What it Looks Like When a Country Doesn’t Trust its Banks (VOX)

  • I went to Argentina and the US did a bank run.
  • “Since the ’60s and ’70s, Argentines’ confidence in their currency and their economic institutions has been eroding,” said Roy Hora, an Argentine historian. “What Argentines have done is to adapt to that scenario.”Hora compared it to boiled frog syndrome, where things get worse and worse but just slowly enough that in the day-to-day it’s rather imperceptible. Then, by the time the disaster has really set in, it’s too late. Argentina’s inflation rate just hit 100 percent annually. (In the US, it’s 6 percent.) Hora sent me a tweet about the country’s mega price increases. “Here’s a title for you,” he said, “Worse than expected, even for the biggest pessimists.”
  • “Knowing that inflation has very negative consequences for the medium and long term, for most people, it takes away the opportunity to save,” Hora said. “They can’t plan for the future, they have to live in an eternal present.”

Source: What it looks like when a country doesn’t trust its banks (VOX)

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