[jupiters_release]

$this->bbcode_second_pass_quote('Lighthouse', '')$this->bbcode_second_pass_quote('Drifter', '')$this->bbcode_second_pass_quote('Lighthouse', '')$this->bbcode_second_pass_quote('Drifter', '.').. Peak oil is here. ...

[joewp]

$this->bbcode_second_pass_quote('darren', '')$this->bbcode_second_pass_quote('joewp', '
')
It will be even more annoying when the nuclear engineers can't buy gas to get to those plants and keep them running.

[Lighthouse]

$this->bbcode_second_pass_quote('jupiters_release', 'O')il price doubled this year, but the dollar's value was not halved.

You missed these graphs:

[darren]

$this->bbcode_second_pass_quote('joewp', '')$this->bbcode_second_pass_quote('darren', '')$this->bbcode_second_pass_quote('joewp', '
')
It will be even more annoying when the nuclear engineers can't buy gas to get to those plants and keep them running.

[Tyler_JC]

Darren, I'm glad you brought that up.

People on this board often forget that price controls tend to create shortages.

If gasoline prices had been allowed to rise further, demand destruction would have been higher and there wouldn't have been any shortages.

It is this misunderstanding of economics that leads some people to believe that demand can somehow outstrip supply.

Obviously, no one can consume a resource that doesn't exist.

The high oil prices of the 1970s lead to 2 decades of significantly reduced global demand.

It wasn't until 1997(ish) that we hit the 1980 level of oil consumption again.

[joewp]

$this->bbcode_second_pass_quote('Tyler_JC', '
')People on this board often forget that price controls tend to create shortages.

If gasoline prices had been allowed to rise further, demand destruction would have been higher and there wouldn't have been any shortages.

It is this misunderstanding of economics that leads some people to believe that demand can somehow outstrip supply.

Obviously, no one can consume a resource that doesn't exist.

The high oil prices of the 1970s lead to 2 decades of significantly reduced global demand.

It wasn't until 1997(ish) that we hit the 1980 level of oil consumption again.

[Twilight]

The relationship between price controls and shortage does not have to be a chicken and egg situation.

Price controls cannot contribute to shortage only when shortage is absolute. Then indeed price does not matter. But if shortages occur to varying extent, then the introduction of price controls can have the dual effect of mitigating against demand destruction, thereby inflicting physical shortage all the way up the wealth pyramid, and giving links in the supply chain a disincentive to perform, if not causing outright alienation or financial damage. The impact of physical shortage is widespread.

Allowing the market to price the product destroys demand from the bottom up. The impact is concentrated and while some suffer absolute shortage, the higher layers of consumers should suffer little interruption of supply. At a premium, of course.

Really the only question is which is preferable, distributed time-varying shortages across society or gradual permanent pricing of successively more wealthy layers of society out of the market. You could say the poor would be better off with price controls that would give sporadic access at an affordable price, while the wealthy would be better off paying the market price for uninterrupted access. In the end, populist political issues would have to be balanced against logistical and economic feasibility. You can be sure though that managing shortages will be a zero sum game, with some groups' interests satisfied only at a loss to others.

[Bas]

I think it will be for the best of our society if we can continue to see Britney and Paris bumbing into things driving over peoples feet, drunk and without a license in their big Benz's.


really though, you could also devise a system of rationing, allowing more use for economic activities than private driving, and more use the more important an economic activity is for the whole "system". Price controls alone will not work, there has to be almost always a system of rationing to supplement it. (As Iran recently found out, they couldn't continue just subsidizing and hence had to introduce rationing)

[Twilight]

Bas, oh to be a fly on the wall when that committee meets to devise such a system...

[Rabbit]

High prices tent to affect the poor more and the rich less. The poor can't afford gas while the rich hardly even notice the price at the pump.

Conversely... rationing may affect the rich more than the poor. The poor don't do as much recreational driving as the rich do. If you could limit fuel purchases to something like 20 gallons per person per week, then the rich won't have the gas to drive their hummers, put fuel in their boats or go on long vacations with the motorhome every month during the summer.

Some wealth redistribution could also happen. If the poor person decides to ride the bus and sell his 20 gallons on the black market he might double the cost of the fuel and put a few of the rich guys dollars in his pocket.

[Bas]

$this->bbcode_second_pass_quote('Rabbit', 'H')igh prices tent to affect the poor more and the rich less. The poor can't afford gas while the rich hardly even notice the price at the pump.

Conversely... rationing may affect the rich more than the poor. The poor don't do as much recreational driving as the rich do. If you could limit fuel purchases to something like 20 gallons per person per week, then the rich won't have the gas to drive their hummers, put fuel in their boats or go on long vacations with the motorhome every month during the summer.

Some wealth redistribution could also happen. If the poor person decides to ride the bus and sell his 20 gallons on the black market he might double the cost of the fuel and put a few of the rich guys dollars in his pocket.

[Tyler_JC]

And what stops a black market from forming?

I can see a big market for buying your 5 gallons of gasoline and selling it two blocks down the street.

[Bas]

$this->bbcode_second_pass_quote('Tyler_JC', 'A')nd what stops a black market from forming?

I can see a big market for buying your 5 gallons of gasoline and selling it two blocks down the street.

[Andrew_S]

$this->bbcode_second_pass_quote('Rabbit', '
')Some wealth redistribution could also happen. If the poor person decides to ride the bus and sell his 20 gallons on the black market he might double the cost of the fuel and put a few of the rich guys dollars in his pocket.

[shortonoil]

Andrew_S said:

$this->bbcode_second_pass_quote('', 'P')oor people will be starving while the richest 0.5%, say, still have a decent standard of living.

[TreebeardsUncle]

There was talk of the first casualty being the fiat money system. Will the second be airlines, the third trucking, and the fourth certain elements of long-distance retail trade?
g

[erb]

theres no way the rich and PTB will allow any situation to happen that puts them on an even playing field with the rest of the proles.

you may have 1 or 2 stupid ones (models/music/sports stars) that dont realy influence or make descisions who will fall

[Twilight]

$this->bbcode_second_pass_quote('erb', 't')heres no way the rich and PTB will allow any situation to happen that puts them on an even playing field with the rest of the proles.