I suppose your definition of inflation is “the rise in prices” right?

Perhaps you should read what Paul and Rockwell write rather than criticize them all the time.

http://www.economist.com/finance/displaystory.cfm?story_id=11294547

What about the dollar link? Chakib Khelil, president of the Organisation of Petroleum-Exporting Countries, argued this week that oil could reach $200 a barrel largely because the market was being driven by the dollar’s slide. Movements in the euro/dollar exchange rate and the price of oil have become extremely close (see chart). An analysis by Jens Nordvig and Jeffrey Currie of Goldman Sachs shows that the correlation between weekly changes in the oil price and the euro/dollar exchange rate has risen from 1% between 1999 and 2004 to 52% in the past six months.

That link is partly a matter of accounting. If the dollar falls, the dollar price of a commodity must rise for its overall price—in terms of a basket of global currencies—to remain stable. But commodity prices have risen even when priced in non-dollar currencies. And the correlation between changes in the price of oil and the euro/dollar exchange rate has risen even when oil is priced in a basket of currencies, such as the IMF’s special drawing rights.

So is the weaker dollar driving oil prices up or are high oil prices driving the dollar down? The Goldman analysts argue the latter. Dearer oil is pushing the dollar down, they claim, because oil exporters import more from Europe than America and hold less of their oil revenues in dollars.

http://www.econbrowser.com/archives/2007/11/oil_and_the_dol.html

Paul/Rockwell do not know what they are talking about, they only care about Anarcho-Capitalism and seeing the USA as an “Evil Empire”

jp on August 30, 2008 at 2:20 PM

jp, you have people go to a website that claims that the dollar fall has nothing to do with the rise in the price of oil and how great the U.S. dollar has done since September of last year through November?

Try going back to the year 2002 and post some more of your brilliance.

http://www.econbrowser.com/archives/2007/11/oil_and_the_dol.html

Paul/Rockwell do not know what they are talking about, they only care about Anarcho-Capitalism and seeing the USA as an “Evil Empire”

I sort of addressed this earlier – other central banks are printing more money to cause growth too. It has nothing to do with “evilness,” and everything to central economic planning being implemented in more places then just here.

A more suitable graph is one that looks at both currencies, and a hard commodity, like in this case, gold.

http://bkmarcus.com/blog/images/charts/OilDollarEuroGold2007.png

As you can see, yes, it has increased for both the Euro and Dollar since 2000 – not as much for the Euro overall, but at times it has gone up at even larger rates then the dollar.

Overall though, the Dollar has been devalued more – as born out by the fact that the Euro has increased in value per the dollar. Its like two sinking ships – the slower sinking one will be higher up then the faster sinking one, but both are still sinking.

Meanwhile, with gold – or for that matter, with a dollar that hypothetically had not been devalued – the price of gas has stayed pretty flat considering all the fluctuations in oil supply and instability.

NARN, The Final 2008 State Fair Edition — with Ron Paul

Sadly, the Paultards, or better known to me as Paulturds, still don’t get it about this guy. With Ron Paul, he’s been playing a Constitutional Pied Piper’s money mind game, while at the same time, laughing all the way to the bank. The Ron Paul presidential campaign collected tens of millions, didn’t spend a third, then quit running!

The background, which immediately preceeds this segment is Stanley
Kurtz’s (at 47:00) appearance on WGN on Wednesday, which the boss has an excellent
summary of at NRO.

Paul/Rockwell do not know what they are talking about, they only care about Anarcho-Capitalism and seeing the USA as an “Evil Empire”

Then gas prices would be cheaper in Europe correct? Where the Euro is out performing the dollar. Check those gas prices and see if your theory holds out.

Well, things aren’t quite so simple. The Euro may be stronger then the dollar, but it is actually losing value too as their central banks are practicing the same sort of devaluation-for-economic-growth that is going on here. So their prices have been increasing too.

That aside, the price of gas in Europe is much higher then here for one reason – gas taxes. Taxes account for, on average, 70% of the price of gas in the UK and France, for instance, while it is 11% in the United States. So if you take out taxes for both – yes, their gas actually is cheaper.

And the price of oil is an effect, not a cause, of the devalued dollar.

Then gas prices would be cheaper in Europe correct? Where the Euro is out performing the dollar. Check those gas prices and see if your theory holds out.

Government intervention in the free market is bad in general, but pumping money into it at this point is particularly harmful because we are in a deficit – meaning any money pumped it will have to be created or borrowed with interest.

And the price of oil is an effect, not a cause, of the devalued dollar. Afterall, the price of oil when exchanged to gold has actually been pretty steady – from 2000 to now it is more or less the same price, whereas in dollars it has jumped from, what, around a dollar to a little under 4 now?

jp, what exactly makes you think he opposes drilling? He is all for getting the federal government out of the way and allowing drilling, though he recognizes, unlike many others, that so long as the dollar is continually devalued, drilling unfortunately won’t be enough to stop rising gas prices.

Rangeley on August 30, 2008 at 12:50 PM

not speaking of Domestic drilling, just his absolute hypocriy and helping to elect one of the most corrupt and worse RINO’s in Don Young of Alaska this past week.

what I was speaking of was his naivety about how the world works, what it takes to make Despot nations produce at capacity and how the trade routes are actually protected.

aside from that, I would also argue its the price of Oil that has devalued the dollar more than anything. Its the biggest chunk of the trade defecit by far, and when the price of OIl Triples the Defecit balloons and is alot worse than the Budget Defeceit which has same effect on dollar. Its up around $800 billion, that is dollars leaving the US, mostly thinks to Oil which is bad for the dollar.

Goldman Sachs analyst had a great report on this not long ago. Problem with Paul is to him its the all powerful evil Federal reserve that controls everything, and he discounts the effects of other factors.

talk to Alex Jones lately Paul? he sure has spoke to Ms. Malkin.

what type of Enemies will a McCain/Palin administration create for us, as opposed to your distorted view of the world and human nature in which we can all hold hands, sing kumbaya and Trade just magically happens with goods getting from point A to B without interference. Where Oil is produced at capacity by Despot nations opposed to liberalism……i.e. the paultard Utopia?