Just like that, gas prices are inching over $3.20/gal.

[MrRational]

[SeattleMoose]

Big Oil in Whitehouse = Record Oil Baron Profits.

And oh yea, the ONE oil refinery blowup should easily account for all of the runup as almost all U.S. gas comes fron that ONE plant.

Will there be a "probe"?

The only "probe" is the one you get every time you go to the pump and bend over for Oily Dick and his cronies (the ones he has not yet shot).

[sniglet]

[rose-colored-coolaid]

[laxtosnoco]

[perfectfire]

[Matthew]

laxto,

No, my terminology is correct.

Lets look at how wikipedia defines deflation:

"Therefore, under the usual contemporary definition of inflation, 'deflation' means a decrease in the general price level over a period of time (Barro and Grilli 1994, p. 142). Alternatively, the term was used by the classical economists to refer to a decrease in the money supply; some economists, including many Austrian school economists, still use the word in this sense. The two meanings are closely related, since a decrease in the money supply is likely to cause a decrease in the price level."

Look at inflation/deflation in the classical sense. It is much more useful to truly understand what is taking place. By following the money supply, and not price action, you will understand what is happening. Commodities prices are much more volatile and subject to rampant speculation which often drives the price just as much as does demand.

Money in the system is being destroyed, not created. While we may be subjected to certain PRICE inflation, in the long term we are in the midst of a deflationary spiral and ultimately this is why the Fed is choosing to cut rates and not raise them.

[laxtosnoco]

Your response made my point for me:

"under the usual contemporary definition of inflation, 'deflation' means a decrease in the general price level over a period of time"
AND
" a decrease in the money supply is likely to cause a decrease in the price level"

I just think people sometimes confuse the terms. Inflation of a good or service means its price increases. You can't say money supply of a good or service can you?

Besides, the effect people care about is changes in prices for things they buy. In Japan in the 1990's there was a deflationary environment (prices fell), even while money supply rose. According to your definition, that was an inflationary environment!

I'm agreeing with you that changes in money supply can certainly signal inflation/deflation.

[sniglet]

The debate over definitions for deflation are beside the point. Whether deflation is solely a function of the money supply, or a measure of price changes for things people buy, we are headed for deflation by whichever definition you choose.

The money supply is contracting and asset prices are declining as well. Real-estate and stocks are on the leading edge of the price declines, but commodities and services will follow eventually as the recession picks up steam.

[WestSideBilly]

[rose-colored-coolaid]

[deejayoh]

[S-Crow]

Peter Schiff forecasting oil to be $125-$150 by years end.

From Bloomberg, Feb 20th:

`We should be looking at oil in the $120-to-$150 area by the end of the year without any major changes,'' said Peter Schiff, chief executive officer of Darien, Connecticut-based brokerage Euro Pacific Capital, which has $1 billion in customer accounts. ``It's not just oil; all commodities are moving higher. Soybeans are at $14 a bushel and platinum at $2,000 an ounce.''

For those of us who are 'Grasshoppers', what is a simple way to understand what causes prices to go up vs. down and it's impact on the economy.

[sniglet]

[deejayoh]

FWIW, Peter Schiff seems top be just to the right of Nouriel Roubini when it comes to economic doomsday scenarios.

His book title: says a lot about where his predictions are coming from.