Printing money does not lead to inflation, argues Argentine central bank president
The president of Argentina’s Central Bank (BCRA), Mercedes Marcó del Pont, stressed the importance of the recently approved bank’s charter reform and denied that printing currency leads to the creation of an inflationary state “since inflation is rooted in other causes”.
“The new charter will provide the government with more tools to deepen the development model and to give priority to investment credit” said Marcó del Pont in a Sunday interview with two pro-government local newspapers Página 12 and Tiempo Argentino.
The banker added that “it is totally false to say that printing more money generates inflation, price increases are generated by other phenomena like supply and external sector’s behaviour”.
In that sense, the BCRA president explained that “the priority right now is the investment credit, because it is one of the issues in which Argentina is still with insufficient coverage. We look for credits of longer-term investment plans at reasonable rates with the return of these investment projects.”
“We discard that financing the public sector is inflationary because according to that statement the increase in prices are caused by an excess of demand, something we do not see in Argentina. In our country the means of payment are adjusted to the growth of demand and tensions with prices must be looked on the supply side and the external sector”.
Marcó del Pont remarked that criticism of the way the state is funding itself “have a clear ideological condiment, it is that or either the public sector has to make adjustments or go abroad to get credits and/or loans”. She added that the debate is very similar to that referred to “the use of BCRA reserves to pay for sovereign debt”.
Under the new charter of the bank the primary and main task of the BCRA will not be only to preserve the value of the currency but must also include inflation, jobs, economic development with social fairness, financial stability and the need to coordinate with government policies.
“We’re recovering the sovereign capacity to formulate and implement economic policy”, said Marcó del Pont who anticipated some pictures will be coming down from the bank’s hall of fame “beginning with Milton Friedman.”
The banker explained that the criteria to determine the optimum level of reserves will be determined in coming days and will involve several existing and new elements. Under the new BCRA charter funds above the ‘optimum level’ can be used for other purposes such as development financing.
“The formula will include issues referred to imports, short term foreign debt payments, the evolution of bank deposits and accumulation of foreign currency assets”, said Marcó del Pont who forecasted that in the first quarter the sum will be below two billion dollars but for the whole year the sum is estimated in 9 billion or more.
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44 comments Feed
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From a psychological standpoint, she's some lackey put in place by a authoritarian crypto-fascist government, so she's not even very persuasive when it comes to communications...
She reeks of FAIL.
Brilliant ! Someone help it tie it's shoes.
most of the argie blogers on here, were openy comdemming the west , like America of printing money,
how stupid and pathetic it was.
and now they are doing the same,
so what has changed there minds.
You fool! Just because feathers float softly towards the ground when dropped from 10 stories of your balcony, doesn't mean you will float softly to the ground if you jump! Just because another system has shown flaws does not mean everything CFK does is right.
Tell me, if you give me a gold coin to hide and I give you a sheet of printing paper with an “$” sign on it and I tell you “bring this back to me and you can take your gold coin”, we know the value of that paper.
What if I later decide to give 10 more sheets to other people and tell them to come back later and they'll get something... I still have that same ONE gold coin. Or if they also give me gold coins, but I decide to go on a world vacation and spend half of the coins.
You come back one day and discover there are 10 others that are asking for for their coins... is your sheet of paper worth the same now as when I gave it to you? Think hard before you answer.
Hint: this bitch is the laughing stock of Argentina this morning, read the newspapers and the reader comments!
www.losandes.com.ar/notas/2012/3/25/marco-pont-falso-decir-emision-genera-inflacion”-632110.asp
Hmm... fun for all the family!
It's printing too much money (i.e. money not balanced by a similar increase in productivity) that leads to inflation - she just forgot to address that aspect of the subject.
The issue is when you tried to project this dissonance righting onto other people through a comment board and made yourself look like a liar and a tit.
She is right because printing money per se does not create inflation meanwhile the money supply is in balance with the size of a given economy.
For example it is like to say that expending money creates debt, while you expending is in balance to your earnings and savings there is not problem. You will not fall into debt.
This Idea that printing money creates automatic inflation comes from Milton Friedman's thesis.
Well if that would be true USA will be a super hyper-inflation state since 1970 when Nixon abandoned the gold standard convertibility and USA since then start to print money like crazy.
Mercedes and you are quite right, printing money does not necessarily lead to inflation.
And she did address that and many other aspects of the subject.
It's just not been reported by the main newspapers.
God knows why?
is correct
It matters not what she does at this moment in time.
But
If you guys nothing of printing all that money,
Then print some for us would you .
A billion would do
.
Dear mate Elaine....
Please tell us ,where are you from in India ?
Don't be shy telling from India who will be a superpower also has Jaguar right now.....
You Fool!
...and yet Another Victory of reason, logic, and intellect, brought to you by the TTT™ (all rights reserved).
Till la proxima fools!
Printing money does lead to inflation if it doesn't enter productive areas, for example bailing out the zombie banks and other corporations who continue to enrich themself at the cost of the taxpayers.
We're not talking about currencies linked to the gold standard, we're talking about FIAT currencies.
Printing money in isolation, because that's what she's talking about, is an increase to the money supply. Given you have a finite amount of things to possibly buy with that money you're increasing demand. If you increase demand the value of that commodity rises, and hey presto you have inflation.
She gave no mention of an associated productivity increase, and let's face it, Argentintians are as productive as a slug... just look at your failed $42 a barrel oil strategy. That's dripping with productivity increases, that is. Or your farming.... et cetera, et cetera, et cetera
HEREIN ENDETH THE LESSON
I'll now let you all get back to pretending she was right... because let's face it, you cannot cognitively deal with the fact she was wrong.
www.youtube.com/watch?v=WCkOmcIl79s
www.youtube.com/watch?v=qMxX-QOV9tI
you either have it
or you don’t lol.
.
#25 You really are atroll, you seem to hate my Queen and the British equally, that'll make you popular round here =)
Argentina is the only country to have a room full of the World's finance ministers burst out laughing because their FM said the normal rules of economics don't apply to Argentina! Yeah neither does gravity.
Quantitative easing may cause higher inflation than desired if the amount of easing required is overestimated, and too much money is created.
Sounds like printing money is hard to disentangle from inflation.
To be fair to Argentina they have already rewritten the rules by following Iran and North Korea back into a prehistoric 'barter' system of trade. In this system you only pay companies you buy things from in soy-oil rather than return to the credit markets.
Let's see how that one works out for them?
(answer: it's not working out for them, all the oil companies said no)
It has got to be so embarrassing to be Argentinian!
Funny.
n economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.
Inflation's effects on an economy are various and can be simultaneously positive and negative. Negative effects of inflation include a decrease in the real value of money and other monetary items over time, uncertainty over future inflation may discourage investment and savings, and high inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Positive effects include ensuring central banks can adjust nominal interest rates (intended to mitigate recessions),[5] and encouraging investment in non-monetary capital projects.
Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.
My mistake, I shall try to write it more slowly.
# Sarcasm starts here.
Sra. Marcó del Pont is quite right.
/ End of sarcasm.
# Marcó del Pont spin follows.
Printing money does not lead to inflation.
/ Marcó del Pont spin ends.
# What Marcó del Pont should have said begins.
Printing too much money [parenthetical note: as Argentina is presently doing] (i.e. money not balanced by a similar increase in productivity) leads to inflation.
/ End of what Marcó del Pont should have said.
# Irony starts here.
- she just forgot to address that aspect of the subject.
/ End of irony.
# Implicit note begins.
When the expression “just forgot” is used in connexion with a - in common language self evident, but in economy patently false - statement as “Printing money does not lead to inflation” it is used ironically to show that the statement in question is meant to mislead the uninformed reader.
/ End of implicit note.
PS When you point your index finger at others, do note that three fingers point back on yourself.
PPS I love tits, especially 36D and 38DD
That may happen in other fields....
So what if Ms Marcó del Pont is right?
If Argentinean government let her to do it, ok....go ahead!!...Future will show results...
Man is always inclined to deny what is opposite to all he knows...
lanic.utexas.edu/project/etext/llilas/tpla/8714.pdf
Hellooo... guess where all ze real loot eez going...
But ok, just for fun's sake, let's say that as Mr Saul Bellow once said when he quoted the Jewish proverb “A fool can throw a stone in a pond that 100 wise men can not get out”, it sounds like the 100 “unwise” men were economists.....
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