Here’s my theory which inspired this question:
In 2022, internet penetration is significantly higher than it was during many of the famous tamed inflationary episodes.
As such, more and more countries, upon hitting bad inflation, instead of taming it via higher
1/x
In 2022, internet penetration is significantly higher than it was during many of the famous tamed inflationary episodes.
As such, more and more countries, upon hitting bad inflation, instead of taming it via higher
1/x
https://twitter.com/Molson_Hart/status/1482925491568975877
interest rates, won’t; they’ll get stuck in an Argentine or Venezuelan inflation loop. This will happen because today, unlike before, the internet makes it much easier to hold other currencies such as USD Euro or Crypto.
If this is right, two things happen from here:
If this is right, two things happen from here:
1. At some point, it’s going to set off a tsunami of loss of trust in small country currencies resulting in higher and higher inflation. The countries may transact some in local currencies but everyone will hold in usd, euro, or crypto
2. It’s going to set off a perverse demand
2. It’s going to set off a perverse demand
for dollars and euros, the stronger fiat currencies. See dollar milkshake theory.
I find this stuff really interesting and it seems to me that this is the big economic question of right now in the same way that subprime mortgages and CDOs were the question in 2007 2008.
/end
I find this stuff really interesting and it seems to me that this is the big economic question of right now in the same way that subprime mortgages and CDOs were the question in 2007 2008.
/end
Bonus tweet: remote work powers a lot of this as well. It’s a lot easier to earn and hold foreign money than before.
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