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	<title>Comments on: Inflation is Now Illegal</title>
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		<title>By: Realist</title>
		<link>http://www.dailyreckoning.com.au/inflation-illegal/2007/02/08/comment-page-1/#comment-1612</link>
		<dc:creator>Realist</dc:creator>
		<pubDate>Thu, 08 Feb 2007 21:52:13 +0000</pubDate>
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		<description>Forgive me, but you are forgetting that inflation has long been illegal in Zimbabwe. Price controls have been in existence for at least the last two years on &quot;vital&quot; goods. Anyone who charges more is arrested for profiteering.

However, the problem is that these price ceilings (like the absurd pegged exchange rate) are woefully inadequate. Example: It costs you one dollar in the US to bake a loaf of bread. If the government tells you that said loaf can only be sold for ten cents, your options are to A. not sell anything. B. Sell at a higher price. C. Sell a substandard product. Or D. Sell at a loss. (No sane person would choose D.) Yet: the CPI assumes D, so there is yet another mess.</description>
		<content:encoded><![CDATA[<p>Forgive me, but you are forgetting that inflation has long been illegal in Zimbabwe. Price controls have been in existence for at least the last two years on "vital" goods. Anyone who charges more is arrested for profiteering.</p>
<p>However, the problem is that these price ceilings (like the absurd pegged exchange rate) are woefully inadequate. Example: It costs you one dollar in the US to bake a loaf of bread. If the government tells you that said loaf can only be sold for ten cents, your options are to A. not sell anything. B. Sell at a higher price. C. Sell a substandard product. Or D. Sell at a loss. (No sane person would choose D.) Yet: the CPI assumes D, so there is yet another mess.</p>
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