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Re: Just because you're paranoid...
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Originally Posted by sebastian_dangerfield
Indeed. But consider... We pump a shitload of dollars into govt projects. This causes a domestic increase for simple supply and demand reasons. That's the simple energy price inflation. The more complex one is, we pump a shitload of money into the system via QE. This gets funneled to emerging markets which provide the best returns. This creates inflation in emerging markets which inflates the price of oil there which, in a global market, causes our prices to rise. Add to that the speculation increased by policies feeding financial institutions looking for big returns cheap money with which to make bets... in a commodities bubble.
Yes. You cite contributors to energy price increases. I add the Fed to your list. How big a contributor is it? Not as big as Chinese growth, surely. But significant, I think (hence the emerging markets accusing of us of exporting inflation). And in combination with a stimulus that put few back to work while increasing energy prices a bit, I'd say the Fed easing and stimulus had a considerable impact on energy prices domestically.
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I tend to doubt that conclusion, but would be interested to see on the question. When you look at the size of global markets, the Fed's actions just shouldn't be that influential.
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“It was fortunate that so few men acted according to moral principle, because it was so easy to get principles wrong, and a determined person acting on mistaken principles could really do some damage." - Larissa MacFarquhar
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