Tuesday, October 6, 2015

Book Review: And The Money Kept Rolling In (And Out)

In the early 2000s, middle class Argentinians regularly awoke to find scavengers going through dumpsters looking for plastic bottles. In many cases, these scavengers had once lived in the same neighborhood or one like it. Looting, fires and civil disturbance were regular features on the evening news.

The culprit? Argentina's currency had collapsed and set loose a disastrous inflation rate that decimated the savings of normal people. Read the book for the gory details of a too large government, national debt, and an ill-thought basis for currency exchange.

The situation is not completely analogous to the issues the United States faces now. Argentina's problems were caused by pegging its weakening national currency to the dollar. Nevertheless, the episode does show what lurks under the delicate threads of currency valuation, debt and ultimately savings and societal trust.

And the Money Kept Rolling In is recommended as a lesson in national finance policy. For any student of Latin American economic history, it's a must read.