Topic: INFLATION IN THE UNDERDEVELOPED COUNTRIES - page 7. (Read 3642 times)

If the stable coin is relying on Dollar for its stability then its not going to work out long term, stablecoin is fine to hedge short term and to avoid exit costs but its not really a solution to just hold.    People are already exposed to dollar or their own national currency, they dont need more of that especially if inflation is the worry.
The 3rd world countries should really invest in their own particular commodity and only commit to one or two years of agreed pricing when doing deals.   Its a mistake to make any commitment to debt rather then the raw commodity, the problem being the countries no doubt dislike the irregular prices many commodities suffer from.     Its the job of their own national economy to account for the variance in commodity worth and to benefit when price peaks and be strong enough to survive the drop in prices.   Venezuela is demonstration of the terrible fallout of relying on a high oil price but it applies to every commodity dominated economy, they have to build stability and savings not debt or promises from the west that are external to their economy and can become a liability
  The problem is its not a fair relationship, the world is dollar centered and its hard for countries to operate independently of that.  I dont believe its impossible just requires discipline, I know Russia, China maybe other countries are trying to build reserves in gold but gold has no yield so really investment in productive industry is required also.

I'm truly glad for Bitcoin to be an option we can tap into, but we have to look at how it is impossible for people to have all their funds in Bitcoin so that we have total control over what we own. Volatility is a major concern right now and will be that in the forthcoming years as well. I wouldn't even put all my money in Bitcoin if it has Gold's 'stability'.

What we need is a decentralized unit of account that maintains its value no matter what. I like the DAI stablecoin because it aims to solve that problem. The only thing we can't solve is scalability, therefore have to accept that Bitcoin and other cryptos will likely never reach a state of total mass adoption. Perhaps that we can have some sort of a workaround through interoperability between various networks, but we haven't seen it be put to the test yet.

Even in India there is tax on cash deposit and withdrawal in excess of certain amount. But What's happening in Brazil is more drastic. Now the thing is that it's just a Myth that coming on Cryptocurrencies will solve these problems because currently Cryptocurrencies are Highly volatile so when people try to keep their mainstream money into crypto prices could fall by a lot daily so what you could buy today with your money can get you much more tomorrow because it's a deflationary currency.

When the government keeps on printing money for their own good, the money will just break down. Inflation is a serious problem in a lot of countries, poor leadership will result to breakdown of the community and economy. But I think it's not Government is to blame, even you are the smallets part of the community you can do something to get a better life.

Inflation is the main problem of this paper money but economist claims that its good to have inflation in the least rate but in the modern days inflation keep increases every year and many developing countries facing huge economical crisis and soon it also will after the developed nations as well.What you said is right main cause of this problem is idiots at poor and theory poor financial management of total economical funds.

This is a huge warning sign, when a government begins to try to restrict the way people use their wealth you know there is something terribly wrong with the economy, that kind of tax is obviously an attempt to try to keep people away from the money that they have deposited in their bank accounts, I will not be surprised that during the next years you see the Brazilian government passing laws to limit the amount of money that you can withdraw from your bank account.

As if we did not have enough reasons to use bitcoin and other cryptocurrencies that is yet another reason to use them, banks think that they can do whatever they want with money that is not even theirs but fortunately for us we have an option that we did not have before in the form of bitcoin and no one can tell you what to do with it no matter what they do.

The heart of the fact is that if you see the history " development" has been defined as a phase with respect to the contemporary technological and economical aspects. I mean to say there was a time in 1300s when Indian subcontinent was too flourished and was conisdered a developed economy but now it's called Developing. While the west was nowhere in the picture at that time now the centre of development. In 1600s China was greatest economy of the world under the Qing Dynasty. My point is that every good economy was bad in the past while many good economies have blown themselves up. You cannot blame the underdeveloped countries for high inflation. Moreover many a times countries with great natural resources have failed as a great Economy example being Venenzuela.

Also the bitter truth is that economy crashes root themselves from Major Economies only. The 2008 Housing debt bubble was created by America itself. So basically no small countries can effect the world Economy that easily. It's the giant nations which are the cause.

LOL, Bolsonaro just enter in the war against China to get aproval from USA, now, China stoped importations of soy from Brazil, and will buy it from USA. Thats funny.

The problem is keep safe without any debt during the crisis. Its really hard, no job, supermaket prices rising like a bitch. Lets pray for our governaments. =D

An underdeveloped country is a country gripped by poverty with low income per capita. This is reflected in the very low standard of living of its people. About 75% of income is spent on food. Usually, poor countries are ex-colonies and they inherit the economic and political system from colonial countries. Their poverty and backwardness were caused by economic and political exploitation by the invaders. The colonizers dredged the natural resources of the colonies and sold them on foreign markets at high prices and allowed the colonies to remain poor.

Poor countries find it difficult to break the bondage of colonial heritage. After decades, even though developed countries did not do physical colonization, but they continued to carry out economic colonization by imposing free trade ideology on poor countries even though they knew poor countries were not ready for it. Developed countries through the IMF and World Bank under the guise of assistance control and even control loans and infrastructure projects for poor countries. Globalization has caused wider economic imbalances between developed and developing countries. To put it simply like this, you are born with the condition of your parents being poor and leaving a debt with daily interest. To buy food is difficult. So it is impossible to escape from the snares of poverty.

Inflation in poor countries occurs due to declining food production and ongoing war. Processing raw materials into finished goods or semi-finished goods, of course, requires adequate facilities and infrastructure. To support production, of course, requires a very large cost and competent experts, and even then they depend on developed countries.

To overcome inflation in a poor country, in my opinion, stability, and supply of basic needs must be fulfilled. although conventional food self-sufficiency must be planned to tackle various serious problems in poor countries.

I know Brazil looks like the only country like that but I can count at least 10 countries who are having the same problems. Yes Brazil was never a big huge economical country so going even worse meant a lot worse things but look at USA, even they are not doing that well and in a world where USA is not doing well because of idiots at power, it is not a wonder that third world countries like Brazil and all others not doing well neither.

I would personally wait it out, I know it is really difficult to manage financially right now but as a person who has seen multiple economical crisis all around the world thanks to my age, I can tell you that after the crisis is always the best time to make money, you have to just not make any debts during the crisis itself.

Brazil is going to hell.

We have a crazy president, the inflation is big and rising. Our economy minister is a dumb shit and the things will get worse.

The brazilian real is going down day by day and, a lot of people without job.

This shit govern want to give our things to USA. FUCK THE SYSTEM

And now, the governament want set tax to deposits and withdraws

The main reason why most of these countries suffer from inflation is due to bad economical strategies set by the governments, if we take for example Venezuela which represents one of most countries that suffers from inflation due to its economy heavily  relaying on oil back in the 90s so when the prices went down so it did and they had to get in debt and because of that all their earning had to go directly to paying them, there was no liquidity in the market so they just kept on pumping and printing more and more of the currency until it is worth noting compared to a dollar,  there are many ways to fight inflation but most of them revolve around reducing the currency supply directly and indirectly, and adding value to natural resources without selling to other countries is only gonna make things worse, because one thing leads to another and it will cause more inflation.

If only things were that simple

The problem is that countries which are already industrialized have a competitive advantage while the third world countries can't just proceed from exporting raw materials and natural resources to manufacturing finished products and retail-ready goods because they simply would not be able to stand the competition with the developed countries. So, instead of getting 10x the profits from exporting natural resources, they would only incur losses by producing subpar goods that will fail to market

To do what you suggest requires a lot more than just building factories as it also requires highly qualified labor force, technologies, capital, etc, as well as support from the big guns like the US opening their markets (see Japan as one such example) and it takes literally decades to go in that direction till finally getting there (or just somewhere)

It's high time that third world countries realise that it is industrialization and not natural resources alone that is going to make them leap from being a third world country to maybe an economic super power, They are over reliant on their natural resources and all they tend to do is to export them, if they are able to build factories that could transform their raw materials to finished products like developed countries do, they will end up being getting 10x the profits they make from exporting just the raw materials alone.

If you ask me, that would completely bring down their economies (and very fast at that)

These countries have to export their natural resources "as is" because there is not much else they can do (or sell) as they lack the required technologies as well as expertise "to add value to their natural resources themselves". Remember, they are underdeveloped, which basically means natural resources are their only available means of keeping up their level of welfare

If they didn't export natural resources as you suggest, they wouldn't receive the financial means (read, dollars) to buy thousands of other things which they don't produce themselves since they are underdeveloped (but I repeat myself). Then they would quickly turn into a North Korea of sorts. In simple terms, selling whatever they have is their only option (other than developing their economy the "hard way"). It is just how things stand in the world

Most of the underdeveloped countries have populist governments,that spend a lot more money than they can gather from taxation.This creates more debt and weakens their national currencies even more.
Another problem is the "poverty trap".There are too many young people and not enough money for education,so most of the young people grow up uneducated and therefore poor.
I don't believe that anything positive can happen in the underdeveloped countries.

This topic invokes something known as imperialism.

The hierarchy of nations is defined within social order resembling a caste system. Wealthy and powerful nations retain their status through adopting measures to ensure poor(er) nations are unable to elevate their own standards and become competitive. This is reflected by leaders of underdeveloped countries receiving financing and support from foreign powers in exchange for guarantees to keep the population repressed.

As mentioned, the end goal of imperialism is to limit competition between wealthy and poor nations, to guarantee the wealthy retain their status as king of the mountain. It enforces the status quo of the wealthy remaining rich, and those living in poverty remaining poor. This is one reason why many brutal and repressive dictators are found to receive billions in support from foreign sources. It is cheaper for wealthier nations to fund a dictator who is guaranteed to regress educational and economic standards so their country can never compete on a global scale. Cheaper than it would be to compete directly with said nation if they made a legitimate effort to strengthen their economy and elevate standard of living.

The second issue relates to design flaws in how governments are structured. Governments are structured as the largest and most powerful monopolies in the world. Any negative criticism that can be said about US big tech or amazon being a monopoly would apply far more to governments as they lack competition and are not incentivized to produce intelligent nor efficient solutions to problems.

Being a monopoly implies if state issued fiat currency hyperinflates, there are no alternative options. If governments implement poor economic policy or poor regulatory standards, there are no alternative options. The centralized design of state authority is flawed from inception due to it being monopolistic in origin and implementation.

One way to improve conditions relating to inflation would be for governments to issue more than one fiat currency to create a competitive environment. That way if one state issued fiat is poorly managed and devalues, there are other superior options for consumers to fall back on. Governments and leaders need a competitive environment to produce their highest quality work and demonstrate why they deserve to make decisions that affect the lives of millions.

Breaking up state monopolies and forcing them to compete on some level has potential to produce a superior state format in contrast with the way things are now.

If that were true, 3rd world countries would be in a better situation. Unfortunately, the situation is much more related to public debt and irresponsible politicians, like Greece experienced.


In Brazil, for example, take a look at this article published in a domestic economic magazine. I will translate the last paragraph using google translator


What does this means? That we are now going to make a big auction of our giant oil fields and use that money to build a new infrastructure? No. Education? No. Technology? No. We are going to spend all that money to pay pension funds, i.e., current expenses and personnel expenses.

This is not an investment. This country is never moving foward, and it is not 1st world countries faults. This is not capitalism or greedy companies fault. Who can we blame? Irresponsible government that spent and promised to spend more money than it actually have. Solution? Sell our property to pay current expenses.

This is saying simply that countries that can't manufacture things, products are those that are in such predicament. The third world countries are majorly found in this level of economic quagmire.