2/22/2024 - economy-and-finance

Hard phases for monetary stabilization

By horacio gustavo ammaturo

Hard phases for monetary stabilization

In other opportunities, we confirmed that extreme inflationary crises are lower in consumption, as a result, it is more poverty for the most deferred economic classes. the decrease in demand makes the price of products lower.

When inflationary processes are extensive, producers and traders get used to highlight their prices knowing that someone will buy them. By comparing prices, we meet with relativizing the visual impact on the lists, gondolas and vidrieras.

Part of the policies faced by President Milei's new government are committed to the fact that the purchasing power of the Argentines decreases as significantly as for companies to see the need to reduce prices, and thus, together with a restrictive monetary policy, that is, without issuing new weights, gradually ending inflation.

There is therefore another mandate factor to resolve the inflationary issue.

As we express it, loss of purchasing power with the consequent drop in consumption is the beginning of this program, however, those that buyers are a part of this process because they are the sellers who form prices, so newcomers when they arrive at this agenda. economic and financial lack of large producers and commercial chains We can check the beginning of a new phase in crisis management and probable economic recovery.

Access to the exchange market by importers would enable the Central Bank recover weights selling dollars, without having the need to pay high interest rates to get them out of square. For this, it should fix a sufficiently high exchange rate how to seduce currency forks to sell them.

Finally, they could reach the real instance that holds the inflationary processes, iliquidity.

La lack of circulation It was the one that allowed after the departure of convertibility that inflation remained controlled, that the near-measures were adopted mostly and that the creativity of a people hit until the ruins quickly reestablish confidence in their own currency, credit and a nearly broken banking system.

So we can identify different phases within the monetary stabilization program:

  1. Loss of people's purchasing power.
  2. Lower consumption.
  3. Stamping.
  4. Impact on Pymes and accountants, rupture in the chain of payments, unemployment and bankruptcy.
  5. Transfer of impact to large corporations that are affected by solvency problems in distribution chains and down sales.
  6. Iliquidity.
  7. Revaluation of weight.

We probably meet in the third stage, at the doors of the painful moment when the loss of purchasing power violently impacts most families and proximity trades.

The lack of money to cover people's basic needs is the cruelest form of containment to inflation.

Only recently, when the water reaches the waist of the few large and has drowned many of the medium and small, the lack of liquidity will be the sign that from that moment the weight has returned to charge life.

There are alternatives based on payment processing technologies that can conceive of transactional ecosystems so that it can regulate monetary flows so that iliquity is lower in the most vulnerable sectors and accelerate the re-evaluation of weight in the economic factors that accumulate and despise them.

The search for change in the country's model means transformations in the philosophical, moral and customs of the Argentines that go far beyond economic issues.

Supporting the tools of the 21st century in terms of monetary, fiscal and fiscal models would reduce the negative impact on those who least have and accelerate the recovery so desired.

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horacio gustavo ammaturo

horacio gustavo ammaturo

I am Gustavo Ammaturo. I have a degree in Economics. CEO and Director of infrastructure, energy and telecommunications companies. Founder and mentor of Fintech, DeFi and software development companies. Blockchain Product Designer.

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