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Tippit's Nightmare

mhaze said:
Argentina, 2000, economic collapse.

Brief summary.

The only people that came out with some of their wealth and or savings, excluding the political figures at the top, were those with money in precious metals or real estate.

It's astonishing how many people fall for the "It can't happen to US" and "We're in uncharted territory" lies.
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In 2000, what happened again? Argentina had a FIXED currency exchange rate. Once they stopped that and devalued their currency their economy took off again.
 
daenku32 said:
In 2000, what happened again? Argentina had a FIXED currency exchange rate. Once they stopped that and devalued their currency their economy took off again.
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http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999–2002)

The economy took off and left the country, you mean. The entire middle class lost it all and joined the ranks of the poor.

By 1999, newly elected President Fernando de la Rúa[5] faced a country where unemployment had risen to a critical point and the undesirable effects of the fixed exchange rate were showing forcefully. In 1999 Argentina's gross domestic product dropped 4% and the country entered a recession which lasted three years ending in a collapse. Economic stability became economic stagnation (even deflation at times) and the economic measures taken did nothing to avert it. In fact the government continued the contractive economic policies of its predecessor. The possible solution (abandonment of the exchange peg, with a voluntary devaluation of the peso) was considered political suicide and a recipe for economic disaster. By the end of the century, a spectrum of complementary currencies had emerged.
While the provinces had always issued complementary currency in the form of bonds and drafts to brave shortages of cash, the maintenance of the convertibility regime led to this being done in an unprecedented scale. This led to their being called "quasi-currencies", the strongest of them being Buenos Aires province's Patacón. The national state also issued its own quasi-currency—the LECOP.[6]
[edit]Event

Argentina quickly lost the confidence of investors and the flight of money away from the country increased. In 2001, people fearing the worst began withdrawing large sums of money from their bank accounts, turning pesos into dollars and sending them abroad, causing a run on the banks. The government then enacted a set of measures, informally known as the corralito,[7][8] that effectively froze all bank accounts for twelve months,[9][10] allowing for only minor sums of cash to be withdrawn, initially announced to be of just $ 250 a week.[11]​

Cheers!
 
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timhau said:
Is that an argument for something, and if so, for what? Feodal era financial policies?
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Just for grins, I look at the prior post which I responded to....and find:

This would be a nightmare only if Tippit's dream didn't come true.

Then your question is answered.

The nightmare has came true dozens of times in the 20th century.
 
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timhau said:
... and the rest of the time, things have worked. Contrast that with the 1600s. You're essentially arguing in favor of mule carts by bringing up all the times your Chevy broke down in the last 25 years.
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I guess you are welcome to make an actual fact based argument. Go find a historical case where the equivalent of $5T in currency was printed and there was a happy outcome.

I do know of one or two. But I'm not going to make your argument for you.
 
mhaze said:
http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999–2002)

The economy took off and left the country, you mean. The entire middle class lost it all and joined the ranks of the poor.

By 1999, newly elected President Fernando de la Rúa[5] faced a country where unemployment had risen to a critical point and the undesirable effects of the fixed exchange rate were showing forcefully. In 1999 Argentina's gross domestic product dropped 4% and the country entered a recession which lasted three years ending in a collapse. Economic stability became economic stagnation (even deflation at times) and the economic measures taken did nothing to avert it. In fact the government continued the contractive economic policies of its predecessor. The possible solution (abandonment of the exchange peg, with a voluntary devaluation of the peso) was considered political suicide and a recipe for economic disaster. By the end of the century, a spectrum of complementary currencies had emerged.
While the provinces had always issued complementary currency in the form of bonds and drafts to brave shortages of cash, the maintenance of the convertibility regime led to this being done in an unprecedented scale. This led to their being called "quasi-currencies", the strongest of them being Buenos Aires province's Patacón. The national state also issued its own quasi-currency—the LECOP.[6]
[edit]Event

Argentina quickly lost the confidence of investors and the flight of money away from the country increased. In 2001, people fearing the worst began withdrawing large sums of money from their bank accounts, turning pesos into dollars and sending them abroad, causing a run on the banks. The government then enacted a set of measures, informally known as the corralito,[7][8] that effectively froze all bank accounts for twelve months,[9][10] allowing for only minor sums of cash to be withdrawn, initially announced to be of just $ 250 a week.[11]​

Cheers!
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The devaluation happened in 2002. After all that.

What exactly are you arguing against? I assume it was for devaluation of currency, but now I really don't know.
 
mhaze said:
I guess you are welcome to make an actual fact based argument. Go find a historical case where the equivalent of $5T in currency was printed and there was a happy outcome.

I do know of one or two. But I'm not going to make your argument for you.
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What's yours? That there have been a few instances of hyperinflation in the 1900s, and therefore we're all doomed?
 
timhau said:
What's yours? That there have been a few instances of hyperinflation in the 1900s, and therefore we're all doomed?
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Suuurrreee, buddy. Answer a question with a question, when the question was for you to get specific, regarding, well...YOUR mule cart assertions.

daenku32 said:
Btw, here is a good article from Brad Delong explaining the liquidity trap, and why some things people fear aren't going to happen.

http://delong.typepad.com/sdj/2011/11/the-sorrow-and-pity-of-the-liquidity-trap.html
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Good thing you stick to vague assertions there, that allows redefinition of "some things" to suit, well, you know, maybe some argument?

Because there's nothing new or sensational or unknown in that article.
 
daenku32 said:
The devaluation happened in 2002. After all that.

What exactly are you arguing against? I assume it was for devaluation of currency, but now I really don't know.
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And ANY of the countries I cited, with dates, the dates are approximate. As we are seeing in the USA now, there is a slow unraveling since 2008, there was a slow buildup to 2008 for three decades, and so forth and so on.

An "economic collapse" is different than a devaluation.

A devaluation is a government effort to fix a balance of payments and trade problem, or if coupled with some other factors, a means by which a government steals wealth from it's population.

In general, what I'll argue against is policy and or philosophy which clearly will cause widespread suffering or creative income and wealth removal from the population, to the benefit of government and institutions --and individuals, who think they know better.
 
timhau said:
I tried getting some sort of argument out of you in post #21, but it doesn't seem to be forthcoming.
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Oh. Well, what part of "let's learn from history" do you not understand?

The fact that I didn't choose to elaborate on each of the mentioned countries as to WHAT we could learn?

Maybe I thought it was self evident that these may be considered teaching aids (or for those who are idiots, "training aids") regarding Tippit's nightmare.

First point of reference.

Let's neither fall for the sucker ploy argument from ignorance:

"We're in uncharted territory!"

Nor the GreatFreeStuff scam:

"Printing money works wonders for the economy"

Hint: Atlas Shrugged is not a How-To-Handbook for your favorite government political party.
 
I wonder what would happen if the US sold project bonds -- say for upgrading or maintaining the Interstates -- and set them at a 2.5% yield, Federal tax-free?

For those parking their funds in cash, 2.5% is a lot. The money raised would have to be dedicated to the named projects, and the bonds backed by the full faith and credit of the US.

Wouldn't this be a way of raising revenue, at least temporarily, while also (a) getting something done with it, (b) giving incentive for people to put their money to work, and (c) providing jobs?
 
DallasDad said:
I wonder what would happen if the US sold project bonds -- say for upgrading or maintaining the Interstates -- and set them at a 2.5% yield, Federal tax-free?

For those parking their funds in cash, 2.5% is a lot. The money raised would have to be dedicated to the named projects, and the bonds backed by the full faith and credit of the US.

Wouldn't this be a way of raising revenue, at least temporarily, while also (a) getting something done with it, (b) giving incentive for people to put their money to work, and (c) providing jobs?
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It's an interesting idea. There was a recent thread where the liberals here were repeating the mantra of "Infrastructure repairs" and came up with a half trillion dollars of urgently needed bridge and road repairs.

That looked like a solid argument until I showed that the total price of the entire Interstate road system in recent-year-dollars was about a half a trillion.

Which .... makes you think they want to spend it somewhere else.

Your scheme at least on the surface doesn't appear to have sufficient opportunity for corruption and graft to be interesting to DC. In a curious way, this illustrates at the same time, how big a number like a trillion really is, and how equally big the out of control spending on entitlements has become.

Oh....and don't forget....

 
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mhaze said:
Your scheme at least on the surface doesn't appear to have sufficient opportunity for corruption and graft to be interesting to DC.
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Spoilsport. Being right is no excuse for stamping on the burbling hopes of the throng who still believe, somehow, Mr. Smith is in Washington and will do the Right Thing.
 
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