Big Oil

Originally posted by normbenign
Laymen generally consider inflation to be rising prices at retail. Economists generally view those rising prices as a symptom of inflation, actual inflation being increases in the supply of money circulating in a market, nation or the world.

There are lot's of tricks and power plays to manipulate and direct the effects of inflation and hide the effect ...[text shortened]... those it harms the most, consumers in the poorest economies, and poorest parts of any country.

Unfortunately for the professional economists that is how inflation is measured. The reasons for that inflation are varied and complex.

One of main global inflationary factors today is the increased purchasing power of China and to a lesser degree India, both through the increased demand for raw materials and commodities generated by their increased industrial activity, and the increased purchasing power of their burgeoning middle classes chasing consumables. It is the basic economic law of supply and demand.

This has been exacerbated in the U.K and U.S by the intentional devaluation of the £ & $ by the process of quantitative easing (printing money) in order to stimulate the economy. As mentioned in an earlier post the other desired effect is that a devalued currency results in a lessening of the national debt in real terms.

As for gold prices, again it is increased demand that is causing the price rise as investors shy away from the uncertainty of the currency market and stocks in general.