Reply to May CPI 8.6%

Forum Index » Political Discussion

Reply to "May CPI 8.6%"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I just honestly don't think the old rules apply here with what we have been through in the last year and a half. Pandemic and now war are the reasons for so much of this trouble.

What exactly would the Republicans do? Tax cuts again? Yeah, those have worked out so well for everyone *MASSIVE EYEROLL*[/quote]

Agree that the old rules don’t fit the pandemic effects on the economy but the official economic statistics are adjusted for the pre-pandemic economy. We’ve seen that with the BLS labor data using their seasonal adjustments from pre-pandemic patterns  and then having to make big adjustments. They finally modified their adjustments but with mostly guesswork.

For CPI and all the other stats adjusted to CPI, the average basket of goods and services built into it is based on pre-pandemic consumption patterns. Yes, gas prices are up but how many people drive as much now as they did in 2019? I sure don’t. I work from home 3 or 4 days a week now vs. 0 days 3 years ago. For commuting, I filled up twice a month 3 years ago but only once a month now, so even with higher prices, I spend less money on gas now. I also spend less on lunch, business attire, auto maintenance, etc., related to commuting, so inflation really hasn’t affected me. But the economic stats assume I’m still buying as much of everything as I bought in 2019. [/quote]

If gasoline and food consumption were down, enough to make the old CPI models outdated, post pandemic, then odds are prices for those items would be down. The simple answer is that demand is not down enough to offset any supply constraints. The more nuanced answer is that oil flows through everything. You may not be driving to the office but you probably receive a lot more delivered goods at home.  The further nuance is that consumption is down marginally from pre pandemic levels, but supply constraints more than offset reduced demand and cost for goods and services are up. [/quote]

Come on. You know gas prices are not based on consumer demand. Its not a legitimate economic market. [/quote]

Thats why gas was so cheap the past two years, right?[/quote]

Demand for gas is higher than last year but not dramatically so, and demand isn’t at pre-pandemic levels. There is no demand reason for the current gas prices. It’s all due to the industry and supplier side. [/quote]

Prices are set by SUPPLY and DEMAND.

Not one or the other.  The reality is that if oil companies stopped drilling for oil today then in 12 months the world would produce about 7-10% less oil. The price of oil is incredibly sensitive to supply. The price cratering from 2014-2020 was due to roughly a 1% oversupply. Oil companies have to constantly reinvest to keep production flat (let alone grow). Would you invest in 30 year oil projects right now?[/quote]

Competition doesn’t set gas prices except on a small scale at the microeconomic level. Big swings in gas prices are always determined by global oil producers and suppliers, as you just admitted. Energy demand doesn’t change that much. As you admitted, the pandemic disrupted the oil industry’s business model. Global oil producers have to reassess and reset and it takes time and money. That is what caused the inflation in oil and gas. Not demand or regulation, which have not changed significantly. [/quote]

Please read what I said:  prices are set by supply and demand (I even used all caps). The regulatory outlook plays a massive role in the supply situation. You would have to be borderline crazy to invest in 30 year oil projects right now.  The oil guys aren’t stupid. They saw what the Obama admin did to coal.  Everybody believes  that oil and Nat gas are next on the Democratic hit list.

It really is incredible to watch people who openly hate carbon based energy and absolutely want carbon based energy to be permanently retired by any means necessary act shocked when oil production starts to lag. [/quote]

Nobody believes oil and natural gas are on a “hit list.”  Delusional conspiracy shit. They will be phased out — just as with coal — because economics evolve. Coal plants are decades old and expensive to operate when compared to those using shale or other natural gas. No company is going to invest millions in a new coal plant because the ROI isn’t there. And hasn’t been since the 1980s.

EVs still need electricity to charge. We still need gas fired plants to generate electricity until there are larger investments in solar, wind, hydro, biomass and nuclear. Your home no longer uses town gas for light and heating. There’s a reason for that. [/quote]

[twitter]https://twitter.com/rncresearch/status/1535667434912464897?s=21[/twitter][/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics