Economists are constantly trying to analyze data to find principles. On that note, let us consider the Great Recession. We may debate what caused the Great Recession: Wall Street greed in reselling mortgage-backed securities of subprime mortgages, or government backing for these same subprime mortgages. The issue is debatable, and it all probably contributed. But it is undeniable that the Great Recession ended in December 2014, coinciding with a massive drop in the price of oil and automotive gasoline. The only difference between December 2014 and any other month in the preceding 5 years was the collapse of the price of oil, so we must conclude that this is what ended the Great Recession.
There is no more poignant argument for GOLD economics. What actually happens when the price of an inelastic commodity collapses? According to GOLD, price is the mechanism whereby consumers and producers compare one item relative to all other items, in the context of their supply and demand. American fracking technology released a massive amount of fossil fuels into the marketplace, which nobody had been expecting. At this point the supply of fossil fuels relative to their demand went way up, so the price went way down. When the price collapsed, Americans who would have had to spend $500 on gas for their cars were instead able to spend that $500 on other things, which stimulated the economy enough to end the Recession.
To understand this, let's consider XYAB. Say that X drives to work, and pays oil rigger A $20 for a tank of gas. A sells gas to X. X makes widgets, which X sells to C, also for $20. Now, A suddenly sells gas to X for $10 instead of $20. Next, the amount of money X must pay A for gas goes down, from $20 to $10. The price of gas is inelastic, meaning that its buyers must have it and will therefore pay whatever price is necessary to get it. So this puts an additional $10 in X's pocket. X can then spend an additional $10, or sell cheaper widgets to C, to compete better against the other widget makers. If X chooses to pay $10 to D for something else, this creates a job for D to make $10 worth of that item, or if X sells cheaper widgets to C, then X sells more widgets, and C then has more money, which he can spend to buy something from D or use to pass on a discount to his buyers, and so on. This continues until A reaches the new price that is the highest price he can charge in the context of the supply of oil.
One of the central principles of GOLD is that the use of money in economics can sometime cloud and obscure what actually happens, as is the case here. If we look at it in terms of trades, and not in actual dollar amounts, it is clear that the people who trade things to the makers of oil in return for oil end up trading less to the oil makers in return for the same amount of oil, at which point these people then have held more of their wealth, which they can then turn around and trade to other people. The increased amount of oil is an increase in the total amount of value in the economy, and, as GOLD theorizes, the value of a dollar is equal to the total value in the economy divided by the number of dollars, so this results in a massive deflation, but what has actually happened is a vast increase in the amount of economic wealth in the economy, and the amount of value that goes to the buyers of oil is equal to the amount of new wealth that increased, as this additional wealth is represented by the difference between the new price of oil and the old price of oil. This is literally the inverse of inflation: when more money is printed and the amount of wealth remains the same, the printing of money causes inflation, whereas, when the amount of money is relatively stable and more wealth is created, it results in deflation. A classic example of the GOLD theory that the value of a dollar equals the amount of wealth divided by the number of dollars, to explain inflation and deflation under the general GOLD theory that money represents value in trades.
So we can see several GOLD economic principles at work: first, that when supply or demand changes the market recalibrates to the new point of equilibrium where a buyer would not pay more to a seller for that product, and, second, and distinctly libertarian in nature, the more wealth people have, the more jobs and wealth it creates, because each new unit of wealth creates a job to buy or sell it or buy and sell what accompanies it, so economic efficiency creates an upward spiral, where having more money creates more jobs, which creates more things, which makes more money, and so on. Sadly, jobs were lost in the oil industry, but the net effect is a benefit to the economy, and, of course, to new jobs for displaced oil workers. This is why, also sadly, government taxes and regulations designed to help the poor actually hurt the poor, frequently, because every trade which might have happened but for government regulation would have created new wealth, and each unit of new wealth that is created also creates jobs to go with it, making it or buying it or selling it or making, buying and selling whatever accompanies it.
In this story we can also see a decisive refutation of socialist economics. The socialists would say that the price of gas is dictated by the exploitative greed of the oil makers, and that the surplus benefit of any increased efficiency in oil production would be kept by the oil makers as their profit, instead of being passed on to the consumers, and to the people generally. Certainly, if the oil makers could have kept the price of oil artificially high, they would have done so, as their profit would have grown by billions if not trillions. The fact that fracking increased the supply of fossil fuels which thereby sharply increased economic growth overall shows that the price was set by supply and demand, not by corporate greed, and that the benefits of economic growth naturally flowed out into the economy to be enjoyed by the people, and were not siphoned into exploitative profits by the rich. The facts simply do not support the socialist economic theories of the nature of profits and the setting of prices.