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Interest rates and Money Supply...Print your way into prosperity??

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Helsworth
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Post: #11
RE: Interest rates and Money Supply...Print your way into prosperity??

Well I dropped it and created a new state with a german template. I mean I can't really believe that a + 0.10 $/euro parity, from last quarter to now means 6 billion in exports, I really don't believe this. I agree with you that messing with the money supply kills people, but inflation remains high no matter what, combine that with recessions and all you'll get is frustration. I wish you nerves of steel in building your template, obviouslly you've won the contest in this department.


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16.01.2011 09:31
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VincentNikolai
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Post: #12
RE: Interest rates and Money Supply...Print your way into prosperity??

I don't need nerves of steel as much as simple resolve. It's been soooo tempting to get my GDP at high levels and say "screw how inflation rises", but I know better.

I would like to stress a difference from my state and the average, then I would like to show (without naming the state name so as to not give the regent un-wanted publicity) the same difference in a state with a GDP 90 billion higher than mine AND a debt surplus.

Viciana
Annual percentage change of inflation -1.90 % 3.00 %
Annual percentage change of economy 1.10 % -0.70 %

State with debt surplus and higher GDP
Annual percentage change of inflation 10.10 % 3.10 %
Annual percentage change of economy 2.90 % -0.60 %

Now I want you to do some simple math on why printing money and lowering interest rates isn't always the HEALTHY way to go.

2.9-10.1= -7.1

While 1.1-(-1.9)= 3

Meaning on a growth to inflation average I'm a bit over 10 % higher than my economically powerful counter-part! In the long run what does this really mean? (I would like to stress less people die in my state and lower un-employment) That the people will not only have money coming into them per capita, but they can actually use it! The money will go further and the citizens can buy things like food for themselves!

I also got a cute little benefit of having more migration on average and lower immigration which led to a lower population. Hehe It worked to my advantage since after inducing the prolonged recession an extra million people in my state would have meant my welfare and pension costs could've crippled me from growing at the rate I wanted. I've actually been pleasantly surprised with the growth I'm getting now since inflation is still dropping Big Grin.

In the long-term my goals are to make this a developed country by 2011. I want this country to be my proof of concept that Latin America has to drop inflation through long-term resolves and embracing capitalism. I had to even make some dictatorial moves which I'm not proud of Sad, but it had to be done damn it!


Politics has no relation to morals.
The Prince, Niccolo Machiavelli
The Prince- A dedication and political maneuver by Niccolo Machiavelli to prove his advice's value to the maintenance of the ruling Florentine Medici Political force.

This post was last modified: 17.01.2011 10:14 by VincentNikolai.

17.01.2011 10:09
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