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Kansas Big Dog
...combined with a policy of not going after our own resources, it's a recipe for high price.

Seriously?

That and the continuing higher demand for fuel oil to heat folks out on the east coast.  The same thing happened with propane.  You need to remember your basic supply and demand economics.  Demand for petro products is up due to the sever winter that is continuing out east. And if we had built the pipeline from Canada, it would have increased supply.

But, gas is $3.45 here.   :down:

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You need to remember your basic supply and demand economics.

You really ought to stop believing the oil/gas companies' spin machine. They are making record profits and killing our economy in the process. It's time for Americans to wake up and demand an end to the modern day robber baron business tactics being leveraged against us for products that we must have in order to live.

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Larry Brown
I'm still good on propane, but the mail lady today told me that it was back down under $2.  Thought that was too good to be true.  Turns out:  just under $3 per my supplier.  That's progress, but still darned high.
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You need to remember your basic supply and demand economics.

You really ought to stop believing the oil/gas companies' spin machine. They are making record profits and killing our economy in the process. It's time for Americans to wake up and demand an end to the modern day robber baron business tactics being leveraged against us for products that we must have in order to live.

I hear this argument a lot but it just doesn't stand up to a bit of critical thinking. In 2012 the big 5 oil companies made 118 billion in combined profits. For that same yr the US GDP was 15.8 trillion. So the profits of big oil accounted for .007% of overall GDP. Do you really believe that .007% of GDP really has any affect on the economy at all? Our problems are so much bigger and more complicated than big oil profits. Besides, Govt rakes in on avg $.50 per gallon of gas, big oil $.07 per gallon of gas. A gallon of gas is a bargain and I am amazed we get it so cheap. What it takes to get it out of the ground, refined, distributed is nothing short of amazing.

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Larry Brown

Regardless of how big a "bargain" a gallon of gas is--and remember, it was under $2/gallon when Obama was elected--increases in energy costs have a significant impact on the economy.  Price of gas goes up, we start paying fuel surcharges--mostly hidden--for food and various other necessities.  Price of heating fuel goes up, like LP did this winter, that can be a significant hit on people's budgets.  I spent roughly $500 more for LP this winter--so far, and I only bought 200 gallons--than I would have normally spent.  That's on top of the fact that the winter's been much colder than average, which means heating costs would have gone up even if prices had not increased.  And LP has never been anywhere nearly as expensive as it has been this winter.  At the current $3 price, that's still twice as much as it cost last fall.

Result:  Everyone has less money to spend because they're spending more to run their vehicles and heat their homes.  People living close to the break even point can't afford an extra $1,000 to keep warm.

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You need to remember your basic supply and demand economics.

You really ought to stop believing the oil/gas companies' spin machine. They are making record profits and killing our economy in the process. It's time for Americans to wake up and demand an end to the modern day robber baron business tactics being leveraged against us for products that we must have in order to live.

I hear this argument a lot but it just doesn't stand up to a bit of critical thinking. In 2012 the big 5 oil companies made 118 billion in combined profits. For that same yr the US GDP was 15.8 trillion. So the profits of big oil accounted for .007% of overall GDP. Do you really believe that .007% of GDP really has any affect on the economy at all? Our problems are so much bigger and more complicated than big oil profits. Besides, Govt rakes in on avg $.50 per gallon of gas, big oil $.07 per gallon of gas. A gallon of gas is a bargain and I am amazed we get it so cheap. What it takes to get it out of the ground, refined, distributed is nothing short of amazing.

I think you're making the wrong comparison. What is relevant is the percentage of middle class Americans' income that remains after covering necessities. Between the fuel and grocery industry's price gouging, that number is currently very small. By reducing the cost of either, there could suddenly be a very large amount of cash available to be spent in other areas of the economy.

Isn't it interesting that published inflation figures no longer include fuel and groceries? Things that make you go, hmmm...

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Kansas Big Dog

You need to remember your basic supply and demand economics.

You really ought to stop believing the oil/gas companies' spin machine. They are making record profits and killing our economy in the process. It's time for Americans to wake up and demand an end to the modern day robber baron business tactics being leveraged against us for products that we must have in order to live.

I hear this argument a lot but it just doesn't stand up to a bit of critical thinking. In 2012 the big 5 oil companies made 118 billion in combined profits. For that same yr the US GDP was 15.8 trillion. So the profits of big oil accounted for .007% of overall GDP. Do you really believe that .007% of GDP really has any affect on the economy at all? Our problems are so much bigger and more complicated than big oil profits. Besides, Govt rakes in on avg $.50 per gallon of gas, big oil $.07 per gallon of gas. A gallon of gas is a bargain and I am amazed we get it so cheap. What it takes to get it out of the ground, refined, distributed is nothing short of amazing.

I think you're making the wrong comparison. What is relevant is the percentage of middle class Americans' income that remains after covering necessities. Between the fuel and grocery industry's price gouging, that number is currently very small. By reducing the cost of either, there could suddenly be a very large amount of cash available to be spent in other areas of the economy.

Isn't it interesting that published inflation figures no longer include fuel and groceries? Things that make you go, hmmm...

Tim, I am sorry but you are just plain incorrect. Most economists use the Bureau of Labor Statistics Consumer Price Index to calculate inflation.

From the BLS website:

 What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:

FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)

HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)

APPAREL (men's shirts and sweaters, women's dresses, jewelry)

TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)

MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)

RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);

EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);

OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

http://www.bls.gov/cpi/cpifaq.htm#Question_6

Here is the latest CPI info:

Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city

average

                                                                             

                                                                             

                                 Seasonally adjusted changes from            

                                         preceding month                      

                                                                         Un-  

                                                                      adjusted

                                                                       12-mos.

                             Aug.  Sep.  Oct.  Nov.  Dec.  Jan.  Feb.   ended

                             2013  2013  2013  2013  2013  2014  2014   Feb.  

                                                                        2014  

                                                                             

                                                                             

All items..................    .1    .1    .0    .1    .2    .1    .1      1.1

 Food......................    .1    .0    .1    .1    .0    .1    .4      1.4

  Food at home.............    .1    .0    .0    .0    .0    .1    .5       .9

  Food away from home (1)..    .2    .1    .1    .3    .1    .1    .3      2.2

 Energy....................   -.4    .3   -.9   -.4   1.6    .6   -.5     -2.5

  Energy commodities.......   -.4   -.1  -1.5   -.8   2.6   -.5  -1.3     -6.8

   Gasoline (all types)....   -.5   -.2  -1.6   -.8   2.6  -1.0  -1.7     -8.1

   Fuel oil (1)............   1.2    .9   -.6    .4   2.4   3.7   4.1      2.9

  Energy services..........   -.5    .8    .1    .0    .1   2.2    .7      4.8

   Electricity.............   -.1    .5    .2    .5    .4   1.8   -.2      3.8

   Utility (piped) gas                                                        

      service..............  -1.8   1.6   -.5  -1.5  -1.0   3.6   3.6      8.3

So, according to the BLS CPI, gasoline has actually dropped in price 8.1% from Aug 2013 to Feb 2014.

Food prices have risen 1.4% during the same time period.

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What is relevant is the percentage of middle class Americans' income that remains after covering necessities. Between the fuel and grocery industry's price gouging, that number is currently very small. By reducing the cost of either, there could suddenly be a very large amount of cash available to be spent in other areas of the economy.

100% agreed.

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Kansas Big Dog
By reducing the cost of either, there could suddenly be a very large amount of cash available to be spent in other areas of the economy.

Tim, there is no shortage of money in the economy with the Fed keep interest rates at zero.  The problem with the economy is there is no incentive to invest the money in new businesses as it is too risky in the current business environment.  All that cheap money is going into existing businesses (check out the inflated DJIA).

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The CPI is no longer the index that's widely reported. Instead, the Core Inflation rate is what is publicized and that does not include fuel or food. The "logic" is that those sectors are too volatile and would skew the number too drastically if included. Damned right they would!

As far as available cash, yes, business and banking is flush with cash. The average consumer is not. Consumers drive the economy.

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You need to remember your basic supply and demand economics.

You really ought to stop believing the oil/gas companies' spin machine. They are making record profits and killing our economy in the process. It's time for Americans to wake up and demand an end to the modern day robber baron business tactics being leveraged against us for products that we must have in order to live.

I hear this argument a lot but it just doesn't stand up to a bit of critical thinking. In 2012 the big 5 oil companies made 118 billion in combined profits. For that same yr the US GDP was 15.8 trillion. So the profits of big oil accounted for .007% of overall GDP. Do you really believe that .007% of GDP really has any affect on the economy at all? Our problems are so much bigger and more complicated than big oil profits. Besides, Govt rakes in on avg $.50 per gallon of gas, big oil $.07 per gallon of gas. A gallon of gas is a bargain and I am amazed we get it so cheap. What it takes to get it out of the ground, refined, distributed is nothing short of amazing.

I think you're making the wrong comparison. What is relevant is the percentage of middle class Americans' income that remains after covering necessities. Between the fuel and grocery industry's price gouging, that number is currently very small. By reducing the cost of either, there could suddenly be a very large amount of cash available to be spent in other areas of the economy.

Isn't it interesting that published inflation figures no longer include fuel and groceries? Things that make you go, hmmm...

I agree if the argument is the overall price of energy is having a negative impact on our economy. Where we differ is the "obscene profit" part.

It's my opinion the debasement of our dollar has more to do with high energy prices than any other factor. And as far as inflation figures published by the govt they are nothing more than a fairy tail, very similar to unemployment figures.

The middle class is an endangered specie, I'm not too optimistic that trend is going to change anytime soon.

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Kansas Big Dog
The CPI is no longer the index that's widely reported. Instead, the Core Inflation rate is what is publicized and that does not include fuel or food. The "logic" is that those sectors are too volatile and would skew the number too drastically if included. Damned right they would!

As far as available cash, yes, business and banking is flush with cash. The average consumer is not. Consumers drive the economy.

Economists look at the CPI, and so should we. Look at my previous reporting of the CPI, gasoline prices have actually dropped 8.1% between Aug 2013 and Feb 2014.

The prices are "more volatile" for fuel and food exactly because they are sold in more of a pure free market and respond more quickly to changes in demand and supply; which was my argument.

There maybe less consumption now, but that would not be due to food or fuel prices, it is because there is no growth in jobs and there are a whole lot of people not working that would like to work.

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While I could provide some pretty startling figures around Exxon's profit numbers, I'll skip that and focus on the agreed upon point- Fuel and grocery prices are having a real and significant negative impact on our economy. The questions then become: Why don't we hear any discussion along these lines at a national level? How can we create a national dialog to address what is clearly a threat to the well-being of our economy? Why does the mainstream media only report on the Core Inflation numbers?
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In February 2009, the national average for highway diesel was $2.205/gallon. In February 2014 the average was $3.984/gal. That works out to an average annual inflation rate of over 16% per year over the last five years. Are we to believe that the cost to deliver that fuel to us increased at the same rate?
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Larry Brown
The CPI is no longer the index that's widely reported. Instead, the Core Inflation rate is what is publicized and that does not include fuel or food. The "logic" is that those sectors are too volatile and would skew the number too drastically if included. Damned right they would!

As far as available cash, yes, business and banking is flush with cash. The average consumer is not. Consumers drive the economy.

Economists look at the CPI, and so should we. Look at my previous reporting of the CPI, gasoline prices have actually dropped 8.1% between Aug 2013 and Feb 2014.

The prices are "more volatile" for fuel and food exactly because they are sold in more of a pure free market and respond more quickly to changes in demand and supply; which was my argument.

There maybe less consumption now, but that would not be due to food or fuel prices, it is because there is no growth in jobs and there are a whole lot of people not working that would like to work.

KS Big Dog, fuel prices traditionally drop from summer to winter.  Start going down after summer vacation time is over.  Try comparing Feb 13 to Feb 14.  Seems to me the price of gas is unusually high FOR THIS TIME OF YEAR.  And just a guess, but it seems logical to me that food prices go up in the winter.  Not much buying going on in farmers' markets in cold country in the winter, which means more food is being trucked in from somewhere farther away.

But the real hit this winter has been for those of us who heat with LP.  Bad enough for me, but lots worse for people who burn a lot more of it than I do.  I was still running on the Sept fill of my 500 gal tank when I bought 200 more gallons in Feb.  Most people, unless they have a very good supplementary heat source, will have used a whole lot more than that up this way this winter.

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