Obama responsible for bringing $5 per gallon gasoline

This will hit home amongst troubadours and other performing arts professionals.

 

What is your policy prescription, texxxx? I'm curious, if only because I think we'll get hilarity.

If it turns out you're an Austrian, I'll get the laughtracks playing.

 

When trying too hard goes wrong...

 

Oh for crying out loud...I'm not cherry-picking statistics. Before you "educate" me, you might want to educate yourself first using an economics textbook that's less than 50 years old.

There's a reason why no economists ever use the monetary base (which incidentally is 'MB' not 'M0') to look at inflation and use M2 instead: MB includes bank reserves.

QE dumped trillions of dollars into bank reserves because the Fed thought it would spur lending. At the moment, none of it is getting into the economy because no households want to borrow. It's akin to throwing trillions of dollars into a dark hole that nobody can find. Even after the household sector deleverages, the increase in MB won't create a spike in M2 either. You're running off the obsolete money multiplier theory. Banks aren't going to see excess reserves in their account with the Fed and decide, "Oh what the hell...we'll just throw more money at anyone who walks by."

Banks don't lend reserves, nor are they truly reserve-constrained. It's a relic of the gold standard that ended in 1971. These days, they're capital-constrained based on their finances via the Basel Accords. Banks always lend first based on how much capital they have and the credit-worthiness of the customer. They sort out how much reserves they need to maintain the correct fractional-reserve banking requirements later via interbank federal funds market or the discount window.

 

Bigtexx wins again!

You fools don't get it. He is just getting a raise out of you. Look at his responses to your points. They are nonsensical. He doesn't care! He's messing with yall!

 

I like the description.

Gets me back to a discussion I had on whether reserve requirements in America are obsolete. In Canada, the country has effectively no reserve ratio required. The only constraint is that you cannot as a bank have no reserves for a certain time period (I think 2-3 business days), but that just makes plain old business sense---what bank wants to be stuck telling clients "sorry, we don't have any cash for you?".

With the implementation of the FDIC and the Fed as a lender of last resort, the conventional "terror" of the antiquated 20s-30s "run on banks" may be no more than a phantom menace. It's just interesting to see America, which has possibly the most cowboy banking sector and rules in the world, hold on to that one antiquated rule, one that really doesn't serve that much of a purpose.

 

serious post in texxx thread


Oil is fifty bucks less than when gasoline went to $4.50 a gallon

we have a glut of oil

gasoline is expensive because of usage around the world even though we have more than we did in summer 08 at the the height of prices

refining usage, meaning the percentage of usage out of a 100% is at historical lows in the US

fuel economic cars have really help boost supply by not using much gasoline.

bottom line, the price is overpriced and it has nothing to do with Obama

Natural gas is less than 10% of price when oil and gas were at historical highs

 

texx isn't getting under my skin. I like the way he adroitly steered the conversaton away from "Obama causes inflation!" to a discussion as to whether additional bank reserves has any effect on inflation at all.

Regardless of whether you think excess reserves will eventually cause M2 to increase exponentially, it clearly hasn't happened yet. Even texx agrees with me there...

Since it hasn't happened yet, then it's clear that inflation (and any Obama administration policies) did not cause the current spike in gas prices. He's basically already refuted his own point.

 

Sure, but I'm seriously learning something worthwhile from Kyrodis, pgabriel, et al. Troll threads are still worthwhile because you get intelligent answers to stupid questions.

 

Bigtexxx you've been boring for months now...


TRY HARDER

 

For someone who claims to be so conservative... you really don't understand how oil/commodity prices work do you?

 

I thought we didn't get oil from Libya under Gaddafi.

 

Options:
(1) bigtexxx signed a new contract with GOP, paid per thread started (like basso), in order to afford his 1-bedroom river oaks 650 sq ft apartment.
(2) bigtexxx is an Obama supporter
(3) bigtexxx has a serious and accelerating brain disorder.

I am hoping it's #1. If it's #2, he needs to be less obvious. If it's #3... God bless, brah. We're pulling for you.

 

Instability is instability. Markets react to change and speculation.

 

Any possibility of us receiving oil from Libya or maybe Syria in the near future?

 

Says the KING of statistical cherry pickers.

For God's sake, the statistic YOU threw out there ($5 gasoline) isn't even remotely close to true AND wouldn't have been caused by Obama at all.

Your ignorance, hypocrisy, and intellectual dishonesty are hilarious.