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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: bond_bubble who wrote (39729)	8/25/2005 1:46:55 PM
From: Umunhum	Read Replies (1) of 110194

What you DONT understand is that, if oil prices increases then other spending falls!!! You are stupidly assuming that people will spend all the money on oil AND also spend on ALL other items that they are currently buying!! I am not assuming anything. I am flat out saying that a rise in oil prices is inflationary. And to think otherwise is absolutely absurd! they will stop spending on ipods, tvs, cars, movies etc. and hence those prices will fall - there will be deflation in those items because oil prices went up Sounds to me like you are making a few assumptions. It could be that the prices for these items remain constant or quite possibly even go up. Fewer of these items will be produced because less people can afford them. You seem to assume that everyone's standard of living is going to remain constant. That is not what happens in an inflationary environment.

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