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Wednesday, March 09, 2022

Adjusted for inflation, there is no inflation

Rick Newman, senior columnist for Yahoo Finance, has good news. He wrote, "Gas prices aren’t really at a record high."

His argument is, "If you adjust for overall price changes since 2008, gas prices would have to hit $5.25 per gallon to be a new record high, in real terms.

"That doesn’t make $4.19 gas easy to deal with. Gasoline accounts for 3.4% of household spending and higher pump prices are the equivalent of a tax that leaves consumers less money to spend on other things. Some people with long commutes or a lot of kids to shuttle around feel the pain more acutely. Most people can’t do much, at least in the short term, to ease the burden of gas costs."

Over at Market Watch, Rex Nutting just happened to make the same argument.

He wrote, "Once you adjust for the purchasing power of a dollar and the increased gas mileage of the cars and trucks on the road, you’ll recognize that — even with the huge price increases in just the past few weeks — gasoline prices aren’t so high that they’ll crush the economy."

And it just so happened that Michael Hiltzik of the Los Angeles Times also had the same thought. It is almost as if someone whispered in their ear on Tuesday what to write for today.

Hiltzik wrote, "When accounting for inflation, however, today’s prices are still about 20% below the 2008 peak on the national level and 7% below the California record that year."

Wow. What a relief. Just adjust prices for inflation and inflation goes away.

Suddenly a new Bentley convertible no longer costs $222,085 to $239,600. Adjusted for inflation, the price is only $22,208.50 to $23,960. I should run this by my darling and treasured wife.

Adjusted for inflation, that ice cream cone is 10 cents and a pair of shoes cost a dollar. 

Newman really doesn't want to hear your complaints. He wrote earlier, "Wanna help Ukraine? Stop whining about gas prices."

So on March 1, gas prices were going up but on March 9 they are not because we have to adjust for inflation. And if we adjust all prices for inflation, there is no inflation.

But I am not whining about gasoline prices. We have two cars. I filled up one in January. It will need a refill in April. The Mustang is half-filled from a month ago when prices were $3 a gallon, or just 30 cents a gallon when adjusted for inflation, according to Rick Newman and all these other financial experts.

Meanwhile, in the real world, inflation hit 7% last year, the highest in 40 years. It was 8.9% in 1981. 

But the real year to compare 2021 with is 1973 because we are entering a period of inflation like 1973, and not leaving it like in 1981.

In 1973 inflation was 8.7% thanks to the OPEC oil embargo. A year later, President Nixon -- who had carried 49 states in 1972 -- was out of office as inflation hit 12.3%. It receded a bit but came back with a vengeance, hitting 13.3% in 1979 and 12.5% in 1980.

This is where we are headed.

But don't worry. The media will say we don't have inflation if you adjust prices for inflation.

45 comments:

  1. So when are they going to start adjusting my Social Security for inflation at the same rate they're adjusting the price of gas and food?

    ReplyDelete
    Replies
    1. Um, they do that every year. You get a statement showing that.

      Delete
    2. Yep, real inflation rate 10%?
      Hey, you get a 5.9% SS increase, yahh!
      Real inflation rate 15%?
      Hey, you get a 6.9% SS increase!! Biden bonus, baby!

      You get the drift in direction, right?

      Delete
  2. Lies, damned lies, and statistics, huh?

    I got thinking the other day -- Europe gets a lot of gas from Russia. So, I wondered, how much frack recoverable natural gas is already in Europe, just not being exploited?

    ReplyDelete
    Replies
    1. Let's not forget that Russia has provided a huge amount of funding for anti-fracking campaigns in recent years; this isn't a conspiracy theory but established fact - such as the $95M that Russia provided to the (ultimately-successful) anti-fracking campaign in Britain alone. Then pile on top of that all the anti-fracking environmentalist propaganda that they spread via their outlets like RT.

      Europe has refused to drill for their enormous reserves of recoverable (via fracking) natural gas in the guise of "saving the planet" - but really at the behest of Gazputin.

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    2. Exactly, make them dependent on Russian oil.

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    3. Very happy RT shut down in the US of A.

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  3. Hmm. Fuel for trucks have gone up.almost a dollar a gallon in the last week.
    2 things are going to happen.
    First, there will be many truck drivers stay off the road until the price comes down this means more shortages of products.
    And those companies who still operate will be charging more for delivery, which will increase prices, causing more inflation

    ReplyDelete
    Replies
    1. When I worked, one client was a trucking company - a bulk carrier. They passed on the cost of fuel to their customers via a fuel surcharge. Everyone’s costs increased. Prices for all goods went up.

      Delete
    2. In 2020 while POTUS Trump was in office, the US became a net exporter of oil once again - after many decades of being a net importer. The lower costs of core necessities & fewer regulations gave us a roaring economy without inflation. Black employment reached an all time high. Female employment reached an all time high. Hispanic (Latino) employment reached an all time high. Salaries were going higher. People who worked had money in their pocket and in their accounts. They became much more hopeful about their futures & their family members' futures.
      Now, everything that is transported is costing more and will cost more because of the increased cost of oil products, particularly gasoline & diesel. Both are up double (that's 100%) in Texas since Biden reduced oil & gas production (making us a net importer again) plus means of transport by stopping those pipelines. Pipelines provide cheaper & environmentally appropriate transport. Costs to light, heat and cool homes and apartments also are increasing.
      "Inflation" is not measured by these left biased media bozos writing bs (Don is not a bozo and any bs by him is intentional). It's also not relevant based upon 10 or 20 years ago. I remember gasoline price wars at 16.9 cents per gallon in FL during younger days. The increased cost of living is what is measurable & felt by the consumer. The costs have increased (note the double above) for everything since Biden assumed his throne in DC & Delaware & basements elsewhere. Those like the 2 know-nothing media gnomes mentioned who are not engaged with normal Americans do not see or feel their financial challenges & problems. Misery is on the faces of almost all in the grocery stores & all at the gas pumps.
      A Haverford College president back in the 70's always "stealthily" took a "normal American" summer job such as dishwasher, truck loader, lawn mowing service worker, etc. When asked why his answer basically was: I never want to be disconnected from normal Americans & their challenges. My job in academia is not in the real world & is far removed from normal, real America & Americans".
      Now, all the far left politicians are totally removed from America & Americans. The vast majority of all in DC are removed from the real world & Americans. They seem to work only to enrich themselves, their families, their associates and their donors. They also make colossal blunders - Afghanistan & November's formal support for Ukraine to enter NATO without due regard for the real world & the history of the real world. Both disasters were predictable & preventable if anyone making those decisions lived in the real world with real people.
      The damage caused by self-centered or supremely ignorant or unbelievably arrogant decision making is always incurred most by normal people or those being "led"- Americans, Ukrainians & tbd. The effects of the China Russia alliance made more solid in the last 2 weeks will be extremely significant throughout the world. Americans deserve more from "leadership". Wind & solar power transition may make a few people richer but, it will make the masses a lot poorer (middle class being destroyed may be a goal). Wind & solar are not reliable sources for energy capacity. Weather does not seem to always be cooperative (Texas has 5% solar & 25% wind on its grid. Its failure during the harsh winter week in Feb 2021 caused many deaths & billions of dollars worth of damage; those who received energy from a nuclear plant in north Texas never lost power). Americans aren't stupid. They know they're being sold snake oil for energy. Getting used to higher costs won't be accepted for very long.

      Delete
  4. These "experts" are so full of crap that if you gave them an enema, you could fit them inside a shoe box.

    ReplyDelete
    Replies
    1. Just think how strong their sphincters must be!

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    2. Their sphincters were replaced with butt plugs years ago by the CCP. That's why all that crap comes out of their mouths.

      Delete
  5. I love how these guys carry water for Democrats. I remember Chuck U. Schumer screaming about the high oil prices when G.W. Bush was president, and everyday he was yelling to have oil released from the SOR. Where is he today? So suck it up people, and pay for the shut down of our wells and pipelines...Oh excuse me, the Russo-Ukrainian War.

    ReplyDelete
    Replies
    1. Yes, and those oil prices were courtesy of the Democrats to coincide with the election. Those high oil prices preceded the housing crises. Everything is planned.

      Delete
  6. What is $1.74 adjusted for inflation, cause that is what i paid for gas in Nov. 2020

    ReplyDelete
    Replies
    1. Depends on which type of inflation.

      Because of global warming, the size of a gallon is expanding, so you're getting more fuel for the same price.

      Expect someone to make that argument soon...

      Delete
    2. That’s fooking good, man!

      Delete
    3. biden says gas went down 14.5%. That means the government plans on defining a gallon 109 ounces.
      Kind of like changing the definition of vaccinated every few months.

      Delete
  7. If you calculated the current inflation rate as it was calculated in the 70-80s, it would be north of 25% right now, and accelerating.
    FWIW
    Posting on this blogspot really sucks a yahoo columnist on an iPad.

    ReplyDelete
  8. Local airport is $7.50 a gallon of 100oct. Avgas.
    Jet fuel is worse. $8.75
    time to park the gulfstream.

    ReplyDelete
  9. A senior columnist for Yahoo Finance is a Democrat by any other name.

    But don't worry. The media will say we don't have inflation if you adjust prices for inflation.

    Isn't that what Kevin Bacon said when the DeathMobile crashed the parade?

    ReplyDelete
  10. This would be comical if it weren't so hurtful to people. Wonder how much money the person got that came up with this inflation spin?

    ReplyDelete
    Replies
    1. The spinning is way beyond anything that I would have thought. It's downright insulting.

      Delete
  11. This is nothing but propaganda for Brandon and team. Total BS. I just hope voters are smart enough to see through this in November.

    ReplyDelete
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    ReplyDelete
  13. “It is almost as if someone whispered in their ear on Tuesday what to write for today.”

    Big D, are you saying Valerie Jarrett, yes, THE Iranian born Valerie Jarrett, might be controlling the whole narrative? GTFO, man.

    ReplyDelete
  14. Here in British Columbia Canada, I paid $1.89 CAD for 1 liter of regular grade gas.
    Premium grade was $2.11 / L.
    1 US gallon is 3.785 L so that would be $7.15 CAD for a US gallon.
    In US dollars that's about $5.72 for a US gallon.

    ReplyDelete
  15. I have also been wondering how these "journalists" all come up with the same angle. Do they phone each other and talk about it? (I know a lot of reporters who did that.) Or, do they really believe their own spin? Or, is someone phone them to suggest an angle. Would that someone be a high-ranking Democrat? How do they routinely get on the same page?

    ReplyDelete
    Replies
    1. Journolist of past years has undoubtably been updated to some higher tech versision. We have also seen (on Project Veritas releases that CNN directed everything dailey from the top down. If that is general on the industry, only 10 or 15 links in a journo-list would cover the industry with as much concentrafion as there now is in "news."

      Delete
    2. Journolist itself was a successor to the simpler method that the clintons used during their 1990s reign of (t)error.

      They'd have the DNC fax out the requested "talking points" to all their pet sock puppets like Mark Shields and Eleanor Clift and many others so that they could repeat them on the weekend shows.

      Delete
    3. As Rush used to call him, Maxi Shields.

      Delete
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    ReplyDelete
  17. Gasoline accounts for 3.4% of household spending...
    Was that percentage while Trump was president? I'm betting it was and this is just another lie from the stenographers of the democrat party masquerading as "journalists".
    -----------------------------------
    And our new found pals, iran and venezuela will be getting the red carpet treatment from commie FUCK joe biden*. Consider yourselves converted, you just haven't been put on the cattle car yet.
    ----------------------------------
    And that oil shut off FUCK joe biden was forced to impose?
    March of 2020

    https://apnews.com/article/7d15631558f3caca5c0fe80eef2cdf23

    Rosneft hands Venezuelan oil business to Russian state firm

    FILE - In this Aug. 27, 2018 file photo, Russian President Vladimir Putin, left, listens to Russian Rosneft CEO Igor Sechin during his flight to visit Chernigovets coal mine, in Beryozovsky, Kemerovo region, Russia. On Tuesday, Feb. 18, 2020, the Treasury Department slapped sanctions on Rosneft’s trading arm and its CEO, accusing the Geneva-based firm of providing a critical lifeline to Venezuela’s President Nicolas Maduro. (Alexei Druzhinin, Sputnik, Kremlin Pool Photo via AP, File)
    FILE - In this Aug. 27, 2018 file photo, Russian President Vladimir Putin, left, listens to Russian Rosneft CEO Igor Sechin during his flight to visit Chernigovets coal mine, in Beryozovsky, Kemerovo region, Russia. On Tuesday, Feb. 18, 2020, the Treasury Department slapped sanctions on Rosneft’s trading arm and its CEO, accusing the Geneva-based firm of providing a critical lifeline to Venezuela’s President Nicolas Maduro. (Alexei Druzhinin, Sputnik, Kremlin Pool Photo via AP, File)

    MOSCOW (AP) — Russia’s Rosneft has transferred its assets in Venezuela to a company fully owned by Vladimir Putin’s government, a move apparently intended to shield Russia’s largest oil producer from U.S. sanctions while Moscow continues showing support for Venezuelan President Nicolás Maduro in the wake of a U.S. narcotics indictment.

    ReplyDelete
  18. "If you adjust for overall price changes since 2008, gas prices would have to hit $5.25 per gallon to be a new record high, in real terms.

    Rick Newman, you're such a dumb f*. Wait another month an then it actually WILL be $5.25.

    ReplyDelete
  19. There is still a lot of layers to peel back on all the gas/economy/war shenanigans... Adjustments don't count. I will say though, the Morons in charge can all adjust my... Dick isn't happy.

    ReplyDelete
  20. But it always creates a recession.Energy costs figure in to everything in our lives People forget, apparently in minutes and can't do remedial math regardless.

    ReplyDelete
  21. Don't know Nutting, but Rick Newman and Michael Hiltzik have proven track records as dishonest liars.

    ReplyDelete
  22. There's a bit of a difference between 1973 and 2022.

    1) The USA wasn't $30T in debt, and zooming higher, with not even the slightest plan to bring the Federal budget and expenditures into balance, let alone ever pay one red cent back.

    2) The "Social Security Trust Fund" was raided under W. Clinton, to "reduce the national budget deficit". There is no more trust fund. It's hand to mouth, month by month, SS benefits paid by the Federal general appropriates fund.

    3) The FED printed upwards of $20T of US dollars (I believe over the past year, but I could have that period wrong). $20T!!!!! That's cash from thin air, with no gold stocks, assets, Federal bonds, NOTHING to support it other than the "full faith and credit of the US Federal government", which has proven itself to be the worlds biggest deadbeat.

    4) **** BIG WINNER **** The bonds that have been issued to cover past debt come up for renewal monthly (i.e. reimbursement to the bond holders, and/or sale back to the bond holders, or sale to NEW bond holders). The US Treasury MUST pay those bonds off, or the US Government technically defaults. Well, what do you think happens when a bond at maybe 1%, or 2% matures, and the Treasury tries to resell it in an economic environment with 10%+ inflation? Answer: No buyers. So, the next offer is 3%. No buyers. 6% No buyers, and on it goes, until investers believe the bonds will support future inflation (which is a huge unknown risk, so that risk factor will be priced in).

    5) *** Bonus *** So, if the Fed tries to tamp down inflation via it's transitional tool of raising interest rates (i.e. on the money the Fed "lends", or read "gushes out like a firehose" to financial institutions WORLD WIDE (yes, they're printing $$$ to send to foreign institutions, i.e. free $$$ for all!), there are several problems. Oh, yeah, the economy will tank, but that's already a given. The real fun begins when interest rates reach the Jimmy Carter levels of 20+%. What happens to the Federal budget, when 100% of receipts CANNOT PAY the interest due on the budget debt (in bonds, or other financial instruments). Well, that $30T debt spirals into the stratosphere, as the Federal government attempts to both cover debt interest AND pay current entitlements AND pay real and manufactured annual expenses (i.e. social programs and corporate give always).

    The main thing to realize is that THIS IS ALL YOUR FAULT, and so, you can suffer and maybe die with the impact of this sh***t to your daily lives. YOU VOTED for this. Whether Democrat or Republican, you voted for representatives that have done all of this to you. What, you say you didn't vote for Biden? Well, boo hoo, too bad. Why don't you run an election, put up your candidates and WIN for a change. Oh, that's right, I forgot, YOUR vote doesn't count anymore. HaHaHaHaHaHaHa! You're the fool, the jokes on you, that you ever believed that it did. (I know that's my role, for sure.)

    I honestly do not believe that there is anyway to back this up, fix the corruption mistakes of the past 70 or 100 years to regain financial integrity, and the freedoms guaranteed by that now, piece of toilet paper called the US Constitution/Bill of Rights. I've got no solutions other than buy ammo, arm up, gather with family and local groups for the common defense, and prep, prep, prep. Your government will not help you. Steve Bannon's "+100 GOP Congressmen House for 100 years" won't change anything (85% will be opportunists and RINO's who will only accelerate the course of "progressive" national destruction, if they can even win), no one can help you and your family, except yourself.

    And, I'm an optimist by nature, too. ��

    ReplyDelete
  23. Why pick 2008? Why not compare prices to 2020?
    If they picked 1910 they would tell us that gas should be $2245.37 per gallon adjusted for inflation. We're lucky it is only $6!

    ReplyDelete
  24. Let's include technology and productivity improvements over the same time period and petroleum products including gasoline should be much lower cost than they were at the starting point of your comparison. Instead the best they can offer is that current prices are not the all time record if you adjust for inflation.

    ReplyDelete
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