Tuesday, September 10, 2013

Are We Going into Stagflation?

Another week and a few thoughts to share here, our beloved platform, well, sort of. Now that the threat of the world ending with a bang is over - temporarily - we can relax. If the big O from the big A had bombed Syria then Russia might have retaliated and there would have been a nuclear war. The two earlier world wars have ocurred over trivial matters and the next one could, as well.

Be that as it may, we think it's stagflation that is facing us. Stagflation is when good aren't available in the market due to high transportation and other costs - tax for example - and, consequently, products disappear from shelves. Prices of merchandise rise, stagflation results. That's what wifey is facing now. She went to the market to buy vegetable and had to pay Rs 30 for a half kilo of cabbage. God help us if stagflation is on us. Since the costs are high people will stop buying, resulting in high inflation and stagnation of the market. This is our humble understand of the dreaded word.

Brazil, Russia, and Zimbabwe are countries that faced stagflation. Here prices of essential groceries shot up, and, sort of, adding insult to injury, these needful essentials weren't available in the market, even if one had the money. People in these countries would go around with big bags on their shoulders and soon as they saw something they would latch upon it and buy. Hope we don't come to that stage, yet.

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