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Pockets on fire, “real” CPI is like a missile!

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✔ The monthly increases in December and January will remain low and annual inflation will decrease, this is the bill, it seems, efforts are already being made so that there are no price increases in these months.

✔ It is hoped that the effect of electricity and natural gas will increase in September, October and November and that a page of clean inflation will be opened in January and December.

September 1st is World Peace Day, but we did it “Day of the rise of Turkey” it happened. Because only two items were raised yesterday, but these are not such increases. There are some excursions, they only affect those who consume that product.

Some relaunches, on the other hand, concern the production of all types of goods and services, from needle to thread, in classical terms. The increases in electricity and natural gas, valid since yesterday, are of this type and there are no goods and services that will not affect. That’s why September 1, 2022 “Day of the rise of Turkey” There is nothing wrong with declaring

Increases in electricity and natural gas … It would be very misleading to focus only on household consumption and do the math. Okay, the increase in household consumption will directly affect citizens, but there are also indirect ones.

First of all, let’s remember these excursions …

In electricity, consumption in residential and agricultural activities increased by 20%, consumption by the public and private service sector and other subscriber groups increased by 30%, and industry consumption increased by 50% .

Natural gas, on the other hand, increased by 20.4 per cent in homes, by 47.6 per cent in SMEs and by 50.8 per cent in industry. Natural gas used for electricity production also increased by 49.5 percent.

So we repeat; focusing only on increasing housing is misleading; As the cost increases in other areas, the price of all goods and services will rise.

Excursions with electricity and natural gas, especially excursions with electricity, create a huge rock and tsunami effect, not a stone thrown into the water. We will see it starting this month.

What is the effect on CPI?

In the CPI, the weight of electricity is 2.3256 percent and the weight of natural gas is 1.5496 percent. According to these weights, the effect of the 20 percent house increase on the September CPI increase is 0.46 points in electricity and 0.31 points in natural gas.

In other words, these two items will affect the September CPI rise of 0.77 points. I must stress once again, this is the direct effect. The indirect effect can be much greater than the direct effect, as non-residential uses have been increased at a much higher rate. Obviously it is not possible to measure this effect exactly, moreover this indirect effect can be noticed especially after September; but in the end it will somehow be seen and reflected on the citizens.

Meanwhile, the 1.55% weight of natural gas in the CPI is still a matter of debate. I can’t think of a family that pays more for water than gas. Who cares more about the water bill than the gas bill?

THE FAMOUS BASIC EFFECT PROBLEM!

Everyone knows that all hopes for a decline in inflation are based on relatively low increases in December and January. Rates of 13.58% in December and 11.10% in January will be rolled over and replaced by lower rates and the annual rate of rise in the CPI will drop rapidly. It is worth pointing out once again; Of course, this decline will not mean that prices have fallen. It’s like a price that goes from 100 to 150 when inflation is 50 percent, this time it goes up from 150 to 165 if inflation drops to 10 percent the following month. The rate will decrease but the price will continue to rise.

After this reminder, we come to the effect of the latest price increases. Now the following opinion has been expressed:

“With these price increases, the hope of a base effect could be disappointed.”

I’m not so sure, I think it might as well be the other way around.

If the price increases, which will be made in December and January, are taken earlier, it means that cleaning is being done for those months that will cause annual inflation to decrease.

The sooner the price increases are made, which will have a large indirect effect, the effect will spread over time and will not last until December and January. This too can be calculated.

Therefore, the high inflation rate for the three months starting in September seems to have already been taken into account. Rates in these months should be high so we can see a dazzling decline in December and January …

DOES THE COST INCREASE SO MUCH IF THE CURRENCY JUMPS?

There is a reason that is expressed tirelessly and that still has customers:

“Energy prices have gone up all over the world, so it is inevitable that we will go up. We also subsidize it heavily, thus minimizing the burden on the consumer. ”

It is said in fuel, it is said in natural gas, it is said in electricity. It is true that energy prices are rising all over the world, no one can deny it …

It is good that our cost of importing energy is rising much faster than prices abroad, it is not a result of our bad choices!

Do not be afraid, as we are taking measures that will make the currency appreciate very quickly, we do not buy a product of 2 dollars for 20 lire at the rate of 10 lire, now we are not costing a product of 3 dollars at the rate of 20 lire to 60 lire. !

There’s nothing we can do against a $ 2 product going up to $ 3, but aren’t we the ones who pushed the dollar from 10 to 20? (Don’t get stuck at 10, 20, are examples!) Wouldn’t it be better if the dollar stayed at 12 even if it wasn’t 20 and we bought the $ 3 product for the price of 12 and the cost of 36?

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