In an Argentine newspaper I come across a joke about inflation, where a housewife asks a supermarket employee the price of a can and the latter asks her if she wants to know what it is worth or what she will pay when she gets to the checkout. The cartoonist's humor is not unreasonable: in Germany after World War I, restaurants set the bill when taking the order, because prices could have risen at dessert time. Argentina's inflation is an incurable evil. At the moment, it is of the order of 100%. Result: 43.1% of its citizens are poor and 8.1% are indigent. The only ridiculous thing about this chaos is that the government, in order not to recognize that inflation is unleashed, has decided to stop issuing 5,000 and 10,000 peso bills. The highest value bill will be the 1,000 pesos, which is equivalent to three euros, and possibly will bear Messi's face. Football for Argentines is a poultice that cures everything, although it does not fix anything.
In Europe, we have learned again what inflation is in 2022. Surely, inflation is the word of the year, but above all it is the name of the damage that has been done to our economies. It is the collateral damage of the war in Ukraine and, although in Spain it was close to 11% in July, at the moment it is at 5.8%, the lowest in Europe, in which the Sánchez government will have some merit. The ranking in the EU is headed by the Hungary of Orban, Putin's friend, with 23.1%. The European average is 11%.
Inflation in Spain was about to wipe out the transition, in 1977. For once, the Government and the opposition in full agreed to sign the Moncloa Pacts, which managed to stabilize the economy but also politics. In those days inflation was 26.39%.
Milton Friedman wrote that inflation is a tax without legislation, and John M. Keynes warned that in a continuing process of inflation, governments can secretly and inadvertently confiscate a part of the wealth of citizens. And what is more worrying: inflation can make us lose not only money, but also hope. May 2023 bring peace to Ukraine and stability to our economies.
