Price controls

[pmbug]

Argentina did it last year, now Thailand is on the desperation train:

Thailand freezes prices of goods for 6 months

Thailand’s Commerce Ministry said on Friday that prices of many consumer goods would be capped for six months to November. The measure is aimed at holding down living costs and boost the economy and confidence. “Producers of 205 categories of necessary consumer goods are happy to freeze prices for six months,” Reuters quoted the ministry’s permanent secretary, Srirat Rastapana, as saying. Rastapana is acting minister under a military government that seized power on May 22. The move was announced after a meeting with companies and trade associations.

http://rt.com/news/line/2014-06-06/#6340

 

[benjamen]

Price control ==> Blackmarkets ==> increase in crime

Price control ==> hurts producers ==> producers produce less ==> true prices go up

 

[ancona]

I remember the Nixon 90 day price freeze, and I also remember the subsequent hoarding that occurred as a result. Any attempt to control prices will end badly. Just look at Venezuela, North Korea and Argentina. How did that work out for them??

 

[mmerlinn]

I remember the Nixon 90 day price freeze, and I also remember the subsequent hoarding that occurred as a result. Any attempt to control prices will end badly. Just look at Venezuela, North Korea and Argentina. How did that work out for them??

Actually, that 90-day freeze turned into an almost 3 year debacle that took years for the market to unravel.

And I remember it well as his freeze probably cost me hundreds of thousands of dollars. No way to ever know how much I lost, but I remember getting a call from my bank the following Monday reversing approval of a loan granted the previous Friday for a small apartment complex (4 units) that I was going to build. A few years after the freeze that complex was built by someone else and now the whole block has 4-unit complexes on every lot.

Last week I read an article comparing Nixon's freeze to Obamacare, which is just another price freeze under a different guise. O makes Nixon's freeze look like a walk in the park. If I can find the article again, I will post a link here.

Also note that we have effective price control on movement of money across international borders, due to get worse at the end of the month. Already some banks refuse to wire money out of the country because of the controls. No limits on incoming wires, though, so watch out when China et alia decide to dump the dollar.

 

[ancona]

Ahh, you give away your age Mmerlinn. ;-)

I am only 51, so the memory of the price freeze is a little dim, but I do remember chaos. Just like the oil embargo somewhat later. My mother was just as guilty as everyone else because she went out and loaded up on stuff we didn't really need, but bought it "just in case".