When A Student Nails The State

Inflation is the hot topic of the day, with Mint warning in an editorial that “the virus is spreading.” So far, all talk had been of “food inflation,” but now, the editors of Mint say, prices of metals – gold, copper, aluminum – are showing a dangerous rising trend. The newspaper is also carrying an interview with Pawan Munjal of Hero Honda, who is quoted as saying that he is “concerned” about rising commodity prices, especially of steel and rubber.

What do you make of this?

We all know what the economists employed by The Chacha State have to say on the subject. Here is a report from last week quoting Kaushik Basu:

India does not need to tighten monetary policy now and risk stalling a nascent economic recovery as inflation pressure was mainly caused by high food prices, the chief economic adviser to the finance ministry said

…

Basu added:

Right now, it is a sector-specific intervention that is needed, which is in food sector and that is what the government is doing…

But there is good news in the face of all this mendacity. A young student from Kerala, Shanu A, has published a perceptive piece on inflation and nailed the real culprit – The Chacha State and its central bank. They are the real cause of inflation, he says, and the only cure is sound money. Shanu calls for gold.

You can read Shanu’s piece here – and I recommend it to all, especially students. You guys are the future – and Chacha & Co. are screwing up the future. This para is noteworthy for its forthrightness:

Inflation is purely a monetary phenomenon, no matter how hard the statists try to evade that fact. Intellectuals and politicians would want the public to believe that inflation is an act of God, over which we humans have but no control. Inflation however is a policy, and as any policy, it can be halted. Our government goes on with its inflationary policies because it wants to tax the public, but lacks the temerity to resort to it in so explicit a manner. Inflation is in fact a hidden tax everyone pays irrespective of their incomes. It is a tax, which hits the poor more than it hits the rich. The sections hit most by inflation are orphans, widows and the elderly who live on the buying power of life insurance policies, pensions and annuities. Inflation leads to a re-distribution of wealth from the poor to the state and its parasites.

So I am happy to rest my pen today. It is deeply satisfying when the youth take over. Well done, Shanu.