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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (371790)	2/23/2008 5:54:41 PM
From: Road Walker	Read Replies (1) \| Respond to of 1578499

But you have to put it in the proper context. At $100 oil is back to where it was in 1980. However, oil in 2008 makes up a much smaller portion of the GDP than it did in 1980 so its impact on today's economy is much smaller as Krugman aptly points out. Yeah but we are importing twice as much so that money is going elsewhere, and the $100 oil isn't static it's dynamic. We are at peak oil. We may have seasonal downs but the trend is hugely up... by 100's of percent over the last 4-5 years. If we get 100's of percent (or even just 100%) on this base price of $100 over the next 4-5 years our economy is crippled. Period, end of argument. Secondly, the stagflation argument neglects the incredibly deflationary aspect to the decrease in housing prices. And housing and its pricing are far more important to the American economy than oil. So as I see it, the problem is not inflation or even stagflation but deflation. Housing is just one aspect of cost and another aspect of wealth. If you can't buy a house because you have no wealth, just debt, then it the lowered cost does nothing for the economy. If inflation starts eating away at discretionary income, then a paralyzed housing market is a negative not a positive. Ted, look at the inflation numbers, they don't lie (but are probably understated). They are going up. People's wealth is going down. Their debt is going up. People are tapping their 401K to maintain their lifestyle. Grab your butt and hold on... we're in for a ride.