TPS

You've just expressed why you are wrong. Gasoline has not continued to rise. It has see-sawed for the past 3 years. As I said, the price of oil hit a peak in April 2011, and prices have been below that peak price ever since, almost 2 years now. Look at any commodity index and it is the same. Please do explain why almost all commodity prices are lower today than they were 2 years ago, even though the Fed has pumped another trillion dollars into the economy over the same period. By the way Cinga, that nice little inflation indicator supports me as well, from 2008 to 2012, $100 is worth $106.64. An inflation rate of less than 2% per year. And that is the debate: it's not that there hasn't been inflation, rather there hasn't been significantly high inflation. Moderate inflation is the "price" we pay to prevent debt-deflations. Madox expresses the issue in the following quote. Magox: "monetary policy is the number one driver of commodity valuation" If so, please explain why almost all commodity prices are lower than they were in April 2011 (almost 2 years ago), even though the Fed has since pumped another trillion dollars into the economy.

Seems every year the Bills trot out an article about Troup and his battle back from his back. I like the guy, and wish he would recover and contribute, but I'm tired of the February articles that try to give hope he will eventually be a contributor.

Wow! You have changed your target again. Now you say that QE impacts asset prices. Of course! That is how monetary policy impacts the economy, via asset prices. My point all along is that the changes from the 2000 cfma have turned commodities into financial assets, so they now increase from Fed actions just like other financial assets, but commodity prices eventually have to reflect true demand. Which eventually brings those prices back down to earth. the big debate is, you and others have argued that the fed's policies will cause significant inflation of real goods prices, and that has not been the case. Inflation of real goods and services has been no different than the past 30 years, roughly 2-3%. The impact has been on the inflation of assets. That's the way monetary policy has always worked.

If you want to change the metric to people who are in the middle and lower class, of course higher prices for necessities hits them harder than is measured by the cpi because the cpi measures prices for a bundle of goods purchased by "the typical urban consumer." The reason I argue these mini speculative bubbles in oil always come back down to earth is because of that exact impact. However, I could argue that those higher prices barely impact the rich and upper classes, which changes the metric. So of course prices impact different classes differently, but if that's the focus you want to take, rather than on average inflation, then you better say so from the beginning, otherwise you are simply dancing around to make the data fit your point. Where we differ is 1) I argue (since the 2000 cfma) investors now have the greatest influence on short term commodity prices which does not reflect the true underlying demand, hence those mini bubbles pop; and 2) your analysis does not explain why WTI or brent hit peaks in April 2011 and we have not seen prices go above those since, yet QE policies continue... Was it only the first round of QE that was inflationary? You have to change the measuring stick to support your case; i don't. You are the one who is being dishonest to use a base price of 2009. What was the impact of QE2, QE3, and current QE(insert infinity sign here)? I only used the year over year because that's what the article used. I simply pointed out how stupid it was to say gas prices are higher than the equivalent time last year. You want to play games about "relative" demand, let's do it for every quarter for the past 2 years and see if your argument holds. In fact, since you are focusing on domestic demand, domestic consmption has been declining in the US since the crisis began, regardless of what growth has been. Yes, according to your friends the traders, the recent oil rally began with news that things are improving. That should be understandable to anyone who knows trading. It's the same reason the 10 year Tbond has been increasing, many people think the economy is finally recovering. Traders do bet on the future, yes? The recent impact on refineries and the many closings is not some common occurence; there has been a significant change in the industry in the past few years.

We weren't discussing oil, we were discussing what Magox seems to have in surplus...gas.Seriously, this was a really poor attempt to support a belief that we are experiencing high inflation, which we are not, and have not to date. The issue has been that those who hold to old fashion notions of money believe the Fed's actions have caused or will cause seriously high inflation. The best arguments on their side to date: 1. Fun with numbers: If you start at the trough of the crisis in 2009, then you can come up with a really big % change. This is the most dishonest way to support your case. Another problem with this type of number fudging (to support your contention that the FED has cause HUGE inflation) is that the additional rounds of QE should ALSO cause the burst in prices to continue onward and upward; however....the data doesn't support it. Since April 2011, oil and gas prices have declined, AND QE has proceeded non-stop. Shouldn't successive rounds of QE lead to successive rounds of inflationary burst? Not in their vocabulary. Given, that this doesn't support their belief system, they come up with the second argument... 2. It's a government conspiracy. With the exception of the Shadowstats estimates, two other outside non-partisan estimates suggest differences of at most 2%. So at best, average inflation could've hit 4-5% over the past couple years. Hardly hyper. Now my good friend Mag tries to use gas prices as the indicator of inflation, telling us they are the highest they've ever been. Again, compared to the same time last year, gas prices are NOT higher. Most people would laugh at someone who went batty over a one-year difference between $3.48 and $3.52 to make their case. As the article stated, gas prices rose 17 cents over the past week, so something has happened in the past week that has caused this article to be written and Magox to use it to defend his inflation contention. What? Two main things: oil prices having been increasing for the past few weeks (because of good economic news on the employment front); but, more important, refineries have closed, and this has been the more important issue wrt gasoline prices. This has NOTHING to do with Fed policy. BTW, there is also some crazy old law (Jones Act) that requires American oil to be transported domestically by American companies. This has created the perverse outcome of higher cost Brent being shipped to the east coast vs transporting cheaper WTI oil from Texas/Oklahoma. I've given my good friend Mag credit when deserved. This is a stretch buddy.

Let's see, you start by posting something on gas prices which have seen a two week run up of 17 cents, which makes them 4 cents higher than a year ago, which is barely over a 1% increase from last year Now you go back to the trough of gas prices to justify some idiotic remark about inflation related to the two-week run up in prices, and I'm the dingbat? Keep trying to justify your idiotic attempt to use a two week trend to support the idea that inflation is a threat. Btw, the recent run up fits the argument I've made for that past 4 years. You just can't admit you started this with something so stupid.

Uhhh..what part of "compared to a year ago" don't you understand? Currently averaging $3.52, up 4 cents from last year. I'll do the work for you 3rd....I mean magox, it's an increase of 1.15% over last year. Yup, better tell the Fed to put the brakes on....

This is a joke, right? I'm surprised you also didn't post something yesterday about the "S&P's biggest drop of the year"? Sheesh! The average price of gas is 4 cents higher than at this time last year. Do the math on the annual increase and get back to me about inflation....

If you haven't seen Will Farrell's Old Milwaukee take on it, it's pretty funny.http://newsfeed.time.com/2013/02/04/watch-will-ferrell-weird-old-milwaukee-ad/

C'mon Mag, don't let him get the best of you! Besides, I'm enjoying it too much.... Btw, don't know who this is, but, from my perspective, I think he does a good job of clarifying the Joe vs Krugman thing. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/31/joe-scarborough-paul-krugman-and-the-economist-pundit-divide-on-debt-and-deficits/

That's pretty close to nailing RH. I'll get back to you on this shortly.

Friedman as at least wise enough to reject their wacky views...

http://www.forbes.com/sites/abrambrown/2012/10/26/irony-behind-2-rise-in-q3-gdp-without-defense-spending-economy-barely-moved/

And what I said was that 3Q was propped up by accelerating defense expenditures into 3Q, which would support your contention of underlying private sector weakness.

The Bloomberg piece on the GDP data stated that the drop in defense spending knocked off 1.1% from growth and was the largest drop since the early 1970s.As for the recovery, as I stated, we'll see it in the 2nd half of the year because the payroll tax hike will slow things down a bit; however, it will also depend on what spending cuts go into effect this year.

I agree, the republicans in congress should not be taken seriously... :-)gnite

As to krugman's point, if you add spending cuts on top of the recent tax increases, the austerity will push a fragile economy back into recession. Magox wants to tout some piddly country like Latvia as the poster child of austerity. how's it working out for a serious economy like the UK?

The people who are calling for entitlement cuts today are the ones who are letting their political bias interfere. We have a problem of high unemployment today; we have a medicare deficit projected to begin 10 years from now. Which one should we be more focused on today? But the amount we spend as a % of GDP is twice what every other advanced country spends, and it's expected to double in 20 years. We have problems; you guys? Ha! :-)

It's one thing to criticize the guy, but when one creates a strawman to tear down, that's another. His basic argument on Joe was, since DC seems to be able to focus on only one thing at a time, then focus on the immediate problem of high unemployment and tackle the medicare problem (that starts in 2024) later. There is no reason to hold the economy hostage over a problem that can be addressed a few years from now. Those who are pushing the line of having to cut a deal on entitlements now are the partisan hacks. Btw, thought I posted a response to your healthcare question, but guess not. I think we have the system assbackwards in that we don't do preventative, rather we try to find a magic pill or operate when a festering issue finally explodes. I think so many health problems are related to the ****ty diet that pervades our culture. Obesity and diabetes are epidemics. Everyone knows the rising costs are not sustainable, and changes are being made, but more to do.

Yes, Latvia, the country where people are pouring into to jump on their growth train...oops! Check that, it seems everyone is leaving...http://www.france24.com/en/20120522-latvia-emigration-population-brain-drain-economy

You don't need to start thinking about it for another few years since it's a problem that needs to be addressed beginning in about 10 years. If you really tried to listen to the discussion, you would've heard all of them talk about the dysfunction in DC and all of them agree that DC CAN'T seem to solve 2 issues at once. He understands you CAN do both, but DC seems incapable of chewing and walking at the same time. Btw, as everyone also seems to agree on, the main driver of those really, really large FUTURE deficits are health-related costs. That's what will need to be fixed. PK also said that the future deficits were projected based on the assumption that costs will continue to rise as they have been, and that's why he mentioned the uncertainties in the futre.

As our favorite villian pointed out, the stimulus was too small, and I'll add that the focus was on bailouts more than stimulus. I see the markets are really worried about that... It raises an interesting issue that I read about during the election, that the administration accelerated defense expenditures in Q3 to prop up the growth number (unexpected 3.1%) before the election--and these numbers confirm it. Surprised none of the wackas jumped on this? The numbers are always seasonally adjusted.

Apparently Magox can only focus on one thing too. It's a pretty simple argument: we should focus on the unemployment short term thingy now; then worry about the Medicare long term thingy in a few years, since it's the FUTURE increase in costs and spending, not today's costs and spending, which create a deficit in the future. Btw, the deficit as a % of GDP has been trending down since 2009, and will reach a sustainable level in another year (unless of course the tax increases and coming spending cuts push us back into recession).

within the next month...just sayin...

I won't be surprised if mv is done, again...