interesting read….

[pemeliza]

esmith:

“Every commodity that can be cheaply stored for extended periods of time is a bubble”

Ah then by your definition OIL is a bubble because it would be the most non-perishable commodity on the planet.

But … it isn’t a bubble because there is a shortage and we use as much as we can produce.

But … you never considered that there actually may be a genuine shortage in certain grains. Wheat for example. The push for ethanol has led to growers putting out record corn crops at the expense of soybean acres. What does this to the bean supply? But then beans go up and more acres for beans, etc. etc. The bottom line is that with the droughts and increased demand there is not a super surplus of grains anymore. There are so many tillable acres and climate change is occuring. We have to feed all those darn chickens and cows with something.

I agree the prices are frothy at these points and I would say there is a certain bubble element to them. But the days of $2 corn are over. Noone can grow it for that given the spectacular rise in input costs.

“The only reason we see (price) inflation is because of appreciating oil and bubbles in various commodities.”

Why stop there? How about the following statement which would be just as hard to refute:

“The only reason we EVER see (price) inflation is because of bubbles in various goods and services.”

Since all price inflation can be explained away via bubble theories it is best to measure monetary inflation. But you argue there hasn’t been any of that either. Geez I wonder where all the money comes up from to blow all the bubbles then?

Never mind the fact that countries like Japan and China have been exporting monetary inflation in the form of cheap long bonds and carry trades for some time now.

I’m not arguing that there isn’t some degree of truth to your statements but just that there are IMHO some oversimplifications.

[Eugene]

by your definition OIL is a bubble because it would be the most non-perishable commodity on the planet.

Oil, gas, and electricity are in a separate category. Political forces affect oil prices as much as market forces. There may be some bubbliness in oil, too.

you never considered that there actually may be a genuine shortage in certain grains. Wheat for example.

Genuine shortage, maybe. Climate change, maybe. Change in input costs (pass-through of high oil prices), probably. Enough of all that to justify 80% appreciation of wheat and soybeans since last June? And why do we see appreciation in soybeans, but not in meat?

How about the following statement which would be just as hard to refute: The only reason we EVER see (price) inflation is because of bubbles in various goods and services

Price inflation can be caused by other factors, including overheating economy (low unemployment) and printing presses. Economy is clearly not overheating and printing presses are stopped.

But you argue there hasn’t been any of that either. Geez I wonder where all the money comes up from to blow all the bubbles then?

There hasn’t been any monetary inflation for the last 12 months. Does not mean that people don’t have any money to blow up bubbles. People have TOO MUCH money.

[Eugene]

by your definition OIL is a bubble because it would be the most non-perishable commodity on the planet.

Oil, gas, and electricity are in a separate category. Political forces affect oil prices as much as market forces. There may be some bubbliness in oil, too.

you never considered that there actually may be a genuine shortage in certain grains. Wheat for example.

Genuine shortage, maybe. Climate change, maybe. Change in input costs (pass-through of high oil prices), probably. Enough of all that to justify 80% appreciation of wheat and soybeans since last June? And why do we see appreciation in soybeans, but not in meat?

How about the following statement which would be just as hard to refute: The only reason we EVER see (price) inflation is because of bubbles in various goods and services

Price inflation can be caused by other factors, including overheating economy (low unemployment) and printing presses. Economy is clearly not overheating and printing presses are stopped.

But you argue there hasn’t been any of that either. Geez I wonder where all the money comes up from to blow all the bubbles then?

There hasn’t been any monetary inflation for the last 12 months. Does not mean that people don’t have any money to blow up bubbles. People have TOO MUCH money.

[Eugene]

by your definition OIL is a bubble because it would be the most non-perishable commodity on the planet.

Oil, gas, and electricity are in a separate category. Political forces affect oil prices as much as market forces. There may be some bubbliness in oil, too.

you never considered that there actually may be a genuine shortage in certain grains. Wheat for example.

Genuine shortage, maybe. Climate change, maybe. Change in input costs (pass-through of high oil prices), probably. Enough of all that to justify 80% appreciation of wheat and soybeans since last June? And why do we see appreciation in soybeans, but not in meat?

How about the following statement which would be just as hard to refute: The only reason we EVER see (price) inflation is because of bubbles in various goods and services

Price inflation can be caused by other factors, including overheating economy (low unemployment) and printing presses. Economy is clearly not overheating and printing presses are stopped.

But you argue there hasn’t been any of that either. Geez I wonder where all the money comes up from to blow all the bubbles then?

There hasn’t been any monetary inflation for the last 12 months. Does not mean that people don’t have any money to blow up bubbles. People have TOO MUCH money.

[Eugene]

by your definition OIL is a bubble because it would be the most non-perishable commodity on the planet.

Oil, gas, and electricity are in a separate category. Political forces affect oil prices as much as market forces. There may be some bubbliness in oil, too.

you never considered that there actually may be a genuine shortage in certain grains. Wheat for example.

Genuine shortage, maybe. Climate change, maybe. Change in input costs (pass-through of high oil prices), probably. Enough of all that to justify 80% appreciation of wheat and soybeans since last June? And why do we see appreciation in soybeans, but not in meat?

How about the following statement which would be just as hard to refute: The only reason we EVER see (price) inflation is because of bubbles in various goods and services

Price inflation can be caused by other factors, including overheating economy (low unemployment) and printing presses. Economy is clearly not overheating and printing presses are stopped.

But you argue there hasn’t been any of that either. Geez I wonder where all the money comes up from to blow all the bubbles then?

There hasn’t been any monetary inflation for the last 12 months. Does not mean that people don’t have any money to blow up bubbles. People have TOO MUCH money.

[Eugene]

by your definition OIL is a bubble because it would be the most non-perishable commodity on the planet.

Oil, gas, and electricity are in a separate category. Political forces affect oil prices as much as market forces. There may be some bubbliness in oil, too.

you never considered that there actually may be a genuine shortage in certain grains. Wheat for example.

Genuine shortage, maybe. Climate change, maybe. Change in input costs (pass-through of high oil prices), probably. Enough of all that to justify 80% appreciation of wheat and soybeans since last June? And why do we see appreciation in soybeans, but not in meat?

How about the following statement which would be just as hard to refute: The only reason we EVER see (price) inflation is because of bubbles in various goods and services

Price inflation can be caused by other factors, including overheating economy (low unemployment) and printing presses. Economy is clearly not overheating and printing presses are stopped.

But you argue there hasn’t been any of that either. Geez I wonder where all the money comes up from to blow all the bubbles then?

There hasn’t been any monetary inflation for the last 12 months. Does not mean that people don’t have any money to blow up bubbles. People have TOO MUCH money.

[pemeliza]

“Price inflation can be caused by other factors”

One such factor is the devaluation of the currency which the good is priced in. When you erase the gains due to dollar weakness, prices may not seem as bubbly.

[pemeliza]

“Price inflation can be caused by other factors”

One such factor is the devaluation of the currency which the good is priced in. When you erase the gains due to dollar weakness, prices may not seem as bubbly.

[pemeliza]

“Price inflation can be caused by other factors”

One such factor is the devaluation of the currency which the good is priced in. When you erase the gains due to dollar weakness, prices may not seem as bubbly.

[pemeliza]

“Price inflation can be caused by other factors”

One such factor is the devaluation of the currency which the good is priced in. When you erase the gains due to dollar weakness, prices may not seem as bubbly.

[pemeliza]

“Price inflation can be caused by other factors”

One such factor is the devaluation of the currency which the good is priced in. When you erase the gains due to dollar weakness, prices may not seem as bubbly.

[JWM in SD]

JWM in SD

Pemeliza,

Look at a chart of M3 and correlate it to SD housing prices. It is almost perfect. The hyperinflation already happened. Debt/Money (m3) is created out of thin air and that is why you don’t need printing presses to have hyperinflation.

[JWM in SD]

JWM in SD

Pemeliza,

Look at a chart of M3 and correlate it to SD housing prices. It is almost perfect. The hyperinflation already happened. Debt/Money (m3) is created out of thin air and that is why you don’t need printing presses to have hyperinflation.

[JWM in SD]

JWM in SD

Pemeliza,

Look at a chart of M3 and correlate it to SD housing prices. It is almost perfect. The hyperinflation already happened. Debt/Money (m3) is created out of thin air and that is why you don’t need printing presses to have hyperinflation.

[JWM in SD]

JWM in SD

Pemeliza,

Look at a chart of M3 and correlate it to SD housing prices. It is almost perfect. The hyperinflation already happened. Debt/Money (m3) is created out of thin air and that is why you don’t need printing presses to have hyperinflation.

[Author]

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