The new Indian government is back to old tricks. They are trying to blame the hoarders for rise in vegetable prices. When stock prices rose five fold between 2004-2008, did you ever hear the term stock hoarder? When real estate prices went through the roof, did you ever hear the term real estate hoarder?
When you print money, it goes into financial assets initially and financial assets become a bubble. If the central bank does not allow financial assets to deflate during an eventual recession, the economy goes into stagflation where commodity prices eventually rise faster than financial assets. What people want is that stocks and real estate should rise 100 fold but commodity prices should not rise at all. That is a mathematical impossibility. Prices of food items will rise in India even if you destroy all the storage and outlaw hoarding. There is no difference between a hoarder and stock investor. They are both in essence momentum traders. In a money printing environment, prices would rise regardless.
If you want to end inflation, stop money printing. And stop blaming the hoarder. Prices have been rising for sixty years, ever since silver coinage was removed. Could anyone have hoarded onions for six decades? Also, why are milk prices rising? Are cows hoarding the milk?
When you print money, it goes into financial assets initially and financial assets become a bubble. If the central bank does not allow financial assets to deflate during an eventual recession, the economy goes into stagflation where commodity prices eventually rise faster than financial assets. What people want is that stocks and real estate should rise 100 fold but commodity prices should not rise at all. That is a mathematical impossibility. Prices of food items will rise in India even if you destroy all the storage and outlaw hoarding. There is no difference between a hoarder and stock investor. They are both in essence momentum traders. In a money printing environment, prices would rise regardless.
If you want to end inflation, stop money printing. And stop blaming the hoarder. Prices have been rising for sixty years, ever since silver coinage was removed. Could anyone have hoarded onions for six decades? Also, why are milk prices rising? Are cows hoarding the milk?
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