I’m just a dumb layman who has no knowledge of or grounding in Economic theory and practice. The only thing about Economics that I know is the Law of Demand & Supply; that too due to my teaching a class of plus two students in a tutorial institute during the early part of my career. However, I have always been fascinated by ironies and it is one such irony that I’m writing about today. I know this post is going to be bashed by a few economic whizzes here who live and breathe economics all the while. Being thick skinned I guess I can take any bashing and am going ahead with what I intended to say at the out set.

Actually, It is the news item in today’s papers stating that Inflation has come down to negative levels for the first time in 30 years that has prompted me to write this post. It has been mentioned that the rate of inflation that is gauged by the Wholesale Price Index (WPI)has become negative after staying high for more than thirty years. Being the Bacchanalian character that I am I could only heave a sigh of jealousy for I really wished I could have been on a high that lasted for thirty years.Unfortunately all my highs came crashing down the next morning only to be raised up again at a considerable cost to my economic status and hence the envy.

Jokes aside, the news reports mentioned that this augurs well for consumers and that home loans and consumer loans will become cheaper in the near future. It was this statement that made me want to throw up. Even as inflation has been on a downward spiral over the past few months the prices of essential commodities has been on an upward spiral. This has led me to the question of what use is a negative inflation to the common man if it does not reflect on the prices of essential items? Will such negative inflation only benefit us by making loans cheaper and thereby binding us further into debt or would it really have a beneficial impact on the ground?

In fact, on the very day when the news that inflation had turned negative hit the broadcast media, the same broadcast media was also quoting that the prices of gold had jumped up by eighty rupees per sovereign (exactly eight grams) in one day.

I really can’t figure this out and request my enlightened brothers and sisters to throw some light on this paradox for indeed to the eyes of a dumb layman like me it looks like the common man is being taken for a ride. Is Inflation as determined by WPI merely on paper and are we being fooled by the smart alec politicians who are aided by slippery economists; or is this negative inflation going to bring about a turn around in the cost of prices and bring it back to ground level?