Posts Tagged ‘inflation’

Angst threatened to brim over among the Brotherhood of the Economists. In one evening meet at their favourite joint, the Ivory Tower Tavern, these troubled souls reassessed their situation. There was general consensus about the assumption of their pitiable state. It was a rare instance when the Mavens of Assumption agreed on anything, without a War.

Apart from being the butt of ridicule, generally centered around their love for making glorious assumptions, and finer assumptions about crude assumptions, the Brotherhood felt the recession had undone much of their world view. The world had broken down in their theory, though most non-Brotherhood folk held the opposite view. This did not bother the Brotherhood. The recession had pushed many in the Brotherhood into marginal unproductivity, a state worthy of much despair.

The Brotherhood plotted a fight back. They decided to teach the real world an ideal lesson in the real value of their idealized theories.

On scanning the globe for potential sources capable of spreading widespread strife, they chanced upon Iran. Here was an economy that few liked. Its grand plans of nuclearization was seen as a furtive attempt at militarization. The Brotherhood did not understand, or care about, the finer nuances of Uranium and Plutonium and isotopes, which were classified under Boreium. They decided to assume the existence of WMDs to build their strike against the vile world that disregarded their theories.

The Brotherhood were of a non-violent bent of mind. They opted to deploy a tool in their vast armoury so potent that some in the Brotherhood did what came naturally to them – disagree – with the idea. They were worried, for the Brotherhood had decided to unleash the ogre of Hyperinflation.

The Brotherhood reasoned that if they could trigger rampant and widespread rise in prices, uncontrolled misery would follow. The world would pause to watch a disaster unfold, and would learn to treat the Brotherhood with the respect they so naturally deserved. Not many in the world had experienced hyperinflation. An unknown devil could only be exorcised by a skilled hand. Bad times (for Iran) would mean the beginning of good times for the embittered Brotherhood.

They would encourage the legion of well-intentioned and patronizing nations to impose sanctions on Iran. Iran would be shunned by the international trading community. Partnering would be scoffed at, with the defiant running the risk of being ostracised from the community. Most nations would tow the line, gradually. Iran would be isolated. Payments and financial assistance  suspended.  Iran’s well-oiled economy would come to a screeching halt. Faced with evaporating revenue and cash flow, inflation would rear its unwanted head. The falling currency – the rial – would trigger this end.

Everything proceeded according to plan.

The clogging of Iran’s financial arteries set off a heart attack, causing an avalanche in its currency. Prices began rising at at nearly 70% per month when someone checked. The government tried its bit in artificially propping up the currency, in the vain hope that somehow problems would be swept under the carpet. It didn’t work. People began losing faith in the currency and this set off a new round of depreciation; which caused faith (and the currency) to plummet further. The vicious cycle threatened to cause a complete breakdown. The inevitable inevitably comes to pass.

Their plans had succeeded in stopping Iran on its nuclear tracks, though there were many that weren’t sure if Iran was indeed in the path to begin with. The Brotherhood was a satisfied lot. The world had been dealt a fatal blow.

Or so they thought.

They hadn’t counted that a rapidly dying man wielding a gun had little to lose, in pulling the trigger. Pushed into a corner with dwindling options, Iran decided to reciprocate the Brotherhood in kind and clogged vital oil arteries (passageways) that greased the world trade. Oil prices spiked, and soon many parts of the world joined the ranks of the despondent. A few suggested that the Brotherhood had triggered a serial heart attack across the globe. The Brotherhood’s eyes and ears, as usual, were locked shut.

As tensions escalated, attempts at dialogue went nowhere. Nuclear weapons, tired of idling for years and accumulating dust, were invited to do the communication. Things turned ugly. Economic warfare had spilled over to an unwanted area.

Pandora’s Box had reopened.

Hyperinflation had triggered an unforeseen consequence. The Brotherhood had wanted to teach the world a lesson. They lined up to learn one.

…with their chests (hyper)inflated.

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Inflation and his brother, Deflation, were strange siblings. Apart from a rhyming name and a penchant for inflicting pain on those around them, the siblings’ personalities bore few pointers to their brotherhood. Each found it impossible to co-exist with the other, preferring instead the peace afforded by solitary existence. Neither was particularly welcomed by humans, who somehow, abhorred their presence, when they tried to make their existence felt.

Disturbed, the brothers attempted to unearth the reasons behind this hostile behaviour. What they found perplexed even the mavens of the Queer…

Like some humans, Inflation started thin and – like most humans – progressively grew heavier with time. Deflation, on the other hand, started fat and progressively grew thinner. Keen observers following Inflation’s growth noticed that the lad grew bigger and bigger with each passing day. On further observation, they thought the cause was an abundance in the supply of Money, which was nourishing fodder for Inflation. Deflation, on the other hand, seemed to grow thinner precisely due to a lack of similar nourishment. A handful of eager beavers, maestros of an arcane art-form called Economics, quickly concluded that controlling the supply of Money could regulate the brothers’ sizes. The consequences were dire…

Inflation noticed that he was a master illusionist. He created an illusion of growth for humans, who were generally oblivious to most things around them apart from the nickels that accumulated in their bank accounts. With time, as nickels grew, humans seemed mighty thrilled. What they seldom noted was that costs of most things that they so furiously consumed were on the rise too, sometimes growing faster than wages. Was there really growth? Inflation was a master of Money Illusion. Inflation gloated on learning about this hidden talent and smirked at the folly of human beings.

Queerly, both Inflation and Deflation held an intense admiration for the comely Gold. Humans, fearful of hyper-Inflation, frequently scampered crazy to Gold, courting her, doing their best to convince her to mollify Inflation’s wrath. She appeared to be successful in her endeavours but her record was patchy, at best. But humans, severely challenged when navigating the scale of time, especially backwards, cared for little but the very near-term. Gold seemed to be doing great and they deified her.

Always keen on growing ever thinner, Deflation pushed prices lower with time. Consumption-friendly humans noticed that their friendly neighbourhood cappuccino prices ticked down with time. Down went car prices, tuition fees, rents, real estate prices, household appliance prices and a slew of other materialistic things that humans enjoyed. But strangely, they did not seem happy with the scheme of affairs. Nickel-happy humans observed that their wages were stagnant or, worse, falling. Shrinking wages and dwindling bank accounts soon led to a congregation of the despondent.

It seemed that Inflation was preferable to Deflation. Few had lived in a Deflation-ruled world. Dread was high as a result.

Some felt the only way to trounce Deflation was by increasing Money. Money seemed like the cure-all. The spigots were opened.

All seemed well for a while…

Things got murky beyond a point, as humans forgot the true reason for owning things. Humans, ever alert to homing in on the scent of euphoria, felt a moral obligation to partake in the speculative orgy. Their frenzied buying was so intense that prices everywhere only went higher. Inflation started growing fatter, too much, too soon. When the bubble popped one fine day, prices reversed. The world looked different. Prices now only seemed to be headed down. Deflation stirred from a long period of slumber, even as Inflation prepared for hibernation. The Economists were invited to exorcise virulent spirits.

As Deflation reared his head, the Economist magicians, with their limited but well-rounded view of reality, recommended cranking up the fodder, Money supply. Known neither for prudence nor moderation, the Money spigots ran for far too long. Somebody had forgotten to turn the faucets off. Gradually, Inflation reared his head and Deflation threatened to hibernate. The Economists now recommended the opposite. The brothers were perplexed at these frequent flip-flops. Just who did the humans really like?

In a queer similarity with human relationships, those present went unappreciated while those absent were missed. That there were living entities queerer than themselves was quite enlightening to the brothers.

Neither seemed to understand humans.

Humans reciprocated.