Surging food prices push inflation to 30-year high

bbc.com

4 points·batmaniam··3 comments

The title seems to be backwards. Doesn't surging inflation cause the food prices to go up?

I have been seeing a lot of weird definitions for "inflation" lately and it's not doing the population any favors. The BBC defines inflation as "the price of things going up." This is like saying that a rise in shoplifting is caused by an increase in shoplifters.

Quite simply inflation occurs when you have less goods and services compared to the amount of currency in circulation. The cure is to increase production of goods and services to outpace the amount of new money entering the economy.

The consumer price inflation level is calculated by checking the current prices of things consumers typically buy, such as food. The usual cure for inflation is to increase interest rates and cut government spending. That can be done with the stroke of a pen. Increasing production of goods and services is much harder.

Either increase goods and services or decrease the amount of new money entering the economy, either will get you to lower inflation. But calling the method of measurement the thing itself is misleading. Inflation might be measured by the price of things going up but it's not caused by it. If someone has this idea they will blame corporations for increasing prices instead of blaming the correct source of the problem: mismanagement of resources.

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