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The price of food is going up and there is a shortage of video cards and CPUs and other computer parts. There is shortage of playstation 5 and parts for cars.
Covid did some thing.
One big reason is that Biden has crippled domestic energy position.
It was a week or so ago that he was begging OPEC+ to open the spigots. They didn't do so. Demand is increasing as things reopen. Combine higher demand, weak domestic production, policies unfriendly to oil, and the shipping bottlenecks, and you have a mess.
Like always its big money and politics looking how to squeeze the little guy. Production controlled by oil cartel, somebody gets an advantage in commodity market. Refineries going on/off line for variety of reasons. It can be anything or nothing. But greed always wins.
I'm not seeing lines, but gas prices certainly seem to be creeping up here in the DMV area. When I was traveling through Pennsylvania yesterday, I was regularly seeing $3.35 a gallon for regular unlimited. Where I fill up at Sams Club in MD, gas is now $2.82 a gallon, up from $2.75 a gallon the week before, and stations out in town have also similarly gone up (still about 25 to 30 cents a gallon more than Sams Club, though).
The Hutchinson Parkway Mobil is up from $2.45 at the height of the pandemic to $3.59 now. It had been as high as $4.45 during July 2008 and $4.85 after Sandy. It got rapped with a price-gouging complaint for that and paid a fine, after jumping from $3.29 pre-hurricane. A Gulf station I frequent in White Plains was as low as $2.03 during the pandemic and now it's $3.19. Costco is $3.07 after being about that level pre-pandemic and dropping to $1.65 during the pandemic.
One big reason is that Biden has crippled domestic energy position.
It was a week or so ago that he was begging OPEC+ to open the spigots. They didn't do so. Demand is increasing as things reopen. Combine higher demand, weak domestic production, policies unfriendly to oil, and the shipping bottlenecks, and you have a mess.
The Democrats want to restrict the use of fossil fuels at a time when energy demand is surging. It's not one event, but they've set the tone for constraining the supply of cheap fuels in the face of surging demand.
Biden's attack on U.S. energy producers, starting with his freeze on federal oil and gas leases. Biden has pushed those prices, which were already rising because of severe weather, even higher by gratuitously alienating Saudi Arabia. The Gulf kingdom just surprised energy markets by announcing it would not raise oil output, despite developing supply constraints and rising prices. Oil prices jumped on the news, popping 4 percent to pre-pandemic levels for the first time in a year; the surge rattled markets already nervous about rising inflation.
The Saudis are reminding Biden that they can be a valuable ally or a formidable foe. Biden has pushed those prices, which were already rising because of severe weather, even higher by gratuitously alienating Saudi Arabia.
Upon taking office President Biden immediately froze arms sales to the UAE, He next halted military aid to the Saudi war in Yemen and rescinded the terrorist organization designation applied to the Houthis by President Trump, emboldening that group to step up their attacks on Saudi Arabia.
Also, it took a full month for Biden to call Israeli Prime Minister Benjamin Netanyahu, finally speaking to the leader of one of our strongest allies only after reaching out to more than a dozen other heads of state.
All these gestures made it clear, not that "America is back," as Biden has proudly announced, but that America is going backward...fast.
Saudi Arabia still occupies the enviable position of swing oil producer; they are currently producing about nine million barrels of oil per day, down from 9.8 million barrels in 2019. The country has the capacity to produce between 11 and 12 million barrels, thus allowing it to flood the market when prices get too high. Because the nation is wealthy, it also can cut output to prop up prices, as it did last year when, due to COVID-19, energy demand collapsed.
In other words, despite the growth in U.S. oil output in recent years, the Saudis still run the show. And MBS runs Saudi Arabia. Last year, a personal confrontation with Vladimir Putin drove him to push a price war with Russia; almost certainly, the recent decision to drive prices higher was also his.
It is clear those are just his opening moves; Biden's appointments of progressives to important Cabinet posts and insertion of climate issues into every agency's agenda will doubtless drive U.S. oil and gas investment and production down over time. Consequently, prices will increase.
Saudi Arabia still occupies the enviable position of swing oil producer; they are currently producing about nine million barrels of oil per day, down from 9.8 million barrels in 2019. The country has the capacity to produce between 11 and 12 million barrels, thus allowing it to flood the market when prices get too high. Because the nation is wealthy, it also can cut output to prop up prices, as it did last year when, due to COVID-19, energy demand collapsed.
Right out of the gate, Biden curtsied to the climate warriors by canceling the Keystone Pipeline and, more consequentially, pausing the leasing of federal lands for oil and gas development. Federal lands account for about 22 percent of U.S. oil production.
It is clear those are just his opening moves; Biden's appointments of progressives to important Cabinet posts and insertion of climate issues into every agency's agenda will doubtless drive U.S. oil and gas investment and production down over time. Consequently, prices will increase.
In 2012, President Obama suffered one of the worst-ever drops in his approval rating when gas prices spiked. According to a NYTimes/CBSNews poll at the time, "54 percent of poll respondents believed that a president can do a lot to control gas prices..." and had punished Obama accordingly.
The other knock on all this is that gas prices permeate underneath and inform the price of everything else.
I was going to head to Popeye's for a quick dinner tonight after something came up at home where I didn't have that much time to cook. The dining room was closed because of a lack of personnel. This is happening more and more often.
I went to a locally owned place instead. $12 for an Italian sandwich with ham, salami, pepperoni, veg, and a bit of prosciutto. That sandwich, with a cup of chili ($1.95) and two craft beers, was $30.14. I gave the waitress some loose bills I had in my wallet for the tip ($6), so that small dinner was $36. That might have been $20 a few years ago.
According to the bartender, I was the fourth customer (around 7 PM) since she had been there at 4 PM, at a normally busy bar. Sure, it's a Monday night, but still. I'm sure the restaurant's costs have gone up somewhat due to higher food prices caused by higher gas prices, among other things. The customer's budget is being squeezed on the other end from the high gas prices - they have less discretionary income to spend at the restaurants and bars after accounting for their higher critical bills. At least here locally, it seems like the wall is being hit on consumer spending. Inflation, and gas prices are a big part of that, are starting to crowd out discretionary spending.
I'm fairly high income in my local area. I should make about $97k as a legally single guy in a small town in Tennessee. With that said, $35 sandwich and two beer dinners are making me rethink going out. Grocery prices are up enough as it is - I'm starting to shop at Aldi instead of the local stores more.
Gas prices contribute to everything.
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