Is oil ( really) expensive?

 The recent waves of popular discontent in the middle East has been blamed on inflation by many financial analysts and academic economists. We absolutely agree with their premise; yet we must proceed carefully from there on because we find it to define the "concepts" that are often thrown around by these "experts" because words are powerful and can be distorted to uselessness when not properly adjusted within their real conjecture. Inflation is nothing but the increase  in the money supply that leads to higher prices over time. So, when the "experts" talk of inflation, they are actually meaning " price inflation" or " price increase".

 

Secondly, what is a price? A price is a monetary ratio that is weighted between a buyer and a seller in the course of an economic transaction. The ratio denote the subjective willingness of the buyer and the seller to exchange. The price of a good is calculated with "money", which the media of exchange for goods and service. Consequently, the " quality" of the money plays an important role in the course of the economic exchange because money provides an economic information to the different actors in the markets. If the " medium" money is distorted through inflation, the price mechanism is affected and the processes of exchange suffers because it misinforms the market participant about the relative value of their goods. 

Now, we live in a world of monetary interventionism where central banks have completely debauched the monetary system with their constant inflationary policies which  are aimed at nothing else but to support governments spendings and the corrupted financial institutions. Therefore, while the favored institutions that receive the money first can purchase goods or invest at relative stable prices, the monetary circulation that ensue causes price to spike, thus distorting the prices of various baskets of commodities and tampering with the economic calculation of consumers and producers alike. 

But what if we could calculate the price of our goods and service with  real money instead of fiduciary instruments manipulated by the State? 

When you strip away the veneer of currency depreciation, we see that food prices are actually near their 20-year lows, not making new highs!

The real problem here is that governments are destroying the purchasing power of money – your money – even while technology and intelligent employment of capital are reducing the costs of food, technology, energy, housing and transportation. Unfortunately, governments are kleptomaniacs.

 ( www.pricedingold.com)

This chart shows that oil is around 2 grams/barrel, equal to its price in 1992! But omce priced in paper dollar, you get a totally different impression thanks to Ben Bernanke's destructive policies.

Heretofore, we can conclude that given the constant technological innovation that are taking place in our modern world, the relative prices of most commodities and goods are actually going down; which means that the living standards of most people should be increasing and fewer people would normally be considered poor. But unfortunately, the " financial elite" monetary distortions are working to steal away the wealth of the commoner and to transfer it to a connected group of bankers and corporations through evil mechanism of inflation. Oil is not expensive, food is not expensive, cars are not expensive... their prices have been simply corrupted by the evil central bankers!