Soaring prices of foods and inflation

Reently, foods, especially vegetables are getting extremely expensive. The prices of winter leaf veggies like cabbage are doubled or even tripled at supermarkets here. 

Soaring price is partly due to the unusual weather in fall. In the first half, it has been hot and dry like a drought throughout our country. It has turned a long and heavy rainfall in the latter half. Both extremity of weather were not beneficial for vegetable growth. The paucity of the harvest due to the aberrant weather should be one of the reasons for the high price. But it is only a part of the reasons.

The leading cause should be the inflation going on right now. The prices of foods have started rising in accordance with the inflation long before the aberrant weather. The cost for the agricultural materials occupy, as they say, approximately 30% of the total. Before the vegetables are handed to the consumers, there are other costs occurring such as the energy cost, the transportation and the interests of the middleman and the retailer. All of them are influenced by the inflation. 

The problem is that our government has no effective means to settle down the inflation or rather would let it go on. With the tax revenue increasing due to increased consumption tax by inlation, the Ministry of Finance seems not to deal with the ongoing inflation. "Increase net income" is a kind of motto for some politicians and people, without any financial resources. If it is realized with new national bonds, it will worsen the inflation. A typical populism politics!

The most important means against inflation should be, of course, higher interest rate. With astronomical amount of national bonds issued in the past for quantitative easing, the government as well as the Bank of Japan could hardly rise the interest rate. Increase of the interest rate has caused drastic decline of the stock price last August, which has impacted the world wide stock market. 

Most affected with this high prices of items, especially foods, are the elderly people living only on their pension. About half of them is receiving only the basic part of pension, that is, only 400 to 500USD a month. Expenses for utility and housing are also rising. It might be quite tough for them to live at present. Now people who have lived under non regular employment, that is, on low wage are ready to retire soon. They should go on living under suppressed social security. 

Without tactics to settle down the inflation, it will persist for coming years, I am afraid. Per capita GDP has lowered the rank to the 22nd place in the world. One of 6 children is told to be in starvation. We don't have necessity or fisacal leeway for military expansion.

So perspective for the finance issue and inflation is not bright at all. We should still go on living by any means. I would grow some more vegetables this year. For ourselves and for those in poverty if possible.