Friday, February 17, 2012

Climbing Gasoline Prices

On a seasonal basis gasoline prices generally peak in early summer, so prices aren't at those peak levels,yet. But what is noteworthy is that current prices are well ahead of prices at this time last year (the two circled areas).

Price inflation is developing. Ben Bernanke's money is hitting the system

chart

(ViaJefferies)

5 comments:

  1. I know you're not going to respond to this, because you don't ever respond to posters, but you're fallaciously focusing only on prices, and not on demand in money terms.

    Increasing prices doesn't necessarily mean there is increased demand on the basis of inflation.

    http://i.imgur.com/PIeHR.jpg

    http://i.imgur.com/r9ZwT.jpg

    The quantity of gasoline consumed has been tanking. With a decreased quantity of gasoline consumed, the same demand for gasoline in the absence of monetary inflation can lead to rising prices.

    You can't ignore supply and then say that because prices have gone up, it must be due to monetary inflation. You're just trying to find an excuse to tell your story.

    I am not saying that inflation hasn't affected the economy, it clearly is, but you can't just focus on prices like this and ignore demand and supply.

    ReplyDelete
    Replies
    1. "With a decreased quantity of gasoline consumed, the same demand for gasoline in the absence of monetary inflation can lead to rising prices."

      Sorry, but all those graphs show is deliveries and imports. It doesn't spell out the entire supply/demand scenario. It does not show actual supply. Deliveries are made based on mostly demand, and since we have not had any shortages reported decreasing the supply, the resulting drop in deliveries points to less demand.

      So with that being said, those graphs are actually pointing to decreased demand which should result in a price drop. So with prices on the rise, would that not signal the inflationary argument?

      Delete
  2. I'd like to know if you think this inflation should coincide with a sharp fall in excess reserves: http://research.stlouisfed.org/fred2/series/EXCRESNS

    ReplyDelete
  3. Rising prices sure aren't due to demand as shown in the charts here:

    http://www.financialsense.com/contributors/charles-hugh-smith/it-is-not-just-gasoline-consumption-that-is-tanking-it-is-all-energy

    ReplyDelete
  4. It's those evil speculators that are doing this - Core inflation is a at a manageable level just over 2% and everything is proceeding according to plan.

    Of course that plan is basically jumping out of a plane without a parachute, but why worry? Seriously, what's the worst that could happen?

    ReplyDelete