Oil didn't shock (in that case) because of supply or demand, it shocked because of the devalued dollar, that's all I'm trying to get at. Supply and demand was at whatever point it was at, but the value of the currency paid de facto for oil, USD, was damaged, so OPEC raised prices to compensate. Neither supply nor demand changed prior to the oil shock.
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What Is The Dollar Worth ?
- Thread starter libertad
- Start date
Oil didn't shock (in that case) because of supply or demand, it shocked because of the devalued dollar, that's all I'm trying to get at. Supply and demand was at whatever point it was at, but the value of the currency paid de facto for oil, USD, was damaged, so OPEC raised prices to compensate. Neither supply nor demand changed prior to the oil shock.
When did I ever say I don't know a family that earns less than 50k? What your strange and misdirected outburst is telling me is that you cannot cite even decent anecdotal evidence to support your relatively wild claims that inflation has far outpaced wages. Given that, I think I'll ignore your unsubstantiated conspiracy theories and stick to my own conclusions.Quote from Emini Maestro:
It already is the case. So you don't know any family who earns less than $50k? Take a ride down middle America. Is anyone so disconnected they think most families are earning more than $50k per year? That they do not go to Walmart every week to squeeze their budgets?
What, do you have a butler who shops for you? Do you have no memory of prices seven years ago for staples that everyone needs? Or do you doubt that any part of what I described has increased, while the value of the dollar has gone down?
Or are you assuming that the dollar is NOT going down, that inflation has not eaten the dollar, or that the cost of living has NOT far outstripped wages in addition to the value of the dollar?
I am not English and I do my shopping myself. I have also lived in the US for quite a long time. My personal observations suggest that you're wrong and that real wages have actually grown, but this could be due to a regional bias (I was in the Northeast).
Quote from PlusMinus:
Oil didn't shock (in that case) because of supply or demand, it shocked because of the devalued dollar, that's all I'm trying to get at. Supply and demand was at whatever point it was at, but the value of the currency paid de facto for oil, USD, was damaged, so OPEC raised prices to compensate. Neither supply nor demand changed prior to the oil shock.
WRONG It was pure supply and demand:
The 1973 oil crisis started in October 1973, when the members of OAPEC (consisting of the Arab members of OPEC, plus Egypt and Syria) proclaimed an oil embargo "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war; it lasted until March 1974. OAPEC declared it would limit or stop oil shipments to the United States and other countries if they supported Israel in the conflict. With the US actions seen as initiating the oil embargo, the long-term possibility of embargo-related high oil prices, disrupted supply and recession, created a strong rift within NATO; both European nations and Japan sought to disassociate themselves from the US Middle East policy. Arab oil producers had also linked the end of the embargo with successful US efforts to create peace in the Middle East, which complicated the situation. To address these developments, the Nixon Administration began parallel negotiations with both Arab oil producers to end the embargo, and with Egypt, Syria, and Israel to arrange an Israeli pull back from the Sinai and the Golan Heights after the fighting stopped. By January 18, 1974, Secretary of State Henry Kissinger had negotiated an Israeli troop withdrawal from parts of the Sinai. The promise of a negotiated settlement between Israel and Syria was sufficient to convince Arab oil producers to lift the embargo in March 1974. By May, Israel agreed to withdraw from the Golan Heights.[1]
Independently, the OPEC members agreed to use their leverage over the world price-setting mechanism for oil to stabilize their real incomes by raising world oil prices.