20 Sep 18
Originally posted by @ashiitaka"It's really not a good thing. Very low inflation can be a sign that there is something wrong with the economy."
[b]I think you are confusing deflation with inflation.
Oh dear. Nope.
No country struggles with low inflation. Low inflation is good.
It's really not a good thing. Very low inflation can be a sign that there is something wrong with the economy.
Where are you getting your information from, Portfolio magazine? Where are you getting such sick propaganda from?
You are a funny guy, Metal Brain.[/b]
That is a ridiculous assertion!
What is your source of information?
20 Sep 18
Originally posted by @lundos"That the way to combat inflation depends on the rest of the economy and there isn't a one size fits all."
That the way to combat inflation depends on the rest of the economy and there isn't a one size fits all. So the FED doesn't want to keep people poor. They just make mistakes from time to time.
Btw I can understand why they did what they did in the 70s with the data and computers available. I don't feel the same way about the 2008 crash which were predicted by plenty of the best macro economist around the globe.
There you go ignoring what I have told you before. There is no need to "combat" inflation when the cause of inflation is an increase of the money supply. It is like saying you are combating yourself since the FRS caused the inflation in the first place by increasing the money supply.
I gave you examples of why your explanations are flawed and you keep ignoring them. You seem to have a poor understanding of economics. Did you drop out of college?
Originally posted by @metal-brainLMAO. This is what I've written:
What you did was blame inflation on oil prices. You never mentioned other factors so you seemed dismissive of them. At the very least you claimed oil prices were the main cause, but oil prices also rose after the invasion and overthrow of Iraq and there was not much inflation relatively speaking.
You had stagflation in the US. Something that was not foreseen due to multiple reasons. But saying that a huge price increase in oil prices due to the OPEC embargo didn't have any effect on the overall price level is bonkers. Money supply wasn't the only reason for inflation during the oil crisis.
I've never said otherwise. What I have said is that money supply isn't the only reason for inflation.
I've also told you before that the effects on inflation of oil price increases are determined by other factors like expectations and demand. Therefore you cannot directly compare effects of supply shocks like oil price increases from one to the next without taking these other factors into account.
Your explanation was flawed and I'm pointing that out. The main cause is the money supply increase. Why don't you just accept that I'm right? I think you know that I am.
LMAO. The only thing you've shown is poor reading comprehension and a poor understanding of inflation and the causes thereof. There's a reason it's called the oil crisis and not the 'increase of money supply' crisis.
Originally posted by @metal-brainAnd I will keep ignoring what you write as long as it is wrong.
There you go ignoring what I have told you before. There is no need to "combat" inflation when the cause of inflation is an increase of the money supply. It is like saying you are combating yourself since the FRS caused the inflation in the first place by increasing the money supply.
I gave you examples of why your explanations are flawed and you keep ignoring them. You seem to have a poor understanding of economics. Did you drop out of college?
No, what you have done is coming with broad, unsubstantiated claims. You have shown that you don't understand inflation and what causes it. You have also shown that you don't understand the difference between nominal and real wages, what the FEDs role is, how risk in investment works and an overall bad understanding of (macro) economic analysis. You have even gone so far as to claim economic theory is propaganda and/or are not based on 'economic fact'.
And while you've been acting like a little Trump you've managed to make insulting comments to wolfgang59, DeepThought, Ashiitaka and myself.
All in all I would call your comments in this thread embarrassing.
Btw I didn't go to college. I went the a university. Google the difference.
22 Sep 18
Originally posted by @lundos
LMAO. This is what I've written:You had stagflation in the US. Something that was not foreseen due to multiple reasons. But saying that a huge price increase in oil prices due to the OPEC embargo didn't have any effect on the overall price level is bonkers. [b]Money supply wasn't the only reason for inflation during the oil crisis.
[q ...[text shortened]... here's a reason it's called the oil crisis and not the 'increase of money supply' crisis.[/b]You have not established that oil price increases cause inflation at all. I gave you an example of a huge oil price increase without much inflation after the invasion and overthrow of Iraq.
I proved you wrong.
22 Sep 18
Originally posted by @lundos"No, what you have done is coming with broad, unsubstantiated claims. You have shown that you don't understand inflation and what causes it."
And I will keep ignoring what you write as long as it is wrong.
[b]I gave you examples of why your explanations are flawed and you keep ignoring them. You seem to have a poor understanding of economics. Did you drop out of college?
No, what you have done is coming with broad, unsubstantiated claims. You have shown that you don't understand inflatio ...[text shortened]... ad embarrassing.
Btw I didn't go to college. I went the a university. Google the difference.[/b]
No, that is exactly what you are doing and not me. Every time I prove you wrong you pretend I didn't and claim I'm the one who is mistaken when it is clearly you. If you cannot accept that huge price increases after the invasion of Iraq did NOT result in inflation then you are simply in denial of reality.
What university did you go to? I would like to know what university teaches oil increases result in hyperinflation in the 70s while ignoring they don't in the 2000s. That is a good example of economic propaganda since it is contradictory and illogical to those that know history.
Originally posted by @metal-brainYou 'proved' no such thing. You made a claim by trying to compare two situations that might seem the same at a glance, but as I've told you multiple times now, you have to look at the rest of the economy too. Other factors matter.
You have not established that oil price increases cause inflation at all. I gave you an example of a huge oil price increase without much inflation after the invasion and overthrow of Iraq.
I proved you wrong.
The price of oil and inflation are often seen as being connected in a cause-and-effect relationship. As oil prices move up or down, inflation follows in the same direction. The reason why this happens is that oil is a major input in the economy – it is used in critical activities such as fueling transportation and heating homes – and if input costs rise, so should the cost of end products. For example, if the price of oil rises, then it will cost more to make plastic, and a plastics company will then pass on some or all of this cost to the consumer, which raises prices and thus inflation.
The direct relationship between oil and inflation was evident in the 1970s, when the cost of oil rose from a nominal price of $3 before the 1973 oil crisis to around $40 during the 1979 oil crisis. [..]
However, this relationship between oil and inflation started to deteriorate after the 1980s. [...] Using this data, it appears that the strong correlation between oil prices and inflation that was seen in the 1970s has weakened significantly.
https://www.investopedia.com/ask/answers/06/oilpricesinflation.asp
Originally posted by @metal-brainYou haven't 'proved' me wrong in any part of this discussion.
No, that is exactly what you are doing and not me. Every time I prove you wrong you pretend I didn't and claim I'm the one who is mistaken when it is clearly you. If you cannot accept that huge price increases after the invasion of Iraq did NOT result in inflation then you are simply in denial of reality.
I haven't denied that price increases in oil after the Iraq invasion didn't cause inflation. What I've said is that the economic situation was different, i.e. the demand for oil wasn't as high and that there were expectations for oil price increases so the prices would be hedged (expectations and demand).
What university did you go to? I would like to know what university teaches oil increases result in hyperinflation in the 70s while ignoring they don't in the 2000s. That is a good example of economic propaganda since it is contradictory and illogical to those that know history
LAMO. Moving the goal post again. I've never mentioned hyperinflation. I've corrected you about this once already. And I haven't said - not even once - that oil prices causes hyperinflation. It's extremely dishonest to keep doing that.
The only person here in denial is you. Obviously.
Originally posted by @metal-brainThought experiment.
There you go ignoring what I have told you before. There is no need to "combat" inflation when the cause of inflation is an increase of the money supply.
Aliens take away most of Earth's water and leave.
What would the effect be on inflation?
WITH NO INCREASE IN MONEY SUPPLY!!!
22 Sep 18
Originally posted by @lundos
LMAO. This is what I've written:You had stagflation in the US. Something that was not foreseen due to multiple reasons. But saying that a huge price increase in oil prices due to the OPEC embargo didn't have any effect on the overall price level is bonkers. [b]Money supply wasn't the only reason for inflation during the oil crisis.
[q ...[text shortened]... here's a reason it's called the oil crisis and not the 'increase of money supply' crisis.[/b]"Money supply wasn't the only reason for inflation during the oil crisis."
You have failed to give the other reasons. Expectations and demand? That is another way of saying supply and demand which is a way to evade giving your source of information.
Unless you can give me reasons why supply and demand effect those 2 different oil price increases you are just making crap up.
"Therefore you cannot directly compare effects of supply shocks like oil price increases from one to the next without taking these other factors into account."
Then give your reasons why they cannot be compared instead of just making up crap without explaining why. You do this all the time. You pretend to know something you don't with vague stuff like "supply and demand". Any moron can say that when they have no better explanation than mine.
For example, Zimbabwe had hyperinflation and in 2008 it was the 2nd worse on record. Did Mugabe freely admit to his people that it was because of an increase in the money supply? Does any government admit that is the reason? You could give me an example of a government admitting that is the reason or you could just be honest and admit you don't have any idea what you are talking about.
Inflation is a tax and leaders generally do not admit they are taxing people into poverty. Like all crooks they lie. What you are doing is repeating lies and pretending you know they make sense.
Most people call that bluffing. Ignorant people do that a lot.
22 Sep 18
Originally posted by @wolfgang59Thanks for pointing out the impossible. Give a realistic reason for supply catastrophe. Even your space aliens stealing water they could more easily get from the Kuiper belt is unrealistic.
Thought experiment.
Aliens take away most of Earth's water and leave.
What would the effect be on inflation?
WITH NO INCREASE IN MONEY SUPPLY!!!
The post Iraq invasion restricted supply, yet not much inflation. Explain that without space aliens.
22 Sep 18
Originally posted by @lundos"the demand for oil wasn't as high and that there were expectations for oil price increases so the prices would be hedged (expectations and demand). "
You haven't 'proved' me wrong in any part of this discussion.
I haven't denied that price increases in oil after the Iraq invasion didn't cause inflation. What I've said is that the economic situation was different, i.e. the demand for oil wasn't as high and that there were expectations for oil price increases so the prices would be hedged (expectations ...[text shortened]... 's extremely dishonest to keep doing that.
The only person here in denial is you. Obviously.
What is your source of information?
I did not move the goal post. I'm still asking you for your source of information which you keep failing to provide.
It sounds like you are saying speculation caused it. That is what you are implying by saying "expectations", but that would affect the oil price and you have not established they were much different.
Expectations of what? You can't be talking about oil or the prices would have been very different and you have not. You need to prove something. Expectations of what?
Originally posted by @metal-brainYou are mixing up two different subjects. The difference in inflation from different oil price(s) (shocks) on inflation and causes of the 1973-75 inflation (stagflation).
"Money supply wasn't the only reason for inflation during the oil crisis."
You have failed to give the other reasons. Expectations and demand? That is another way of saying supply and demand which is a way to evade giving your source of information.
Unless you can give me reasons why supply and demand effect those 2 different oil price increases ...[text shortened]... l crooks they lie. What you are doing is repeating lies and pretending you know they make sense.
The demand and expectations were examples regarding the difference in price increase effect on inflation.
Take a look e.g. here:
https://www.nber.org/papers/w13368
I'll quote the important findings regarding our conversation from the conclusion.
Second, that the effects of oil price shocks have changed over time, with
steadily smaller effects on prices and wages, as well as on output and employment.
[...]
Fourth, that a second plausible cause for these changes is the increased
credibility of monetary policy. We have offered a simple formalization of
lack of credibility and its effect on the volatility frontier. We have shown
that the response of expected inflation to oil shocks has substantially decreased over time.
Fifth, that a third plausible cause for these changes is simply the decrease
in the share of oil in consumption and in production. The decline is large
enough to have quantitatively significant implications.
Or you can look here:
https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/07/Fic/dt0735e.pdf
From the conclusion:
Our estimates indicate that oil played a non-trivial role in the volatility decline. In particular, the reduced oil share alone can explain around one third of the inflation moderation [...and around 2/3 coming from better monetary policy].
Or here if you want something more recent (you need the rights for it, but the abstract show the conclusion:
https://www.sciencedirect.com/science/article/pii/S0261560617302541
We find that a 10% increase in global oil inflation increases, on average, domestic inflation by about 0.4 percentage points on impact, with the effect vanishing after two years and being similar between advanced and developing economies. We also find that the effect is asymmetric, with positive oil price shocks having a larger effect than negative ones. The impact of oil price shocks, however, has declined over time due in large part to a more credible monetary policy and less reliance on energy imports.
Expectations include, of course, the expectations of the FED responses and the credibility of it.
The other reasons for the 1973-75 oil crisis and rising inflation are another subject. In short I think the other reasons are the end of the Bretton Woods System, interest rates increases from the FED (to try to increase growth), the USD devaluing and an increase in the money supply.
you could just be honest and admit you don't have any idea what you are talking about. [...] Most people call that bluffing. Ignorant people do that a lot.
LMAO. You have shown precisely nothing and you have the gall to write the above. No wonder other people on RHP call you a moron.
22 Sep 18
Originally posted by @lundosI think you dropped out of economics. Here is a quote you posted:
You are mixing up two different subjects. The difference in inflation from different oil price(s) (shocks) on inflation and causes of the 1973-75 inflation (stagflation).
The demand and expectations were examples regarding the difference in price increase effect on inflation.
Take a look e.g. here:
https://www.nber.org/papers/w13368
I'll quote the ...[text shortened]... othing and you have the gall to write the above. No wonder other people on RHP call you a moron.
"We have shown that the response of expected inflation to oil shocks has substantially decreased over time."
Nothing you posted shows that at all. I am looking forward to you explaining it.
Same with this:
"Second, that the effects of oil price shocks have changed over time, with steadily smaller effects on prices and wages, as well as on output and employment."
Another statement without explanation.
Then this:
"Fourth, that a second plausible cause for these changes is the increased credibility of monetary policy."
Does that mean the FRS decided not to substantially increase the money supply like they did in the 70s? That makes sense. I'd like to hear your explanation. Will it make sense? I doubt it.
All you have done is copy and paste a lot of stuff that does not explain anything. Try doing that. Explain something thoroughly. Until you do that you are the moron. You are just frustrated out of failure. You want to believe the FRS is not a big scam, but it is.
How much money did the FRS create to bail out the banks again? 29 trillion, right?
https://www.cnbc.com/id/45674390
How is that not a scam? We Americans paid that inflation tax. The reason the government throws counterfeiters in prison is to prevent competition. The FRS wants to continue that monopoly of screwing people over.
Iceland handled it better. We got screwed. 29 trillion!
22 Sep 18
Originally posted by @metal-brainYou asked for sources. I've provided sources. Obviously, there's no reason to copy all of it. Read the linked articles for the background explanations. It's all there.
I think you dropped out of economics. Here is a quote you posted:
"We have shown that the response of expected inflation to oil shocks has substantially decreased over time."
Nothing you posted shows that at all. I am looking forward to you explaining it.
Same with this:
"Second, that the effects of oil price shocks have changed over time, ...[text shortened]... hat monopoly of screwing people over.
Iceland handled it better. We got screwed. 29 trillion!
You on the other hand have provided absolutely nothing other than claims, conspiracy theory regarding the FED and insults.
I wouldn't call what I feel for fustration. Rather mild amusement with regards to your constant need to insult everyone and this obsession with my degree. Psychologists call it projection. Are you sad that you didn't have the brains to get a degree?
I see now. The FED is just another big conspiracy of the 'Elite' or the 'Deep State' or whatever you people call it now.