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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: FiveFour who wrote (53846)2/14/2006 5:12:21 PM
From: Mike Johnston  Read Replies (1) of 110194
 
Since Argentina is one of the largest producers of beef in the world, that would explain why a steak dinner did not go up in price during currency devaluation. But anything that had to be imported or had an imported component must have gone up in price significantly.

By definition, if one currency loses value against the other, the other must be gaining value, it is common sense.

What happens during hyperinflations and currency devaluations is that huge increases in money stock do not raise the purchasing power of the money stock.
Money supply goes up, but the total purchasing power of that money supply goes down even quicker. Hence, significant declines in living standards.
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