A century ago, Argentina was one of the world’s wealthiest nations and the Argentine peso rivaled the dollar. Today, Argentina is famous for periodic hyperinflation.
Original Article: "Argentina Sleepwalks into Hyperinflation (Yet Again)"
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Read More »While the Fed and the Biden administration try to assure Americans that their banks are safe and secure, the numbers tell a different story.
Original Article: "Charles Schwab and Other Big Banks May Be Secretly Insolvent"
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The Argentine peso has lost half its value in one year. Both the official and parallel exchange rates with the US dollar and the Mexican peso have doubled in one year. Consumer prices have doubled in one year. The quantity of Argentine pesos has doubled in one year. All the rates at which these variables are increasing have also doubled in one year. Expecting everything to double again in half a year is now a conservative projection.
Argentina was the richest country in the world at the beginning of the twentieth century. It has now endured almost one hundred years of fiscal dominance, meaning that the central bank always accommodates whatever deficit the government decides to run. Argentina has been practicing modern monetary theory since before it was even a
Over the present year we have experienced record-breaking price inflation, a series of interest rate hikes, and an overall fall in stock prices. It is widely accepted that there is a bubble. A good way for Misesians to measure this is by comparing the price of capital (stock prices) to its replacement cost (book value). A normal ratio for the overall market should be close to one. Such a ratio means that value is being properly imputed, and that the structure of production properly reflects real preferences and relative scarcity.
In the last quarter of 2019, when monetary policy was starting to tighten after almost a decade of near zero interest rates, the price to book ratio of the S&P 500 Index was around 3.5. That means that the calculated value you would
