Inflation - Who is responsible?? - Page 4

While the inflation in the economy is a product of food scarcity and oil price hike, the government is seeking a solution with interest hike, that will reduce demand for houses and cars in about 2-3 years time. It will also increase the cost of lending to agriculturists who may not get the money for harvesting in this season having more impact on agriculture and more scarcity of food. It will aslo weaken the already dull stock market further with banking, real estate and auto industries being hit hard. Auto industry is gonna hit with oil inflation and also higher interest for finance. Why did i buy stocks of tata motors 😭😆.... well i am not worried.... they will come up some time.

I felt the government shall first look to cut the taxes on the oil products reducing the price of perol and gas. Shift most of the vehicles to CNG rather than petrol. Look how we can improve the productivity in agriculture and give some incentive to the manufacturing industry who has gone into so many expansions in recent years. If the government does nt give this industries some hand at present its no longer we will see them in red and unemployment on increase

Inflation up, interest rates go up that is Economics 101, that is the first thing that any central bank of a country will do to check inflation short term, then they will start to look at long term measures.

Now what/who is responsible for the inflation, there are lot of answers. We are pulling Oil out of the groung pretty much at the same rate as we were doing 5-10 years ago, but our demands have grown up 1.5 times, In India for decades everyone knows our entire supply stock is moved from one place to another using diesel based vehicles, Cost of crude goes up, cost of transportation goes up, prices rise, this was true in 1950, 1960, 1970, 1980 and is true in 2008. To compensate people started using food supplies for producing fuel, making already pricy food stock more pricy.

Couple of the best economic minds in India are tied up solving political problems and dont have their minds on the economics or else they wouldnt in their wildest dreams approved a write-off of 72000 crore rupees, when we start paying for it, then the real inflation will hit us

Originally posted by: chal_phek_mat

Inflation up, interest rates go up that is Economics 101, that is the first thing that any central bank of a country will do to check inflation short term, then they will start to look at long term measures.

Now what/who is responsible for the inflation, there are lot of answers. We are pulling Oil out of the groung pretty much at the same rate as we were doing 5-10 years ago, but our demands have grown up 1.5 times, In India for decades everyone knows our entire supply stock is moved from one place to another using diesel based vehicles, Cost of crude goes up, cost of transportation goes up, prices rise, this was true in 1950, 1960, 1970, 1980 and is true in 2008. To compensate people started using food supplies for producing fuel, making already pricy food stock more pricy.

Couple of the best economic minds in India are tied up solving political problems and dont have their minds on the economics or else they wouldnt in their wildest dreams approved a write-off of 72000 crore rupees, when we start paying for it, then the real inflation will hit us

I agree it is the first economic movement on inflation, however it is not the best option always. If the reasons for inflation are other than the money in hands of people, the increase in interest rate wont affect inflation progress.

The stock market stood to the test because of some market reports on acquisitions. However bank, reality and automobile stocks plunged further.....

Tatamotors down 3.5 % 😭 😆 .... hope it shoots up in next month 😳

In New Zealand,we have not yet ahd our GDP Q1 results, they will be given on the 27th of spetember and this is expected to be negative and so is the Q2 GDP results.
I thik that we may go into Glbal recession because inflation is starting in many countries and pertrol prices rose 12 cents per litre in two days and is going to get even worse.
Food prices are rising and low unemplotment has become higher then it has in a while.
and stock market has fallen badly, shares and everything is down, even the dollar.
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The central bank of India, the RBI has taken several measures to contain inflation, and indeed keep the mood on the economy positive in order to keep the hard earned economic gains. RBI has raised key short term lending rates, increased the amount of cash that banks must keep in reserve in abid to reduce the volume of loans on the financial system by raising that percentage, and added fuel to the fire by removing energy subsidies that have raised fuel prices by about 10%.

http://www.india-forums.com/forum_posts.asp?TID=941252&TPN=1

New Zealand doesn't have enough fuel for them to add subsidies. No one in NZ recieves subsidies so it doesn't encourage anyone. The government has raised taxes because they think it will keep inflation down. It has risen a little bit though.
It will be a while beofer inflation hits NZ properly.
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Wow, great comments/news and insight from your countries..

In the US as well we are feeling the pain of the global economy as well.. I think we are all in the same boat since each country plays a major role in each other's economy.. Case in point is with the Asian currency crisis (i think in 1997)...

Yeah, But apparently from the news in NZ, palces like India and China are doing really well because of America's downfall in exporting Asia is having to make up for their loss.
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Its interesting seeing how it has affected different countries.

In the US, short dated debt is unlikely to extend it's recent rally. That would force central banks to shift their attention away from inflation back to growth-an unlikely prospect this week, with the European central banks set to raise rates in it's meeting thrusday.
The 2 year treasury yield in US-2.65%, Germany 4.45%, UK 5.14%. For the quarter through June 26 treasuries had lost 2.4% in US, 2.08%-Germany, 2.87%UK and 1.6%Japan. So far this year in local currency terms, the US treasuries have handed investors a return of 1.9%, better than all the other countries mentioned.

http://www.india-forums.com/forum_posts.asp?TID=941252&TPN=1