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Posted on: Aug 01, '08

INFLATION- rising prices - where it is all leading to?

Dear friends,

                     I think it is time to take aboard some economics into my renamed zone as SCIENCE EXPRESS(see profile page) . I use to go to a nearby grocery shop myself to get an idea of the prevailing prices. When I asked for a detergent bar which cost Rs.5.50, the shop owner the rate has been hiked and it Rs.9.50. Four rupee increase in a single shot? why? the rising petroleum was the cause. Petroleum product is used in detergent making and that went into the pricing. I studied the detergent making process and saw whether there was any alternative to petroleum product in making detergent. Yes, indeed there is alternative but the process is not insisted upon by the Government by bringing pressure on the detergent makers.Not only the alternative raw material provided a away route from petroleum is also provided a green detergent as the petroleum product-used detergent is a pollutant.

      The story goes beyond detergents. The petroluem products fuel the vehilces carrying the goods , groceries contributing to the price hike when the fuel price goes up.

     Is the OPEC(Organisation of petroleum exporting countries) playing foul on the world economyh by hiking the petroleum prices indiscriminately? Not, so. The OPEC itself cries foul stating that the intermediaries in the trade are responsible for the hike by indulging in unbridled speculation.

    The speculation game is not restricted to stock markets where share prices go up and down depending on the whims and fancies of the operators though economy of the country plays an overall role in boosting the stock market or ousting it. As far as indian economy is concerned it is oil-driven though exceptions are pharma and software industry. While U.S. federal reserve is going in for interest rate cuts to boost consumer spending, the Reserve bank of india is going in for deposit rates and lending rates hike resorting to inflationary cutting measures.

    Ok, leave the petroleum products- the price rise is all around -in commodities and gold.   Commodity and metal exchanges fuel speculations in these. By paying only 5 to 10 % of the total price one can take possession of 100% value of the commodites and Gold in these exchanges. It is said that the speculators have taken possession of commodities like-pulses, grain sufficient for meeting more than one year's requirement of the U.S. citizens in their possession and when they play the commodity prices are artificially jacked up due to the demand.

     Be it grocery, oil or Gold -speculation plays a spoil-sport acting against the interest of the countries and the common man.
Time to ban commodity and metal exchange trading . The oil intermediaries have to be dealt with by the OPEC countries by going in for direct export.

    It is a bell to be tied to a cat to forewarn it's arrival. Who will be doing it?

    It is a remorseless world. God save the people!

   Thanks for reading. Your valuable comments are welcome.

   Bharathselvan

Tags: your paisa and my paisa

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manisha_bhattacharya said:
Good post and suggestions. But yes, who will bell the cat?

August 08, '08

madhumitaCAP2000 said:
ya food for thought

August 02, '08

maalolan said:

August 02, '08

ravichd said:
great suggestions,i do not know about commodity trading,but as you talk about the speculations,they really do harm.our PM has a great understanding of economy but why the govt is not taking good steps to bring the inflation down.how increase of deposit rate may affect, i don't understant but still i think encouraging spending may boost economy.
i am not a economist so if i have said wrong, any one who is having a sound knowledge of economy can ractify my words.
your suggestions are good, as in news i hear the same things.

August 01, '08

neha_sh2000 said:
hmmmmm....

August 01, '08

geetsudha said:
yes u r right,we have the resources to feed everyone in the world,we have enough wealth for everyone to live a decent life but greed,power,lack of compassion creates all these problems.we can just hope n try.

August 01, '08

earmarkedfortrouble said:
It is a full cycle!!!!
One can just hope and pray that all tis ends alright for all of us!!!!

August 01, '08

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