What is negative inflation

Friends today, Inflation in India turned negative 1.61 for the first time in 32 years but the prices of food items like fruit and vegetables, cereals and oil were still higher than last year. It is a big question that what is mean of negative inflection.

Negative inflation is an indication of over production of goods. It indicates that market is flooded with all essential goods. Because of the huge supply the prices will fall down. But what is the truth? The price of all essentials is going sky high. These points indicate the mistake in the tabulations and assumptions and projections. The modern economists have to think of changing GDP method of tabulations. The theory they learn is being proved wrong. But their pride does not allow them to accept it. Poor men!! Let them accept that India needs a concept for statistical tabulations suitable to India. Let our economists work for evolving a method for India. The government should give them patronage for that. Let there be debates in media and public forums.

One of my friend email me today about this negative inflection, he said the Truth about Inflation or Deflation in relation to Cash, Demand and Supply .I am publishing this here, I hope you people like his words.

• You have CASH in hand and you wanted to BUY a product/service which is available in market. (INFLATION)
• You have CASH in hand and you wanted to BUY a product/service which is NOT available in market. (INFLATION)
• You have CASH in hand and you do NOT want to BUY a product/service which is available in market. (DEFLATION)
• You have CASH in hand and you do NOT want to BUY a product/service which is NOT available in market. (DEFLATION)
• You do NOT have CASH in hand and you wanted to BUY a product/service which is available in market. (INFLATION)
• You do NOT have CASH in hand and you wanted to BUY a product/service which is NOT available in market. (INFLATION)
• You do NOT have CASH in hand and you do NOT want to BUY a product/service which is available in market. (DEFLATION)
• You do NOT have CASH in hand and you do NOT want to BUY a product/service which is NOT available in market. (DEFLATION)

Conclusion: Negative inflation can also be termed as deflation. Deflation is a fall in the price of goods and services. Deflation occurs when the inflation rate falls below zero per cent. This is the opposite of inflation.When the inflation rate is negative, the economy is in said to be in a deflationary period.

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