alt.politics.economics

royls@ wrote:

> On Sun, 17 Feb 2008 18:14:11 -0800, stuff_stuff@ wrote:
>
>
>>On Mon, 18 Feb 2008 02:03:21 GMT, royls@ wrote:
>>
>>
>>>>>A sudden rise in price of a particular commodity is not something that requires
>>>>>immediate increase in money supply. Remember, our object in regulating the money
>>>>>supply is to prevent a general rise or fall in the price of goods and services.
>>>>>Since our price target is a basket of goods and services, annual adjustment is
>>>>>sufficient.
>>>>
>>>>LOL.
>>>>
>>>>That was the thinking before the stagflation of the 70's.
>>>
>>>ROTFLMAO!!!
>>>
>>>Uh, actually, it's still the thinking -- of those who have any
>>>knowledge of the subject, and actually know how to think.
>>>
>>>
>>>>You're living in a too simple academic model.
>>>>/oil_graphs/
>>>
>>>?? ROTFLMAO!!!!
>>>
>>>That graph shows nothing of the kind. Any commodity price can show
>>>wild swings, and it says nothing whatever about general price levels.
>>>You are just bloviating. Try to learn the difference between relative
>>>prices and general price levels.
>>
>>You really have no comprehension of what the oil price shock did in
>>the 70s. That's clear.
>
> No, what is clear is that _you_ are ignorant of the fact that the oil
> price shock was just a sudden adjustment to the long-term weakness of
> the US dollar resulting from Nixon's repudiation of gold
> convertibility in 1971.

Rubbish. The . hit peak oil in 1970, and the Arab nations flexed
their muscles over the 1973 Yom Kippur War.

>>Oil ran through the energy prices of all
>>manufacturing, transportation, utilities and the like. Everything
>>spiked.
>
> In fact, it was merely a sudden adjustment to a reality that had been
> coming for decades.

Right.

>>While there's less manufacturing today in the US, it's stupid to think
>>there can't be a similar surprise in some facet of this complex
>>economy.
>
> Of course there can be surprises... to those who don't understand what
> is going on.

Like Friedman?

>>Only a simpleton has the hubris to think they understand some thing as
>>complex as today's global economies.
>
> It's like the weather: While unimaginably complex in its details, the
> global economy follows fundamentally simple laws.

This more 20/20 hindsight talking? I don't think your hindsight is even
that good.

--Jeff

--
It is only those who have neither
fired a shot nor heard the shrieks
and groans of the wounded who cry
aloud for blood, more vengeance, more
desolation. War is hell.
--William Tecumseh Sherman