Economics Article - Understanding Inflation - My Article at The News

[Sedqal]

Economics is not really my strong point, so excuse any mistakes. I've always feared free market as it gives huge power to entities foremost concerned with profits. In my lay man's opinion some sort of mechanism must be there e.g. govt ensures price keep within a limit for key food items. Which reminds me in India there was once a huge effort by Govt to educate people about benefits of having an egg in breakfast (specifically kids) would it not make sense in this scenario that govt. subsidizes the product i.e. egg? Look at it this way Govt may have to pay ten times more if the populations tolerance to diseases drops because of having no financial backing for healthy food and medical costs add up. Going this way if the health sector was also fully privatized (as public health care is subsidized) the public would be doomed!

 

[AsifAmeer]

Affluent arent the most productive members of Pakistan today. Are they? So how is it they are that rich? 2 things here. 1-Govt Deficits and 2-Land Reforms.

1. Govt Deficits.
This is creation of new money. And the "affluent" get to finance their unproductive production. There is no competition because the "affluents" have a monopoly on the creation of money. Like I have said before, Pakistan has a Govt Deficit problem. They create corruption. You will find more of the industrialists as politicians or politician financiers. Hai na? Thats what's creating your Cartels. These are local cartels. Then there are global cartels. They are supported by Central Banks. They pretty much have a monopoly on the USD. Heard the term - "Too Big to fail"? Thats my proof. They own the banks. They own nations.

Your quote

Can we really differ between MNCs and banks? In a free market MNC reigns supreme!​

Classic! U see there is a difference b/w a functional Free Market system and a Centralized Banking. They are 2 different concepts. What you are seeing around in the world is not because of Free Market. But its because of these too big to fail banks that taken over complete control of the Global money supply via credit issuance.

Let me explain you this from another angle. I am assuming ur in ur 20s just for the sake or argument. We remember just the dad would support the whole family and there would still be some savings. Dad would be upset on a month when there wud be no savings. Can u imagine that today? A couple with a baby can barely make ends meet in Pakistan? Where did the buying power go? It went to Inflation and Exports. Inflation in any way or form, is immoral, and destructive.

Thats a dangerous argument inherently favoring the more affluent (if the case was limited to luxury items only it would make sense).


That would be the ideal case but in real life scenario these companies will most probably form monopolies in growth stage and at some time near maturity it would be a cartel. Additional capital invested in exploration would not necessarily reduce cost of these goods as cartel (I mean in a real Global way) may keep the price at the point where it fetches greatest profits. Lets not underestimate these cartels, they nearly shelved alternative energy projects/ research also there is a very strong case that the famed electric car was shelved because of them (if true that exposes the nature of the beast, in electric cars they would have made indirect sales but didn't allow even that much of competition)


Can we really differ between MNCs and banks? In a free market MNC reigns supreme!

 

[AsifAmeer]

Subsidizing anything twists free market forces. Here, let me quote you something
when the prices became high in the Prophet's time and people asked him to fix prices for them, he replied, Allah is the One Who fixes prices, Who withholds, Who gives lavishly, and Who provides, and I hope that when I meet Him none of you will have a claim against me for any injustice with regard to blood or property. (Reported by Ahmad, Abu Daoud, al-Tirmidhi, Ibn Majah, al-Dari and Abu Y'ala.)


The Govt wants to give the impression that it can solve everything. Just like I am giving the impression that I am working on analysis. lol. Its just human nature. I can come up with 10 reasons why I am not useless in 9 seconds! Govt is trained to do that!

Remember, anything you subsidize, u get more of it. Subsidize eggs, and everyone will eat more of eggs. Subsidies will get larger and larger. If u look at it from the Hadith quoted above, u'll realize that Subsidies twist prices. And see the thing is, sure there will be poor ppl. Shouldnt the masjid manage these matters. It will maintain the dignity of the poor person as well. Charity works plays a major role in Free Market. Lekin there is a social aspect too it too and that is that there is no honour in accept anything for free.



Economics, politics, science, anything you name is pointless if we dont act like humans. Science is what God left for humans to discover. Animals are taken the slaughter house..

1 thing I would add, that when a govt subsidize anything, or when banks "financialize" any field. Prices go up because of that. Let me give you an example. Pak Govt subsidizes farming in Pakistan. See the food shortages and price spikes? Banks in the US started giving loans to students for education. In 20 years, the education became so expensive that now even with the education, new grads cant pay their loans. Thats what I meant by financialization. Remember, Govts and Banks dont produce anything. They merely move capital around. And they suck at allocating it efficiently. So remember, the problem is the Govt and the Bank! They both are the problem. U remove subsidies and financialization, and prices of items will come down. Can you imagine a bread costing 1 Rupee? Which poor person will not be able to afford bread then? And why call him poor then when he can find a low wage work but the food prices are much cheaper.

Economics is not really my strong point, so excuse any mistakes. I've always feared free market as it gives huge power to entities foremost concerned with profits. In my lay man's opinion some sort of mechanism must be there e.g. govt ensures price keep within a limit for key food items. Which reminds me in India there was once a huge effort by Govt to educate people about benefits of having an egg in breakfast (specifically kids) would it not make sense in this scenario that govt. subsidizes the product i.e. egg? Look at it this way Govt may have to pay ten times more if the populations tolerance to diseases drops because of having no financial backing for healthy food and medical costs add up. Going this way if the health sector was also fully privatized (as public health care is subsidized) the public would be doomed!

 

[eysonm]

1 thing is proved that bookish philosophies & analysis r flop cause America is still standing on its feet despite trillions $$$ debt & other financial crunch's. 2nd thing is called blessing in disguise that will overcome the problems. So [MENTION=24375]AsifAmeer[/MENTION] bro just chill dot com & dont tease your professor. several other examples r Zimbabwe 1lac % inflation, still existing on worlds map. Afghanistan, iraq etc. Allah is running all this show. if economy was in Humans hand u might have saved all money in ur bank alone. All world businesses, tycoon heads r in Israel, n i saw few days back that they were on streets cause of Financial situation. bottom line churla baba churla dot com.

 

[AsifAmeer]

And I have a halal pork chop to sell ya!

Sab Allah par chor dena. Aysa nahi hota bhai. Mein Ashraf-ul-mukhlukaat houn. My Creator created everything to awe me with HIS wisdom. He has given me the capacity to understand every thing out there, as long as He wishes.

I got a good news for you. My Creator also made you the same way! Congrats!

Have fun.

1 thing is proved that bookish philosophies & analysis r flop cause America is still standing on its feet despite trillions $$$ debt & other financial crunch's. 2nd thing is called blessing in disguise that will overcome the problems. So @AsifAmeer bro just chill dot com & dont tease your professor. several other examples r Zimbabwe 1lac % inflation, still existing on worlds map. Afghanistan, iraq etc. Allah is running all this show. if economy was in Humans hand u might have saved all money in ur bank alone. All world businesses, tycoon heads r in Israel, n i saw few days back that they were on streets cause of Financial situation. bottom line churla baba churla dot com.

 

[eysonm]

[MENTION=24375]AsifAmeer[/MENTION] may ray dost. hope u heard this waqiya about trust on Allah...Boy came to Aalim sab that how should i start my work. He said before starting any work, recite ur Kalma and trust on it. one day they both wanted to cross the river and their was no boat. in short boy recite Kalma and crossed the river but da azeem mullah or aalim couldnt cross it cause his trust on Allah wasnt that strong. Allah gave u the power to work hard. Result is with Allah. U cant b sure that if you will goto Jannah or not even though u performed all your Farz etc through out your life. You can just TRY. Final decision is with Allah[/IMG]

 

[AsifAmeer]

Islam is one of the very few religions that teaches individualism.

@AsifAmeer may ray dost. hope u heard this waqiya about trust on Allah...Boy came to Aalim sab that how should i start my work. He said before starting any work, recite ur Kalma and trust on it. one day they both wanted to cross the river and their was no boat. in short boy recite Kalma and crossed the river but da azeem mullah or aalim couldnt cross it cause his trust on Allah wasnt that strong. Allah gave u the power to work hard. Result is with Allah. U cant b sure that if you will goto Jannah or not even though u performed all your Farz etc through out your life. You can just TRY. Final decision is with Allah[/IMG]

 

[Sadaf]

You took the article really nicely and made the concepts digestible easily. First it made me nostalgic as I remember the past days when my pocket was small but the things were cheaper. Now the pocket is large but the price took a higher jump than my pocket.

But sentiments are also taking place here. Things that I buy here, don't know why they look more expensive in Pakistan although the currency conversion tells me a different story :)

 

[AsifAmeer]

Those who say Economics is a dry subject probably probably bumped into a professor who wasnt happy with his wife. But to be safe, I had to connect to the reader. So I shared some childhood memories to relate to the reader. I hope the article made sense.

You took the article really nicely and made the concepts digestible easily. First it made me nostalgic as I remember the past days when my pocket was small but the things were cheaper. Now the pocket is large but the price took a higher jump than my pocket.

But sentiments are also taking place here. Things that I buy here, don't know why they look more expensive in Pakistan although the currency conversion tells me a different story :)