PPRuNe Forums - View Single Post - Inflation Inflation! EK what to expect?
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Old 13th Mar 2008, 15:55
  #152 (permalink)  
Flying Spag Monster
 
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Keeping food prices at 2007 levels has to be paid for by someone if not the consumer. If the co-ops recieve subsidies then this is pro inflationary by putting more money into the system. If the co-ops wear the costs then expect the quality of product to fall. (Zimbabwe did the same thing...). Dropping the import duties on cement and steel allows the construction companies to maintain their margins, the money stays with them instead of the government, it is still in the money supply system therefor no change to inflation, just the price of cement and steel. (Who owns the construction companies??) 70% pay rise to 'selected' workers and food cards...all these measures mentioned are not designed to combat inflation. Less money spent on food leaves more money left over for big screen TVs etc, pro inflationary spending as the money is still in the system. There have been no measures announced to combat inflation, only measures to keep the locals happy so they don't get restless. This quite clearly indicates the intentions of the authorities towards those it needs to keep happy and those it doesn't need to care about...
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