I am quite supportive of your work at Mises, but could an institution named after an economist please show long term price history using real vs. nominal dollars, or else explain the philosophical reason for not doing so.

The saddest part is that I have seen stories all over the place on the sudden jump in petroleum prices buy have yet to see a single one in the print and TV MSM give the correct cause: The dilution of the value of the currency by the Federal Anti-Reserve.

If the Federal Reserve would RESERVE the value of the currency by simply stopping the creation of more of it, then the value of the dollar would rise and the price of petroleum, other energy and food would come down under the relentless progress of technology.

The MSM is afraid to knock the reputation of the only body that can impose taxes and confiscate wealth at its whim.

That’s a good one Jeff. Let’s deflate inflation by inflation. You might just get a horizontal line.

So, inflation doesn’t throw a veil of illusion of economic reality? Mark can post what ever graph he wants, but I don’t see why you should become so defensive over a simple request of seeing a graph in real terms.

Thanks for the link, Mark.

One thing that is interesting to look at is the price of oil in US$ graphed against the price of gold in US$. I’ll see if I can find a graph like that, but I believe they’ve been almost identical for, like, ever.

Ron,

An interesting graph is provided by James Turk from Goldmoney.

It shows that if you were paying for oil with gold, the oil price is relatively stable. You can view it here: http://freethemarketman.wordpress.com/2008/03/06/an-overview-of-golds-supply-demand/

I don’t know if that is excactly what you’re looking for. If you’ve seen it before, then nevermind.

What is misleading is:

1) This is a Big-Oil administration (as opposed to a Big-Corp. regime which has been in power since the Civil War)

2) This “Big-Oil Administration” had an explicit goal of higher nominal crude prices. I find this implication not only unsubstantiated, but contrary to common sense. Surely, they would want lower costs and higher pump prices, which is accomplished by restricting refining and lower crude prices.

3) Any attack on the ruling class ought to be made explicit. Are we attacking economic policies or corruption here? It looks like a cheap shot better published in the NY Post or similar rag.

“Deflating” nominal numbers really can mislead more than people realize. The whole process starts out with finding the “deflator” — i.e., adding up mystical “baskets of goods” — and it ends, in this case, by adjusting downward the dollar-price of oil, in spite of oil being a major component of “the basket” used to find the deflator. Talk about bias.

Big Oil (I work for a little oil company) does most certainly gain from higher prices. Take only the example of Royal Dutch Shell/Saudi Aramco. This conglomerated partnership prices oil at the spot. Saudi Aramco charges Shell the spot price minus a contracted %. So, as the price of oil goes up, Shell makes more. It is no different than the credit card companies. As gas prices go up (or any other retail good) the fees generated from the % goes up in real terms.

Let alone where Big Oil owns resource rights to the wells themselves with only simple royalties paid (as in the Alabama – Exxon case).

to be fair, i think the administration naively hoped that the iraq escapade would deliver lower oil prices.
prominent iraq war supporter rupert murdoch exemplified this panglossian view in february 2003:

“The greatest thing to come out of this for the world economy, if you could put it that way, would be $20 a barrel for oil. That’s bigger than any tax cut in the any country.”

the us’ ability to manipulate crude prices is minimal, and indeed the administration could have done very little in augmenting refining capacity, given long lag times in construction and the inevitable “stakeholder” obstructionist tactics.

bush – incompetent? yes! desirous of high pump prices? sounds like drawing a very long bow to me.

pomofo,

Deflating a series is not that difficult to do, although some people may not know how to do it. The people who run this site should be capable of doing so if inclined and Mark has already provided the link.