Now, why are prices falling? The argument is that we are already in a recession. I do not buy it. There was a report of the US sending 5,000,000 barrels of oil from the strategic oil reserve to Europe. No doubt to manipulate oil prices and keep prices lower for Europe for a short while only. Commodities prices follow the price of oil because oil prices is inflationary. What is to stop Russia and OPEC from just cutting some oil production in the millions of barrels to drive oil prices higher? That is all it takes. People still have to drive their cars to go around consuming gas and pay the higher food prices because they have to eat. Businesses still have to buy computer chips for cars, electronics, jetliners, etc. We are nowhere near the bottom as talking heads on CNBC and Bloomberg keep saying and the world's economy being A-Okay? It may take another 6 months before reality hits. Let us wait see.
Inflation: Who's lowering prices?
- Thread starter LanceJ
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Now, why are prices falling? The argument is that we are already in a recession. I do not buy it. There was a report of the US sending 5,000,000 barrels of oil from the strategic oil reserve to Europe. No doubt to manipulate oil prices and keep prices lower for Europe for a short while only. Commodities prices follow the price of oil because oil prices is inflationary. What is to stop Russia and OPEC from just cutting some oil production in the millions of barrels to drive oil prices higher? That is all it takes. People still have to drive their cars to go around consuming gas and pay the higher food prices because they have to eat. Businesses still have to buy computer chips for cars, electronics, jetliners, etc. We are nowhere near the bottom as talking heads on CNBC and Bloomberg keep saying and the world's economy being A-Okay? It may take another 6 months before reality hits. Let us wait see.
That might have been the case back then, but the crude price isn't the catalyst of inflation this time around. The biggest factor that have contributed to the current inflation is quantitative easing that has been going on since 2008. Coupled that with all the Covid-19 stimulus packages along with the supply chain delays from Chinese lockdown and labor shortages, not to mention Ukranian war, you have a perfect storm.
Explain if QE is a big factor why it took so long to show up in prices.
What, you've not seen the chart yet? Where have you've been the last 13 years? S&P500 rose more than 700% and you think that's not INFLATIONARY? You thought that was normal and it should go on happily ever after, didn't you?
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The topic is Inflation, as in milk and cookies. Not $SPX asset bubble.
That's what I hear. Stocks always go up in the long term.
Gas fell $.05, time to stop rates!
Stocks are, by nature, inflationary but within reason. To say the astronomical rise we've seen in the last 13 years is reasonable is delusional IMO.
It appears you know very little how economy works. Stock market is not an isolation when it comes to inflation. As you can see from the chart below, stock market (SPX) and inflation (TIPS) moved pretty much in tandem up to now.
Apparently you don't shop or pay attention to the actual inflation rate number.