From Paul Krugman's blog. Love the last line.
Commodity Prices Redux
Remember commodity prices? Not too long ago, the usual suspects were pointing to rising commodity prices as evidence that runaway inflation was just around the corner. Commodity prices were Exhibit A in claims that Bernanke was “debasing the dollar”; Paul Ryan called for monetary policy that would stabilize the price of a basket of commodities (and therefore require deflation in America whenever China experienced a boom, but hey, never mind).
So it’s instructive to look at what has happened to commodity prices recently. ....
http://www.bloomberg.com/quote/CRY:IND/chart
Commodity prices have fallen sharply this year. They’re still above their levels at the bottom of the global slump, but that’s hardly surprising. What may be surprising is that they’re just about where they were in 2007, before the big 2007-2008 runup. Over a 4-year period, then, it turns out that the Bernanke Fed has just about stabilized commodity prices — not that this is a good goal, but it is what has happened.
So will people like Ryan admit that the dollar has not in fact been debased? Will they look at the recent plunge and conclude that maybe we need more expansion, not tightening? Will they admit that their favorite “experts”, who saw the commodity bulge last year as a harbinger of hyperinflation, don’t know anything? Is the Pope Jewish?
http://krugman.blogs.nytimes.com/
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