The Enemy Within


As of yesterday, prices of food in Slovenia are higher some 10 to 15 percent. A tug-of-war has erupted between the retailers and the food industry as to who is to blame, with both being equally interested to blame the other guy. Mercator, the largets retail chain in Slovenia even published a list of producers, their products and increase in prices..

Meanwhile, in his bat lair, the PM is calling upon the dark powers to help him find those responsible for this staggering increase in prices and correspondingly high inflation.

Please, read the previous sentence carefully. The PM and his ministers (Dumb & Dumber) are actually trying to find out who is to blame!!! What are they going to do? Pull out their nails? Tickle them until prices are lowered again? Make them listen to Damjan Murko? What?!?

I want my government to stop wining about it and start taking measures to curb the looming inflation shock. Instead, Janša et al. are (as per custom) busy looking for the enemy within, yet at the same time claiming that there is no cause for worry, but that they will take appropriate measures.

And while they are at socialist-speak (the last paragraph being a case in point), they might as well go for broke and reinstate price control. You know, just to get that special feeling of economic downfall we are about to experience anyhow.

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Agent provocateur and an occasional scribe.

15 thoughts on “The Enemy Within”

  1. Food is getting expensive in Germany, too. We are being promised things like “chocolate to become luxury”, “up to 40 % price increase for cheese and cottage cheese” and “bread to become expensive?” and what not.Also, heating gas is always supposed to suddenly become too expensive for some people to afford it, electricity’s never cheaper and so on.
    And of course, in January this year, things got more expensive because of the brand new, 19 % VAT rate.

    But no one is talking about a crisis. Don’t know about inflation, though.

  2. The problem is twofold: First, the word “inflation” which sends shivers down the spine of anyone who ever lived in ex-YU. Second: the fact that the government is apparently chasing ghosts instead of adapting its fiscal policy.

  3. This is indeed surreal. Come to think of it, several surreallish things are going on simultaneously in this country. Are things getting out of control or just switching controllers? A mess I can’t put my finger on. Humm… interesting times lie ahead.

  4. Now, I don’t know anything about inflation, but they do claim in Wikipedia (DE) up to 5% is “light inflation”. If I got that right, Slovenia has reached 3,5%? (Germany: something around 2%) BTW: Simbabwe tops us all: it has 3714 % inflation…

    They also say in Wiki price control is quite a controversial measure.

    What I mean is: yes, the government should undertake something clever, as far as possible.

    But as to our experiences with high inflation: no realistic comparison can be yet made to the bundles of notes necessary to buy bread in former Yugoslavia, can it?

  5. Trust me, this is only some cunning method of our government to stop the young generations from developing all sorts of obesity related diseases. Bread is on the black list for its calories, so lets make it so expensive, it is out of our shopping lists. And I even think the sacking of the three ministers is connected somehow with this same issue. (Health, Science, Transport…they didn’t come up with this smart solution, so they got fired).

  6. @alcessa: Well, pre-Nazi Germany had it worse, right? 😀

    Re: inflation: Right, but the problem is that Maastricht Criteria state that inflation should be around Eurozone inflation (circa 2% at the moment) and being 75% above that is a problem.

    Secondly: From Zimbabve’s point of view a .5 percent increase is not much. But from Slovenia’s point of view it’s a lot.

    @venera: 😉 Conspiracy theory. Me likes…

  7. @alcessa: I’m not really in favour of price control. It’s just that the gov’t is snowing us with socialist rhetoric, and I’m just saying that if they mean it they should reinstate price control as well… As thing stand they’re just full of shit, while the situation in (not so slowly) slipping out of control.

  8. A little bit it reminds me of the days after we got the Euro in Germany. There were quite a lot of prices which went up. There was some time during which it was forbidden to increase the prices, but a the end a lot of stuff is now twice the price it was before. Some significant price changes could also lead to a chain reaction.

  9. I have just remembered that Maastricht criteria for joining the EU are not fixed, so I checked:

    Inflation rate: No more than 1.5 percentage points higher than the 3 best-performing member states of the EU (based on inflation).

    Don’t know about the best-performing member states, but it seems quite normal for EU members to do worse than required (Germany did that for, I think, 3 consecutive years, to the EU stability pact).

    Also: we do have some good economists, don’t we. Let us hope they will get the chance to act.

  10. I have absolutely no idea about economy and the like, so correct me if I’m wrong, but … Had the government intervened in this price rising thingie – wouldn’t that again be the politics trying to take control over economy? So, contrary to something that we want (that is, a free economy)? Aren’t the prices rising because the economy is taking care of itself? Just a thought of somebody not aligned with anybody. 😀

  11. @Dietmar: I suspect something like this is happening here as well. The only problem is that Slovenia cannot rely on so-called “economy of scale” because it doesn’t have a market of 80 milion consumers.

    @alcessa: Yearly inflation in the Eurozone in August was 1.8 percent, meaning that from January to August prices went up 1.8 percent in the eurozone (Slovenia included). In that same period, however, prices in Slovenia went up 3.5 percent, which is 0,2 percent outside the 1,5 percent margin allowed. Not much, you’ll say… But in August alone prices went up 0,3 percent, puttnig Slovenia outside the “green zone”.

    Furthermore, Germany can politically afford to break Maastricht critera, as it bankrolls almost the entire EU. Slovenia obviously carries little weight in that departement.

    As far as good economists are concerned…. They’re not those who get to act. The government does. And it ain’t doing notin’…

    @Iva: Economy only takes care of itself in theory, provided all players have continually the same positions. Moreover, perhaps you’re unaware of the fact that the Law on Price Control is still in use – there are prices which government does control and will control. Like price of tap-water in Ljubljana, for example. (more on that on Saturday)

    Even more – if you had to choose between a collapsing economy and government intervention, which would you chose? Because if the market is taking care of itself, I wonder who’ll take care of the people?

  12. This mess is out of the government’s hands. The ECB now sets the borrowing rate. YU inflation was caused by printing huge lumps o money in Topcider. So really, there is nothing they can do. As for price control and government invtervention, that is the dumbest idea ever. Remember the laws in old YU that forbid everyon from owning foreign currency? Remember the official exchange rate? Exactly. The market finds a way, whether the government dwarves are jumping up and down or standing still.

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