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Originally Posted by jbermingham123
Again, you are forgetting that wealth is not based in absolutes anymore, but on share of the total pie.
Brazil has more total assets than it did in 2011. far more. But its share of the overall money supply has shrunk, because the US dollar decreased in value slower than the Real, and thus increased in value relative to it. And unfortunately, thats what matters, at least nowadays in the era of asset management.
In the last decade, but particularly in the last 5 years, high finance has largely moved on from investment banking, and is now all-in on private equity and asset acquisition and management. Goldman Sachs, for example, isnt Wall Street's top dog anymore, its Blackrock and to some extent JPMorganChase.
The full force of Wall street is now directed toward vacuuming up as many assets as possible. Airports, power stations and substations, truck fleets, nursing homes, apartment buildings, houses, etc. And in that context, it REALLY MATTERS that the US dollar has grown in value relative to the Real. because those fuckers buy everything in dollars. And so far, theres no country i know of that is able to stop them (because of their ability to use shell corporations).
I wish it wasnt this way. this same process is running rampant in the US and destroying thousands of businesses and families. but more people need to be aware that they or their community/country can be getting more material assets while simultaneously getting monetarily poorer, and thus more vulnerable to parasitic investors, who then gradually strangle the community/country out of those assets.
This is what has been happening to Greece, without Greek citizens even realizing how dire of a situation they are in. On paper, they made it out of their rough years and are doing great recently, but they will wake up one day and realize that everything around them is owned by people in Frankfurt and London
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I completely agree with you. That's definitely an issue and even though there are pros on a devalued Brazilian Real, there are also cons you mentioned above. What I meant was we cannot say whether a society, a population is "poor" or "rich" based on the GDP of a given year and worse: picking up this GDP and converting it to US Dollars.
As I said: 2011 Brazil is not poorer than 2021 Brazil by any metric despite the GDP per capita numbers I posted. Brazilians are way more affluent today: they're healthier, have more years of schooling and a bigger purchase power.
That's why Crawford is completely misguided when think he can assess whereas a country is poor or rich based on GDP converted in USD. That's not the purpose of GDP.
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Originally Posted by Crawford
How is PPP different comparing states as opposed to comparing nations?
The underlying data used in PPP comparisons is largely crap, and the bucket of goods-type analysis is inherently faulty.
Not true. Nominal and PPP are both used. They aren't the same, with one measuring size and the other measuring purchasing power. Any graduate-level economics class will have a built-in awareness that price comparison sampling is less accurate than market-based calculation. Also the PPP rates are notoriously nontransparent and dependent on national reporting bodies.
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GDP itself is completely dependent on local statistical offices. IMF or World Bank don't collect such stats anywhere. They only compile them. And even though stats offices worldwide follow some general guidelines, each country has their own methods to measure it.