook the /s for an attack on the comment above it,
| when it was actually a completion of my own grandparent
| comment. There was not inflation, even when some
| inflation was desired, after an almost inconceivable
| amount of money printing.
|
| I know it's my own fault for thinking of Poe's Law as a
| target rather than a pitfall. Sadly, for me
| satire/sarcasm isn't good unless the target of it
| sometimes can't tell that it is satire. It's evidence
| that I've treated them fairly.
|
| edit: note that cm2187 understood that, and formulated a
| direct, thoughtful reply.
|
| edit: also note (although you can't see it) that after I
| explained the "/s" wasn't an attack but an affirmation of
| the reply that told the truth about hyperinflation, that
| it wasn't a goldbugging Libertarian smirk, the upvotes
| started disappearing. Poe achieved.
| pessimizer wrote:
| To be dead honest, and not trying to insult anyone, in
| real life when I assert two contradictory things within
| two short sentences about any subject, the people who are
| listening to me who agree with those sentences
| immediately start to make their case to me why those two
| statements aren't contradictory.
|
| It's only on the internet where I can assume that people
| will show up who really think that I believe that
| stubbornly low <2% inflation is hyperinflation, and
| attempt to excoriate or support me.
| kortilla wrote:
| The US hasn't ever had hyperinflation.
| Turing_Machine wrote:
| It was technically before the US was officially founded
| (counting from the adoption of the Constitution), but the
| Continental currency printed by the Continental Congress
| during the Revolutionary War was inflated to such a degree
| that a banknote in 1781 had only 1/40 of its original value
| in 1776, and was finally redeemable at only 1% of its face
| value in the 1790s, thus leading to the expression "Not
| worth a Continental".
|
| https://en.wikipedia.org/wiki/Early_American_currency#Conti
| n...
|
| Edit: tried to clarify wording. In 1781, a banknote of a
| specific denomination was worth only 1/40th of what the
| same banknote was worth in 1776.
| cm2187 wrote:
| Because of the way it was introduced (in the financial
| system), there was inflation, it created an asset bubble.
| Asset managers, hedge fund managers, VC investors got rich,
| and the cost base of this population (prime real estate,
| restaurants in city centres, tuition fees) inflated too.
| That's not captured in CPI indices. Part of it was also
| neutralised through massive liquidity requirements imposed on
| banks, and the multiplier effect of banks was also killed
| with capital ratios / forcing banks to deleverage. But that's
| done now and the said requirements aren't increasing anymore.
|
| What changed with the covid money printing is that it was
| distributed directly in people's pockets. Also its scale and
| pace dwarfed the previous 10 years of QE.
|
| I have no good explanation for Powell to have kept printing
| money like there was no tomorrow after Feb 2021, after the
| first >7% inflation prints. I suspect he must have made a
| deal with Biden to let the inflation go (helped Biden's
| policies) in exchange for renewing his mandate. The ECB is
| run by a lawyer who probably had to look up on wikipedia the
| definition of inflation.
| pessimizer wrote:
| I don't know that the inflation of luxury goods is a bad
| thing, because that's going to trickle down. It's the
| damage to (inflation of) housing, for me, that begs for
| intervention.
| fennecfoxen wrote:
| Eh, we're not at serious risk of hyperinflation here. We are at
| risk of regular old plain vanilla inflation, which is
| adequately obnoxious and harms real wages plenty.
|
| As a net debtor, I might see see a 50% fall in the real value
| of my mortgage in 5-7 years at current inflation rates, if the
| politicians are feckless enough about it ("Milton Friedman
| isn't in charge any more," Biden tells me.) I seriously doubt I
| will see it in a month (the threshold cited in TFA).
| llanowarelves wrote:
| Yes the US is the least bad for now. No disagreement there.
|
| But these same dynamics, just more extreme, have plagued all
| less lucky people each and every time.
|
| There are European families who have been through multiple
| hyperinflationary events in the last century, and couldn't
| convince their kids that it could happen again. Then, it did.
|
| And it's always smoke and mirrors on the population (begging
| for more money printing) as to the cause of what's happening.
| There are some smart ones who plan ahead.
| ajross wrote:
| > which is adequately obnoxious and harms real wages plenty.
|
| That's not historically correct. Wages generally track
| inflation well, and are often (and are right now) a leading
| indicator.
|
| What gets people upset about inflation is that it hurts
| lenders, not workers.
| seibelj wrote:
| The only reason you want this is because tax payers subsidize
| your mortgage (assuming standard fixed-rate US mortgage). No
| other country offers this, and it's clearly a handout to the
| upper middle class. In a free market your mortgage rate would
| rise with inflation, or to get a fixed rate ( _for 30 years!_
| ) you would have to agree to a rate far above current
| inflation.
| sofixa wrote:
| > (assuming standard fixed-rate US mortgage). No other
| country offers this
|
| Fixed rate mortgages are the norm in multiple EU countries
| (i have one in France and it's pretty much the only
| option).
| xani_ wrote:
| here in Poland you can freeze the rate for 5 years and
| that's it ;/
| cwalv wrote:
| The home ownership rate in the US is > 65%; it seems
| unlikely that this correlates well with "upper middle
| class", by any reasonable definition. A more interesting
| metric would be the percentage of people that benefit from
| the deduction and gov guarantees at some point in their
| life; I'd bet it's > 90%.
| seibelj wrote:
| It has to do with the absolute size of the mortgage.
| Fixed rates go as high as $770k borrowed. You have to be
| well-off to carry a $770k mortgage, and the value of this
| subsidy to that type of borrower is unneeded.
| cwalv wrote:
| I believe it's possible to get a fixed rate "jumbo" loan
| for even more than that, but since they're "non-
| conforming" they can't be sold to fanny/freddy, and so
| the banks take on the full risk of these loans. For
| conforming loans, the limit in most areas is $647k [1],
| which has risen substantially in recent years (along with
| broader housing cost inflation). Not adjusting for HCOL
| areas would effectively be blocking lower income people
| from moving into these (arguably) "higher-mobility"
| areas.
|
| [1] https://www.fhfa.gov/mobile/Pages/public-affairs-
| detail.aspx...
| nostrademons wrote:
| There's no cap to the amount of cash borrowed on a fixed-
| rate mortgage. Bay Area jumbo loans regularly top $2.5M,
| and during the 2020-2021 period, they had sub-3% fixed
| interest rates. The big difference between jumbo &
| conforming loans is that jumbo loans cannot be packaged
| off and securitized by Fannie & Freddie, and so they are
| largely kept on the originating financial institution's
| books.
|
| The reason fixed mortgage rates have been below inflation
| recently is because the financial industry (bond buyers
| and mortgage underwriters, at least) have largely bought
| the Fed's "transitory" narrative. A 3% mortgage remains
| profitable if inflation runs at 8% for a year and then
| returns to 2%; it becomes very unprofitable if inflation
| stays at 8%. The reason mortgage rates have climbed so
| much in the last couple months is because the
| "transitory" narrative has basically collapsed, and the
| bond markets are now starting to price an extended period
| of high inflation into the rates they charge.
| seibelj wrote:
| It's not that the interest is higher now! It's that it's
| fixed for 30 years no matter what the interest rate
| environment is! Plus it can be paid off early and
| refinanced when it suits the borrower!
|
| I don't know how more clearly I can state why this is a
| glaring subsidy for the rich. I'm sure in a free market
| these would just appear by themselves /s
| nostrademons wrote:
| My point is that fixed-rate jumbo loans are not a
| taxpayer subsidy, they're a _banking_ subsidy. The bank
| is left holding the bag for existing jumbo loans when
| interest rates move against them.
|
| There is some historical validity to the point that
| fixed-rate mortgages existed because of taxpayer
| subsidies. The creation of the FHA during the New Deal,
| and Fannie-Mae shortly after that, basically jumpstarted
| the practice. But there's a difference between
| jumpstarting the a market and continued subsidy of it.
| The existence of jumbo loans is an indication that even
| without taxpayer subsidies, fixed-rate mortgages still
| exist, presumably because the expectation of price
| stability means that private institutions don't think
| that the risk of interest rate variability is _that_
| great (jumbo mortgage borrowers usually pay about 0.5%
| more, so that 's the implied risk premium). This can
| change during times of high price variability - my
| parents mortgage was 13.5% back in 1978, because expected
| inflation was about that. But that also indicates that
| interest rate risk is primarily absorbed by the private
| markets, and taxpayer subsidies play a relatively small
| part in it.
| cjbgkagh wrote:
| You have to re-weight by the value of the housing.
| checkyoursudo wrote:
| > tax payers subsidize your mortgage
|
| How do taxpayers subsidize fixed-rate mortgages in the US?
| seibelj wrote:
| The government guarantees them. Banks would never offer
| this product otherwise.
| cortesoft wrote:
| The government does not guarantee mortgages.
| dragonwriter wrote:
| The overt purpose for the money printing is to increase
| inflation beyond the level it would be without it. Essentially
| no one has the delusion you discuss.
| llanowarelves wrote:
| Yes, supposed to be a couple percent -- but you have a
| significant number of people who think that you can simply
| "QE" a lot money (40% of all existing etc) and not have
| significant inflation, and any price increases are purely the
| result of corporate greed (as if they weren't always trying
| to charge more, they were less greedy sometimes??), supply
| chains, whatever. Mainstream articles telling normal people
| this.
| rmah wrote:
| They think that because that's what happened. The Fed
| pushed out $4T of QE and inflation barely budged for over a
| decade (after 2008/2009 recession). It took a global
| pandemic + a land war in Europe to bring on substantial
| inflation.
|
| I remember when the Fed started doin QE in 2009. I thought,
| "my god, pushing this much money into the economy will lead
| to high inflation!"... except, it didn't. Then they did QE2
| and again, I thought, "for sure, THIS time inflation will
| spike up!" Except it didn't. Then QE3 in 2012...
|
| Call me slow, but it wasn't until that point that I started
| to seriously re-examine my mental model about how
| macroeconomics works. But at least I could admit to being
| wrong.
| sofixa wrote:
| > It's not us doing money printing.. it's uh.. COVID, uh.. the
| war, uh.. Climate change, uh.. corporate greed
|
| If you think a pandemic (and policies to combat its effects)
| and a war including some of the main exporters of foodstuffs
| and energy don't impact the world markets and increase prices
| worldwide (inflation), it's just willful ignorance pursuing a
| (stupid) agenda at this point.
| jbay808 wrote:
| A loss of production will of course result in lost wealth,
| but that can manifest as any combination of an increase in
| prices (account balances constant) or a decrease in account
| balances (prices constant).
|
| For example if the government taxed enough money out of the
| system, prices would not increase (but stuff would be less
| affordable because you have less money to buy it with).
|
| There's no getting around the increased scarcity, but the
| increased prices are in some sense a choice.
| janandonly wrote:
| From the end of the article: But the most
| surprising realization? All but one of the documented episodes of
| hyperinflation occurred in the last 100 years.
|
| I feel that with all the QE going on right now, we might soon add
| major currencies to this list.
| mtoner23 wrote:
| What QE? we are in an era of quantative tightening right now
| actually.
| octoberfranklin wrote:
| Before departing, Mr. Horse left a note saying to close the
| barn door.
| bee_rider wrote:
| I'm curious how surprising this really is. I mean I imagine
| most of the documented anythings have happened in the last 100
| years, because documentation of everything has gotten so much
| better over the last 100 years.
|
| Not to mention, how do you have hyperinflation with gold bars
| and barter?
| chrisco255 wrote:
| We have pretty good documentation on the performance of
| currencies over the past 500-2000 years. It is usually of
| historical note when an entire nation's economy collapses as
| a result of hyperinflation.
| dragonwriter wrote:
| > We have pretty good documentation on the performance of
| currencies over the past 500-2000 years.
|
| Not "Pretty good" enough to detect hyperinflation by the
| definition at issue (50%+ monthly inflation.) Before
| regular, systematic, and frequent collection of data for
| price indexes, we have good enough data to make wide-range
| estimates of inflation over intervals of years to decades,
| in the best cases, but hyperinflation (whether or not it
| produces collapse of currency) doesn't continue long enough
| to show up in that, and also hyperinflation tends to
| correlate with conditions which reduce the availability and
| survivability of data. (The author of the article here
| notes a data problem with Yugoslavia in the late 20th
| century, for instance.)
| Stamp01 wrote:
| Oh. I thought this was a different type of inflation gallery.
|
| This is still cool, though.
| XorNot wrote:
| For whatever reason when I saw this I thought it was going to be
| an archive of people's predictions of imminent hyperinflation in
| the West (still hasn't happened guys).
| aidenn0 wrote:
| It's not hyperinflation by any means, but it is interesting to me
| that when federal reserve notes were first issued, there was a
| $100 bill. That would be roughly $3000 today, and yet many places
| to this day won't accept bills larger than a $20 and the US has
| declined to print larger bills due to a worry of large
| denominations utility in crime.
| Turing_Machine wrote:
| $100 bills are still made, though you're right that there may
| be reluctance to accept them.
|
| There were bills much larger than $100 at one time, but those
| were mainly used for things like, e.g. settling accounts
| between banks in the days before electronic transfers. The
| largest ever made was a $100,000 gold certificate.
| thriftwy wrote:
| Not only they are made but they are a staple of savings and
| exchange in a range of countries from Argentine all the way
| to North Korea.
| adventured wrote:
| All major retailers - that includes Target, Walmart, CVS,
| Walgreens, Costco, Kroger, BestBuy - will accept $100 bills.
| They might occasionally get annoyed at needing to request
| change, to break the $100, from a floor manager. The parent
| comment is wrong on that point.
| eloff wrote:
| Just as crazy is that we still have the penny. Worth less than
| the metal it's made out of. If you see it in the street, you
| leave it there. When you get home you empty the change from
| your pockets, and the pennies just end up taking up space in a
| drawer somewhere. Not worth enough to even bother counting to
| change at the bank.
| eth0up wrote:
| Pre 1983 pennies are, I think, worth 2-3 cents in copper. The
| value fluctuates with copper spot price, so this could go up
| or down.
| roomey wrote:
| Terry Pratchett did a piece on this in his book, "making
| money".
|
| A scam artist was asked to take over the capital city's
| rotten central bank, which contained the mint.
|
| He made the point that these little coins cost more to make
| than they were worth, and what was the point? In this case
| they had a coin that was a tenth of a penny I think.
|
| Turns out the point was when you didn't have a lot of money,
| these coins mattered. They could buy you a not so rotten
| apple core on the right street.
|
| I think the point was; life is a lot different when you are
| poor, and that's when cents matter.
| thrown_22 wrote:
| The penny doesn't really buy you a rotten apple core in the
| US today.
| forgotmypw17 wrote:
| I don't leave it there, because it's a pretty coin.
| aidenn0 wrote:
| If I could, I would eliminate the penny, nickel, _and_ dime.
| In terms of value, the dime is a bit iffy, but having to make
| change with a combination of quarters and dimes would be
| rather unpleasant, and now that consumer price inflation is
| going again, the dime should be on its way out anyways.
| [deleted]
| dllthomas wrote:
| If memory serves, when we got rid of the half-penny it was
| worth more than a modern quarter.
|
| ... memory of the time I looked it up and did the
| calculation, not memory of the event, of course.
| aidenn0 wrote:
| My memory is it was somewhere between a nickel and a
| dime, but that was maybe 15 years ago.
| gs17 wrote:
| How would you handle things like change on a 1 dollar item
| with 10% sales tax? I use a dollar and a dime to pay for a
| coffee refill regularly, and no coins smaller than $0.25
| would be messy without forcing prices to go up/down to
| round evenly or elminating all cash. Rounding to the
| nearest cent now isn't an issue since sales tax should
| always be roughly an integer percentage, but rounding to
| quarters is problematic.
| aidenn0 wrote:
| A) gas prices are in fractions of a cent, and people buy
| that with cash
|
| B) most items aren't an even dollar anyways
|
| C) I've only once lived anywhere that sales tax was an
| integer percent
|
| More specifically, you round to nearest quarter, just
| like we do now for pennies. In your case, the coffee
| would be a dollar, and if that was too rough on the
| coffee shop, they could raise prices by $0.10 and you'd
| pay a dollar and a quarter.
| emptybits wrote:
| In Canada, with sales taxes varing from 5% to 15% by
| province, we round to the nearest nickel on cash
| transactions. Non-cash transactions are rounded to the
| nearest penny as usual. Works fine IMO.
|
| Note that the rounding is to the _nearest_ nickel,
| neither up nor down. So it favours neither buyer nor
| seller; it all nets out about the same for all in the
| end.
|
| We stopped minting pennies 10 years ago. They're still
| legal tender but rare to see since there's no need with
| 5-cent cash rounding conventions now. There were brief
| popular grumblings and misplaced arithmetic anxiety
| leading up to the death of the penny. I expect the same
| when we bury the nickel and I bet few will miss it either
| when its time comes. And then the dime.
|
| Of course one can construct amusing temporary edge cases
| or arbitrage opportunities when buying specific
| quantities of specifically priced items in the presence
| of any new rounding rules. The market will respond.
| ajmurmann wrote:
| The US could do what Europe doors and just include the
| sales tax in the advertised price and arrive at desired
| prices by leveling things out across the offered
| inventory.
| metadat wrote:
| This approach is too imprecise, you'd constantly be
| rounding everything up to the nearest dollar -- the net
| net equates to yet another ripoff against consumers.
| aidenn0 wrote:
| We already round up to nearest penny. How do you think I
| pay 8.75% tax on something that costs $1.99 anyways?
| sneak wrote:
| The $10k limit for CTRs and reporting for international travel
| is a particularly annoying one, as when it was set it was worth
| more than $60k in today-dollars, making our current regulatory
| burden something much greater than the law originally intended.
|
| Currency limits hardcoded in law as integers really need
| automatic inflation adjustment similarly specified.
| rubyfan wrote:
| I kind of wonder if this is intended.
| notch656a wrote:
| Some of the fines for currency reporting have been adjusted
| for inflation. It is absolutely intended.
| throwaheyy wrote:
| Funnily enough Australia does this. But only for fines!
|
| https://en.m.wikipedia.org/wiki/Penalty_unit
| aidenn0 wrote:
| I kind of would like the CPI to be used as a peg, but also
| think that if lots of things were pegged to it, the
| calculation would become a political football.
| drdec wrote:
| If you choose carefully which things to peg to it, you
| might end up with countervailing influences.
| nostrademons wrote:
| A lot of things already are pegged to it (eg. social
| security), and the calculation is already a political
| football. That's why there's so much distrust of official
| CPI numbers.
|
| There's no real escape from this other than free trade and
| hard assets. Cash regularly becomes less valuable, but food
| remains food, housing remains housing, and the future cash
| flows of providers of these good continue to float
| regardless of cash's value.
| batshibstein wrote:
| How are these bills now worthless? I can't go to Zimbabwe today
| and get 100 trillion dollars (2.6 billion USD) from the currency
| that they printed that is supposed to be worth that amount?
| fzzt wrote:
| Many countries that suffer hyperinflation keep the historical
| name of their currency, but establish some exchange rate
| between the "old" and "new" money. Zimbabwe went through four
| cycles - currency codes ZWD, ZWN, ZWR, and ZWL.
|
| Per Wikipedia: "The final redenomination produced the "fourth
| dollar" (ZWL), which was worth 10^25 ZWD (first dollars)."
|
| The ZWL itself was subsequently largely abandoned, too. I
| believe you'd have more luck transacting in foreign currencies.
| ilaksh wrote:
| It's been maybe a day since I have had a comment on here buried
| so I will go ahead and mention cryptocurrency.
|
| Hyperinflation is evidence that money needs to be a high
| technology. Public ledgers in and of themselves don't prevent
| hyperinflation or other problems with money, but they do give us
| potentially much more and better tools to make money work.
|
| Especially if high tech digital money can be holistically
| integrated with information about real world resources.
| wuliwong wrote:
| I bought a couple 100 trillion Zimbabwe dollar notes a while
| back. Been meaning to frame them, just like this. :)
| christophilus wrote:
| My brother recently told me that Austrian economics is well known
| to be a dead end and that no one takes it seriously anymore. I'm
| curious if that's really a generally held view among modern
| economists.
|
| It does seem to me the Austrian theories had decent predictive
| power when it comes to the boom / bust cycles and inflation baked
| into the current monetary systems.
| cpp_frog wrote:
| Mark Spitznagel wrote a superb book on austrian investing [0]
| (risk management with an austrian perspective, so not exactly
| the same). Personally as a mathematician, I prefer this to the
| economists who think that because the use lagrangians their
| ideas are somehow more valid, or worse yet, sophisticated.
| Either case, I don't see why austrian economics get more dirt
| than say, MMT.
|
| EDIT: Spitznagel works with Taleb and his fund, Universa
| Investments, had a 4000% return at the beginning of the
| covid-19 pandemic.
|
| [0] The Dao of Capital
| eth0up wrote:
| Any opinion on Friedrich Hayek, particularly The Road to
| Serfdom? I had difficulty absorbing it and lent it to a book
| snatcher before finishing. I do remember admiring the bits I
| thought I understood.
| ogogmad wrote:
| Not an expert but my guess is: A purely deductive approach to
| economics shouldn't work because economics is not mathematics.
| Austrian economics is an attempt to justify economic policies
| many would consider overly individualistic using pure
| deduction.
|
| An example of deduction failing unexpectedly can be found here:
| https://en.wikipedia.org/wiki/Unexpected_hanging_paradox
| omegaworks wrote:
| It's no surprise that many former colonies are on this list. Many
| were subjected to economic retribution from attempting to
| establish their sovereignty in a hostile global trade
| environment. Many colonizers imposed enormous debts on colonies
| in exchange for their freedom[1]. Runaway inflation is one of the
| many indiscriminate tolls sanctions impose on the people of a
| country.
|
| Why sell the products you produce on your farm to locals when you
| can ship them overseas and get dollars to exchange for medicine?
| Medicine that is illegal to produce in your country if your
| country hopes to operate in the good graces of the WTO[2].
|
| All of this history is condensed by the author into mere
| "haphazard fiscal policies and civil struggles." This gallery of
| currencies is a stunning visceral departure point for
| understanding macroeconomic policy, my only wish is that it went
| deeper.
|
| 1. https://www.nytimes.com/2022/05/20/world/americas/haiti-
| hist...
|
| 2.
| https://www.wto.org/english/tratop_e/trips_e/pharma_ato186_e...
| sofixa wrote:
| > Many colonizers imposed enormous debts on colonies in
| exchange for their freedom
|
| Which others apart from Haiti had to pay for their freedom?
| keeganjw wrote:
| I was looking at the bill from Weimar Germany that says "Zwei
| Billionen Mark" with the caption of "Two trillion mark" and I was
| like, did they get that wrong? I looked it up and sure enough the
| German word for trillion is billion! Languages are wild, I wonder
| how that happened.
| macintux wrote:
| Here's some backstory on the UK vs US treatment of that
| question.
|
| https://www.thenakedscientists.com/articles/questions/why-ar...
| keeganjw wrote:
| Oh cool, I didn't know the British used to do that as well!
| TazeTSchnitzel wrote:
| It's English that's weird here. In most languages that have the
| word "billion", the long scale is used.
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