In a free market economy with honest money, prices tend to deflate. From Joel Bowman at joelbowman.substack.com:
Deflationville at the End of the World…
(Something for the working man to look forward to…)
“Too many factors must be known, and no one can know them.”
~ Henry Hazlitt, from Economics in One Lesson (1946)
Look out below, dear reader… prices are actually falling at the other End of the World.
A friend sends a message from our adopted home in Buenos Aires, Argentina. It shows a sign out front of a popular cafe-restaurant in Palermo:
“Bajamos los precios un 11% para estar más cerca tuyo.” (“We lowered prices by 11% to be closer to you.”)
Commented another friend, also a long-time Argentine resident:
“Competition, baby!”
The price war comes as Javier Milei’s administration continues to tame inflation at what might be called the “printing press level,” with producer (wholesale) prices actually falling for the first time in years. From local paper, La Derecha Diario:
In a historic event for the Argentine economy, the Wholesale Domestic Price Index (IPIM) recorded a 0.3% monthly decrease in May, marking the first wholesale deflation in almost two decades.
The data was confirmed this Tuesday by INDEC and was quickly celebrated by the Minister of Economy, Luis “Toto” Caputo, as a new milestone in the process of economic stabilization.
The decline was mainly driven by a 4.1% monthly reduction in the prices of imported products, while the prices of domestic products remained stable. On an annual basis, the IPIM rose by 22.4%, the lowest increase since December 2017, consolidating the downward trend of wholesale inflation.
I know that I know nothing.
Socrates
I’m your Boogieman.
KC & The Sunshine Band