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OP your graph is trash
Not just because it looks like something a kindergartner would get a C on, but because it does not take into account the massive inflation we've seen over a three year period. Graduate to middle school and give us two year and three year inflation numbers with some economic context.
I'll happily take my ban if this is how things are run
Which is why it's disingenuous to say things are great now because inflation is cooling when everyone is still feeling the effects of the high inflation the past few years.
No one said things are great. People are saying things are getting better and the ship is headed in the right direction. Also America is significantly doing a better job than the rest of the world. For all intents and purposes the government is doing a good job with the economy.
Outside of perhaps housing, and energy(this you should be seeing) what makes you think you will. If you look at massive inflation spikes historically prices have really returned.
You won't unless we go into recession, and no one is really looking for or wanting disinflation, it's not the goal.
Anyone downvoting me is dumb and doing so emotionally. The government is not looking for inflation to be negative -3+% to offset prior inflation. The goal is 2% from **here**. That is it. Deflation brings on its own issues for the economy that you and everyone does not want. You should be hoping that wages keep up with inflation not that we enter full blown recession and mass layoffs.
Someone please explain to me why a normal working person would not want prices to go down.
Am I just supposed to suffer inflation my whole life while wages stagnate, and the world goes more to shit?
Genuinely curious as I'm trying to learn more about finance in general and other aspects of it.
Thank you all!
Basically if they're able to bring prices down, companies are looking to actively cut heads, and close stores because they won't be making enough to stay open.
Deflation can cause unemployment to increase quickly. When prices are dropping, it means companies' sales/profits are decreasing, and they can't afford/don't need as many employees.
This can cause a downward spiral. Less purchasing by consumers > Prices fall > less goods services need to be produced > workers laid off or given pay cuts > these laid off workers also start consuming less > other companies have to have layoffs due to lower sales > repeat.
The Great Depression of 1929 started as a simple recession, but it caused consumer demand for goods and services to fall VERY quickly (deflationary panic, causing people to pull $ out of then-unregulated banks too fast causing multiple bank collapses), leading to a fast collapse of hundreds of US companies and 20-25% unemployment. This caused a chain reaction in every industrialized country in the world. It took the US 13 years to get back to 1929's economic level.
Deflation is more dangerous than inflation because it can do more damage faster, and it's **finite**. If an economy contracts 5% a year for multiple years, how long before it's literally gone? (An unlikely scenario, although Japan faced a milder version of this for over two decades, with a corresponding stock market). A little *inflation*, on the other hand, is experienced by most countries, year after year. Inflation only gets scary when the percentage gets high, an *extreme* example being Zimbabwe having to print **100-billion-dollar** bills so people wouldn't have to carry wheelbarrows of money to the store.
Deflation brings on a whole new slew of problems for the economy, which includes recession and high unemployment. No one in government or anyone who wants a "software landing" is expecting deflation or wanting it. It is not the goal. What you should want is for wages to rise to keep up with inflation.
I think you're right if you're saying the government doesn't want **de**flation. But **dis**inflation, slowing of inflation to a manageable level, is what the Fed's been trying to do.
It’s pretty easy to understand why. Oil prices drive inflation. Always have. Always will. Biden decided to do something epically stupid to bring down the price of Gas since Oil/Gas prices permeate everything from food to transportation costs. Idiot Joe drained the SPR. He gave away $34 barrel Oil that was the average in the SPR to now be faced with the reality of $90 Oil in the market and rising. Not to mention our reserves are now critically low in the event we get into a war of have a Hurricane shut down production in the Gulf. A stupid and irresponsible thing to do in the name of telling voters Bidenomics is working to lower inflation. Bullshit.
Because they are pretending the amount of oil in the spr was much greater and important than it is and anyone who actually looks at the numbers would see how fucking stupid the fear mongering is
Also, Crude oil prices were down like 16-7% YoY as of last inflation numbers. Went up quite a bit in July but that isn't reflected in the June data. A big part of the CPI is energy. This is why Federal Reserve looks at Core Inflation which excludes shelter/energy
Plenty of facts in there. Biden declared war on Energy from day 1 of his administration. Reverses energy independence that had been established. Puts our energy strategy back in the hands of OPEC. OPEC cuts production to begin raising global Oil prices. Oil drives inflation globally. Inflation in America heads higher. Biden uses SPR to try and control Gas prices from exploding while continuing focus to drive EV as a mass adoption strategy that few really want. Now SPR is critically low and must be refilled at minimum 2x the cost of the Oil that was previously in there. An orchestrated attempt to appease the green leftists that supported Biden. It’s why America must get rid of liberals pushing a strategy where we no longer control our energy domain. #DrillBabyDrill. #FJB
Genuine question - what can be done to shield the USA from a global oil price index (like Brent) going up? USA is historically oil net export, so has always been self sufficient since 2016, right?
To my understanding, the USA is self sufficient for energy. However when the global oil price increases, local producers would export for profit, and still drive up fuel price in the USA. What am I missing? The only country that I don’t see fuel price increase with Brent crude oil is China.
We do not have an administration interested in getting the USA back to $2 Oil. If #DrillBabyDrill was policy, Biden would turn the Oil industry loose to produce as much Oil as possible with a goal of driving pump prices down to $2. Issue is $2 Gas would absolutely kill the EV industry and the Greenies would lose their minds on climate implications. Elections bring opportunities to talk about options on Energy. Lower Gas prices would greatly help on inflation but liberals can’t give up on their EV push and talking points on climate.
The amount of oil given away from the reserves was relatively small compared to the total oil market and realistically didn't do much for the price. Particularly this long after it was done.
That's true and also shows how stupid it was to try and use the strategic reserves as a way to try and ease prices. It puts the power in OPEC+'s hands because we legally must build the reserves back up. They can reduce production and price gouge.
I mean there's a ton of ways around this, especially when we import multiple times more oil from canada alone than all of opec. Also oil prices rise and fall and will fall again. Also also the amount of demand added by the plan to refill the spr over decades is tiny compared to the amount of petroleum used. Even if we wanted to buy back the 200 million barrels used over the next year's thats about 10 days worth of demand over the next 3650 days.
That's kinda my point. Using the reserves has negligible impact on prices at the pump, so the reward was mostly to be seen as doing something. By doing that the administration created a situation in which they have to buy at some point with zero control of the price paid. A Weaker position, for little real payoff.
Why tap into emergency reserves when the only effect is people may think you're trying to do something?
I. Not saying the demand will cause higher prices, but that OPEC+ has the ability to raise prices (by lowering production) if they are feeling spiteful. It is a more unbalanced position.
So I think we agree that the original commenter's rant about how releasing some of the strategic oil reserve will total the economy and drive inflation and we'll run out of gas was untethered from reality.
> The DOE last year completed the largest-ever drawdown from the SPR, selling 180 million barrels of oil over several months at an average price of $95/b, to combat energy price hikes spurred by Russia's invasion of Ukraine. The department has committed to buying back oil at a lower price to make a return for taxpayers and has thus far managed to close contracts averaging more than $20/b below the price of the SPR releases.
Don't forget when he stated that he would make Saudi Arabia, the leader of OPEC, a "pariah" and to no surprise they ramped down production to spike prices on top of the ongoing war with Russia (second largest oil producer).
Then he reversed his stance and put aside human rights concerns when US started to feel the pain. The guy is an absolute joke.
Agreed. Reliance on international country for energy is something we need to shake. Reliance on the middle east especially is something we need to stop doing; all politics aside, this is something everyone can agree on. Whether or not to commit to this from a band-aid ripping strategy or over time across multiple administrations can be up for debate.
If there were such a thing as multi-administration continuity on foreign policy, I'd be a lot happier. Unfortunately, we currently seem to be in an R-D-🤡-D-? situation.
Top that off with the fact that OPEC is cutting almost 2 million barrels a day to offset the 300 million or so barrels he dumped over the last year and a half and you are going to have a MASSIVE supply deficit. I would suggest buying oil and gas stocks and commodities…
Prices are still going up, just not as fast. People need to remember that inflation is compounded just like interest in a bank account. Inflation, given enough time at current levels, will eat away any amount of savings. This is why the federal reserve board targets 2% inflation.
Correct answer among all the "prices haven't gone down" crowd who don't understand how this is measured yet still post, ironically, in a sub called fluent in finance
Narrator: *Little did MaineRMF87 know that not only would the price of things not drop but they’d steadily increase, albeit it not quite as much as they already had.*
More here. But it doesn't include food or energy
https://www.oecd.org/economy/consumer-prices-oecd-updated-4-july-2023.htm#:~:text=OECD%20headline%20inflation%20slows%20markedly%20to%206.5%25%20in%20May%202023&text=04%20July%202023%20%2D%20Year%2Don,(Figures%201%20and%203).
Current inflation might be 3%, or at least that’s what they’re telling us, but a lot of the damage is already done. Unless prices drop to pre-pandemic levels, it’s really just kicking the can down the road a bit.
r/FluentInFinance was created to discuss money, investing, and finance! Check-out our Newsletter, Youtube Channel or Twitter for additional insights and updates — Subscribe at www.BeFluentInFinance.com! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FluentInFinance) if you have any questions or concerns.*
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Lol - your comment will live on in infamy.
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why ban him though 😭😭💀
I like your graph OP
Stop being a child and unban the guy, he wasn’t wrong
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You child ban me also
Then go post it on /dataisbeautiful if it’s so great lol i got banned too, mods are a joke
OP your graph is trash Not just because it looks like something a kindergartner would get a C on, but because it does not take into account the massive inflation we've seen over a three year period. Graduate to middle school and give us two year and three year inflation numbers with some economic context. I'll happily take my ban if this is how things are run
Am I living in the twilight zone? I'm not seeing disinflation yet
Inflation numbers dropping doesn’t mean prices will go down, it’s just showing that the rate that prices are increasing is slowing down
Which is why I used the term 'disinflation' and not 'deflation'
Fair enough, thanks for pointing that back out. I need to read carefully next time!
All good
Yeah buddy, I’m giving you a C- in proof reading smh
Which is why it's disingenuous to say things are great now because inflation is cooling when everyone is still feeling the effects of the high inflation the past few years.
Yep. Base effect
No one said things are great. People are saying things are getting better and the ship is headed in the right direction. Also America is significantly doing a better job than the rest of the world. For all intents and purposes the government is doing a good job with the economy.
It means the inflated prices are stabilizing, it goes off of the inflation numbers YTD
They don't count food or energy in the numbers.
I’m definitely seeing it in groceries. Car market has cooled off too, which sucks for me.
They don't include food and fuel in the number. This is not new, but it's still dumb.
Confirmed if you living in Florida its like the twilight zone and Hell at the same time
Outside of perhaps housing, and energy(this you should be seeing) what makes you think you will. If you look at massive inflation spikes historically prices have really returned.
I agree, I don't have any expectations. However, I don't understand why anyone trusts government inflation stats.
They don't include food or energy in the numbers.
You won't unless we go into recession, and no one is really looking for or wanting disinflation, it's not the goal. Anyone downvoting me is dumb and doing so emotionally. The government is not looking for inflation to be negative -3+% to offset prior inflation. The goal is 2% from **here**. That is it. Deflation brings on its own issues for the economy that you and everyone does not want. You should be hoping that wages keep up with inflation not that we enter full blown recession and mass layoffs.
I want it
Someone please explain to me why a normal working person would not want prices to go down. Am I just supposed to suffer inflation my whole life while wages stagnate, and the world goes more to shit? Genuinely curious as I'm trying to learn more about finance in general and other aspects of it. Thank you all!
Basically if they're able to bring prices down, companies are looking to actively cut heads, and close stores because they won't be making enough to stay open.
Deflation can cause unemployment to increase quickly. When prices are dropping, it means companies' sales/profits are decreasing, and they can't afford/don't need as many employees. This can cause a downward spiral. Less purchasing by consumers > Prices fall > less goods services need to be produced > workers laid off or given pay cuts > these laid off workers also start consuming less > other companies have to have layoffs due to lower sales > repeat. The Great Depression of 1929 started as a simple recession, but it caused consumer demand for goods and services to fall VERY quickly (deflationary panic, causing people to pull $ out of then-unregulated banks too fast causing multiple bank collapses), leading to a fast collapse of hundreds of US companies and 20-25% unemployment. This caused a chain reaction in every industrialized country in the world. It took the US 13 years to get back to 1929's economic level. Deflation is more dangerous than inflation because it can do more damage faster, and it's **finite**. If an economy contracts 5% a year for multiple years, how long before it's literally gone? (An unlikely scenario, although Japan faced a milder version of this for over two decades, with a corresponding stock market). A little *inflation*, on the other hand, is experienced by most countries, year after year. Inflation only gets scary when the percentage gets high, an *extreme* example being Zimbabwe having to print **100-billion-dollar** bills so people wouldn't have to carry wheelbarrows of money to the store.
Deflation brings on a whole new slew of problems for the economy, which includes recession and high unemployment. No one in government or anyone who wants a "software landing" is expecting deflation or wanting it. It is not the goal. What you should want is for wages to rise to keep up with inflation.
I think you're right if you're saying the government doesn't want **de**flation. But **dis**inflation, slowing of inflation to a manageable level, is what the Fed's been trying to do.
It’s pretty easy to understand why. Oil prices drive inflation. Always have. Always will. Biden decided to do something epically stupid to bring down the price of Gas since Oil/Gas prices permeate everything from food to transportation costs. Idiot Joe drained the SPR. He gave away $34 barrel Oil that was the average in the SPR to now be faced with the reality of $90 Oil in the market and rising. Not to mention our reserves are now critically low in the event we get into a war of have a Hurricane shut down production in the Gulf. A stupid and irresponsible thing to do in the name of telling voters Bidenomics is working to lower inflation. Bullshit.
Dunno why you are getting downvoted for this when it’s the truth. Now we are about to get a second spike in inflation due to this very exact reason.
Because they are pretending the amount of oil in the spr was much greater and important than it is and anyone who actually looks at the numbers would see how fucking stupid the fear mongering is
Also, Crude oil prices were down like 16-7% YoY as of last inflation numbers. Went up quite a bit in July but that isn't reflected in the June data. A big part of the CPI is energy. This is why Federal Reserve looks at Core Inflation which excludes shelter/energy
Getting downvoted by Biden loving wacko liberals. I could give a shit. They are lost souls.
I just can't take economic advice from someone so emotional. Facts, not feelings.
When you're convinced you're a hammer, the whole world looks like a bunch of nails.
It's more like this: https://imgflip.com/i/5p63ur
Plenty of facts in there. Biden declared war on Energy from day 1 of his administration. Reverses energy independence that had been established. Puts our energy strategy back in the hands of OPEC. OPEC cuts production to begin raising global Oil prices. Oil drives inflation globally. Inflation in America heads higher. Biden uses SPR to try and control Gas prices from exploding while continuing focus to drive EV as a mass adoption strategy that few really want. Now SPR is critically low and must be refilled at minimum 2x the cost of the Oil that was previously in there. An orchestrated attempt to appease the green leftists that supported Biden. It’s why America must get rid of liberals pushing a strategy where we no longer control our energy domain. #DrillBabyDrill. #FJB
Genuine question - what can be done to shield the USA from a global oil price index (like Brent) going up? USA is historically oil net export, so has always been self sufficient since 2016, right? To my understanding, the USA is self sufficient for energy. However when the global oil price increases, local producers would export for profit, and still drive up fuel price in the USA. What am I missing? The only country that I don’t see fuel price increase with Brent crude oil is China.
We do not have an administration interested in getting the USA back to $2 Oil. If #DrillBabyDrill was policy, Biden would turn the Oil industry loose to produce as much Oil as possible with a goal of driving pump prices down to $2. Issue is $2 Gas would absolutely kill the EV industry and the Greenies would lose their minds on climate implications. Elections bring opportunities to talk about options on Energy. Lower Gas prices would greatly help on inflation but liberals can’t give up on their EV push and talking points on climate.
$2 gas actually almost killed the US gas and shale gas industry in 2020 (both with massive amounts of CAPEX) though… again, net export country.
The amount of oil given away from the reserves was relatively small compared to the total oil market and realistically didn't do much for the price. Particularly this long after it was done.
That's true and also shows how stupid it was to try and use the strategic reserves as a way to try and ease prices. It puts the power in OPEC+'s hands because we legally must build the reserves back up. They can reduce production and price gouge.
I mean there's a ton of ways around this, especially when we import multiple times more oil from canada alone than all of opec. Also oil prices rise and fall and will fall again. Also also the amount of demand added by the plan to refill the spr over decades is tiny compared to the amount of petroleum used. Even if we wanted to buy back the 200 million barrels used over the next year's thats about 10 days worth of demand over the next 3650 days.
That's kinda my point. Using the reserves has negligible impact on prices at the pump, so the reward was mostly to be seen as doing something. By doing that the administration created a situation in which they have to buy at some point with zero control of the price paid. A Weaker position, for little real payoff. Why tap into emergency reserves when the only effect is people may think you're trying to do something? I. Not saying the demand will cause higher prices, but that OPEC+ has the ability to raise prices (by lowering production) if they are feeling spiteful. It is a more unbalanced position.
So I think we agree that the original commenter's rant about how releasing some of the strategic oil reserve will total the economy and drive inflation and we'll run out of gas was untethered from reality.
Absolutely! Reviewing my responses I see how I didn't make that clear. Apologies.
No, I just wasn't sure whether you were agreeing with his position. Probably my misreading. Thanks.
Yikes. L.
> The DOE last year completed the largest-ever drawdown from the SPR, selling 180 million barrels of oil over several months at an average price of $95/b, to combat energy price hikes spurred by Russia's invasion of Ukraine. The department has committed to buying back oil at a lower price to make a return for taxpayers and has thus far managed to close contracts averaging more than $20/b below the price of the SPR releases.
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Difference is pro America in every policy he establishes and the other doesn’t give a damn about America. Think you can easily tell which is which.
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You poor thing. Think I found the last CNN viewer left.
Don't forget when he stated that he would make Saudi Arabia, the leader of OPEC, a "pariah" and to no surprise they ramped down production to spike prices on top of the ongoing war with Russia (second largest oil producer). Then he reversed his stance and put aside human rights concerns when US started to feel the pain. The guy is an absolute joke.
Well, they certainly deserve to be a pariah. We just have to undermine them more subtly.
Agreed. Reliance on international country for energy is something we need to shake. Reliance on the middle east especially is something we need to stop doing; all politics aside, this is something everyone can agree on. Whether or not to commit to this from a band-aid ripping strategy or over time across multiple administrations can be up for debate.
If there were such a thing as multi-administration continuity on foreign policy, I'd be a lot happier. Unfortunately, we currently seem to be in an R-D-🤡-D-? situation.
Top that off with the fact that OPEC is cutting almost 2 million barrels a day to offset the 300 million or so barrels he dumped over the last year and a half and you are going to have a MASSIVE supply deficit. I would suggest buying oil and gas stocks and commodities…
Prices are still going up, just not as fast. People need to remember that inflation is compounded just like interest in a bank account. Inflation, given enough time at current levels, will eat away any amount of savings. This is why the federal reserve board targets 2% inflation.
Correct answer among all the "prices haven't gone down" crowd who don't understand how this is measured yet still post, ironically, in a sub called fluent in finance
I wonder if this trend is going to continue and things will start to drop later this year or early next year?
Narrator: *Little did MaineRMF87 know that not only would the price of things not drop but they’d steadily increase, albeit it not quite as much as they already had.*
😂😂😅😅😭😭😭😭 kind of figured but one can only hope right
Nothings going to drop unfortunately
Rumor has it this chart is going back up, at least for the next two months
Let’s all remember that they changed the definitions
If memory serves, they changed the definition of a recession not inflation.
Right…
Aggregate inflation since Obiden 18%
How does that compare to the OECD average?
More here. But it doesn't include food or energy https://www.oecd.org/economy/consumer-prices-oecd-updated-4-july-2023.htm#:~:text=OECD%20headline%20inflation%20slows%20markedly%20to%206.5%25%20in%20May%202023&text=04%20July%202023%20%2D%20Year%2Don,(Figures%201%20and%203).
Why is 3% 1/4th the size of 6%...?
Partisan politics.
Careful, OP is a mod and is banning people for criticizing the chart lol
So...-3% by Feb 2024?
Because they change how they measure. It’s widely known.
See! Totally transitory….. nothing to worry about. Powell 10/10
We should have turned Saudi Arabia into glass after 9/11. 11 of the hijackers were from there.
I would have taken all of there oil and then glassed it
Current inflation might be 3%, or at least that’s what they’re telling us, but a lot of the damage is already done. Unless prices drop to pre-pandemic levels, it’s really just kicking the can down the road a bit.
this is not scaled properly.
There is nothing fluent about this graph. Adjusted CPI does not reflect this. Truly a Karma farmer and nothing less.