A Run on Gas

[hawkman]

Quite frankly, I've often been amused by those who say that our government creates money out of thin air or just keeps printing money to pay bills. Neither of those claims are ever true, as far as I'm aware.

Quantitative Easing​

From the link.

"Quantitative Easing (QE) Basics​

Quantitative easing effectively allows central banks to dramatically increase the size of their balance sheets, which also increases the amount of credit available to borrowers. To make that happen, a central bank issues new money and uses that to purchase assets from commercial banks. These then become new reserves held at these banks. Ideally, the funds the banks receive for the assets will then be loaned to borrowers at attractive rates. The idea is that by making it easier to obtain loans, interest rates will remain low and consumers and businesses will borrow, spend, and invest."

Suggested reading.

https://archive.org/details/TheCreatureFromJekyllIslandByG.EdwardGriffin

miamited Question for you, who prints that "new money" the central bank issues ?

I agree with you miamited , I hope Biden and Trump are not our presidential choices .

 

[WIP]

Well, according to the polls, your position is in line with a large percentage of Americans. That's ok. I'm not clear on what your 'from thin air' comment is a reference to, as far as any spending bills that have been passed.

For one, the national revenue from 2020 was roughly $3.4T but before any stimulus bills were passed, the mandatory outlay for the year was over $6.6T leaving us with a deficit of about $3T. Adding $1.6T in stimulus monies had to come from somewhere.

 

[WIP]

But, it can't be denied that gas prices are falling as we were promised by Pres. Biden.

If I go to a retailer and purchase something "on sale" at 30% off but find out that the prices were raised 50% before the sale was enacted, did I really save any money? When what has been done is partially responsible for the inflated costs in the first place, taking steps now to reduce the costs are only artificial and begs the question, why didn't they take the steps to prevent the inflated costs in the first place? I suspect that because taking the steps now makes it look better at the up-coming election and the hope is people will forget what has happened while they are standing in the voting booths.

 

[WIP]

We do not live in a socialist economy and so the government isn't generally the place where prices are decided.

You are absolutely correct here but government action can have a pretty significant impact. If they didn't then why does government take reactive steps to affect things? It would do no good or bad anyway.

 

[miamited]

Hi hawkman

Question for you, who prints that "new money" the central bank issues ?

The Federal Reserve, along with the U.S. treasury, which actually prints the bills, of course. The U.S. Treasury prints every legal tender bill that our nation has in circulation. The question that you really want answered is 'how' is 'new money' put into circulation and where does it come from? See here:

Understanding How the Federal Reserve Creates Money

Learn how the Federal Reserve targets and creates new money in the economy, and find out how the savings and loans system magnifies this process.

www.investopedia.com

God bless,
Ted

 

[miamited]

Hi WIP

Adding $1.6T in stimulus monies had to come from somewhere.

Yes, that comes from the issuance of debt bonds. Pretty much every nation issues debt bonds to cover spending above and beyond current revenues. However, your complaint goes much deeper than some personal angst you seem to feel towards Pres. Biden. According to the Washington Post, we've been throwing billions and trillions of dollars at the effects of the Covid 19 outbreak for a lot longer than Pres. Biden has been holding the reins.

In late February, the Trump administration said it planned to spend $2.5 billion to fight the coronavirus. A month and a half later, President Trump signed off on spending almost a thousand times as much — $2.35 trillion. And that amount doesn’t include the Federal Reserve’s efforts, which are harder to measure but seem likely to blow past the $4 trillion mark.

So, let it be known that I'm in agreement with you that, as a nation, we've spent a real ton of money on the effects of the Covid 19 pandemic, but I'm not so quick to say that it's all something that Pres. Biden has been in control of.

I suspect that because taking the steps now makes it look better at the up-coming election and the hope is people will forget what has happened while they are standing in the voting booths.

Yes, you've made that point several times in conversation with me. You have this idea that a lot of what is done on a day to day basis in our national governance, as we come within a year or so of an election, which is pretty much all the time, is done for some purpose of making an impact on said election. Me, I believe that the operation of our national governance really has little to do with expectations concerning an upcoming election, but it is something that the media is great at pointing out. Media headlines seem to like making claims that this posture or that posture or action of our federal government is to sway an election. Personally, I find it amusing that such an idea doesn't seem to be nearly as important in local state elections - I mean, let's face it, governors and state legislators must be trying to sway future elections in all that they do, too. Right? - as it seems to be in national elections.

You are absolutely correct here but government action can have a pretty significant impact. If they didn't then why does government take reactive steps to affect things? It would do no good or bad anyway.

I'm going to suppose that some explanation that that's pretty much what people expect their government to do when prices and costs get high or seem out of control, isn't going to fly here. Look, you're free to believe as you will. I know that there are, right now, a large part of our population that holds Pres. Biden responsible for things that most people who actually know and study such economic issues will tell you are not within his wheelhouse.

On gas pricing:

USA Today: Drivers in Hong Kong pay over $11 a gallon at the pump. Filling up in Finland costs over $10 a gallon. In Iceland, Norway, Greece, Denmark, the Netherlands, Monaco and the Central African Republic, the price of petrol tops $9 per gallon.

How is Pres. Biden responsible for all of those other nations suffering with outrageous gas prices?

On inflation: Here's what the WSJ has to say about blame.

Opinion | Biden Isn’t to Blame for Inflation

Rather look to the Federal Reserve’s timidity and, yes, the war in Ukraine.

www.wsj.com

So, I hear your complaint, but I think the truth is, that if the President of the United States is not to blame for such economic realities, then reactive handling is all there is. I'm pretty sure we haven't yet elected a President who can foretell the future.

God bless,
Ted

 

[WIP]

So, let it be known that I'm in agreement with you that, as a nation, we've spent a real ton of money on the effects of the Covid 19 pandemic, but I'm not so quick to say that it's all something that Pres. Biden has been in control of.

I never said it was just Biden. You need to stop putting words into my mouth.

 

[WIP]

Yes, you've made that point several times in conversation with me. You have this idea that a lot of what is done on a day to day basis in our national governance, as we come within a year or so of an election, which is pretty much all the time, is done for some purpose of making an impact on said election.

No, again, you are putting words into my mouth. What I have been saying is that the current administration sat on its hands and didn't take the appropriate action until now when they are not sitting well. In other words, what they have been doing is not necessarily in the best interest of the country but more so in the best interest of their own personal goals and you, like a lot of other party die-hards, praise them for it.

It isn't any different from the opposition side either. I am not a Republican supporter any more than I am a Democratic supporter. In my opinion, politics in this country have become so divided, it is almost impossible to find a person that actually looks to the best interest of the country anymore and the reason for that division is we the voters.

 

[WIP]

I know that there are, right now, a large part of our population that holds Pres. Biden responsible for things that most people who actually know and study such economic issues will tell you are not within his wheelhouse.

Not just President Biden. The whole congress.

 

[miamited]

I never said it was just Biden.

I believe a large part of our economic problems have been the result of the Biden administration and the congressional actions taken.

Hi WIP

You're right, I should have allowed that your argument is against the 'Biden administration' and 'congressional actions taken'. My error and please accept my apologies. However, in my defense, when one says " I believe that so-and-so's administration...' I tend to think that it's the leader of that administration who holds the stopped buck.

No, again, you are putting words into my mouth. What I have been saying is that the current administration sat on its hands and didn't take the appropriate action until now when they are not sitting well. In other words, what they have been doing is not necessarily in the best interest of the country but more so in the best interest of their own personal goals and you, like a lot of other party die-hards, praise them for it.

Yes, but such a position would mean that the leadership would have to know the future. Just using gas pricing as an example:

Gas prices rose from a low of about $2, but that was expected as we came out of the Covid mess. $2 gas is not a sustainable price. The only time gas is $2 is when the nation is in crisis. The last time in recent history was 2008/2009 at the height of the mortgage default financial crisis. The price of gas, in 2018, averaged about $2.60/gal. In 2013/2014 gas averaged over $3/gal. So, I think it fair to say that no one, as gas began its climb was expecting that it wouldn't stop until it reached $5/gal. Because in a healthy economy, historically over the last 10 years, gas is generally $2.50 - $3.25/gal. Then in 2022 gas quickly climbed, in a matter of 5 months, from the low $3 to the high of $4.92. Now, I don't know how you see it as not being addressed, but it seems that within just a couple of months of the meteoric rise of early this year, the Biden administration has been doing quite a lot to bring about changes to help bring down the price of gas.

I've been in the stock markets long enough to know that no one 'knows' the future. You'll find people telling all sorts of future stock movements with some saying up and some saying down. It isn't until the changes begin to actually happen that consensus comes among the foretellers of the future of the stock market and that is generally for only a few months at most. Right now there are those saying that we're in a bear market and it's going to continue down. Then there are those saying that we've hit a bottom and it's going to start back up. So foretelling the future of gas pricing beyond a few months isn't any sure bet any more than foretelling the stock market.

Question, if our leadership should be so forward looking, as you're claiming, how come we weren't preparing for the Covid pandemic in 2017? As I see it, Pres. Biden has done an admirable, and relatively quiet and calm job of working to bring down gas prices, and it seems to be working. No crowing about what a great, great man he is. Better than everyone else while denigrating and name calling all of his naysayers as we had in the previous administration. For me, that's much better leadership.

God bless,
Ted

 

[Corn Pop]

 

[miamited]

What this president is not allowed to go on holiday? As far as I'm aware, every president has taken time off to be with their families on holidays or vacations pretty much like everyone else gets to do. That it would follow any particular announcement certainly seems like a non-issue to me. Is it a big deal for you that you don't get to assign the president's time off? Or that you aren't the one telling him what his words should be?

I would suggest that you work on your understanding and comprehension of what someone says. Pres. Biden is correct that for the month of July our inflation rate was effectively zero. You, like many other detractors, heard that as "There is no inflation!! Inflation is zero!!!" That's not what the man said. He said that today he was happy to announce that the inflation rate 'for the month of July' was zero. You can check the monthly inflation rate for yourself if you don't believe him. It is publicly available information. If you want to check. Are you in need of a hearing device to be able to hear what people actually say rather than what your mind thinks it heard someone say?

God bless,
Ted

 

[miamited]

I remember having a teacher in middle school that I had asked if I could go to the bathroom. I 'assumed' that she was going to say ok and got up out of my chair and headed to the door. She called my name and asked, "Did you hear what I said?" It was then that my mind recalled that she had actually said no. Ooops. She told me then that I need to be more careful in my listening to hear what people were actually saying and not what I was expecting them to say.

God bless,
Ted

 

[Corn Pop]

What this president is not allowed to go on holiday? As far as I'm aware, every president has taken time off to be with their families on holidays or vacations pretty much like everyone else gets to do. That it would follow any particular announcement certainly seems like a non-issue to me. Is it a big deal for you that you don't get to assign the president's time off? Or that you aren't the one telling him what his words should be?

I would suggest that you work on your understanding and comprehension of what someone says. Pres. Biden is correct that for the month of July our inflation rate was effectively zero. You, like many other detractors, heard that as "There is no inflation!! Inflation is zero!!!" That's not what the man said. He said that today he was happy to announce that the inflation rate 'for the month of July' was zero. You can check the monthly inflation rate for yourself if you don't believe him. It is publicly available information. If you want to check. Are you in need of a hearing device to be able to hear what people actually say rather than what your mind thinks it heard someone say?

God bless,
Ted

Well you can say there was 0% in July or you can say it slightly dropped and was sitting around 8.5% in July. Anyhow I hope he has a good holiday everyone needs time out sometimes, I got no issues with him having a holiday.

Being President would be a hard job in general because your always on the go consistently busy. He's nearly 80 now. He's done well. So hope he has a good holiday and refresh.

 

[Corn Pop]

Usually when you talk about inflation rates it goes on quarters and annual.

 

[miamited]

Usually when you talk about inflation rates it goes on quarters and annual.

HI King Dan of Great the 1st

I agree with that, but...

When you say that the particular figure you are discussing is for a particular and specific month, then the figure that you then talk about should be for that particular and specific month. I imagine that Pres. Biden's intention was to get us thinking that the worst of this inflation surge may well be over. Wherever we're at now, is the worst it's going to get and just like the stock market and just like gas prices, we now have the work of trying to reclaim some of the increase in wholesale and retail prices. So, Pres. Biden happily and correctly and truthfully said to the American people, "The good news is that the rate of inflation was zero for July." He also could have said that for the month of June that gas prices had not gone up for two weeks since June 13th. That would have been a totally true statement, although we were still paying close to $4/gal in my neck of the woods. But it would have been a comment that would create hope in those suffering through the high gas prices that we'd been through the worst of it and now we hope it gets better...which it continually has since that June high.

Then he left to go to Kiawah island in South Carolina for a well earned weeks vacation with his family that likely isn't like any vacation, as far as real free time, like you or I have ever had.. I'm sure that even on vacation he is constantly bombarded with meetings with various government counterparts and being notified of what's going on in the world and in the nation.

As far as your linking the video that you did, it seems a bit incongruous that you, who apparently thinks that Pres. Biden is doing a good job

He's done well.

would then post a video that is pretty much not supporting that position of Pres. Biden's work.

God bless.
Ted

 

[Corn Pop]

Amazing how gas price skyrocket and everyone has a cry then it lowers a bit and it called cheap. That's called conditioning.

 

[miamited]

Hi King Dan of Great the 1st

Could you point me to the article or post that has referenced current gas prices as 'cheap'? Without that evidence it would be amazing that someone would just make up such a position to post. Personally, I haven't referenced current gas prices as cheap and I honestly can't recall seeing any articles or posts that would support your idea that we're being conditioned in the manner that you explain.

Cheap gas is under $2. Much like cheap clothes come from Goodwill. Most businesses aren't fighting the consumer battle by being the cheapest. But cheap gas under $2 is not a sustainable long term price where everyone is satisfied with their profits. The only time we've had gas under $2 is when there's been some sort of crisis. The pandemic when there was suddenly a glut of refined fuels because half the country stopped going into the office to work and vacations were verboten. The 2009 financial collapse where 30% of the nation was out of work and markets and pretty much all financial instruments crashed for a time.

Yes, that's when you get 'cheap' gas, but it is not enough to sustain a healthy economy. In a healthy economy, as has been for the last 10 years, gas generally runs between $2.50 and $3.00/gal.

2010	2.715	2.644	2.772	2.848	2.836	2.732	2.729	2.730	2.705	2.801	2.859	2.993
2011	3.095	3.211	3.561	3.800	3.906	3.680	3.650	3.639	3.611	3.448	3.384	3.266
2012	3.380	3.579	3.852	3.900	3.732	3.539	3.439	3.722	3.849	3.746	3.452	3.310
2013	3.319	3.670	3.711	3.570	3.615	3.626	3.591	3.574	3.532	3.344	3.243	3.276
2014	3.313	3.356	3.533	3.661	3.673	3.692	3.611	3.487	3.406	3.171	2.912	2.543
2015	2.116	2.216	2.464	2.469	2.718	2.802	2.794	2.636	2.365	2.290	2.158	2.038
2016	1.949	1.764	1.969	2.113	2.268	2.366	2.239	2.178	2.219	2.249	2.182	2.254
2017	2.349	2.304	2.325	2.417	2.391	2.347	2.300	2.380	2.645	2.505	2.564	2.477
2018	2.555	2.587	2.591	2.757	2.901	2.891	2.849	2.836	2.836	2.860	2.647	2.366
2019	2.248	2.309	2.516	2.798	2.859	2.716	2.740	2.621	2.592	2.627	2.598	2.555
2020	2.548	2.442	2.234	1.841	1.870	2.082	2.183	2.182	2.183	2.158	2.108	2.195
2021	2.334	2.501	2.810	2.858	2.985	3.064	3.136	3.158	3.175	3.291	3.395	3.307
2022	3.315	3.517	4.222	4.109	4.444	4.929	4.559

This is what gas prices look like when the economy is healthy. These are facts, not make a wish prognostications.

God bless,
Ted

 

[hawkman]

60 cents for a gallon of ethyl , that would be nice and cheap !

 

[jasonc]

60 cents for a gallon of ethyl , that would be nice and cheap !

You must have an antique to use ethyl gas.

I thought pure gas (pure oil) was an oddity to see in north Florida and Georgia