We cannot avoid the conclusion, that was an oil shock in 2008 and most of our foreign bondholders went through some mighty shock to their beliefs, as Roger Farmer puts it.
The structural result was a strong monopoly in Japan of their FX insurance business, it became popular. The yen was and continues to be a carry currency because it is balanced among ther foreigh currencies via insurance payments.
The other structural change was that the Fed became our new tax collector. By default the FX insurance agencies have us on the petrodollar standard.
We will never see a general price rise if such a thing even exists. The FX insurance agencies watch domestic oil consumption and raise insurance costs to keep our oil exports robust.
A partial erquilibrium, and works as long as we retain consistent productivity growth with respect to energy. But the is up against its own bound on being a tax collector, the retail banks are disappearing as transaction costs go through the roof. This is likely to result in a meeting of the elders.
Our favorite godotist economists have fooled us here about low rates and demand collapse. But we caught the truth in time, no reason to be scaredy pooh.
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