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July 03, 2007

How to Deal With Inflation

Yes:

Ministers claim that the inflation rate of 4,500 per cent - the highest in the world - is solely caused by greedy shopkeepers raising their prices for no good reason.

Must be true, eh?

The new controls force supermarkets to sell food at below its cost from wholesalers. Unless the regime relents, there will be food shortages, empty shelves and, eventually, the closure of all shops.

"We won't be restocking. If need be, we might have to close shop rather than stick to government prices," said the manager of one store.

That'll do it. What would you give it? Another three weeks or so, before there are no shops open at all?

July 3, 2007 in Economics | Permalink

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» Could Someone Please Send Mugabe an Econ 101 textbook? from Blue Collar Heresy
Usually when someones answer to an economics question is econ 101 they dont have a clue what theyre talking about. Most economics issues are too complex for the class, but not all. Apparently Robert Mugabe, the tyra... [Read More]

Tracked on Jul 3, 2007 9:50:01 AM

Comments

Three days.

In the Mugabe v Chavez "who can f*** over his economy first and worst", Mugabe is showing the Central American lad a clean pair of heels!

Textbook, textbook.

Posted by: Mark Wadsworth | Jul 3, 2007 9:40:18 AM

Chavez is authoritarian and willing to do anything to stay in power; in general, this tends to deter people from things like inducing hyperinflation.

Mugabe is merely crazy.

Posted by: john b | Jul 3, 2007 12:02:07 PM

Price rises follow shortages and price falls follow a surfeit. Conversely if price controls are enforced, then a too low price leads to a failure to supply (a shortage) and a too high price a surfeit.

Clearly the difference between Chavez and Mugabe is not that they have both enacted laws about wearing underpants on the outside ((c) Bananas) but that one has more effective price controls.

Posted by: Alvin | Jul 3, 2007 2:11:21 PM