The “DUHHH???” feeling arises out of one’s complete inability to judge whether the thing stated is actually good or bad. Let’s take this negative inflation thing.Does it mean that I’ll be getting a cheaper lunch at office from now on??Does it mean that I’ll be able to get a new Reebok pair for lesser?? Would it mean melting of polar ice??Would it mean that Lalu will join team India for the next T-20 World Cup??
Alas…we’ll have to ask the economists .Economists,in my view,are people with three to seventy six degrees who look like this:
I also feel that macroeconomics is the art of taking a simple economic phenomenon,making it more and more "macro" till a point where you see nothing but small dots where your focus area used to be.Surely,you are dumbfounded by now,and are at the complete mercy of the interpretation presented by the economist,who by the way,makes truckloads of money in the process of giving random guesses or common stuff that you knew anyways.
Let’s take this small piece itself:“Negative inflation was expected by the market and policy makers. It reflects lower commodity prices on a year-on-year basis”.Holy crap!!I am enlightened.Since Inflation means rising of prices,then negative Inflation would mean their lowering!!Never thought of that one!!Amazing wisdom shared here!!.I wonder whether negative Deflation means the same as positive Inflation then. I wonder whether I can multiply or divide it too!!
Again,let’s look at this one:” However, food articles were costlier by 8.7 per cent from the comparable week last year as pulses moved up 17 per cent, cereals 13.5 per cent, and fruit and vegetables 10 per cent. The dip was on account of a fall in fuel prices as international crude oil is now ruling around $70 a barrel against over $140 a barrel during the year-ago period.”Doesn’t this mean that while prices of food items,the roji-roti of people at large is actually increasing in any case,the dropping of petroleum prices is nothing great,considering the over-the-top rise that they took anyways a year ago??.And then again,with oil depleting fast,would we really have crude prices in check in the long run??No.So that means that in a few years,I will have costlier food as well as fuel,with inflation again hitting the roof.So all of a sudden,”sentiment” will dampen and stocks markets will start crashing again.Economists will predict another Big Bang followed by an ice age.Never mind that oil depletion was always known to happen!!
Another great insight:”It is not very positive for the economy, particularly the manufacturing sector ... inflation dipped to below zero level in 1975, the emergency days,".Now when the cause of negative inflation is fall in crude prices,why would that have a great ruboff on manufacturing??Do we mean to say that manufacturing is equivalent to oil refining and nothing more??Even where oil is an input,this should actually be a good sign for such companies.Perhaps not being an economist ,there are subtle pieces of gyan that elude this poor soul!!
Another good observation:“Negative inflation does not reflect deflationary environment. Though WPI is higher from week before, deflation is not a concern right now,” .Now if WPI is higher from the week before,then naturally deflation is not the word that strikes you first in any case.Where is the added information I was looking for??I tried reading this through a magnifying glass,but alas,couldn’t find any encrypted code or stuff that could lead me to more knowledge.
So one of two premises of mine stands confirmed:
1)I am dumb
2)Economists speak Martian
Whom should I ask for the answer??Definitely not an economist!!
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