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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (90057)	1/2/2008 7:43:34 PM
From: TheSlowLane	Respond to of 110194

My heating oil has gone from 1.90 in November to 2.60 in December to 3.33/gallon today. Dang.

To: GST who wrote (90057)	1/3/2008 12:18:59 PM
From: skinowski	Read Replies (2) \| Respond to of 110194

""Just define inflation as a narrow measure of money supply and ignore prices -- a neat trick to pretend that rising prices have disappeared"" Agree - I may not grasp all the intricacies of the great inflation vs. deflation debate, but it does appear that general increases - or declines in prices - simply must be part of how those concepts are defined in order for them to be meaningful. Under a gold standard, when the money supply remains relatively stable, it is easy to understand that general price changes will reflect the actual existing supply and demand dynamics for the items in question. However, under a fiat monetary system it all becomes much more complex, since it is so easy to manipulate the supply of money. Anyway, from what I read, the percentages of income which Americans spend on car fuel and other energy related needs are still not extreme by historic standards. However, if in the future they will begin to consume a portion of our incomes which will be sufficient to have a great impact on our financial lives - then, perhaps, many other prices will have to come down. We will not shop as much. We will not travel as much, and will generally not drive as much. The competition for our spendable money will increase, while our incomes themselves may very likely remain relatively stagnant. It is possible that Inflation and Deflation - in many ways - are like the two faces of Janus - opposite, and yet parts of one and the same. I submit that if a person shows up in a country suffering from hyperinflation and offers a currency which is perceived as being "stable" - he will discover that when measured in that "stable" currency - prices may have actually decreased.