Myriad thoughts on a million things
Terrorist Alert or Inflation Control?
We all know about the multiple bombs that have been going off in all our big cities… Bangalore, Ahemdabad, Surat…. The scare is touching all cities with people in Mumbai, Calcutta, Hyderabad, Chennai wondering when the terror train will hit their cities, Astrologers going in mystic convulsions predicting the next city to be hit, TV channels having a blast zipping from one bomb site to another and causing more panic with their dramatic overtures.
55 dead and more injured… that’s just one of the more obvious impacts of the terror attacks. But what else is happening because of this? People across large cities are retreating in fear and decidedly not going out gallivanting in public places. Protective mums are telling their children to ‘come straight home!’ rather than hang out with their friends after work or college. So people are going out less, and by virtue of that buying less, spending less. And guess what will happen if this continues for a bit…? Inflation will come down…!!
For an economy which is being adversely impacted due to runaway inflation, these are desperate times. The government has tried almost everything from raising repo rates, CRR limits, lending rates, etc etc. But nothing seems to work to reign in the upward trend of inflation…. So in trying times, would it be too far out to think that the desperate government could resort to scaring its own population into their homes and hoping they will in turn tie up their purse strings? Just a thought.
| This entry was posted by Anmol on August 5, 2008 at 11:18 am, and is filed under Politics. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site. |
about 2 years ago
Reminds of a unpopular theory on 9/11. The US government planned it to get its own people’s approval on the war in Iraq. I never really baught that and I will not buy this either. This can never bring the inflation down for 2 reasons:
1) The effects are short lived – 10 days later everyone is out there living again.
2) The inflation is also build into the cost of the comodities and not just the MRP. The cost of already produced comodities does not really come down.
Goverments are corrupt and desperate – there are no 2 ways about that. We all saw what transpired during PM’s vote of confidence in the parliment last month. Also there are popular theory’s that the communist left front gets funded by China to ensure development in India gets a beating. Many would believe that these are terrorist like acts. And I agree. But all that is power driven and does not lead to direct death and destruction of its own people. This however is a huge accusition – this is like saying the PM and his gang are terrorist. I would not agree to this.
There are terrorist forces in this country that conduct these events for no reason other than terrorism. A classic example to sight is the attack on parliment few years ago when all 540 MP’s were in the house. Did the govt. plan that too kill itself ? No.
about 2 years ago
Hmm.. interesting… thanks for the comment Shakes! I’ve got some strong views by the other people who have read this blog ….yes, I do agree thats it’s a little extreme… not impossible though.
On the point of this being only a temperory fix fr inflation, I’d recd a really interesting piece on how spending less can help curb inflation. Article given below…. Maybe if we all curbed our expenses and bought less, we’ll make some impact. Love!!
Nice Logic – It May Work !!
A man eats two eggs each morning for breakfast. When he goes to the Kirana store he pays Rs. 12 a dozen. Since a dozen eggs won’t last a week he normally buys two dozens at a time. One day while buying eggs he notices that the price has risen to Rs. 16. The next time he buys groceries, eggs are Rs. 22 a dozen.
When asked to explain the price of eggs the store owner says, “The price has gone up and I have to raise my price accordingly”. This store buys 100 dozen eggs a day. He checked around for a better price and all the distributors have raised their prices. The distributors have begun to buy from the huge egg farms. The small egg farms have been driven out of business. The huge egg farms sell 100,000 dozen eggs a day to distributors. With no competition, they can set the price as they see fit. The distributors then have to raise their prices to the grocery stores. And on and on and on.
As the man kept buying eggs the price kept going up. He saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there. He checked out the huge egg farms and found they were selling 100,000 dozen eggs to the distributors daily. Nothing had changed but the price of eggs.
Then week before Diwali the price of eggs shot up to Rs. 40 a dozen. Again he asked the grocery owner why and was told, “Cakes and baking for the holiday”. The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs goes up. Expect the same thing at Christmas and other times when family cooking, baking, etc. happen.
This pattern continues until the price of eggs is Rs. 60 a dozen. The man says, ” There must be something we can do about the price of eggs”.
He starts talking to all the people in his town and they decide to stop buying eggs. This didn’t work because everyone needed eggs.
Finally, the man suggested only buying what you need. He ate 2 eggs a day. On the way home from work he would stop at the grocery and buy two eggs. Everyone in town started buying 2 or 3 eggs a day.
The grocery store owner began complaining that he had too many eggs in his cooler. He told the distributor that he didn’t need any eggs.
Maybe wouldn’t need any all week.
The distributor had eggs piling up at his warehouse. He told the huge egg farms that he didn’t have any room for eggs would not need any for at least two weeks.
At the egg farm, the chickens just kept on laying eggs. To relieve the pressure, the huge egg farm told the distributor that they could buy the eggs at a lower price.
The distributor said, ” I don’t have the room for the %$&^*&% eggs even if they were free”. The distributor told the grocery store owner that he would lower the price of the eggs if the store would start buying
again.
The grocery store owner said, “I don’t have room for more eggs. The customers are only buying 2 or 3 eggs at a time. Now if you were to drop the price of eggs back down to the original price, the customers
would start buying by the dozen again”.
The distributors sent that proposal to the huge egg farmers but the egg farmers liked the price they were getting for their eggs but, those chickens just kept on laying. Finally, the egg farmers lowered the
price of their eggs. But only a few paisa.
The customers still bought 2 or 3 eggs at a time. They said, “when the price of eggs gets down to where it was before, we will start buying by the dozen.”
Slowly the price of eggs started dropping. The distributors had to slash their prices to make room for the eggs coming from the egg farmers.
The egg farmers cut their prices because the distributors wouldn’t buy at a higher price than they were selling eggs for. Anyway, they had full warehouses and wouldn’t need eggs for quite a while.
And those chickens kept on laying.
Eventually, the egg farmers cut their prices because they were throwing away eggs they couldn’t sell.
The distributors started buying again because the eggs were priced to where the stores could afford to sell them at the lower price.
And the customers starting buying by the dozen again.
about 2 years ago
Oh my god woman… ur mind does work in amazing ways… never though there could be a correlation between Boom Attacks & Inflation!!
Also, I think the next time the Mall guys need to clean/ renovate they should just have a bomb scare for a day… another advantage