Posted on 08/14/2008 6:18:42 AM PDT by Sub-Driver
U.S. Inflation Hits 17-Year High As Increases Move Beyond Food, Oil By BRIAN BLACKSTONE August 14, 2008 9:15 a.m.
WASHINGTON -- U.S. inflation soared to a 17-year-high annual rate in July, a government report showed, led by gains in food, energy, airline fares and apparel.
Separately, the number of U.S. workers filing new claims for unemployment benefits fell slightly as expected last week but remained at high levels consistent with a rapid erosion in labor markets.
(Excerpt) Read more at online.wsj.com ...
I don’t think what we’re seeing is “inflation” by definition.
We’re seeing increased prices, yes, but there is a difference.
As you say, the dollar is strengthening, which is the opposite of inflation.
Inflation, economically, is “too many dollars chasing too few goods”.
It’s not that we have too little food - it’s just that transportation costs, due to lack of oil supply (this IS inflationary), have gone up.
Spot on, well said
...and the Gorelick wall that lead to the successful attacks of 9/11/01!!!
The opening of trading on the NYSE after that speech saw a multitude of "LOSE" buttons on the floor of the exchange.
Ok, so if I add those together, at the midpoint, that's 25%+15%=40%. Oil's at roughly $120 right now. The weak dollar would account for $24 bucks. Oil would be $96. So it looks like if you strengthen the dollar, by your numbers, oil would be under $100/barrel.
My biggest question has to do with this talk of "domestic supply." Hannity was talking last night about increasing domestic supply and energy independence, as if they are related. But I don't get how that can be.
We don't own the oil. Private companies will own it, assuming we sell them leases and allow drilling, right? And that oil won't be earmarked for domestic use, will it? It's price won't be subject merely to US demand, will it? It will add to the global supply, and impact the price however much it will, but drilling for oil won't create energy independence at all, will it? We'll still be buying foreign oil, and the price will still be subject to global demand, won't it?
Seems to me, energy independence will require something other than oil.
I saw that also, but have not been able to find any links to that poll, only references to it. Got any? I could sure use 'em.
I'm not sure that's true. Oil prices have gone from $60 to $120 in 4 years. I am not aware of demand for oil doubling during that time. Demand is rising, but doubled? I'm not so sure about that. My understanding is that the weak dollar is the root of the oil bubble.
“***We’re back to 1973. ***
WIN! Whip Inflation Now!”
NIM! No immediate miracles!
That sounds more like a leveraged hedge fund than an annuity. Annuities by definition should pay a stable amount. Stocks are for younger investors that can wait out a long down cycle. Did they invest in mortgages with borrowed money? I'm wondering if they are running a scam.
Washington will figure out a way to screw them like they did the retirees. Those on SS this year got 2.3% increase to cope with 5.6%. Increased costs plus reduced retiree income by slashed interest rates will have an effect on how seniors vote. They are not better off than they were 4 years ago.
Like the "Kings new Clothes" fable.
Everyone around me says "oooh, the water's rising(gas price)"
I think the boat is sinking.
It’s all due to the recent past precipitous rise in crude, which is in the process (currently) of coming down. Don’t let some Partisan Media Shill (or some goldbug, or some so-called balanced budget advocate) distract.
If you really want to get upset, do some research on the 27.5 percent oil depletion allowance that was in effect from 1926 until 1974.
This politically driven taxbreak gave producers of oil from domestic oil wells a tax deduction of about 27.5 percent of the value of the crude oil sold.
This was pre-OPEC and at time when crude oil from foreign sources was a glut on the market and often cost less (including shipping) than the cost of producing oil from domestic wells.
But the oil depletion allowance distorted the market and corporations made business decisions based on tax law as opposed to other industry and market criteria.
Because of these distortions caused by tax breaks, companies pumped our own, often more costly, domestic oil rather than buying cheap foreign oil because they ended up with more profit.
This was at a time when foreign oil was available for $2 - $3 a barrel (about $20 in 2008 dollars).
Without this sweetheart taxbreak we would still have much more of our own oil still in the ground.
Annual Average Domestic Crude Oil Prices 1949-Present
"Numerous studies showed that the oilmen were getting a tax break that was unprecedented in American business. While other businessmen had to pay taxes on their income regardless of what they sold, the oilmen got special treatment."
"An oilman drills a well that costs $100,000. He finds a reservoir containing $10,000,000 worth of oil. The well produces $1 million worth of oil per year for ten years. In the very first year, thanks to the depletion allowance, the oilman could deduct 27.5 per cent, or $275,000, of that $1 million in income from his taxable income. Thus, in just one year, he's deducted nearly three times his initial investment. But the depletion allowance continues to pay off. For each of the next nine years, he gets to continue taking the $275,000 depletion deduction. By the end of the tenth year, the oilman has deducted $2.75 million from his taxable income, even though his initial investment was only $100,000."
Just one more of a long line of “CHANGES” we’ve seen since dim-os won the congress back with their “common sense approach” to “CHANGING” the direction of America.
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