zaterdag 5 juli 2014

Inflation in Egypt

There is more evidence that inflation is created by the government. If we look at Japan and more recently Egypt, we see that countries with a large deficit are more inclined to raise taxes and print money. This is inflation, because the people will not be able to buy the same amount for the same price.

Take Egypt for example. Electricity prices are said to double in 5 years. Gasoline prices just doubled overnight. This is because the government wanted to reduce its budget deficit. We know that budget deficits are correlated to the trade deficit, so let's take that chart up.

As you can see, the deficit started in the financial crisis of 2008 and hasn't improved ever since. So the government is taking extreme measures now.

This is the result. I get stress already when the pumps are all occupied. I wouldn't want to experience this.:

Vehicles queue at a petrol station during a fuel shortage in Cairo June 26, 2013.   REUTERS/Mohamed Abd El Ghany

Inflation is everywhere, even in the U.S. To read about it go here.

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