How Fake Money Saved Brazil (2010)

> "We didn't understand what it was," says Maria Leopoldina Bierrenbach, a housewife from Sao Paulo. "I used to say it was a fantasy, because it was not real." I was 14 during the URV period. It was like that, nobody really understand what URV was, nor could explain to other what it was. But, it was simple to use. Prices are in URV now, not in the old currency name, not a new currency, it is URV. URV acted…

Sorry, but this story gets nowhere near the real reasons for the inflation reduction. The major and most important change on the Brazilian government to achieve this was the LRF - Lei da Responsabilidade Fiscal, "Fiscal Responsibility Law" in English (free translation). With these law, federal, state and municipal governments, which added much more oversight and control to public spending, requiring budget increases to go through congress, forbidding "money printing" practices and also requiring detailed…

More about this history: https://en.wikipedia.org/wiki/Unidade_real_de_valor https://en.wikipedia.org/wiki/Plano_Real A subtlety about the name is that "real" in Portuguese has two different meanings with two different etymologies: 'real, genuine' from Latin realis (res + -alis) 'pertaining to a thing', and 'royal' from Latin regalis (rex + -alis) 'pertaining to a king'. Portuguese often loses historical intervocalic consonants (the word for consonant itself is "consoante"!), so the words corresponding to English…

That's the problem with all currencies, even precious metals: they depend on the acceptance of people, on belief that they have some sort of value, when in fact they're just a fantasy. It's not real! If an epic catastrophe hit tomorrow, and one had Gold bars, they'd be utterly worthless: nobody would willingly trade their food and uncontaminated water reserves for currency (and if they did, they'd soon die of hunger or thirst); you can't eat or drink Gold, nor…