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116 sats \ 4 replies \ @didiplaywell 1 Jun \ on: Hyperinflation and the Destruction of Human Personality econ
Allow me to speak from first hand experience...
In the eve of the hyperinflation that was starting last year, every merchant started to stutter to clients, out of catharsis, "I don't know any more if I'm making or losing money, I can't tell if things are expensive or not, I'm just moving blindly by inertia, begging I don't hit a wall". Confusion was such that people came back and forth from cynical attitudes, for not even being cynical alone was as a stable attitude.
But, from all of those consequences, none was so cruel and damaging has this: absolutely unable to understand what was going on, pristinely oblivious on economy fundamentals, and plundered by a decades long seemingly unmovable tendency to ever accelerating decadence, with time people assimilated with religious strength the idea that everything was caused by a sub-humane nature of "the argentinian". "Being argentinian" became, for our own people, an indiscernible synonym of being low in virtue, mediocre, crappy, and treacherous. None uses "argentinian" as a serious insult anywhere else as argentinians do to themselves. It's not used in humor but in a seriously (self)despective manner. That's the demise of a nation, right there.
One of the reasons Milei's speech also caught the youth was that he made the case that that's not how we are, but what socialism had reduced us to.
Socialists, on the other hand, keep feeding the self attrition cycle by treating argentinians as poor little animals that need the state to survive, as cows need the stable.
Here's a similar story from Zimbabwe (from the book Hard-Boiled Egg Index: Surviving Zimbabwe's Hyperinflation). Very interesting book, by the way. The main lesson appears to be - leave the country early.
After all these chores, I needed to get a breather and a cold drink. I went from shop to shop, looking for a cold Coke, but unfortunately, none had cold drinks; the reason was that all their fridges were paraffin-powered, and there was no fuel. I settled for a slightly cold drink from one of the shops, but it was more expensive than the one at room temperature. The shop owner had run out of paraffin a day earlier, and only Stoney ginger beer was still reasonably cold. I sat down on a bar stool, gulping down the contents of the can. My eyes moved around the shop after I realized I had paid less for the can than I would have been charged in Harare. The price of my favorite legendary Mazoe orange crush was ZWD$1,000 per two-liter container. This is an orange crush one can dilute to taste and is quite popular for its fruity flavor. Prices in Harare had gone up to ZWD$8,000 for two liters a week ago. Tinned beef, soap, sugar, salt—you name it; all were at least five times cheaper in this shop. I took out crisp, newly minted notes and paid for a three-months’ supply of groceries.
The owner smiled at me and thanked me profusely. “Is this the new money?” he asked, while getting a feel of the new bearer notes.
The Central Bank, maybe out of pride, did not want to call these large denominations currency. They called them bearer checks, which had values from ZWD$5,000 to ZWD$20,000.
As the shop owner displayed a beaming smile for my purchase, I felt so ashamed of myself. I knew his business would crumble in no time, as he would not be able to reorder. However, his ordinary client base could not afford higher prices, and the relatives from the cities now rarely visited rural areas. I thought of rushing off and telling my other Harare folk at the funeral of the cheaper groceries in the rural shops. After loading the goods into my car, guilt overcame me, and I decided to let the cat out of the bag.
“Sir, when was the last time you restocked?” I asked.
“Why do you ask?” he responded.
“I would recommend you contact the wholesaler you order from because prices have increased so much over the past week. You might not be able to restock if you keep your prices this low.”
His happy face turned pale, and I could see sweat on his brow. “How much do these things cost in town now?” he asked.
I told him that Mazoe orange crush was eight times more expensive in Harare than in his shop. During stable times, rural shops would be more expensive than urban shops, owing to transportation costs.
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It sends shivers down to my spine how accurate this is. Not only this has happened here already up to the last detail (and this is how indeed many stores with unaware owners broke in the past), but even the numbers are the same as current prices here.
And yes, the decades long decadence made it a cultural standard for fathers to instruct their sons right from childhood to leave the country as soon as finishing studies (despite how disheartening that is always for them, not really wanting that to happen, but feeling guilty to force their sons to bear decadence only to keep them close). Mine did, all did.
One of the eye widening feats Milei's team has achieved is to start reverting all of those deep structural socialist traits from the roots. It's all changing very fast now.
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It's really heartbreaking to read about. While we aren't yet descending into hyperinflation in America, we are starting to learn what it means to live in a low-trust society.
Hopefully, the fiat nightmare will be over soon. I think the wheels are beginning to come off.
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One reason I started lurking english-speaking sites as this so recently is because I'm not worried any more about Argentina but USA itself. No indicator shows signs of a slowdown but all the contrary. A storm is in the horizon my friend, we know very well how this works and what will ensue, and my greatest hope is reduced to ensure that the correct lessons will be learnt so that not that much time is wasted. I have been trying to humbly add my voice as a warning for months now. I even had a couple of interviews with Austin Petersen, both in twitter space and as podcast. Will keep trying to rise the message.
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