Posted by: nastylittletruths | April 29, 2008

Inflation 1 1/2 Years Ago

Here’s a little note I wrote in my last blog – November 2006 actually – and apart from Conrad Enill no longer in Finance, does it sound much different today?

“After the noise and outrage dies down, one wonders if politicians are really out of their depth, or just try to fool people constantly. Don’t answer that, it may be both…

Our Minister of Works, Colm Imbert, an engineer and a businessman, seemed out of his depth last week (but then he is vertically challenged, so it doesn’t take too long for him to get there) trying to take on his government’s critics on corruption and inflation. The discussion on corruption could take whole day – and another post – so I’ll talk about his rant on inflation.

It is accepted that the rising cost of food (hovering at 27% p.a.) is the main driver of inflation. Colm thinks that “a chain of middlemen” who buy breadfruit in the country for $2/lb and re-sell until it gets to the consumer for $20/lb are at fault. End of discussion ladies and gentlemen, it’s “their” fault. It has absolutely nothing to do with “us” who decided that $38b to spend every year is small change. Trinidad – if you can’t laugh, you will definitely cry…

What Mr. Minister should do is go back to school to understand how a free market system operates. (Engineers – what can I say?) If the farmer cannot get his goods to market, it is logical to assume that someone is going to step in and make money doing it – simple. And if the market is willing to pay $20/lb, then more people get an opportunity to make money along the supply chain. Most important, how much is the market willing to pay for the product. Consumers have immeasurable power in determining price, but they don’t use it.

Second excuse for inflation was by Minister in the Ministry of Finance, Conrad Enill. He attributed it to the high level of employment! Hold on a second – the Prime Minister is crowing about the lowest level of unemployment in the country’s history, and that is the cause of inflation? Hmmmm… so if we keep them unemployed and poor, then we are better off? You all are starting to look like headless chickens gentlemen. At least have a unified approach to the BS that passes for explanations rather than these ad-hoc responses. I believe that you want us to laugh rather than debate you on the matter.”

The Government of TnT could have done itself a favour and read Gwynne Dyer (the ultimate columnist in my humble opinion) last July [2007] and they would have seen the writing on the wall when it comes to food and scarcity. It is never one simple reason but a confluence of many reasons. As I told my daughter recently – all the ingredients of a perfect storm…


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