| High Gas prices = Inflation
Posted: 4/30/2008 6:50:32 AM | You can see this through out the world, Gas is tied to inflation, there are present and historical proofs for this (1973 oil shock and it is really for more the one reason.
Typically when we talk about inflation its either pull, push and or vicious circle types of inflation. The kind of inflation we don't typically think about is the cost side, usually we fixate on demand, perhaps because it is intuitively easier to understand. However i would argue inflation around the world is caused by the other aspect of inflation.
To illustrate
Getting food to your grocery store takes a truck that runs on diesel, increases in the price of crude therefor increases the price of shipping, and therefore increase the price of food. This situation is complicated by the various levels of shipping that take place in mass production. The price of packaging the price of the farmer's production, all add a level of exponentially to the equation as each stage feels a gradual pinch, which is all cumulatively carried by the consumer.
Natural gas adds another layer of complexity... To refine crude oil into usable fuels takes natural gas, becoming more reliant on low grade crude (in north America think tar sands), enhances this relationship. So the increase of natural gas then also increases the price of gasoline in a vicious cycle. Fully around a third of the worlds fertilizer comes from a chemical reaction called the Haber process. This process takes natural gas. Thus the price of food gets tied into the price of crude, before the farmer even picks up fertilizer to enrich his fields, much more so to power tractors and the other implements of first world agricultural mass production.
And so this is inevitably where we come to the price of animal feed and bio-diesel. To some extent it should be apparent now that significant levels of bio-diesel subsidizes its own production via transportation costs. For example, if a farmers tractor ran entirely on crop ethanol it would therefor be detached from international crude prices, and have a loop hole in production to escape into should the price of crude become unbearable. so the question of whether bio-diesel hurts food production doesn't really wash in the long term. Bio-diesel will subsidize its own transport actually, once crude gets rough enough and the process gets cheap enough. In fact switch grass and algae have been found to have similar harvests to corn when it comes to bio-ethanol production; i would posit the initial use of corn is more linked to the interest in raising the price of a core US commodity in a time of economic hardship then it does to any intrinsic need to use feed stock to create bio-diesel.
So what does all of that have to do with the price of meat in China anyway? Some say that increasingly well to do Chinese people are demanding more calories in particular in the form of meat, and this is a major cause of internationally destabilized animal feed prices. Certainly they have a trade deficit issue and need to find things to import, animal feed for pork being an excellent choice for a nation with so many mouths. However the world over the price of rice seems to be the rising commodity rate that seems to promise wide spread famine unless the price is floored. Rice not being a feedstock one has to presume other inflationary pressures of the nature earlier mentioned are the culprits.
So at the farm level do we need switch grass bio-ethanol plants that burn pressurized air (the Haber process) to form nitrates independent of natural gas, so that cheap rice can be grown? Mass producers of corn don't want cheap corn anyway, to boot decreasing the price of feed stocks likely will not substantially elevate the demands for meat in china (and elsewhere) anyhow. I am not really sure that would even make the biggest difference unless transportation issues are addressed.
Typically wealthy western nations will argue that they cannot effectively decrease the price of gasoline by cutting gas taxes, because oil companies will just make up the difference and increase gasoline by the measure it was decrease in taxation. Governments are not in truth so hamstrung though. They could place incentives on keeping the price of gasoline down, while taxing gas companies that either gouge or decrease productivity in an attempt to drive the price back up; Or even threaten to nationalize the process of refinements of any petrol company that decreases production. (not that many such companies keep refining in the environmentally conscious wealthy western nations.)
So WHY don't governments drop the gas tax and enforce regulation of gas prices in an attempt to manage inflation?
Well its a major source of their revenue. Few governments are so forward thinking, and even those that are, understand that for such measures to be truly effective, they would need to be made across whole continental regions to be effective.
Furthermore, aside from the fact the a gas company in the world we live wields so much power, it is difficult to imagine a scene with political actors without oil companies having the ear of democratic political leaders. Many wealthy nations have become so incestuously underpowered by lobbyists that it has become unlikely that many governments are likely to be courageous enough (or simply have the political influence) to make such a move towards increasing taxation on the petroleum industry while delivering the billion dollar profits we see of late, to consumers. However i would argue that is exactly what we need to do in order to avoid a very serious, and looming, economic depression.
...and thus we come back to bio-diesel, it is not that any part of this process is good for the green house effect, quite to the contrary many of these stages are deplorably greenhouse gas producing. The question of bio-diesel is not about the price food and it is not about the green house gazes that are melting the north pole faster then anyone could have imagined. It is about the last single most important problem that inexorably drives all of this...
We are running out of cheap gas...
, and actors that pretended to affect the price of fuel have lost control, the last acts possible in these end times are at best stop gap measures that buy us more time as we look for desperate new means to produce the utility the worlds societies and economies depend on.
So its not about "lets switch to hydrogen", the only way we have to make lots of hydrogen in a mass production feasible way is to burn the richest gases that contain years of saved sunlight all in a single moment. The very lives of more humans then have ever existed cumulatively in the history of our species demand a different path that uses those energies to build new tools to make more energy then has ever been dreamt of just to keep our heads above water. Anything less is darkness, starvation and war. | |
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| High Gas prices = Inflation
Posted: 4/30/2008 8:27:06 AM | Biodiesel and ethanol are entirely different things. Biodiesel is made from vegetable oil, ethanol is made from fermented sugars. A farmer using home-grown fuel in his tractor would likely be using home-processed vegetable oil (it's cheaper to make in small batches). Vegetable oil production is less energy-intensive than ethanol production. IMHO we would have been better off if ADM had lobbied for vegetable oil price supports, instead of ethanol tax breaks.
http://en.wikipedia.org/wiki/Biodiesel
http://en.wikipedia.org/wiki/Ethanol_fuel
http://en.wikipedia.org/wiki/Butanol_fuel
http://en.wikipedia.org/wiki/Methanol_fuel
(Ethanol is currently (as of 2007) priced at 3 to 4 dollars per gallon, while methanol made from natural gas remains at 1 dollar per gallon.)
Hydrogen? Please, it's just another scheme to make money for the oil companies.
I think the long-term investments should be in biobutanol and biodiesel fuels. | |
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| High Gas prices = Inflation
Posted: 5/1/2008 12:54:34 PM | Actually it's high demand and low supply that = inflation. Bottom line here is that oil prices can be manipulated very easily by those who have it simply by turning down or off the spigots. The less they produce the higher the price will be for it and they will make more money for less product because demand will exceed supply.
The problem I have is that oil is a necessity. Since there are countries with a wealth of oil resources we will always be at their mercy because of the current situation. There is no national energy policy in place and why should their be when it is in the best interest in the seedy powers that be and oil lobbyists to maintain low supply which forces the price upward. They could care less about the average American and we have a president whose wealth comes from that very same industry. Is it any wonder why prices have risen this much under Bush? No one will open those spigots until it becomes profitable for a select few at the expense of numerous hardworking Americans. Instead they'll throw you a $300 or $600 breadcrumb (which will further weaken the dollar because it increases the national debt) and hope that everyone goes back to watching American Idol and just sucks it up. Me, I'm madder than hell and I'm not gonna take it anymore.
This rise in gas prices has been carefully orchestrated by big oil and OPEC. The choice is simple find new sources of oil or find new alternatives to oil. But in both cases we have met the enemy and he is us! | |
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| High Gas prices = Inflation
Posted: 5/10/2008 4:33:49 AM | | I appreciate that the starter of this thread was not actually around in the 70's to experience long fuel station lines, alternate fueling days, and the double digit inflation that followed in the early 80's. It's great that someone in your age group actually did some research on what we older people have been through once already. Today, we know that inflation is knocking on the door, driven once again by high fuel prices. For those who have fixed incomes, and that will entail most of the baby boomer generation now, the security they built for themselves will quickly erode away in coming years, forcing many back to work maybe as Home Depot greeters, just to make ends meet or, live in an impoverish, indignified state of being. Our younger generation is empowered with the responsibility of our country's well being and I applaude you for having the wisdom and concern to that end. Solving the fuel crisis isn't going to be easy. The last time it happened it persisted many years rippling through higher service and commodity prices. Last time, they told us fuel supplies were short and fuel supplies were finite, we were running out of crude oil and soon. This time, we don't have long pump lines, we have lots of fuel, and and oversupply of price gouging. It will take a consumer revolution and a leap of faith in transportation technology to get past this. To the youth who are truly thinking of alternative fuel solutions, our future's in your hands. We support our young creative minds. | |
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| High Gas prices = Inflation
Posted: 5/10/2008 5:59:20 AM | The points are all good but concentrating on the detail, how and why and where food, oil gas is going and all that can make one forget the simpler and bigger picture. Why is inflation necessary? WHO BENEFITS or not?
With inflation money is worth less, need more to stay still is the reality???? Who does NOT benefit, the ordinary people who's wages at best keep up with inflation.
Who sets the market price for inflation?? Supply and demand you all say. Well NOT quite so. It is more who controls the supply thus creating the demand. Who has the finance to buy up all the futures for a few years in food and energy? Not you and me is it? Might not the markets be being manipulated, with the blame through compliant press and media outlets help to divert attention away from the speculators? What might high food prices achieve? Might population decrease be more acceptable through blaming a food price restrictions, where no individual or organisation could ever be blamed. Its not terrorism, but market forces? TO play with the futures markets, you need quite a bit of equity, and people with the same ideology might help in pooling resources for such an aim.
Its the boys at home manipulating world markets, making lots of money, money makes money!!! Who has this amount of money? Where is all the money stored? Who and what institutions speculate with money? Whose money do they use? Once you start asking pertinent questions about the bigger picture and the human forces activating such a market, the picture tends to change somewhat. WHO BENEFITS? WHO GAINS? Simple questions that cut to the core!
So what happens if you join up my dots, what picture emerges? Who GAINS? Well you do not, you pay more for food and oil at artificially inflated prices so that certain organisations get rich from both speculation and you! Its a win win situation, they win and you loose. Buts let blame it on the Chinease, the poor, population, and pretend its all GOD's fault. He ordained it all, what can we do but wail and moan, we are ignorant, blinded by the media and helpless.
It seems the population loves discussing the colour, texture, cost, origin, cut of, the Kings new clothes, and are incapable of seeing the silly naked truth! | |
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timj82
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Joined: 11/16/2007
Msg: 7 | |
| High Gas prices = Inflation
Posted: 5/10/2008 7:44:12 AM | Bush & Company are laughing all the way to the bank.
Getting it all they can get before Bush leaves office which won't be soon enough.
Then the Republicans and their well paid lobbyists will scream bloody murder when taxes are raised on the rich to clean the mess up | |
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| High Gas prices = Inflation
Posted: 5/10/2008 9:55:39 AM | Please there is no difference between the Two parties. Washington has lost it way years ago.
What is needed is real plan and real leadership. The Dollar is a rigged game. After the Brentwood agreement everything was great for America. In 60's America was the number exported of finished goods. Today we are the number 1 exported of raw material and the number 1 imported of finished goods. We gave away our industrial base all over the world. Clinton started with NAFTA and GATT remember all the factories in Mexico well stop the illegal from crossing our border because they will jobs. Oh yea that worked didn't it.
There are real energy solution out there. We could easily turn this country around with a real leader. Take care of America first. Ethanol is ADM boondoggle. What a waste of time and money. Coal to gasoline can be done and cure the energy needs of America then you work on real alternative. Lots of little things can be done that added up to big saving like down south no black roofs common sense save mega bucks on A/C cost in the summer switching to white roofs. Demand Cars that get 50 mpg they made them already. Look up Stirling engine a great idea you could have one at home to power your house and charge your electric car. There are real solutions but what we lack is real leaders. Congress, the Senate, and the President have to rise billions of dollars to get re elected or elected all those favor need to be paid back. The only solution there is give tax dollars to each Candidates evenly and that is it no more. Then we elected who ever but get the money out of Washington from the lobbyist. | |
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| High Gas prices = Inflation
Posted: 5/10/2008 11:10:38 AM | .
elected or elected all those favor need to be paid back. The only solution there is give tax dollars to each Candidates evenly and that is it no more. Then we elected who ever but get the money out of Washington from the lobbyist.
.............Very good leadership..... Very strong Leadership.
Exxon and other oil companies are doing fine job of leading.
Tax payers will soon give tax cuts... Incentives... A bill was introduced last week....
Inflation is when Wages go up>>>> Allen Greenspan/Regeanomics
Every time the Prime goes down the Dollar goes down...... Oil price goes up...
Prime 1% by Sept... Gas very close to $5 a gallon.... | |
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| High Gas prices = Inflation
Posted: 5/10/2008 2:21:47 PM | Every time the Prime goes down the Dollar goes down......
"I say we print more money and bail the sub-primes out to run the dollar even further into the ground. Oh yes, and continue to give the enviros their way to keep us dependent on foreign oil." Whatta ya' think D!ck??>> | |
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| High Gas prices = Inflation
Posted: 5/10/2008 2:52:16 PM |
Oh yes, and continue to give the enviros their way to keep us dependent on foreign oil."
We don't drill off florida..Gulf because.... Jeb Bush .... Tree hugger...
There is a lot of oil there....
China is drilling off Cuba???
Would they sell us some for the SPR... | |
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| High Gas prices = Inflation
Posted: 5/11/2008 3:05:06 PM |
I say we print more money
Do you think that may be the actual cause of inflation?
Nah... couldn't be...  | |
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| High Gas prices = Inflation
Posted: 5/12/2008 4:40:29 AM | | Increase supply of Oil is needed the visable hand of goverment only increase the cost of oil, or create a rationing of supply. Inflation costs increases are always passed to the comsumer when energy costs go up. Trucking companies increase frieight charges to make up for increase maintence costs. The solution is simple increase oil supply, but NIMBY crowd will not allow it. Biofuels are part-way solution to the problem over the long-term, but the real solution is more reasearch in alternative energy souces. Tax holiday would of done nada to the supply of oil on the market, and the price effects would of been little savings to the comsumer. Figure need to invest in road building instructure, and using the railroad lines again. | |
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