Author Topic: Inflation, Gas Prices, and what have you.  (Read 758 times)

Mynnion

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Inflation, Gas Prices, and what have you.
« on: April 21, 2022, 04:45:26 PM »
I was reading the We gotta talk about Uncle Joe thread and Cherry mentioned the term political feeblemindedness.  It started me thinking about What Biden is doing wrong and what I would change.  First,  Lets be fair.  Biden has had a lot to deal with.  Covid, inflation, and Ukraine are biggies.  I certainly don't envy him having to try and juggle these and keep as many folks in the US happy.

There is a whole thread on the Ukraine and I guess history will tell us whether the right choices were made.

Covid-  At the beginning of his presidency I wish he had backed off and had the Surgeon General step up to take the lead.  I am sick of the messaging on Covid coming from politicians rather than from medical professionals. One of the few Trump statements that I agreed with was when he stated we were at war with Covid.  Rather than follow though with his war he proceeded to undermine his own programs to stop it.  I was hoping that Biden would step up on it however while he has promoted a more scientifically based agenda the leadership is still missing.

Inflation-  There are a number of factors impacting inflation and most of them are outside of Biden's control.

Currently about 18% of housing is being purchased as an investment driving up the demand and cost for home buyers. 

https://www.fool.com/real-estate/2021/12/08/investors-buy-almost-one-fifth-of-all-houses/#:~:text=In%20the%20third%20quarter%20of%202021%2C%20investors%20made%20up%2018,be%20used%20as%20rental%20property.

While claiming the need to raise prices corporations are raking in record profits.

https://fortune.com/2022/03/31/us-companies-record-profits-2021-price-hikes-inflation/

Gas peaked a couple of weeks ago at it's highest level ever however it is not much higher than it has been in the past.

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m

Speaking of gas prices I was trying to figure out why Biden was not pressuring OPEC to increase production.  It seems like he has been but has not had much success.  It appears that during the height of the lockdown when prices were at record lows the US brokered a plan leading to significant production to bolster the price of oil.  Basically w asked them to cut their own earnings to promote production in the US.  Now we are asking them to cut profits to make fuel cheaper in the US.  I'm not sure I'd be keen to jump at Washington's request.

https://www.foxbusiness.com/markets/trump-saudi-arabia-russia-opec-oil-deal-role

My biggest disappointment with the price of fuel is that it seems Biden lacks the vison to use it to sell electric to the American people.  During the 70's when the first big crisis hit Carter took the opportunity to create significant tax breaks for alternative development as well as government investment in R&D.  Unfortunately Reagan removed most of them as wasteful of taxpayer money. 

Are there other opportunities that Biden is missing?

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #1 on: April 21, 2022, 04:54:06 PM »
I imagine there will be some prime rate hikes this year coming to combat inflation, we'll see. Part of the problem with inflation in real estate in particular is that it's not quite a 'real market' but a perceived market. People will pay what they think they have to because they have no real choice; and also this is different in different regions to an extent. That's a big topic and I could say a bunch about it. But it's possible for a bubble to form - or rather a new absurd normal that doesn't really pop - that is not actually due to demand per se but due to a combination of speculation and a quasi-cartel in the real estate agents. For other types of inflation it's complicated, but I think a lot of price gouging has been going on in the last two years, with everyone from oil to building materials jacking up prices, pretending it's because of supply constraints. I think there's been a lot of opportunistic behavior of people trying to profit off of covid. I am not sure what to do about that exactly, since centrally controlling prices would be worse. It's frankly a strike against the market system for which there's no simple corrective measure. I suppose Washington to pass a law making price gouging equivalent to racketeering or something and go after companies under RICO who do this. That would be really tough to enforce, though.


Mynnion

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Re: Inflation, Gas Prices, and what have you.
« Reply #2 on: April 21, 2022, 05:14:50 PM »
I did hear that several countries are freezing the foreign purchase of property and that some municipalities are putting residential requirements (must live in property for so long before you can rent).  Growing up the interest rates (outside of the blips in the 70s) ran between 6% and 8%  I have to wonder if the large financial groups pushed the rates so low to force investment in the market rather than savings.  With rates as low as they are it is impossible not to lose money by just saving.  I suspect the same forces are what pushed companies to switch from pensions to 401Ks.

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #3 on: April 21, 2022, 05:32:50 PM »
I did hear that several countries are freezing the foreign purchase of property and that some municipalities are putting residential requirements (must live in property for so long before you can rent).  Growing up the interest rates (outside of the blips in the 70s) ran between 6% and 8%  I have to wonder if the large financial groups pushed the rates so low to force investment in the market rather than savings.  With rates as low as they are it is impossible not to lose money by just saving.  I suspect the same forces are what pushed companies to switch from pensions to 401Ks.

Saving sucks in almost all cases unless you need zero risk in short-term, like you need the money in six months and cannot afford losses. Even then you put it in a high-interest savings account, not a regular one. The savings accounts they had when I was a kid won't exist ever again if I'm guessing. But even if they came back investing it is always better, and in fact the entire Western economy is predicated on people not saving, i.e. not putting their funds in a savings account or worse, under the bed. It's a deficit spending economic system, both for government and individuals, spend everything you have all the time and more if you can. If people stopped doing this the money supply and credit contraction would be...devastating.

And yeah, Canada for instance is suggesting a 2-year moratorium on foreign real estate purchase. Not sure if those groups can find a workaround, but they possibly could. Some cities like Vancouver and Toronto already had a surtax on all foreign investment, but this would be far more severe if they did it.

cherrypoptart

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Re: Inflation, Gas Prices, and what have you.
« Reply #4 on: April 22, 2022, 04:44:36 AM »
A big problem for Biden is that his goals of lowering inflation while fighting climate change are mutually exclusive. His pretending that's not the case is a denial of simple reality and makes him look kind of ridiculous. 

I noticed something I said over on the other thread was kind of dumb. If Saudi Arabia increases production they don't have to send their oil to America. Selling it anywhere reduces the global price. But it's still just as bad for the environment.

cherrypoptart

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Re: Inflation, Gas Prices, and what have you.
« Reply #5 on: April 22, 2022, 06:33:57 AM »
Biden on those two issues is a perfect example of the worst, dumbest politician, one who makes promises to two groups that everyone can see can't possibly both be kept. Sure, maybe you can get away with it if neither of them knows about the other, but this is all plain for anyone to see.

If he were inclined to tell the truth, he'd get up there and say that anyone who thought saving the planet could be done without sacrifice was being unrealistic. It's going to require a lot of sacrifice. It's going to mean higher prices on pretty much everything, smaller cars, smaller houses, higher set thermostats in the summer and set lower in the winter.

We're going to have to look at modeling our lives along the lines of Ed Begley, Jr., showing up to the red carpet on a bicycle or in an electric car and for whom a week's worth of household trash fits in his electric car's glove compartment box. By the way, not at all like Al Gore whose lavish home apparently is more environmentally unfriendly than George Bush's.

https://www.youtube.com/watch?v=BkYIuNIDjBk

https://www.snopes.com/fact-check/tale-two-houses/

I'll give Biden some credit though. He's politician enough to stick his finger in the wind and know that the American people have no interest whatsoever in making sacrifices. Americans are unwilling to wear a mask to save the lives of their own grandparents. You can't get any more selfish and spoiled than that.

This lady asked the typical American if he'd be interested in higher gas prices, and pretty much higher everything prices, along with less comfort and convenience if it meant protecting the environment, the planet, and future generations.

His response:

https://www.youtube.com/watch?v=xsZPWsVNTqo

TheDrake

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Re: Inflation, Gas Prices, and what have you.
« Reply #6 on: April 22, 2022, 10:05:29 AM »
Quote
While claiming the need to raise prices corporations are raking in record profits.

https://fortune.com/2022/03/31/us-companies-record-profits-2021-price-hikes-inflation/

Admit I didn't read the article -skimmed it, but I would like to point out a common issue that relates to accounting. Profits are calculated, in most cases, by First In, First Out cost. Your profit margin is determined by Revenue today as it relates to Cost from your oldest inventory (in most cases). But cash flow is determined by Revenue today as it relates to Cost from the inventory purchased most recently. For a business not to lose cash reserves, they must adjust prices as costs go up, which won't be reflected in the current accounting cycle. The onset and lag time for this depends on your contracts, inventory holding time, expedited order costs, and a host of other variables. I'm not claiming there isn't opportunistic price gouging, just that the press (even business friendly Fortune) oversimplifies the whole situation.

A PBS interview names Kroger as one of these companies. They made significantly less profit over the last 12 months than the previous year. Quarterly income:

Operating income (recent to oldest): 965, 868, 839, 805

They had a nice winter, for sure. But their cost of revenue is going up also, and profit looks like this:

Profit: 7.3, 6.9, 6.8, 9.3, 7.0

Doesn't look like wild profit to me, but this is an anecdote.

Here's another breakdown:

Quote
Lindsay Owens:

One of my favorite examples is Tyson Foods.

Paul Solman:

Purveyor of one out of every five pounds of beef, chicken and pork sold in the U.s. here's Tyson's chief financial officer on their latest quarterly results.

Stewart Glendinning, CFO, Tyson Foods:

Our pricing actions led to approximately $2.1 billion in sales and price/mix benefits during the quarter, which offset the higher cost of goods sold of $1.6 billion.

Paul Solman:

In other words, says Owens:

Lindsay Owens:

Our pricing is taking into account the cost of raw materials and the cost of labor, but more than offsetting it. And that more than offsetting it is that additional profit that they're able to bring in.

Paul Solman:

But profits sank when COVID hit, say companies like Tyson. This is just making up for lost time, nothing but an extreme short-term business cycle.

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #7 on: April 22, 2022, 04:42:58 PM »
Profits are calculated, in most cases, by First In, First Out cost. Your profit margin is determined by Revenue today as it relates to Cost from your oldest inventory (in most cases). But cash flow is determined by Revenue today as it relates to Cost from the inventory purchased most recently. For a business not to lose cash reserves, they must adjust prices as costs go up, which won't be reflected in the current accounting cycle. The onset and lag time for this depends on your contracts, inventory holding time, expedited order costs, and a host of other variables.

I think your quote below answers this adequately: they're not going to take a hit on a supply-side price hike, they're going to raise prices to over-account for their actual cost. In other words having to pay more will never cost them profits, and in fact will increase their profits if they keep the margins the same (or greater). And what you say here actually compounds the issue for the public, rather than mitigating it: they are using older (i.e. cheaper) goods in the present tense using tomorrow's higher prices. So not only is the order of goods they made, coming to them in 2-3 months, more expensive, causing them to raise their prices, but they raise them immediately, retroactively increasing their margins even more for their existing stock than they are for the new stock. So yes, selling yesterday's goods at tomorrow's prices is a short-term thing, but it's not like it doesn't mean the public is getting fleeced, it just means that the amount the public is getting fleeced won't be a static number.

I appreciate that in an upward price-spiral it won't be just normal prices all across the board, and one villain raises prices. What actually happens is someone starts raising prices, and it causes a cascade reaction where everyone now feels they can or have to, and the more people that do the more have to because actual costs are now going up. It's an inflationary balloon effect. It's not just a reflection of some added cost in production that simply gets trickled down to the customer, but a series of corrections at every level where everyone is guessing how high they need to go (hint: they won't guess a low number). Since everyone's doing it at once the customer can't reject the price hike and go to the competition. In that respect the market can have cartel-like aspects. The only thing the customer can do is refuse to buy anything, but some items have an inelastic demand: for instance housing (can't live in a teeny condo anyone during covid lockdowns), building materials (if your home is now much more central to your life you need stuff for it), electronics (more time spent at home means you need entertainment), etc. You see the drift. You can opt out of luxury goods if you're middle class but unless you want the covid times to be painful you not only won't opt out of certain things, but may realize you need to increase your short-term spending. The extent to which people won't just go on strike and refuse to buy...anything...is what these price hikes rely on. This is especially so for people who have come to enjoy a life of comforts where they are no longer used to going without certain kinds of things. There are a lot of facets to this.

TheDrake

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Re: Inflation, Gas Prices, and what have you.
« Reply #8 on: April 23, 2022, 01:46:04 AM »
Appreciate your comments, Fenring. There is a real thing when it comes to elasticity, uncoordinated concerted action, and time frame. And when it comes to elasticity, we have to address perceived elasticity. Got to drive to Ohio to visit grandma, we'll have to pay whatever gets charged. Versus, things got expensive so now grandma gets a call. Consumers have far more power to avoid price hikes, they just don't want to sacrifice anything. Which at the end of the day according to basic economics means that companies were charging TOO LITTLE three months ago?

cherrypoptart

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Re: Inflation, Gas Prices, and what have you.
« Reply #9 on: June 11, 2022, 12:03:40 PM »
I can understand how the Biden folks want to blame Trump for everything from inflation to Afghanistan to Covid but the problem is that Biden opened his mouth and proved that he didn't see any of this coming. We can't blame him, apparently though, at least according to him because nobody saw any of this coming. Nobody in the world. All of it was inconceivable.

Kabul is unlikely to fall. Boom. It fell. It's safe for the vaccinated to take off their masks. Bam. Delta. Inflation is transitory. Slap upside the head. It's super high and only transitory in the sense that in the grand scheme of things everything is transitory. If the guy can't even see these freight trains barreling down on us how can he do anything to stop them, or slow them down, or at least get off the tracks? He proves his incompetence every time he opens his mouth. It doesn't prove he caused any problems, though he has been in government for decades, but it does prove that he isn't the right person to be leading this country because he's living in some delusional la-la land instead of clearly seeing reality as it is.

But on the bright side, this super high inflation will help to reduce wealth inequality.

They say most people don't even have enough money saved up to cover a $1000 emergency. Inflation will hurt them sure every time they buy something, but it's not going to hurt the wealth they've accumulated over a lifetime of hard work because they have no wealth to speak of. It will hurt the people who have saved up for their retirement though. They are looking at losing more than 8% in their purchasing power this year and maybe for some time to come and there's not really anything they can do about it. Put their money in the stock market, you say? Yeah... no, then they'd lose a lot more than 8% in purchasing power as they'd be losing that plus principal too if today is any indication. Sure, long term it could go back up. Long term inflation will go down too. Long term we'll all be stardust again. Maybe that's what Biden meant by inflation being transitory, just like everything in the universe in transitory.

やがて死ぬけしきは見えず蝉の声

yagate shinu keshiki wa miezu semi no koe

soon to die
yet no sign of it
in the cicada's cry

—Basho

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #10 on: June 11, 2022, 12:20:43 PM »
But on the bright side, this super high inflation will help to reduce wealth inequality.

This remark is even more outlandish than blaming everything on Biden. Are you aware that the very wealthy have many options available to them to protect the value of their wealth or increase it, that can easily exceed even this high level of inflation? Contrast with 'regular people' whose wealth management options are far more limited. Typically these will involve a 401k or other market-based retirement investments. These, too, can inflate if the market inflates with commodities, but weather this increased value offsets inflation is a question. Maybe, maybe not. But if stagflation hits then these types of investors get killed, with high inflation and a possible bear market. And now for the most important question: what percentage of a very wealthy person's net worth go toward things like food, car lease, and home mortgage or rent? And what percentage of a poor person's? It shouldn't take a trip to business school to figure out whose disposable income is eaten up more by commodity inflation.

Regarding wealth inequality, it sounds like you're cheering on the prospect of the poor getting poorer, but the rich also getting less rich, so that the gap is less wide, with everyone involved losing. Is that the bright side?

cherrypoptart

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Re: Inflation, Gas Prices, and what have you.
« Reply #11 on: June 11, 2022, 01:03:03 PM »
Yeah I agree with you about the very wealthy and apologize for not putting in the asterisk referring to the fine print that stipulated this evening of wealth inequality doesn't apply so much to the very wealthy as it does to the mid-range wealthy, the hard working normal Americans who have a few hundred thousand to a little over a million saved up for their retirements. The billionaires aren't going to notice this inflation at all. It's not even going to be a rounding error as far as having any impact on their lifestyle or quality of life. But for the millionaire next door, or the retired teacher or cop or engineer who can live comfortably but not extravagantly, who can afford a vacation or two every year and a nice house and have enough left over to put their grandkids through college and eat out a few times a week, it's likely they are going to have to make some cutbacks. I'm not celebrating it at all. This looks like it's going to be painful. Entirely predictable based on our government's policies, and it's going to hurt those mid range comfortable people quite a bit as they see the value of the dollars they worked so hard for, scrimped and saved to hold onto, fall in purchasing power with very high inflation.

yossarian22c

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Re: Inflation, Gas Prices, and what have you.
« Reply #12 on: June 13, 2022, 08:43:11 AM »
Yeah I agree with you about the very wealthy and apologize for not putting in the asterisk referring to the fine print that stipulated this evening of wealth inequality doesn't apply so much to the very wealthy as it does to the mid-range wealthy, the hard working normal Americans who have a few hundred thousand to a little over a million saved up for their retirements. ...

You realize that it isn't the people who have worked 30 years with about $1,000,000 net worth that have anything to do with wealth inequality in this country. Its the tens of thousands of the most wealthy who control 10's of thousands more than the person who had a good job and lived wisely for their working lifetime. Wealth estimates show that the top 0.1% of people hold 15-25% of the wealth in America. That is what people mean when they talk about wealth inequality.

NobleHunter

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Re: Inflation, Gas Prices, and what have you.
« Reply #13 on: June 13, 2022, 08:53:17 AM »
Yeah I agree with you about the very wealthy and apologize for not putting in the asterisk referring to the fine print that stipulated this evening of wealth inequality doesn't apply so much to the very wealthy as it does to the mid-range wealthy, the hard working normal Americans who have a few hundred thousand to a little over a million saved up for their retirements. The billionaires aren't going to notice this inflation at all. It's not even going to be a rounding error as far as having any impact on their lifestyle or quality of life. But for the millionaire next door, or the retired teacher or cop or engineer who can live comfortably but not extravagantly, who can afford a vacation or two every year and a nice house and have enough left over to put their grandkids through college and eat out a few times a week, it's likely they are going to have to make some cutbacks. I'm not celebrating it at all. This looks like it's going to be painful. Entirely predictable based on our government's policies, and it's going to hurt those mid range comfortable people quite a bit as they see the value of the dollars they worked so hard for, scrimped and saved to hold onto, fall in purchasing power with very high inflation.

Which government policies are driving inflation?

cherrypoptart

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Re: Inflation, Gas Prices, and what have you.
« Reply #14 on: June 13, 2022, 09:00:38 AM »
Increasing the money supply too much is probably the biggest one. So how does that explain inflation around the world? Other countries did the same thing with their currencies too. When our government gave out all that "free money", where did it come from?

https://finance.yahoo.com/finance/news/did-government-spending-alone-really-120000491.html

There are many other inflation drivers as well but that's the one our government had the most to do with. Biden's hostility to fossil fuels is also in play.

https://www.atr.org/joe-biden-we-are-going-get-rid-fossil-fuels/

There's no doubt that plenty of other factors are in play as well like China's Covid lockdowns, the war in Ukraine, supply chain problems, and more, but the money supply and the war on oil are big ones our government instigated.
« Last Edit: June 13, 2022, 09:06:30 AM by cherrypoptart »

Tom

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Re: Inflation, Gas Prices, and what have you.
« Reply #15 on: June 13, 2022, 09:05:18 AM »
How, specifically, do you think Biden's desire to move us off of fossil fuels eventually is causing increases in oil prices now?

(For my part, I think it's a pretty clear-cut case of profit-taking after a few years of keeping their heads down and trying desperately to avoid selling at record lows.)

cherrypoptart

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Re: Inflation, Gas Prices, and what have you.
« Reply #16 on: June 13, 2022, 09:18:03 AM »
That's some coincidence that we get a President who is hostile to fossil fuels and then the price skyrockets. How specifically?

https://www.politifact.com/factchecks/2022/mar/09/facebook-posts/oil-production-bidens-first-year-par-trump/

https://www.nytimes.com/2022/04/26/business/energy-environment/oil-us-europe-russia.html

So you get one article bemoaning the assertion that oil production dropped under Biden and you get the New York Times asserting that even flat or just slightly increasing oil production under Biden won't help because of the international supply issues specifically with Russia so without a massive ramp up in domestic oil and gas production, a ramp up that Biden with his rhetoric has discouraged, high prices are what we get.

“You had this bombastic, chest-pounding industry touting itself as the reincarnation of the American innovative spirit,” said Jim Krane, an energy expert at Rice University. “And now that they could be leaping into action to pitch in to bring much-needed oil to the world, they are being uncharacteristically cautious.”

The biggest reason oil production isn’t increasing is that U.S. energy companies and Wall Street investors are not sure that prices will stay high long enough for them to make a profit from drilling lots of new wells. Many remember how abruptly and sharply oil prices crashed two years ago, forcing companies to lay off thousands of employees, shut down wells and even seek bankruptcy protection.

Executives at 141 oil companies surveyed by the Federal Reserve Bank of Dallas in mid-March offered several reasons that they weren’t pumping more oil. They said they were short of workers and sand, which is used to fracture shale fields to coax oil out of rock. But the most salient reason — the one offered by 60 percent of respondents — was that investors don’t want companies to produce a lot more oil, fearing that it will hasten the end of high oil prices."


msquared

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Re: Inflation, Gas Prices, and what have you.
« Reply #17 on: June 13, 2022, 09:27:36 AM »
I wonder what else happened 2 years ago that might have affected demand world wide?

TheDrake

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Re: Inflation, Gas Prices, and what have you.
« Reply #18 on: June 13, 2022, 09:47:30 AM »
Maybe Biden should nationalize oil production under an emergency order and set production levels.

Tom

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Re: Inflation, Gas Prices, and what have you.
« Reply #19 on: June 13, 2022, 09:48:57 AM »
The idea that Biden has discouraged the industry from digging new wells is frankly laughable, cherry. They're keeping supply low until they can get margins high enough for long enough to wipe out shareholder losses from COVID.

cherrypoptart

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Re: Inflation, Gas Prices, and what have you.
« Reply #20 on: June 13, 2022, 09:54:47 AM »
I wouldn't put politics past the oil companies either. Keep prices up to keep their profits up and it also has the added advantage of hurting the Democrats in the elections to get a more fossil fuel friendly administration next time.

But if so that brings it back around to Biden. His antagonism of the fossil fuel industry gives them the incentive to get someone with a different mindset in there and that gives them another reason to keep prices high, as if profit alone wasn't enough of a reason by itself, which of course it is too.

NobleHunter

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Re: Inflation, Gas Prices, and what have you.
« Reply #21 on: June 13, 2022, 09:56:12 AM »
That's some serious "look at what you made me do" energy.

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #22 on: June 13, 2022, 11:42:46 AM »
The idea that Biden has discouraged the industry from digging new wells is frankly laughable, cherry. They're keeping supply low until they can get margins high enough for long enough to wipe out shareholder losses from COVID.

Oil magnates, like for example the CEO of Chevron who I watched in an interview recently, might talk about how difficult it is to suddenly increase production. There is a huge lead time for that. But the question of why the production was lower in the first place than it might have been could very well be linked to - if not Biden himself - a general sentiment from large and powerful anti-oil groups. It's not just the green movement tree-hugger types, but frankly the entire left as a political unit, who have been calling for getting off oil, cutting down production and usage, and so forth. And industry really does end up responding to pressures such as this, reinforced by not only government (which is where Biden comes in) but from the general political climate.

NobleHunter

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Re: Inflation, Gas Prices, and what have you.
« Reply #23 on: June 13, 2022, 11:49:24 AM »
Didn't Trump convince the Saudis to cut production? Presumably to keep the US's production profitable.

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #24 on: June 13, 2022, 11:54:53 AM »
Which government policies are driving inflation?

This is a pretty easy question to answer. The general monetary approach since 2001, but especially since 2008, has been a QE approach designed to 'stimulate the economy'. By its very nature this is an inflationary approach. Contrast with the Fed's new QT plan (along with rate hikes), which is expected to shrink the money supply, tighten credit, and possibly even cause a recession in its attempt to curb inflation. Clearly if the current plan is meant to curb inflation, the previous plan directly involved creating inflation. And in fact the huge injections of monies into the economy since covid are a significant part of what many people think contributed to the hyperinflation of the markets in 2021.

Other policies which drive inflation include some of the covid policies, especially lockdowns. Putting aside whether these were good, they created an artificial and insane demand for materials such as wood for home renovations, huge shifts toward large grocery shopping and ordering food, large shifts toward home activities such as baking (which amazingly created shortages of flour and other commodities), as well as other inflationary results in salaries and venture capital in tech. I'm only naming a few areas directly affected by government policies. There are obviously many indirectly effected as well. Much of it has to do with China's policies, with supply chain issues related to covid (for instance in the auto industry), much of it IMO is opportunistic price gouging, and other contributing factors such as the war.

Btw I have at times heard of high oil prices referred to as a necessity in order to reduce demand and consumption. I have heard economic experts mention the need for the oil prices to go even higher in order to curb consumer demand to the extent desired. Now we have no way of know who is calling for such things, and whether Biden is involved, or various groups. But the fact that powerful contingents of political capital are basing their view of the future as being linked to AGW concerns and getting us off oil, it should come as no surprise that an overt anti-oil policy would be pursued though deliberately causing prices to increase so as to make people think oil is finished. But since oil literally cannot be finished for now in the way they want, they end up just destroying regular people for political brownie points and gaining nothing for anyone.

All of these are direct results of government influence. And it's not as if I'm privy to private conversations in Washington, so I'm sure there are many more direct influences I'm not aware of.

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #25 on: June 13, 2022, 11:56:47 AM »
Didn't Trump convince the Saudis to cut production? Presumably to keep the US's production profitable.

Honestly it was probably to make more room for Russian oil...

Mynnion

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Re: Inflation, Gas Prices, and what have you.
« Reply #26 on: June 13, 2022, 01:34:53 PM »
Quote
Didn't Trump convince the Saudis to cut production? Presumably to keep the US's production profitable.

Honestly it was probably to make more room for Russian oil...

See the attached article from Fox Business I posted when i started the thread.  Funny that none of the Biden bashers remember that.  I would also point out that while prices have risen it looks much worse because we hit record lows during the lockdowns because of reduced travel and the Russian Saudi oil price war.

Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #27 on: June 13, 2022, 02:36:01 PM »
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Didn't Trump convince the Saudis to cut production? Presumably to keep the US's production profitable.

Honestly it was probably to make more room for Russian oil...

See the attached article from Fox Business I posted when i started the thread.  Funny that none of the Biden bashers remember that.  I would also point out that while prices have risen it looks much worse because we hit record lows during the lockdowns because of reduced travel and the Russian Saudi oil price war.

In fairness to Trump that was what everyone (certainly on the left) was calling for at the time: reducing oil, and making the markets generally stable for prices. I don't think Trump can be blamed for doing what no one expected, which is for Putin to go renegade, sabotage his own country, and give up the nice new trade deal he affected. And honestly it may just boil down to his cancer diagnosis causing him to panic and realize he needed to become the new Napolean right now. Even the warkawks 2 years ago didn't think he would just invade Ukraine outright. Most of the sabre rattling was about Russia unduly influencing the Ukraine and wooing them away from the EU and from Western allegiance.

To the extent that we are merely talking about consistency, I think Biden-bashers are probably correct that the left-wing politics of reducing oil contributed to our current supply issues. It doesn't mean the present circumstance was foreseeable, but I don't think Trump bowing to popular pressures can be laid at his feet as a mistake. It just turned out badly.

rightleft22

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Re: Inflation, Gas Prices, and what have you.
« Reply #28 on: June 13, 2022, 05:44:51 PM »
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left-wing politics of reducing oil contributed to our current supply issues

Where any policies actually implemented or was the suggestion pf policy change enough for oil companies to limit supply.
Seems like a lot of moving parts to narrow down which policies and or suggestions contributed to what



Fenring

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Re: Inflation, Gas Prices, and what have you.
« Reply #29 on: June 13, 2022, 05:48:40 PM »
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left-wing politics of reducing oil contributed to our current supply issues

Where any policies actually implemented or was the suggestion pf policy change enough for oil companies to limit supply.
Seems like a lot of moving parts to narrow down which policies and or suggestions contributed to what

I haven't looked closely at the quantitative data, but it's a fine question. What I'm mentioning is what the Chevron CEO said regarding oil production being low and its relation to the public desire to reduce oil consumption.

TheDrake

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Re: Inflation, Gas Prices, and what have you.
« Reply #30 on: June 13, 2022, 10:34:20 PM »
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left-wing politics of reducing oil contributed to our current supply issues

Where any policies actually implemented or was the suggestion pf policy change enough for oil companies to limit supply.
Seems like a lot of moving parts to narrow down which policies and or suggestions contributed to what

I haven't looked closely at the quantitative data, but it's a fine question. What I'm mentioning is what the Chevron CEO said regarding oil production being low and its relation to the public desire to reduce oil consumption.

I'll bet that bit of PR doesn't match well with his analyst calls. "This quarter we voluntarily reduced revenue and profit by lowering production due to the public outcry about oil consumption." is a phrase you'll never hear.

This article sets out the real reason production can't increase in Texas (which requires no new leases or opening of wild areas), and it isn't because the administration tied their hands or forced them to stop expanding.

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“It’s hard to get pipe, sand, crews for drilling rigs, truck drivers,” said Mike Oestmann, CEO of Tall City Exploration, a company that drills oil wells in West Texas and has two active rigs that drill 32 wells per year combined. He said the scarcity of supplies, equipment and people “is unlike anything I’ve ever seen.”

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“Every one of our clients are trying to hire 20 to 40 people — field hands, labor for rigging pipe,” Volke said. “I don’t know where these people went to work, Amazon?”

Now this below part might be considered tied to public sentiment.

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they say Wall Street investors have become more hesitant about pouring money into fossil fuels

Yeah, well, no kidding. With vehicles moving to electric at a greater pace every day, expansion of renewables, and expansion of distributed solar, you might just hesitate basing your returns on fossil fuels. But I don't see how they need Wall Street investors when Chevron alone has $5 billion in cash equivalents. No, I don't want to do battle over my simplification and delve into the wonderful world of financial instruments and capital. I'm just saying I think we can assume they can afford to expand, since they are attempting to do, but can't get people or equipment.