Wednesday, March 12, 2008

Stagflation, eh?

They are digging up the roads everywhere. Just beside my house is this huge trench where they are laying cables, outside my office a huge hydraulic excavator is digging away, extracting mounds of earth and stones, constricting the passage of cars, rickshaws and buses.

Hmm, it's the new economy at work,I guess. They work 24x7, all hours of the day, the crash of the stock market doesn't seem to have affected them. But my wife tells me products, even vegetables, are expensive, and they aren't available. She went for fish and couldn't get it.

Stagflation? Uh? Did you say? That peculiar state in which products are expensive, and there isn't much of it around. The sort Russia witnessed after the fall of Communism. Then where are the cables going? I wonder.

Read what this study has to say:

"Rapid economic development in China and India has placed increased demand on the world capacity to produce both food and energy and therefore has surely contributed to the persistent gap between core and headline inflation numbers observed over the past five years."

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