Mathematics and statistics were almost certainly created to support spurious thinking, although the school systems later developed other uses for them.

The headlines across the business media belted out in town crier fashion that oil had dropped a record $20 in July to sit at about $125 a barrel. The prices of corns and wheat also fell at paces not seen in over two decades.

All of this was presented as almost unprecedented good news.

What has been neglected in the analysis is that oil is still at a level which will do massive harm to the global economy and agricultural commodity prices remain close enough to their highs to drive an inflation rate which has not been seen since the 1970s. The drop in prices is relative while the impact of their current levels is absolute.

The reasons for the drops are almost certainly temporary. Global oil production may well have peaked. Unless drilling begins on protected US land and in the Arctic, the largest fields are, for the most part, mature. While US demand for gas and jet fuel has fallen, it would be naive to believe that the developing world can grow without a rising consumption of oil.

With commodities, the factors are even simpler to number. The world’s population is relentlessly rising. Crop production from Africa will continue to drop due to political unrest. Big crop exporters including the US and Canada are near the limits of their yield potential.

Prices may be down, but not nearly enough. Inflation is still out of the wings and at center stage.

Douglas A. McIntyre

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