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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (86360)	6/4/2002 9:01:50 AM
From: E. Charters	Read Replies (1) \| Respond to of 116764

Since every good and its price is subject to its own local negative feedback loop of supply and demand, overall inflation and deflation will be regulated to a much higher degree than would be expected from just an inspection of all the factors that cause inflation or deflation and their power. This statement is admittedly only a declamation, but can you show how the mentioned feedback loop operates with rigour? In feedback cycle control with machines, one has the problem of SHM oscillation under certain circumstances. As well, there is needed an integration and derivative controller. These components of the loop use levels-over-time and rate of change to control the feedback response. This control mechanism implies that the feedback loop, to get to a steady state, must damp the measurement response cycle in some predictive wayin a natural environment. You have stated that there are many factors, yet you state that the control is supply and demand, which are only two. Wherein does complexity occur and how does this smooth the cycle? To be more definitive of operational processes, is there a model that relates the number of processes or factors that control prices to the rate of change of prices? In other words, if say twenty people decide to buy an item in question over ten days, and supply varies according to a function that is some random quantity of flux, - can a statistical metric be developed that predicts the price change as scarcity is perceived? If the control of free markets is better than say, wage price controls, some elucidation of such improved curves must be analysable. If the variation in demand due to population can be measured, and the variation in supply and money can be measured, what formula with reference to Pascal, of the interplay of these variances says that there will be a limiting due to probability of maximally positive or negative moves. What then causes the appearance of such abrupt cycles? ******************* I realize that not all things are always equal. Free markets with a freely spending government or loose credit will make the analysis of the efficacy of non interference hard to measure. And there are always Tulips. People love Tulips. In the absence of deliberate intervention by the state, the subdued inflation and deflation that would appear over time should be relatively easy to adjust to. This is in the realm of a flight of fancy, but can it be checked? Is there a period in history you can point to that had good growth, lack of want, and little government intervention? I am not suggesting here that this period does not exist, just asking to put a practical model on the theory. If this cannot easily be done, then it does not deny any correctness, but it must be qualified. EC<:-}