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By Monty Guild & Tony Danaher, on June 29th, 2008
DRIVERS OF INFLATION #9: EXCESSIVE MONEY SUPPLY GROWTH
Economists can not agree on what causes inflation, so we are writing a series of the ten drivers of inflation. Many people want to focus on rising food and oil prices as the reasons for the current inflation, and that inflation will go away if we get some relief in food and energy prices. We maintain that many of the drivers of inflation are pointing in the direction of higher inflation…for a longer period of time.
The ninth driver causing this current inflation is that money supply growth is excessive . . .
Continue Reading: ‘INFLATION’S DRIVER’ PART 9 OF THE SERIES
By Monty Guild & Tony Danaher, on June 27th, 2008
DRIVERS OF INFLATION #8: WAGE INFLATION
WAGES ARE RISING QUICKLY IN THE DEVELOPING COUNTRIES
It is no secret that when commodities are less available and new resources become more scarce, their price is bid up. We have been proponents of the view that world oil supplies will not last forever, and only at increasingly higher prices will new oil be found. It seems that all the cheap oil has been found so the price mechanism has begun to ration the consumption of oil. In other words, less oil is being consumed as prices rise. This is often referred . . .
Continue Reading: ‘INFLATION DRIVERS’ PART 8 OF THE SERIES
By Monty Guild & Tony Danaher, on June 26th, 2008
INFLATION DRIVER #7: THE FUTURE SUPPLY OF SOME COMMODITIES, AND THE INFRASTRUCTURE TO DELIVER OTHER COMMODITIES, IS
LIMITED. THIS IS ANOTHER DRIVER OF LONG-TERM PRICE INFLATION.
It is no secret that when commodities are less available and new resources become more scarce, their price is bid up. We have been proponents of the view that world oil supplies will not last forever, and only at increasingly higher prices will new oil be found. It seems that all the cheap oil has been found so the price mechanism has begun to ration the consumption of oil. In other words, less . . .
Continue Reading: ‘INFLATION’S DRIVER’ PART 7 OF THE SERIES
By Monty Guild & Tony Danaher, on June 25th, 2008
INFLATION DRIVERS #6: GLOBAL COMMODITY DEMAND IS GROWING FASTER THAN NEW SUPPLIES CAN BE ADDED
As many of you know, economists can not agree on the causes for inflation, so our series of ten inflation drivers covers several economic viewpoints about inflation
Infrastructure Demands Raw Materials
Commodity demand is rising faster than supply. The demand for commodities in the developing world, to fuel infrastructure and manufacturing growth, is a much repeated theme of ours. This is a simple macroeconomic observation. Developing countries like China, India, and many others are consuming raw materials more rapidly than the supply of such . . .
Continue Reading: ‘INFLATION’S DRIVER’ PART 6 OF THE SERIES
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