Looking in the Black Box
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One of the means for manipulating prices to cause deflation in the neo-classical economic era is to black box the process; to make it the exclusive domain of the commanders.

A way to see in the black is with inferential indicators, isolating the variable and then solving for it with the known values.

In the case of the peak price for oil indicating a high level of speculative demand were the stochastic indicators on the users of the commodity, for example. The oversold condition was never enough to suggest a fundamental cause for the overbought price of oil. User markets always behaved as though a big sell off was imminent, and it was.

The general inflation that results in a deflationary trend of the economy has been instilled. As the dollar strengthens with the reduction of a basic input cost, economic activity will increase and "capitalize" on the baked in high prices, enhancing the profit margin and the speculative value of the dollar and equities prices (a capital gain).

The cost of producing the capital gain (the surplused value), of course, is the rise in prices (inflation) and unemployment (reduced purchasing power), or stagflation--profits without growth that will be described as a recovery.

The winners and losers are in zero-sum and defines a person's participatory status in the economy--whether you are paying the economic rent or receiving it.

Reader Comments
  
Hey....
By Vidya Aug 15th 2008 at 11:30 pm EDT (Updated Aug 15th 2008 at 11:30 pm EDT)
Nice evening for a retrospective evaluation of the Neoclassical era and how it's black box economic equation effectively ameliorated the conundrum of inflation, isn't it.
Re: Hey....
By Obama/Biden4highserenity Aug 16th 2008 at 12:06 am EDT (Updated Aug 16th 2008 at 12:06 am EDT)
GEEZ VIDYA---YOU TOO?

I always look forward to griffiths blogs, but it takes me forever to try to figure out what he has just informed me of, ya know---the bottom line.

I have asked him if he could try to at least run a short synopsis in everyday person english that sums up his analysis---but no luck yet. lol
Sometimes I just wait for someone else who knows to make a comment and then I have a better idea.

I got all of yours except the ameliorate and had to look that one up.

Still don't know that bottom line----so I am now back to trying to figure out what griffith just said. lol
lol
By Vidya Aug 16th 2008 at 12:30 am EDT (Updated Aug 16th 2008 at 12:30 am EDT)
Articulatory agility is a desirable ability.

lol
Re: lol
By Donna Aug 16th 2008 at 2:26 am EDT (Updated Aug 16th 2008 at 2:26 am EDT)
Wow, Vidya. Awsome comment, I think.
Re: Hey....
By griffith Aug 16th 2008 at 1:36 pm EDT (Updated Aug 16th 2008 at 1:36 pm EDT)
Thank you for the insulting comment.
Whoa, are you talking to me?
By Vidya Aug 19th 2008 at 11:40 pm EDT (Updated Aug 19th 2008 at 11:40 pm EDT)
I hope not.

NO.

I was not insulting you.

How on earth did you arrive at that conclusion?

Why on earth would you choose to arrive at that conclusion?

In case you were referring to HS she insults everyone.

Either way....

Just PM me and explain, please.