hi doma,
but surely it matters to you when commodity prices rose. there was indeed a bubble economy in the bush years. and then there was a crash. averages don't necessarily tell the story as well as a review of the ups and downs along the way.
product variables. soybean prices rose under bush. okay. not being a soybean specialist, i have no idea why. but in recent years, soybean prices have gone down gradually as have the prices of various other goods. i know enough about the drought in the us to know that agricultural yields are in trouble this year so i know why soybean prices have increased in the last few months. this is a weather phenomenon and has nothing to do with the purchasing power of the dollar.
also, commodity and energy prices are the most volatile sort. they are set by global markets.
so sure - chinese demand may lead to rises in oil prices as they switch from bikes to cars. but what does this tell you about the usa?
time variables. you have chosen a 10 year span. how about using the last four to get a view of the economy in a period of weakness?
i am not here to tell you that inflation is inconceivable. just that in periods of deflation, there's scope to increase the money supply without generating hyperinflation.
whereas to argue for hyperinflation in this period of weakness, you are using prices that capture gains in the bubble years.
sure, gold has vaulted upwards in price since 2007 or so. gold is volatile when people are fearful. this is one more reason why you wouldn't want a gold currency. imagine how difficult it would be to run a business with a price spike the size of the one in gold over the last four years, if gold was our transaction medium. really, we want a medium of exchange that is reasonably stable. like fiat currency.
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