A Short History on Inflation - Why Component Costs and No Costs Are Going Down Soon

[Lee Deming]

One important distinction between government and the business sector - the government doesn't jack up taxes so a disillusioned public will vote it out of office.

So, your federal taxes are going down? Great. Our debt is now over $30 trillion. Unfunded federal liabilities are well over $100 trillion. Congress makes about $160,000/year yet many of them are millionaires after having served a few terms. Yeah, your analysis gets more interesting the longer I think about it. When you can invent money out of thin air you don't have to raise taxes-for now.

 

[QuietTexan]

The rate per mile actually went down in 2020 and 2021 before recovering to slightly over the 2020 amount this year. A mid-year increase is not unprecedented, it would be nice of them to bump it a nickel or two. We got a mid-year bump in 2011 of 4.5 cents a mile.

 

[Veteran]

At $5 it needs to be .75

 

[5.56×250]

It's doubly amazing that many self-employed people I help don't realize they can do that. When they finally realize how much they're paying in taxes and ask what they can do about that, me saying "raise your prices" makes them blink.

Sure being 30% under market brings in a lot of business, but once you have enough you need to expand to service it all that's not a bad time to ease off the discounts some and increase your margin.

When I was in retail, we also offered services for free to build business . The downside was , we worked our butts off for little profit. The trick is to raise your prices till the the profit to customer ratio get to a good spot for your business. Raising prices will clear you of the people looking for "freebees" and only leave those who appreciate your work . You can make 10 bucks a customer and serve 1000s to maintain a living, or 50 bucks a customer and only serve 200 . Its simple concept , but one that many don't get till it's too late

 

[rcol317]

5.56X250 I believe you're correct but I think today most business has figured it out. That's a large reason we have supply issues. Spoke with a GM at a saw mill the other day. He was proud saying, "we are running @ 65% production with 50% employees and making 400% profit we did before Covid." I think they figured it out.

 

[Danehunter]

Readers/members here need to understand that Hillsdale college is a very conservative institution. Therefore its statements need to be read with that in mind.

Inflation is caused by MANY things, not merely government spending and printing of more money than the economy needs. EXAMPLE: gas prices have been rising because 1.) investors are shying away from fossil fuel investment as the climate change crisis worsens, thus less oil exploration and lease development even though there are about 7,000 unused major oil and gas leases available 2.) profit-taking during international crises, such as the war in Ukraine. It is a cynical take on the saying "make hay (money) while the sun shines."

I write this as a former oil and gas lease broker for AMOCO who knows a bit about their business.

 

[rcol317]

Readers/members here need to understand that Hillsdale college is a very conservative institution. Therefore its statements need to be read with that in mind.

Inflation is caused by MANY things, not merely government spending and printing of more money than the economy needs. EXAMPLE: gas prices have been rising because 1.) investors are shying away from fossil fuel investment as the climate change crisis worsens, thus less oil exploration and lease development even though there are about 7,000 unused major oil and gas leases available 2.) profit-taking during international crises, such as the war in Ukraine. It is a cynical take on the saying "make hay (money) while the sun shines."

I write this as a former oil and gas lease broker for AMOCO who knows a bit about their business.

I'm amazed that a climate change proponent would work for an oil company. Probably why a "former". Gas prices is really a very small element of inflation. It's just a reminder each time we pull up to a pump.

 

[Veteran]

Readers/members here need to understand that Hillsdale college is a very conservative institution. Therefore its statements need to be read with that in mind.

Inflation is caused by MANY things, not merely government spending and printing of more money than the economy needs. EXAMPLE: gas prices have been rising because 1.) investors are shying away from fossil fuel investment as the climate change crisis worsens, thus less oil exploration and lease development even though there are about 7,000 unused major oil and gas leases available 2.) profit-taking during international crises, such as the war in Ukraine. It is a cynical take on the saying "make hay (money) while the sun shines."

I write this as a former oil and gas lease broker for AMOCO who knows a bit about their business.

Inflation is caused by printing worthless paper money not backed by anything except faith in the US govt. IMHO lots or people around the world are losing their faith in this government and its leaders. Play money is where we are headed.

That's not a conservative view point. Its a fact of financial physics like gravity pulling down.

The standard talking points for apologists for current inflation include that oil companies have not drilled the 9,000 leases they have. You mention 7,000.

If you are a former oil and gas lease broker, then you know, once a lease is signed, there still has to be seismic and geophysical work done on it to see just how prospective it may be and evaluations and studies run by geologists and geophysicists, then there are federal, state, and local permits, including a drilling permit. Rigs have to be scheduled Right now according to the American Petr. Insititute, a higher percentage of leases in inventory have been drilled than has ever been the case historically. There is always an inventory of leases in "inventory" and in the pipeline of "processing for exploration" into development drilling. So, please lets talk about the details, not the Jen Psaki press talking points about what all is wrong with the oil companies. You of course know this
already.

A market correction on wall street has nothing to do with just profit taking. It it is being directly caused by the 7.9 % inflation report we just got posted a few days ago. That inflation has been in the works for over a year, and this report was in the rearview mirror. Just wait til you see the next one, likely 15%. Financial assets go down when inflation goes up and vice versa.
Its another law of financial physics. Money goes into hard assets when inflation hits, not financial stocks and bonds.

The economy is being grossly mismanaged, spending is being grossly mismanaged, and inflation is here, the direct result of that mismanagement. Gas prices were already way up even before Ukraine and Russia. Up from $2.50 to $3.25 area. Shut down the pipelines, stop all the drilling on federal leases, then threaten the oil companies with Anti Trust investigations because prices go up? What should you expect? There are plenty of campaign video with Brandon bragging how he will shut down all drilling and all fossil fuels on day 1 of his presidency. I can post them if you like.

Brandon has had his knee on the neck of the oil industry and the pipes since he came into office, and this is his war on fossil fuels with the chickens coming home to roost in the form of inflation. Fuel and energy ripple through every facet of the economy.

This is the real reason gas prices are through the roof and the real reason why inflation is through the roof.
Brandon's fossil fuel war and his printing and spending trillions.

I write this as someone who worked for Amoco 25 years in drilling and production.

 

[5.56×250]

There plenty of well functioning governments who manage it.

Examples ? Because every government ive looked at is full of self-serving thieves that take advantage of every opportunity to steal tax dollars and take special interest blood money to pad their own pockets. To even have a glimmer of a chance for a transparent honest governing body , you would need members that don't stay in office long enough to learn the game and NO outside influence from wealthy contributors . Before you give examples from other countries, be sure to look hard at the living arrangements of the governing body and those of the middle class in the same countries . Lots of big words and obviously well studied theories, but all it really takes is a decent set of eyes to see its all a racket for the few that learned to play the game.
You can't convince me that bigger is better in government control. No system is fail proof , but giving its citizens at least the opportunity to better THEMSELVES is the only system that makes sense to me. Our system is sound. We just need to fix a few dumb mistakes and we would be golden. Term limits, no special interests contributions, and government raises voted by the people for both elected and voted in empoyees , and the biggie.......the understanding that the people own the government , not the other way around !

 

[Veteran]

I would live to see 2 year term limits fir everyone in congress both House and Senate. Everyone that goes aught to go to serve only. No more careers and no more retirements.

2 yrs. service period.

I know all the pros and cons but I think at this point, the pros outweigh the cons. just my opinion.

Incentives aligned w the people,
not the party, not Wash DC, not at the trough.

 

[Veteran]

Yeah, I may not live to see it....I meant love to see it.....

 

[Lee Deming]

Inflation is caused by printing worthless paper money not backed by anything except faith in the US govt. IMHO lots or people around the world are losing their faith in this government and its leaders. Play money is where we are headed.

That's not a conservative view point. Its a fact of financial physics like gravity pulling down.

The standard talking points for apologists for current inflation include that oil companies have not drilled the 9,000 leases they have. You mention 7,000.

If you are a former oil and gas lease broker, then you know, once a lease is signed, there still has to be seismic and geophysical work done on it to see just how prospective it may be and evaluations and studies run by geologists and geophysicists, then there are federal, state, and local permits, including a drilling permit. Rigs have to be scheduled Right now according to the American Petr. Insititute, a higher percentage of leases in inventory have been drilled than has ever been the case historically. There is always an inventory of leases in "inventory" and in the pipeline of "processing for exploration" into development drilling. So, please lets talk about the details, not the Jen Psaki press talking points about what all is wrong with the oil companies. You of course know this
already.

A market correction on wall street has nothing to do with just profit taking. It it is being directly caused by the 7.9 % inflation report we just got posted a few days ago. That inflation has been in the works for over a year, and this report was in the rearview mirror. Just wait til you see the next one, likely 15%. Financial assets go down when inflation goes up and vice versa.
Its another law of financial physics. Money goes into hard assets when inflation hits, not financial stocks and bonds.

The economy is being grossly mismanaged, spending is being grossly mismanaged, and inflation is here, the direct result of that mismanagement. Gas prices were already way up even before Ukraine and Russia. Up from $2.50 to $3.25 area. Shut down the pipelines, stop all the drilling on federal leases, then threaten the oil companies with Anti Trust investigations because prices go up? What should you expect? There are plenty of campaign video with Brandon bragging how he will shut down all drilling and all fossil fuels on day 1 of his presidency. I can post them if you like.

Brandon has had his knee on the neck of the oil industry and the pipes since he came into office, and this is his war on fossil fuels with the chickens coming home to roost in the form of inflation. Fuel and energy ripple through every facet of the economy.

This is the real reason gas prices are through the roof and the real reason why inflation is through the roof.
Brandon's fossil fuel war and his printing and spending trillions.

I write this as someone who worked for Amoco 25 years in drilling and production.

This is an excellent analysis in my opinion. Creating 'money' out of thin air can't be dismissed as a factor. Also, remember that the Fed's policy goal is to artificially create 2% inflation a year. This is a deliberate and widely known policy of the Federal Reserve. Add to this the fact that inflation is calculated on a basket of goods rather than on all of the goods that an average person has to buy. And the content of that 'basket' changes conveniently from time to time. Remember, Social Security recipients and other groups get cost of living adjustments to their checks so the Fed is incentivized to underreport inflation. I think the ridiculous cost of components can be attributed to other factors, of course. But supply and demand is an immutable law. So, where have all of the components gone? Yesterday, Scheel's had boxes of 1,000 .223 rounds for sale. I bought a box even though I don't own anything in that caliber. Why the hell did I do that? I don't know. But I'll bet I am not the only one. $600 panic buy? A few days ago I bought 4 boxes of 12 gauge shells in #4 lead that I don't usually use but were on the shelf. Same thing. So, there are lots of factors involved, including panic buying. But for someone to say that corporate greed is the reason just chaps my butt to be honest. The analysis that points to corporate greed as the most or only factor is stupefying in its lack of understanding or depth.

 

[Buxndiverdux]

Any examples of this so called "Climate Change Crisis"? Everything I've read about the predictions have been nothing more than fear mongering, and massive profit taking by the "climate change" proponents.

 

[Hand Skills]

There is some, yes. But perhaps more curious is the active suppression of any evidence to the contrary.