++Very true!"pikto99" said:"...Or are higher costs leading to higher wage demands which in turn are being passed on by business to the consumer?..."
It's always passed to customer/client. No self-consciousness business owner will cut his profit margin. So London Interbank creates a wave on 4,3%, Federal Reserve following and selling it down for 6-30%. Joe Shmoe bagging for business loan, he got it for somewhat 8%!
Oil trades are is totally manipulated. There are no free (meaning independent) trade market ANYWHERE.Back in 07, via NPR there was a talk about "increasingly dangerousness" of crude oil prises rise. So one "specialist" from TX-based distributors dropped a number during conversation, that from a BP sea-terminal to refinery gates it's released at $23/brl and curernt prices were near $75/brl back then. So who's cutting-up da' profits?
So to speak, if we'll take this legend about "supply and demands" as real, then after 4 years of Iraq's oil control, Kuwait (owned already), tight friendship with Saudies, last year of economical resession in-house, domestic RE market crash (ok, downslope) - WHY would prices not dropping down?In which unforeseeable benefits does everyone will have to work have it's day-time shift to just feel-up the tank? All these "opecs" are pretty much under control and severe manipulation, that's why.And US feds are no longer for us , their citizens. Federal Reserve is privately owned structure. IRS? U'name it.There is no more economies, it's one global marketplace, where China doing light manufacturing by importing commodities and exporting goods, US, Japan and EU are heavy manufacturing and consumers. For agricultural sector (may be) - Argentina, Brazil. Rest of the countries are just on they way of acquisition by we know whom.
Using the axiom, MONEY == DEBT/CREDIT
The creation of credit/debt is inflation and destroying of credit/debt is deflation.
If the consumer or government is creating a lot of debt/credit by asking central banks/banks (it's the same) for that, you got more money in circulation, and then you get price inflation, unless the money floats out of the country as well. The US has been inflating for a good time now.
If you have governments that are so 'smart' that they don't create money by creating debt using financial instruments, but just prints the money like they found the solution to all of the worlds economic problems, you can get hyperinflation. Zimbabwe is a nice current example.
The way price inflation ripples down the economy is in many ways I guess the 'dale, dale, dale' mentality here in Argentina is pretty effective
any way, I think that Argentina and Brazil are countries that are robust to handle the coming global destruction of credit aka deflation, since Argentina and Brazil are net o exporters of food and self sufficient. Maybe they even can go fire sale shopping in the US/China if they do something with the stupid import laws in Argentina.
Argentina need to upgrade their computers and technology...