| >You really think that quantitative easing has a higher impact on energy prices than literally millions of people in China and India buying petroleum-fueled vehicles and driving them around? Yes. Again, supply of oil has increased, and oil/gold ratios are pretty static. The big leg of the movement is in the USD. >If rising oil prices are an inflationary USD phenomenon, why do we see the same pattern for Swiss Francs, Emirati Dirhams, Mexican Pesos, Euros, Iceland Kronas, or Pounds Sterling? Most of those currencies have engaged in competitive devaluation against the USD to prevent exports becoming uncompetitive. In countries where the currencies have not matched the USD depreciation, energy prices aren't anywhere near as high. >As for precious metals, the simple fact is that the world's mineral resources are harder and harder to get at over the years, and with the rest of the world rapidly developing, demand for natural resources is going to increase. Population growth isn't that fast as to force a doubling of commodities in the short timeframe that has happening. What is required is a flooding of the denominator - USD. Printing any currency leads to inflation across the board. When it is the 'reserve' currency of the world, you get global inflation. There is nothing to argue in this; it is the stated aim of the QE policies. |
Name a currency where oil prices have remained stable over the past ten years. I can't find one. Even oil-rich countries have seen their oil prices skyrocket.
> Population growth
It's not about population growth. It's about economic development. 2 billion Chinese and Indians doing subsistence farming or riding bicycles don't raise the price of oil. 2 billion Chinese and Indians buying cars for the first time does. You honestly think there's no relationship between the rising cost of oil and the smog blanketing Chinese cities in recent years?
You want to talk precious metals? Half of platinum is used for automobiles, and another 30% is used for jewelry. Two sectors where demand goes up when previously poor countries suddenly get richer. Half of gold is jewelry as well. About 40% of gold is bought for investment, which if anything indicates a speculative bubble.
> What is required is a flooding of the denominator - USD.
So name another currency that doesn't show this. I picked Icelandic krona specifically because most critics of how the US responded to the global economic crisis hail Iceland as an example of doing it right. But their petroleum costs have risen as much as ours.
> Printing any currency leads to inflation across the board.
False. Expanding the monetary base in excess of economic growth leads to inflation.