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To: Bearcatbob who wrote (126968)	12/27/2009 4:40:10 PM
From: elmatador	1 Recommendation Read Replies (1) \| Respond to of 206518

Inflation is taxation on the poor. Rich people can protect their assets. Poor people cannot. Two groups of people defended their income from depreciation: employees of state-owned enterprises and civil servants. There were several mechanisms whereby the middle class and the rich could hedge against inflation. The poor guy could only spend his money as soon as it got into his pocket. To hedge against inflation you bought dollars as quick as you got your Brazilian currency. You exchanged it in aa needed basis. As you have any money you would buy a car you did not need. And put into your garage. You would buy goods and store in a warehouse. You would buy real estate. You would get your money and would put into the money market as soon as it was credited into your account. Brazil hads the fastest and most advanced banking in the world. Advanced online banking, born of necessity; hyperinflation prompted Brazil to find ways to clear checks quickly Article Abstract: Brazilian banks have been years ahead of US banks starting in the early 1990's when hyperinflation took off in Brazil. Inflation was so bad that the price of bread could change while people shopped, and announcements were made in stores to that effect. Now home banking and the electronic transfer of funds are commonplace for Brazilians. Checks clear within 24 hours. faqs.org

To: Bearcatbob who wrote (126968)	12/27/2009 4:48:19 PM
From: elmatador	Respond to of 206518

Something is holding a floor under Elroy's buying power. Gives him a false sense of security before being hit by the train. "because the country adapted by indexing prices, wages, and contracts to the price increases to keep a floor under buying power, real comparative costs were soon difficult to sift out of the shifting plethora of figures." What is this 'something'? In Brazil case the most terrible was that economists did not know their job. It took ten years of trial and error to defeat inflation. So this 'something' may be difficult to find. econ.puc-rio.br