point is, its not inflation, its cornering the market, to drive up price, previous reference to goldamn and gold storage was actually aluminum,of course if i was storing gold, i would say it was old pepsi cans.. http://www.reuters.com/article/2011/07/29/us-lme-warehousing-idUSTRE76R3YZ20110729 ..the fact that they are storing it means that ,unless they are wrong,(hard to be wrong when you control dc, write the rules/laws, and control the media..vote out all dems and reps) price is not coming down
If we magically found a 100 year supply of $15/bbl oil that could come on line in six months, inflation would spike hard as economic activity would absolutely boom from current levels.
Nobody is "cornering the market" on oil. Nobody - not even the countries that store the stuff in their own ground, is powerful enough to do that. The price is what it is because we're running low on the cheap stuff and replacement volume is bloody expensive.
I'm more inclined to agree with you. In the lead up to 2008, I'd hear similar accounts and agreed that it was more of a liquidity phenomenon as opposed to the notion of scarcity. All I have to say is that oil crashed from $147/bbl to $38 in a short six months. At least to me, that is complete evidence of a cornered market coming undone.
well now you are getting above my pay grade. I'm not even sure exactly what inflation is except I lived through a mild bout of it and I know it is bad for everybody, rich, poor, banker or borrower. Are you sure economic activity brings inflation?
I'm sure lack of economic brings deflation. But honestly, we're in the tall grass without defining all these things anyway... The difficulty, IMO, is we keep talking about money, when money itself is the least meaningful facet of policy.
the only thing I know about price controls was after being a vegetarian for years I had to start eating meat due to social requirements, and the only thing I could find in the grocery store was something called a "Spencer Steak" which apparently had been invented by Richard Nixon. I'm all for a little monitering, but at some point, the fed just needs to let go and see what interest rates really are.
as long as you buy 2 lcd big screen TVs and a laptop computer every other month you can live comfortably within what the government calls 'a low inflation rate' something around 2.5%
I don't think it will work, because we would still have an even bigger rate distorter in the taxpayer-backed MBS market. That should IMO be the first thing we get rid of, because there is nothing even remotely natural or "free market" about 30 year mortgages at any rate, never mind at 3%.
I know no one wants to believe it but the speculators in the market have really added to a huge increase in the price of commodities over the last few years.