Theory: Inflation in the wizard economy

[alshainofthenorth]

No: HPFGUIDX 92878

The evil, evil Yahoo wasn't much help when I searched for similar 
posts, so here goes. Apologies if I'm stealing someone's thoughts -- 
no offence intended.

A discussion of the price of Harry's wand and the pairs of 
Omnioculars he bought at the Quidditch world cup gave me a sudden 
brainstorm. Surely a wand is worth more than a pair of Omnioculars, 
people reasoned. Well, what do we call it in the Muggle world when 
the same nominal amount of money buys less than it did three years 
ago? Yup, *inflation*. 

Now I'm more and more considering the hypothesis that the wizarding 
world is suffering from an increasingly more debased currency. 
Inflation rates don't need to be as high as in Argentina or inter-war 
Germany, just enough that you'd notice a difference after a couple of 
years. Here are some possible culprits:

1. Fudge. Just the kind of dunderhead politician who sets the money-
presses rolling since he wants to be remembered as the man who made 
the wizarding economy flourish. Suppose further that he has some kind 
of hold on the goblins of Gringotts (the Quibbler may have got hold 
of the right end of the stick) and forces them to mint more money. 
More Galleons in circulation means devaluation of the currency (the 
gold might or might not be mixed up with base metals.) The scenario 
has one good side: If Fudge's discovered playing with the money 
supply, he'll be kicked out of office for natural causes.

2. The goblins themselves. Sort of same idea as above, but on their 
own initiative. Motive: Destabilising the magical society from 
within, since open rebellion doesn't work.  

3. Voldemort. IF he takes advice from his Death Eaters, they might 
convince him that it's a good way to disrupt society. It's a little 
too subtle for Voldemort, but Lucius seems to be a man with financial 
savvy and the ear of the Minister for Magic.  See # 1 - Fudge may 
become convinced that he'll be covered in glory by giving the wizard 
on the street more money in his Mokeskin moneybag. It could also be a 
good way of smearing Muggles and Muggle-borns (see my point about 
Hermione below.)

This theory would also cast some additional light on the poverty of 
the Weasleys. They may have done well before, but they're just the 
kind of family who would be struck the hardest by increasing 
inflation unless their money was safely invested.

Our main window into the world of the Wizards is a teenage boy with a 
small fortune and no adult to control his spending habits. Would he 
be the first one to notice if the price of Chocolate Frogs went up? 
Then Hermione - IIRC the pound sterling was quite stable during the 
90s, so she'll actually be favoured since she gets more Galleons for 
her pounds. This might work in the favour of the Voldemort-
supporters, since it would stir up discontent against Muggles and 
Muggle-borns. Ron -- his family has been poor for as long as he 
remembers, so he'd be used to hearing about how expensive everything 
is and not connect it to fiscal politics. (And what would happen if 
Percy found out that Fudge is the indirect cause of his family's 
poverty?) 

So what do you think? Is JKR preparing us for a financial scandal in 
books six or seven (might be a good way to bring in the Goblins)? Or 
is inflation too mundane a subject to find its way into books about a 
magical world? The more I think about this the more I believe in it, 
so I need some contrary opinions before my head swells too much.

Alshain 
(P.S. As the good Mr Pope spoke, "a little learning is a dangerous 
thing". If I upset any economists by this post, I only did five 
credits of economics in uni.)