Let us assume that there is a linear relation between the demand of a product with time and the supply met that linearity and the price, hence was maintained at a constant level. Now, one commerce minister wanted to increase the reserves of his governments treasure and cut the supply to half and exported it for a much higher price. The global price was much higher because the global supply was far less than the global demand. This brought in more reserves but at the same time doubled the prices locally. People would panic and hence the politicians, raised the prices of various comodities by a small percent and diverted the funds to wheat so that the price is somewhat stable. They thought that they could do it for as long as the party remains in power as the money channelling due to the difference between the global and local prices is sufficient to keep the economy rising. Their stupidity became enlighted when the other products supply started diminishing and hence these guys could no longer divert the funds to maintain the wheats price stable. They didnt know how to cover the deficit....and couldnt even figure out how to create a new product as we never create products in India...we just buy them. We even buy education (believe me its true), military equipment (legal or illegal...remember the two ship loads of micro controllers first shipped to singapore and then re shipped to india for our missile program?)...ohh yes, we manufacture culture, pride and ego.
