tag:blogger.com,1999:blog-5235419263414453422.post5033785246997233540..comments2024-02-23T01:30:06.101-08:00Comments on Early Warning: Brent PricesStuart Stanifordhttp://www.blogger.com/profile/07182839827506265860noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5235419263414453422.post-30588017962165317262011-09-06T10:45:30.922-07:002011-09-06T10:45:30.922-07:00Stuart has expressed his concern in the past that ...Stuart has expressed his concern in the past that economic thinkers have not been paying the proper attention to the threats to the economy posed by Peak Oil.<br /><br />I thought that Tim Duy's latest piece through this concern into stark relief:<br />http://economistsview.typepad.com/timduy/2011/09/questions-and-answers.html<br /><br />All I could think while reading it was: stagflation, stagflation, stagflation.<br /><br />Assuming that we have entered a period of secularly increasing oil prices, central banks are going to have to start rethinking the trade offs they make in their dual mandate of price stability and growth. I would prefer that they choose growth over price stability right now and get us out of this darn liquidity trap. As oil prices continue to rise and inflationary pressures increase, a trade off whereby we might get out of the liquidity trap in return for a suboptimal but manageable level of inflation will be taken off the table.<br /><br />Then we will find ourselves in the worst of all possible worlds - stuck in a liquidity trap with rising (if not hyper) inflation. Frightening times.Jameshttps://www.blogger.com/profile/16069860882299265079noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-422910563423038252011-09-06T08:02:00.155-07:002011-09-06T08:02:00.155-07:00"Still, oil over a $100 a barrel is hardly ch..."Still, oil over a $100 a barrel is hardly cheap by historical standards and suggests the limits of how much economic growth the global economy can sustain at the present without triggering resource price shocks - not too much."<br /><br />Agreed.A Quaker in a Strange Landhttps://www.blogger.com/profile/15425198389944137571noreply@blogger.com