Great links. I haven't read Gerard Jackson in a while, and I had forgotten how smart he is. Some illuminating statistics:
newaus.com.au
<<< The 1973 OPEC oil hike is often cited as a graphic example of
cost-push inflation and the cause of the Western world's inflationary
woes of the ‘70s. If this explanation was correct, then the biggest oil
importers would have the highest inflation rates. They did not.
Germany is wholly dependent on imported oil, as is Japan, yet after the
oil hike its inflation rate was 7 per cent while that of Japan's was 25
per cent; Australia's inflation rate was 17 per cent, even though it was
75 per cent self-sufficient in oil; America, which imported about 50 per
cent of its oil, had a 12 per cent inflation rate; Britain, which had
become an oil exporter, laboured under an inflation rate of 25 per cent;
Saudi Arabia, the world's largest oil exporter, had a 35 per cent
inflation rate.
The reasons for the different inflation rates is quite simple. Those
countries with the lowest rates of monetary expansion enjoyed the
lowest rates of inflation. What the vast majority of commentators are
totally unable to grasp is that the OPEC price hike was basically
deflationary. The monetary response of the Western world completely
swamped what was initially deflationary. (Only Austrian economic
theory draws attention to all of these facts and provides a
comprehensive analysis). >>> |
