Re:Venezuela Follows India’s Example and Voids Half of Its Cash
by ZenoArrow on Saturday December 17, 2016 @05:23PM
(#13203036)
>"That's mathematically impossible."
It's not. Increased profit can be made from the sale of fewer goods. There's nothing impossible about it.
>"Increasing the velocity of money is actually inflationary. Your proposal to solve inflation is...to have more inflation? That's like saying the cure for hunger is to not eat."
Is it though? Velocity of money does not necessarily move inflation in a single direction. Prices can rise and fall, based on supply and demand. If what you're suggesting is true, how does the liquidity of a market always result in inflation? It's also worth noting that healthy markets rely on a moderate level of inflation to counteract the value taken away from a market by inactive assets (such as housing).
Except the government is creating more and more. You couldn't possibly create a scarcity of bolivars. Also, of all the things you could possibly say about Venezuela over the last few years, you've identified the issue as a shortage of currency?
> The losses incurred by hoarding increasingly worthless currency can be offset by the profits made elsewhere.
That's mathematically impossible.
> possible to encourage more people to trade in Bolivars.
Increasing the velocity of money is actually inflationary. Your proposal to solve inflation is...to have more inflation? That's like saying the cure for hunger is to not eat.