Everywhere today we see discussions on price rise. People are most dissatisfied with price rise and why not after all it reduces your discretionary spend!!
And it is this pain of less to spend in discretion that make people take to the streets.
First let us understand the economics of a price rise. As there are finite resources and as we do not live in a 100% recycle system as the years go by resources will be harder to find. Add to this the problem of rising populations with rising aspirations. We then have a timebomb of inflation in our hands.
Inflation is to be split up into two parts - that which is the direct result of money printing (yeah this is a result of whenever the Aam Admi goes on a strike for higher wages) AND that which is the result of finite resources.
One doesnt need to be a rocket scientist to see that if the Aam admi grew a brain he would be asking for wage reductions rather than wage hikes so that prices of goods come DOWN. On the other hand a reasonable percentage of wage hike to compensate for the REAL inflation due to dwindling resources will keep the balance going.
Now life aint as simple as explained above. (the amount of books on economic theory on the merits and demerits of deflation vis a vis inflation will make a two lane highway between the earth and the moon). What we have in reality is a mix of population growth, fiscal deficits, rising aspirations, imbalance in distribution of income, corruption, vote bank politics etc etc and at the end of which you have the nation still growing!!
IF that aint a daily miracle I dont know what is!! :-)
IF that aint a daily miracle I dont know what is!! :-)
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