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The cartel has now proved that it has enough discipline to prop up prices by restraining supply if need be, and also enough spare capacity to temper prices when they rise too high for its liking.
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Allegations center on Goldman and its warehouse company Metro, which plaintiffs accuse of violating antitrust laws by restraining supplies and inflating aluminum prices.
Strict planning laws and green belts restrain supply.
United States oil prices surrendered recent gains yesterday even though Venezuela's oil minister said the OPEC cartel was putting finishing touches to a deal with rival exporters that would restrain supply.
Although oil prices dropped from near 10-year highs late last year, an American-British attack on Iraqi air defense installations on Friday and commitments by key oil producers to restrain supply have upset forecasts of more stability in the oil market.
The prospect of a larger surplus than expected adds to the challenge of OPEC and non-members such as Russia, who are making a renewed attempt to restrain supplies.
After all, any use of either monetary or prudential policies on their own under those circumstances might have led to contradictory and self-defeating impacts on those two objectives: simply hiking interest rates would attract more capital inflows; and restraining credit supply with no policy interest rate increase would lead to channeling demand for credit to other intermediation vehicles.
As president of the bank, Biddle sponsored policies that restrained the supply of credit to the country's banks; stabilized the investment, money, and discount markets; regulated the money supply; and safeguarded government deposits.
But high prices have had an effect, restraining demand and stimulating supply.
It was based on the theory that prices will be restrained when the supply of money is controlled.
"You don't need to go to 20 or 21% to restrain the monetary supply," Teeters told the New York Times in January 1981.
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