Tuesday, January 18, 2011
Inflation hits the roof!!!
Yesterday I was in Devaraja market for our weekly requirement of vegetables. I was in for a rude shock. Not only do I see that the onion prices have stayed almost at their peak, but also other vegetables have reached record prices. Early in the day I had already seen the rise in petrol prices. This was truly adding fuel to fire.
“Inflation will reach 6% by March”, “inflation will normalise in next few weeks” – I don’t understand whether to call these as clichés or false promises. But, none of these have helped in bringing the inflation down. We have seen multiple governing bodies, personalities, ministries assure us to bring the inflation down with little results. Note that the inflation number that we are watching is also tweaked to make it look optically lower than what it actually is. Had the inflation been calculated as in the previous decades, some of us would have collapsed looking at the number. Add to this is the rising fuel costs, and we are conveniently told “motorists must get used high fuel prices".
If we think this is just a short term patch, we might be myopic. My reasoning is as follows: though we hear that the inflation is due to artificial hoarding of food articles, we have not seen any acts by authorities which has materialised in taming the inflation. As such governance is in a limbo & most of the effort is in the direction of damage control in fighting allegations of various scams. So, what is the easiest action that it could take that is visible to all? ‘A rate hike by RBI’. And most of us have one or the other form of interests to pay. So, we need to prepare ourselves to pay up higher interest rates. Pain is cascaded if you are constructing a house because even the commodity prices have shot up.
So, what do we do? Can you watch money getting virtually shrunk in savings account and even fixed deposits these days? If not it is high time for you to think and act suitably. Would be very glad to see what do you think is a suitable action. Kindly express your views. Please don’t make this discussion a political issue & say it is purely because of XYZ party. Let us know something that we can act upon immaterial of who is ruling the nation/state...
