Inflation – it’s such a mess
A man explained inflation to his wife thus:
‘When we married, you measured 36-24-36. Now you’re 42-42-42. There’s more of you, but you are not worth as much.’
- Lord Barnett
That my dear friends, is the essence of the devil called inflation. In more complex terms, and hence economically speaking, Inflation is a rise in general level of prices of goods and services over time. There are many measures of inflation – the Consumer Price Index (CPI), the Wholesale Price Index (WPI) and then there is the GDP deflator and then there is Excess of money supply – in short, economic and finance newspapers make every effort to confuse the common man using such jargon, thereby making money, instead of explaining it through a simple Lord Barnett’s joke which everyone would have understood. [Feminists who can't see the joke in it can go take a hike, and probably buy The Economic Times or The Wallstreet journal]
I like Zimbabwe. No, not the cricket team – they suck big time. I love their penchant for huge numbers. Nowadays, they only talk in millions, billions and trillions. Rich country perhaps. For example, their inflation is just 2 million percent according to the latest figures. Look at that number, isn’t that music for any Finance minister of the country? Or for instance, look at this bill for one dinner – isn’t this fantastic? How rich must the people be to write a 1.2 billion Z$ cheque? And how much would you tip the waiter on this bill? Wow, the calculation in itself is mind-boggling. Wonder how the Zimbabweans do this day in and day out? They certainly love huge numbers – the bill and the inflation are living proof of it. We should all seriously consider moving to Zimbabwe if we ever want to grow rich…or atleast feel rich.
And what is the inflation in India as per latest figures? A paltry 11.42%. How much does this 11 and some change percentage measure up against 2 million percent? Our inflation pales in comparison. No wonder that still 40% of our population is below poverty line. Tchah! And can we even dream of writing a million rupee cheque for one dinner, forget a 1.2 billion rupee cheque? Nope, not in my lifetime atleast. Such sad state of affairs. On top of that, the media goes gung-ho about inflation over-shooting, food prices rising beyond our means and all that crap – ah, the media is so dumb! Why doesn’t someone direct them towards the map of Zimbabwe I say! [And not to speak of the country I currently live in - USA - inflation is a trivial 4% and the whole country is almost in tears and tatters! Uh!]
The government proves my assumption time and again – they are just a bunch of jokers. I sincerely wish for some meritocracy instead of this bizarre bureaucracy.
Let me not even start speaking of the effects of inflation on Zimbabwe. If everything was set right today, the country would take atleast 10-15 years to recover – and I don’t see that happening in the near future atleast. 2 million percent of inflation is something like – the robber asking the passenger in the train: “Hurry, give me the money, before it loses more value” or the realistic situation of giving two gunny bags of money to buy one loaf of bread.
But what is wrong with the Indian and US media? Isn’t the increase or decrease of inflation a normal part of every country’s economic cycle? Shouldn’t the media analyse what are the causes of inflation? Is the artificial price of Oil (currently at $142 a barrel – inspite of major supplies being held up in Persian Gulf due to political reasons) a cause for worry? Isn’t the sudden increase of food prices a direct effect on some of the insane economic policies undertaken (like the one to produce Ethanol through corn, a staple food) or due to large-scale hoarding by merchants in India? And seriously, any inflation above 6-8% is not worth reporting. Unless a country is in deep economic problems, the rate of inflation is always going to come down very soon from these double-digit percentages – sensationalizing issues when there are none has become a habit, leading to dire consequences.
I suggest the media take a chill pill, rest for a month or so and then comment on inflation. Experts say this inflation is a bubble and there is only a requirement for a prick for the bubble to burst. I sincerely hope this prick, whoever he/she is arrives soon enough and douses this mindless fear and fire for good.