Earlier this week I touched on gasoline prices. One factor I didn’t mention (but which is getting a lot of coverage, now) is the weakening dollar. This humorous video points the finger at “The Bernanke”:
I am not certain about the argument here, though. So I look around for alternatives views. It turns out that David Henderson made the almost same argument as I did: saber rattling is a major factor in the world price of oil, and earlier on EconLog he argued against the inflationary explanation of today’s rising gas prices. (But Henderson assumes that inflation is an equilibrium price phenomenon. As I understand it, the Misesian view of inflation is that the price-upward pressure of inflationary monetary policy proceeds with a lag, and initial price rises tend to be sectoral, so we might expect some markets to be affected by new money first. Like housing was in the last bubble, like stocks are in most bubbles, like . . . gas?)
I am sure of one thing: There is going to be a lot more talk on this subject. I hope some of it is as amusing as the above cartoon.
In Orwell’s book, the spirit of man is defeated, destroyed. Thankfully, in our lives, we can write our own ending.