Binyamin Dissen wrote:
On 7 Sep 2005 05:40:02 -0700 "Harry K" wrote:

:The reality is that after every rise due to shortages, the price
:dropped. Yes. But it never in any of them dropped back to where they
:started. I first started buying gas in the late 40s. Never once did
:it drop back to the beginning levels. YOu insist it did. Simple.
:Post your proof.

If you pick the date of the "start" as the time where the price was lower than
any future price, you have a self fulfilling prophecy.

How do you pick your "start" date?

Find a local minimum on the curve and then look for a time after that
where it got down to that level or lower.

Whether that's happened depends on whether you adjust for inflation
or not. Here's a chart:

http://oregonstate.edu/Dept/pol_sci/fac/sahr/gasol.htm

And if you look at the blue line (not adjusted for inflation), you'll see
that every local minimum is higher than all the local minima prior to it.

But if you look at the red line (adjusted for inflation using the Consumer
Price Index), then you can see several points where a local minimum is
lower than a previous one. Once in 1978 (just before the price skyrocketed,
it dropped just a bit), one in 1988, one in 1994 where the price was
lower than it had been in 1988, and on in 1998 where the price was lower
than it had ever been since even 1950, and then another in 2002 when the
price was lower than any time between 1950 and 1993.

By the way, looking at that graph, it's interesting to note how long the
price stayed high last time it went upwards very steeply: it start going
up very quickly in 1978, and then it didn't go back down below that point
until 1986, so 8 years. If the pattern repeats, then we started our most
recent serious increases in 2002 (or 2004, depending on how you look at
it), so based on that evidence alone (which is thin, I admit), we should
expect the prices to return to "normal" sometime around 2010 or 2012.

- Logan