Diego Basch Profile picture
Apr 17, 2022 9 tweets 3 min read Read on X
I am visiting my mother in Argentina. I found this thing. Prepare for a fantastic lesson about the power of inflation.
This is an Argentine savings book from the 1970s. I got it when I was six years old, and put money into it during a few months. The bank gave me stamps to put in it as records:
First stamp is from August 6th, 1976. Last one is from October 29th. A total of 1228 pesos. How much would you think that money is worth today? What could you buy?
Well, those pesos were replaced in 1983 by a new currency called Argentine peso. 1 Argentine peso equaled 10000 of those. These are equivalent:
But then in 1985 they did it again, so 1000 of those because one Austral:
And then in 1992 they did it again. 10000 Australes became one peso. It's been long enough, we can reuse the name by now and nobody will confuse them with the old ones. These two are equivalent:
So, those 1228 pesos from 1976 need to be divided by 10^11 to convert them to current pesos. Then again by 200 to convert to USD. So if I'm not mistaken, that's about 60 picodollars. Of course no interest was paid.
What can you buy with 60 picodollars? One gram of gold is about $60 these days, so you could buy one picogram. We could do better with copper, which is about 600 times cheaper. Still, I couldn't buy a nanogram of copper.
Takeaway: may the sign of the exponential be ever in your favor. Positive, you own the world. Negative, you get diluted into nanoparticles.

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