Posted on 02/12/2004 5:54:36 AM PST by WarrenC
No, you are right. Just a small sample, hopefully representative.
Yep, OPEC cut production and Iraq also had it's production down to zero. Iraq is now on it's way to get it's production back up. It is at 2 million barrels a day curretnly and is building up its infrastructure but that will take time. Iraq has about 3/4's the oil reserves of Saudi Arabia, which means it is massive.
Also the demos have blocked any development in ANWR. Do you think that you can twitch your nose and oil shows up. It doesn't. There will be a new paradigm when Iraq is up and running at full production, but that will take time and IMO, the US and the US consumer will benefit.
Good kiddies!
And try drawing an un-adjusted chart, to allow folks to use their own recollections and memories of past years so each can more honestly adapt a dollar then to a dollar now.
Let the liberals keep selling short! We'll see how far it gets them!
As for jobs, the unemployment rate is 5.6% and dropping.
History is history. I see that you see only part of it, you think I am seeing something false. I will not say what you see of it is false -- what you see is true, but only part of a bigger whole. You are missing by delusion -- by claiming my reports of that are false -- what in my opinion, are currently significant parts of history.
My observations of history are not opinion. History is what happened, an honest report of that is as true and non-opinionated as when it happened.
Where my opinion does enter is not as to what happened -- but as to whether it is currently signifcant in understanding the present situation.
I can allow that you see different things, and also allow that you weigh those things according to your own wisdom and experience. Yet you cannot even allow that the things of history I report even happened. That is a poisonous bias. We all have biases -- they do not have to be poisonous -- they are, when known and applied correctly and logically absolutely necessary to the process of making observations!
Go back 8 years, 10 years, 20 years. I used 1969 because that was BEFORE the big "oil inflation" supposedly hit. Oil's cheaper today than it was in 1969 in real dollars.
As an experiment I suggest visiting any store in Pennsylvania in a town that borders Delaware. In Delaware there is no sales tax, in Pennsylvania it is 6%. Compare the prices of taxed items. Taxes effect prices.
And with FUEL -- even an end-user sales tax acts to a great degree like a value-added tax driving up the prices of everything that takes fuel to make or deliver. That is, everything.
And a barrel of sweet crude in the 60's was what -- 10-13 dollars, I'm guessing, might be high. Today? A barrel of sweet runs 25-30. And what the heck is a 1969 dollar? My *estimate* of rates of inflation to adjust historic dollars with is just that -- MY ESTIMATE. There are only subjective estimates.
Charts in actual dollars are more honest. And if you like fanciness, ratios of one commodity to another -- say gold/oil, or copper/oil, or eggs/oil are more honest. *Adjusted* dollars are ALWAYS more political than honest.
Gas is still cheap. Taxes can never be factored into a price because as YOU RIGHTLY point out, they are purely political, and have nothing to do with the product itself.
Gas is cheap.
Yet that misses the point. Oil, while cheap, is more expensive today than two years ago. And oil prices factor into every aspect of the economy. Yet it is ignored in inflation calculations -- the publized inflation figures are suspect. They are political numbers.
And I didn't say taxes were political -- I said that the year-to-year dollar adjustment figures were political.
Taxes are allocated politically, yet some level of tax is intrinsic to a market, and is truely part of the cost of a good. Just as oil at the well head can be from a cheap well or an expensive one -- the complete transaction on a good or service can be in tax-low or tax-high place, and that tax is part of the cost.
But, but, but ... since we are in 110% fiat money mode, and there is no gold, the ONLY real thing that values a fiat dollar is the tax rate on labor. In that regard -- in considering income taxes in a late fiat money economy, tax rate and money inflation are very much tied together.
And we -- as you say -- have less labor. "More productive", That can be very very inflationary.
This is an interesting kind of inflation. Fiat money driven. Every new dollar a creation of what in wednesday night poker is called "shorting the kitty". Some commodities will deflate! The metals. Excepting the precious metals.
Excepting oil and alternative fuels. Necessaries. Those will inflate. Have inflated.
There are a couple of Freepers who are astute on this inflataion with some deflations dynamic. For some reason I am not. Maybe imawit knows.
In the early 1800s, ALL BANKS had a minimum gold reserve from which they issued notes. The stronger your bank, the less gold you held---sort of the exact opposite of the goldbug theory. NO BANK held more than about 10% reserves, except on rare occasions. ALL BANKS that were chartered printed their own money. The result? Overall, a very strong system. There were two national panics in 75 years, 1819 and 1837. The latter, scholars know, is overwhelmingly blamed not on Andrew Jackson's "war" on the BUS, but on the decline of Mexican silver shipments (and I despise Jackson).
The Panic of 1819 is the only one even remotely attibutable to "inflation" deriving from banks, but, most scholars agree, more likely tied to the residue of the War of 1812.
The Panic of 1857, as I have argued in a (apparently well-accepted) article in the Journal of Economic History, was entirely due to POLITICAL changes brought about by the Dred Scott decision. Even then, fewer than half the country was affected. Again, though, there was nowhere near enough gold to "regulate" the system---it was almost entirely regulated by the market, which valued notes as to the reliability of the banks issuing them, based on those banks' physical assets (loans, land, etc.) NOT their gold.
Beginning in about 1900, the amount of gold in the country "backing" National Bank Notes was miniscule. The reason there was an issue in 1893 was that the Sherman Silver Purchase bill opened a window for the gold to flow out of the country in an arbitrage arrangement. J. P. Morgan stepped in, as he again did in 1907 (a fairly minor panic). But even he admitted that he no longer could move enough gold to affect the markets.
Today, there is only 7% (!!!!) of all "money" in PHYSICAL form (i.e., paper or coin), and of all that "money," less than 5% of that could be "backed" at any time by gold and silver. In short, the nation has virtually ALWAYS been on a "fiat" money standard, and attempts to impose a "true" gold standard (by the Jacksonians) met with disaster, as there simply wasn't enough to circulate even in small forms.
There is absolutely nothing wrong with "fiat" money if the information flow is unimpeded. People can, and do, know which money is good and which is bad, as they do today with international currencies.
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