An irrational fervor.

"Rising fuel and food prices look set to stoke an 'inevitable' rise in civil unrest, with developing middle-income countries such as Brazil or Egypt particularly at risk, a report by a risk consultancy said," Tribune. "Unlike low-income countries, they were rich enough to offer social protection during the pandemic, but now struggle to maintain high social spending that is vital to the living standards of large sections of their populations," the report found. "Global food prices held near a record as crop trade is disrupted by the war in Ukraine," and "High fertilizer prices and weather worries are adding to the threat for global crop supplies, including drought curbing the US wheat crop," ET "India's wheat output looks likely to fall in 2022 after five consecutive years of record harvests, as a sharp, sudden rise in temperatures in mid-March cut crop yields in the world's second-biggest producer of the grain," Reuters. "The oil ministers of Saudi Arabia and the United Arab Emirates warned that spare capacity is decreasing in all energy sectors, as products from crude to diesel and natural gas trade near record highs in the wake of Russia's invasion of Ukraine," yahoo. "They're spending billions of dollars to raise their crude capacity by 2 million barrels a day between them by the end of this decade." "Vladimir Putin is preparing for a long war in Ukraine, with even victory in the east potentially not ending the conflict, US intelligence has warned," BBC. India is not immune to all that. "We are heading for the worst inflation in a long time," wrote Swaminthan S Anklesaria Aiyar. "Nothing obvious connects the production and prices of oil, cotton, steel, plastics, coal, wheat, polyester, and orange juice. Yet shortages have arisen almost simultaneously for all, pushing up prices." "A rising green attack on oil and coal companies has led to under-investment in energy for years." High prices immediately have an effect on consumer spending. "A quick calculation using shares of different items in the households' consumption basket shows that a 5% increase in spending on fuel and transport costs alone could reduce overall consumption levels in the economy (in nominal terms) by almost 0.5% of GDP. Add to this the rise in food bills (which enjoys an almost 40% share in the consumption basket) and the pressure on households' spending on 'non-essentials' - ranging from buying cars to electronics or eating out - becomes apparent," wrote Sakshi Gupta. The Reserve Bank (RBI) has a mandate to keep consumer inflation (CPI) between 2 to 6%, with a target of 4%, ET. Why hasn't it done anything? Because, "Those against tighter credit conditions feel that just when the Indian economy was showing signs of a pick-up, the Monetary Policy Committee's (MPC) decision to hike rates will affect its path," wrote Madan Sabnavis. Will it? Bank credit, or borrowing by businesses and individuals, Investopedia, is an indication of growth of the economy. In the 15 years from 2007-08 to 2021-22, there were 5 years when the repo rate was raised but bank credit remained high. In the 7 years the repo rate was lowered credit uptake remained low. Then, why this irrational faith in low interest rates? Like religious fervor. Equally damaging.