25 May 2011

In the Pit of Despair

Economics, Federal Reserve 6 Comments

The resourceful von Pepe sends this link. I’m not making any promises, but it’s possible it will have streaming coverage of the testimony of me, Dean Baker, and all my friends. (It starts today–Wednesday–at 1:30pm Eastern time.) The topic is the Federal Reserve and gasoline prices.

6 Responses to “In the Pit of Despair”

  1. Roger Ritthaler says:

    The JEC has already concluded that “Weak Dollar and Federal Reserve Responsible for Sky-High Gas Prices” (
    http://www.weeklystandard.com/blogs/study-weak-dollar-responsible-sky-high-gas-prices_561108.html ) Will you just be confirming it?

    • Desolation Jones says:
      • Major_Freedom says:


        “Clearly, the objective of the study is to argue that QEI and QEII raised oil prices, I think by arguing that they caused inflation. Well, this may very well be the case.

        Austrian economics just barely escapes refutation by the skin of the nose! Muahahahaha

  2. Bob Murphy says:

    Well, I think that report is on the high end for the particular mechanism they analyze, but they also don’t look at the inflation-hedging people might be doing wrt commodities.

  3. Desolation Jones says:

    “Therefore, holding everything else constant, the dollar depreciation alone from early 2009 can explain a 20.5 percent increase in oil prices (quoted in dollars). Put different, the oil prices quoted in (say Japanese) yen has not risen as much since early 2009 as it has in U.S. dollars.”

    I understand you’re making a “holding everything else constant” argument and I’m more or less fine with it. (Although, Dean Baker makes a convincing case that QE might have not been responsible for all of the devaluation seeing how the flight to safety in 2008 made the dollar temporary strong and things are just going back to norm. )

    I’m wondering though how much the actual crude oil price rose from early 2009 to today when comparing crude oil quoted in JPY and crude oil quoted in USD.

    I could only find that type of info from the past 180 days here.

    From 180 days ago to today, both Oil in USD and Oil in JPY rose about 16%. From 180 days ago to the peak price in March, oil in USD rose 34% and oil in JPY rose 31%. Doesn’t this suggest there’s some more “fundamental” things going that are more important than the Fed’s money printing?

    • Joseph Fetz says:

      I don’t know what you consider normal, but the dollar index had been consistently trending downward from early 2002 until 2008. After the dollar rally in 2008 it has been hopping around in the 70s low 80s territory, but one must remember that the other currencies in the index had also been inflating during the past 5 years.