Joe, OT AG
Re: <your point that 30% of the total CPI is raw material cost of Oil and Gas must be wrong.>
Came directly from a discussion on components of the cpi at
stls.frb.org
stats.bls.gov
stats.bls.gov
This is the 'raw material cost of finished goods', including heating, transportation, and what would normally be considered 'raw material, such as feedstocks to chemicals.
In point of fact, the CPI rate on increase, for the last 1.3 years has been 1.95236%/year with energy excluded. See: stls.frb.org
2000.04 177.8
-1999.01 173.3
Diff 4.5/173.3 = 0.02596...
0.02596.../1.33 = 0.019518... or about 1.9% Note, this is w/o energy, not without Oil/Gas, as 'feedstocks' are not energy.
Did I make any errors?
Re: <The US CPI has been the highest in the industrial world for some time. The rest of the world uses oil as well.>
The CPI level is not an issue. the delta in the CPI is the issue. Currently under 3%/year with massive energy increases included.
AG shouldn't be 'Pumping money' either, but the trend, in peace time, in for deflation, not inflation. Money supply, IMO, should trail the GDP.
I didn't post the message about cartels, that came from Scumbria. I was directly answering your question, as best I could. I agree, however, that cartels, generally, succeed only in the short term ( < 100 years or so, like DeBeers ).
Re: <What I asked you in my post was how much of the prosperity would have been lost if the inflation rate was much higher than it is now.>
Sorry, that's not how I took it. What I was saying was that AG fought major wars, *PAST THE DEATH* with inflation. His history is that he just keeps going 'till there is a major problem, then he *RESCUES* the world by backing off and pumping money. the hand on the money pump should be of far firmer material than his, IMO.
I also don't like inflation. I far favor, as opposed to jacking interest rates up and down for a year or so a sudden shock. A 'sudden shock' of 1/2% would have stopped the Naz. bubble last Aug., IMO, without the collateral damage that I fear the feds actions in the near future will precipitate. I also think the last 1/2 point was too much, way too late.
It *REALLY* pissed me off when AG said he wanted 'slow steady inflation'. Inflation, in any amount, IMO, causes damage. Low inflation causes little damage. big inflation causes big damage. Deflation can cause big damage. I am more afraid of Deflation right now than inflation(but I could certainly be wrong in that point).
tgptndr |
