Inflation, people forget a main factor : population growth

Sorry this post is not totally related to Thailand…

As you may know there is currently a large and intense debate : do we have inflation ? And if yes, what causes it ? Speculation ? Demand ? And will it be temporary or… permanent ?

I found an enlighting (I believe) remark on a forum. Nothing fancy. 😉

But a basic idea : population growth.

Check the population clock.

The world population is projected to grow from 6 billion in 1999 to 9 billion by 2042, an increase of 50 percent that will require 43 years (US Census Bureau).

So for that matter, it’s rather foolish to think that demand will decrease for commodities (like food and energy), and ressources in limited quantities like water, minerals, oil, coal, metals etc.

Population growth is mechanically a factor of… inflation.

My point : increase of demand for finished goods, manufactured goods usually leads to… decrease of prices (productivity gains, etc.). But for… some ressources this rule doesn’t apply. Or not totally.

Some people could argue that we could live with inflation on some ressources, while we experience deflation for other goods and services. Like a balance. Why not ? Anyway, the debate is likely to continue.

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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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