Posted on 12/27/2010 8:07:40 AM PST by expat_panama
[snip]
What the commodity markets are telling us is that we’re living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices. And America is, for the most part, just a bystander in this story.
Some background: The last time the prices of oil and other commodities were this high, two and a half years ago, many commentators dismissed the price spike as an aberration driven by speculators. And they claimed vindication when commodity prices plunged in the second half of 2008.
But that price collapse coincided with a severe global recession, which led to a sharp fall in demand for raw materials. The big test would come when the world economy recovered. Would raw materials once again become expensive?
[snip]
(Excerpt) Read more at nytimes.com ...
Why is devaluing of the dollar not a factor to him?
Pure BS. The facts are that commodity prices only surge when the Whitehouse goes Keynesian and that usually economic growth sees stable commodity prices as new methods of mining and use come on line.
Then again, we can't expect liberals and their freeper friends to let mere facts get in their way...
Kruggy probably didn't think of it, but his lack of thought's not nearly as important as what is. Namely, we had level commodity prices from the late 70's through GWB's first term. That's what tells us dollar exchange rates don't matter.
Because he's blinded by "climate change."
gusopol3 wrote:
Why is devaluing of the dollar not a factor to him?
From the article:Although, in the global currency market, the dollar might be falling, but other players are trying to keep things level in a race to the bottom.
Also, over the past year, extreme weather — especially severe heat and drought in some important agricultural regions — played an important role in driving up food prices. And, yes, there’s every reason to believe that climate change is making such weather episodes more common.
I'll let others handle the falacies in this guy's opinions. There are some problems with his assumptions.
What happened in GWB’s first term to change it? Growth of federal deficit?
It wasn't in the first term. There was a run up beginning 2006 and then prices crashed along with homes and stocks when Obama got elected.
When I looked at the graphic in my earlier post I'd thought that there was some kind of unprecedented surge in commodity prices, but then seen with a log axis the latest volatility is really just business as usual.
It can’t help to keep our natural resources locked up and food producing acreage diverted to the global warming hysteria.
The Krugster is coming dangerously close to “Drill, Baby, Drill” here
Exactly, right out of the 'sustainable-development/limits-to-growth crowd. I was in a post grad university class where I was trying to explain that econ growth was powered these days by information, not resources. I pointed out to the prof how over the decades raw material prices fall way below other prices and all he said is that it was 'interesting'.
Some truth in that statement, but NOT the way he means it.
Person A - income (say) $50,000 per year. This person has to balance a budget each payday and month, pay the mortgage, utilities and food. When items cost 5% more, Person A notices it because Person A is operating on the margin and ANY increase has to be covered by personal budget adjustments elsewhere: they live in a finite world (of income).
Person B - let's say Mr. Krugman - with a finite but relatively HUGE income does not notice a 5% increase in utilities, food and incidentals because the actual $$ involved represent just walking around money. From the ivory tower of wealth and privilege where he and his friends and colleagues exist, there simply is no noticeable inflation. Anyone who complains is a whiner with a political agenda that is very possibly racist.
Time for the pitchfork and tumbril etc!
This is a conflation of decades of govt overspending, undertaxing and the end of production by the huge demographic of the baby boom. It has been predicted since the early ‘90’s and happened right on schedule.
We will return to sustainable growth by 2022-23. Until then we stagnate and run in fits and starts, much like Japan has done for some time. Japan hit the demographic wall about 10 years before the USA.
Krugmn is a caveman.
He knows nothing of how technology in advanced economies adjusts for, adapts to, expands the known supply of, creates alternatives for and thus compensates, over time, for supply and demand changes in commodities.
Given a robust and advanced economic and technological base, like ours, technology eventually trumps any as-of-the-moment commodity situations.
[econ growth was powered these days by information, not resources. ]
I’m a mechanical engineer, I look at everything through te 1st and 2nd law, and more importantly the free energy equations (Gibbs). Things happen when there is a free energy gradient, a combination of mas/energy and “information” energy. A gallon of gasoline is worth a combination of it’s mass plus energy content plus the informational content (is there an engine you can run it in). That means while value is influenced by mass/energy and scarcity, it is also influenced by information.
This is another iteration of the rubbish that Paul Erlich used to spout until the late Julian Simon cleaned his clock in their well-known wager 20-odd years ago.
—and you’d think eventually they’d give it a rest. Talk about your one-tune-Charlies...
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