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US Core inflation level lowest in 3 years

Discussion in 'Too Hot for Swamp Gas' started by citygator, Sep 29, 2023.

  1. l_boy

    l_boy 5500

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    Yes because the price of oil - which is a market priced commodity has increased, primarily due to supply constraints and increased demand.
     
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  2. danmanne65

    danmanne65 GC Hall of Fame

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    Well we don’t really import much and their costs increased slightly so tripling their profitability in two years is normal?
     
  3. l_boy

    l_boy 5500

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    Either you do or you don’t understand oil prices are set worldwide as a commodity. It doesn’t matter where the oil is consumed. That’s the thing about market based pricing.

    If worldwide oil prices increase, oil companies make more money and more profit. Period. It’s not like it’s a conscious choice. It just happens.

    It’s obvious some of you are very vested in the idea that evil corporations are a cause of this inflation - it is ideologically appealing to you. But the truth is much more basic - supply and demand sets pricing, especially global commodities like oil. Corporations are neither evil nor good - they are generally amoral - and their primary motive is to maximize long term profits. For them to sell oil/gas etc at something less than market price oils be stupid and a failure of management.

    PS - it is also not true that we don’t import oil. Much of what we use in cars etc is probably imported. I think much of the domestic oil produced here is a different grade and goes to industrial uses like plastics.
     
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  4. danmanne65

    danmanne65 GC Hall of Fame

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    So the fact that we have like four companies that control all parts of the market and they collude to make maximum profit isn’t troubling. If we broke up the monopolies I would be willing to let the market forces play. But monopolies don’t have market forces. Saying that most of our oil is used to make plastics proves to me that you know nothing about oil.
     
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  5. danmanne65

    danmanne65 GC Hall of Fame

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    upload_2023-10-1_18-15-58.png
     
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  6. l_boy

    l_boy 5500

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    Again, it is a worldwide market. Not just US oil companies. Also includes international oil companies like Aramco, Gasprom and Pemex, among others.

    Since you are quoting eia then perhaps read about how oil prices are determined.

    Oil prices and outlook - U.S. Energy Information Administration (EIA).

    Where our oil comes from - U.S. Energy Information Administration (EIA)

    As to oil imports:

    https://www.nasdaq.com/articles/ame...-meet-its-needs-so-why-do-we-import-crude?amp

    The U.S does indeed produce enough oil to meet its own needs. According to the U.S. Energy Information Administration (EIA), in 2020 America produced 18.4 million barrels of oil per day and consumed 18.12 million. And yet that same report reveals that the U.S. imported 7.86 million barrels of oil per day last year.

    You see, the U.S. does produce enough oil to meet its own needs, but it is the wrong type of oil.

    Crude is graded according to two main metrics, weight and sweetness. The weight of oil defines how easy it is to refine, or break down into its usable component parts, such as gasoline, jet fuel and diesel. Light crude is the easiest to handle, heavy is the most difficult, with intermediate obviously somewhere in between. The sweetness refers to the sulfur content of unrefined oil. The sweeter it is, the less sulfur it contains.

    Most of the oil produced in the U.S. fields in Texas, Oklahoma, and elsewhere is light and sweet, compared to what comes from the Middle East and Russia. The problem is that for many years, imported oil met most of the U.S.’s energy needs, so a large percentage of the refining capacity here is geared towards dealing with oil that is heavier and less sweet than the kind produced here.

    Why the U.S. Must Import and Export Oil

    So it is true that even though we produce as much as we consume, will still import and export a substantial share depending on the specific uses of the oil and refining capabilities.

    My understanding oil use and plastics was largely incorrect. So sue me.
     
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  7. danmanne65

    danmanne65 GC Hall of Fame

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    We built our refineries to refine dirty oil. The fracked oil is much cleaner there are economics involved here.
     
  8. Tjgators

    Tjgators Premium Member

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    Pay raises for the low wage earners do not ease the pain at the pump, the grocery store, with utility bills and rent. The low-wage earners are using high-interest credit cards to help.
     
  9. WarDamnGator

    WarDamnGator GC Hall of Fame

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    Pay raises don't help low wage earners? LOL. Link?
     
  10. duggers_dad

    duggers_dad GC Hall of Fame

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    The core inflation of our grocery bill actually has my wife investigating Wal-Mart prices …
     
  11. BigCypressGator1981

    BigCypressGator1981 GC Hall of Fame

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    Making more money doesn't help with rising prices? Does that make sense to you?
     
  12. dangolegators

    dangolegators GC Hall of Fame

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    That's right because when poor people make more money, prices go up and the poor people are no better off. But when well off people make more money, that's just great for the economy.
     
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  13. Tjgators

    Tjgators Premium Member

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    What do you think a low-wage earner makes an hour? How much more per hour are they making to combat higher gas, grocery, utility, and rent prices? Is it $3 or 4? Even if it's $5, that is less than $200 a month after taxes, which could easily be canceled out by just the rent increase.
     
  14. BigCypressGator1981

    BigCypressGator1981 GC Hall of Fame

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    Here let me google that for you:

    Workers in the 10th percentile, that is those making less than 90% of everyone else, saw real wages (or those adjusted for inflation) grow 9% between 2019 and 2022, according to a recent report by the Economic Policy Institute. They earned $12.57 per hour in 2022, or $26,145 annually.

    Pay for low-wage workers grew 'tremendously fast' in the last 3 years—but experts don't think it'll last
     
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  15. danmanne65

    danmanne65 GC Hall of Fame

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    So five dollars an hour is close to 800 a month before taxes. So if you are poor, let’s call it 600 a month after taxes. Did you mistype or can you not do basic math?
     
  16. citygator

    citygator VIP Member

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    High inflation is behind us and now it’s just complaining about random items like gas that has zero to do with monetary or government policy.
     
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  17. AgingGator

    AgingGator GC Hall of Fame

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    They’ve all been answered. You just don’t like those answers because they force you to face the facts that Biden’s (and Trump’s for that matter) spending was a driving force in the mess that has been created and that we will be dealing with until at least the end of this decade.

    Adding 1 1/2 years GDP in liquidity into a supply constrained economy? What could go wrong?

    Now you know.
     
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  18. citygator

    citygator VIP Member

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    It didn’t add GDP.. it replaced “some” of it. The amount of GDP generated during Covid was below the trend going in. That’s just stupid to look at one aspect of the GDP and not the whole.

    I offered several views at what drove inflation but your mind is made up. Somehow stimulus, that replaced some of our lost GDP, jacked up the US inflation rate according to you. You’ve yet to offer anything other than your gut. And you haven’t answered why our inflation was less than first world countries.
     
  19. AgingGator

    AgingGator GC Hall of Fame

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    GDP did not drop by 1.5 years worth. Nice try though
     
  20. AgingGator

    AgingGator GC Hall of Fame

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    Very well said!!