Inflation/Gas Prices/Rising Prices in General

[burn_this_city]

Good to see the inflation thread has morphed into the EV thread.

I saw a graph yesterday that historically the only way the Fed was able to tame inflation was to raise borrowing costs above the inflation %. Inflation at 8.6% means rates might have to climb to similar levels, which would absolutely crush asset prices. Sample size was 5 times in the past between the 60s and today.

[iggy_oi]

Originally Posted by Azure

I think there are a small group of people in business, government, post secondary and other places who are trying to push an agenda that is centered around the completely unrealistic and stupid idea that fossil fuels need to end, and it has absolutely ZERO to do with saving the environment, and everything to do with their warped sense of how the world is supposed to function.

Fair enough, I mean I don’t agree but I appreciate the response. What is it that you believe they expect to gain by doing this for purely ideological reasons?

Oil = Evil. No compromise.
Gas = Evil. No compromise.

But there clearly has been some compromises, maybe not as much as you’d like but at the end of the day I don’t see how over exaggerating the situation on that end is anymore helpful than when the opponents do so.

ESG principle stupidity.

But even the oil and gas industry plays into that. I think the problem isn’t necessarily those principles, more so the practicality or lack thereof applied to how governments and businesses are trying to promote those principles.

If it were really about the environment, Canada would be a world leader in natural gas supply, AND also in the development of the technology used to extract and produce natural gas.

Or it could be that it is about the environment but governments aren’t taking a practical or sensible approach on the file. It’s not like that’d be a first for any government. I’ve said it before that I don’t think the current approach is going to be very effective, but that doesn’t mean I don’t think it’s possible to come up with a better plan that could be.

But instead, we are seeing a surge in coal power because of years of short sighted policies, which again have zero to do with actual environmental reasons.

You’re not necessarily wrong about the short sightedness of their policies in a lot of cases, again that’s not new ground for governments, but I think that’s probably a result of ineptitude on their part rather than your insistence that none of it is for environmental reasons. It’s similar to how every government has a plan to balance the budget, yet for the most part they all consistently fail miserably at it.

This attitude and misconception can be seen in how Mathgod thinks the world should function.

I’m not sure using a single anonymous poster on the internet as an example makes for a very strong argument in this case. I’m sure we could find more than a few posters who demonstrate how there is no compromise from those on the other side of the argument.

Fossil fuels need to end immediately.
The only reason we don't have the battery technology needed to immediately replace fossil fuels is because oil companies are evil.

Etc, etc.

Anyone with a shred of common sense knows both of those things are not realistic at ALL.

Literally no one is calling for or expecting fossil fuels to end immediately, nor have I seen anyone claim that we would already have replaced them had it not been for oil companies. If your gripe is that people are being misled, why are you attempting to do the same?

[Macman]

It seems to me that we’re currently in a bottleneck with few alternatives as far as fighting climate change goes. What are the alternatives as what we’re supposed to do other than paying for high fuel prices, stories in the news about people running out of gas on the side of the road cause they only had $20 or less and no transit to where they were going.

For people looking at buying a new vehicle, not that many alternatives other than gasoline, plus the allure of luxury vehicles is still very much there for most people.

We’re already doing a lot and have awareness but should expand industries that are more environmentally friendly like recycling for example. There’s already a lot of that. Does Canada have emission guidelines for vehicles for example like California?

We’re at the point where we need choices or tell people which vehicles they can no longer own or drive. Except it won’t really matter as Canada isn’t really a major contributor to climate change other than being a supplier of fossil fuels that are very much in high demand still.

[PepsiFree]

Originally Posted by Fuzz

You aren't really reading what I'm saying. It's not that we shouldn't fund the research, it's that there are limitations to progress that can't just be overcome by throwing money and research at it.

Given everything that’s happened over the last couple of years, along with things like certain countries putting an effective end to homelessness, I’m actually no longer convinced that there is any human problem we can’t solve completely by throwing significantly more money and research at it.

[Enoch Root]

Originally Posted by PepsiFree

Given everything that’s happened over the last couple of years, along with things like certain countries putting an effective end to homelessness, I’m actually no longer convinced that there is any human problem we can’t solve completely by throwing significantly more money and research at it.

... given sufficient time.

[PepsiFree]

Originally Posted by Enoch Root

... given sufficient time.

Sure, but the definition of “sufficient” seems to be dependent on funding.

[PeteMoss]

Originally Posted by Azure

I think there are a small group of people in business, government, post secondary and other places who are trying to push an agenda that is centered around the completely unrealistic and stupid idea that fossil fuels need to end, and it has absolutely ZERO to do with saving the environment, and everything to do with their warped sense of how the world is supposed to function.

Oil = Evil. No compromise.
Gas = Evil. No compromise.

ESG principle stupidity.

If it were really about the environment, Canada would be a world leader in natural gas supply, AND also in the development of the technology used to extract and produce natural gas.

But instead, we are seeing a surge in coal power because of years of short sighted policies, which again have zero to do with actual environmental reasons.

This attitude and misconception can be seen in how Mathgod thinks the world should function.

Fossil fuels need to end immediately.
The only reason we don't have the battery technology needed to immediately replace fossil fuels is because oil companies are evil.
Etc, etc.

Anyone with a shred of common sense knows both of those things are not realistic at ALL.

Why/how is Canada's natural gas any more climate friendly than anywhere else's natural gas?

[bizaro86]

Originally Posted by PeteMoss

Why/how is Canada's natural gas any more climate friendly than anywhere else's natural gas?

Because we have regulations around flaring and venting. So a lot less greenhouse gasses are emitted using the drilling and production process.

[PeteMoss]

Originally Posted by PeteMoss

It will involve giving money to poor people - so I'm confident we will have people here complaining about how its going to increase inflation and ignoring their prior posts that were expressing sympathy about the plight of lower income people.

Who could have predicted this National Post article: https://nationalpost.com/news/canada...more-inflation

[bizaro86]

Originally Posted by GordonBlue

and I hate people (not you, people in general) going on about what we all need to be doing to save the earth, while they're still flying for vacations multiple times per year.

not a lot of people walk the walk.

I think poor people are doing the most because they can't afford to do anything. they don't travel, don't drive off to a cabin every second weekend and ride quads, don't have 2 or more cars, heading off to the golf course, etc.

At our current pace of commodity prices and general inflation, a lot more people are going to be feeling poor pretty soon.

[Enoch Root]

Originally Posted by PeteMoss

Why/how is Canada's natural gas any more climate friendly than anywhere else's natural gas?

The fact that you, as someone who follows this topic reasonably closely, doesn't know that answer to that, is a pretty good illustration of the misinformation we see coming from the environmentalists in this country.

The entire process matters, with respect to extraction, refinement, and delivery. And Canada is one of the most responsible nations in these regards. But that doesn't suit the narrative that Canadian oil and gas is the devil.

[opendoor]

Originally Posted by burn_this_city

Good to see the inflation thread has morphed into the EV thread.

I saw a graph yesterday that historically the only way the Fed was able to tame inflation was to raise borrowing costs above the inflation %. Inflation at 8.6% means rates might have to climb to similar levels, which would absolutely crush asset prices. Sample size was 5 times in the past between the 60s and today.

Basically, yeah. The one difference this time is how quickly it came on, so theoretically it's less entrenched than those examples. Something similar happened in the early '50s where they went from deflation to near 10% inflation within a year, but then it dropped right back down within a year or two back to a normal level without interest rates having to go above the inflation rate.

Whereas in the late 60s, inflation slowly rose up over a period of several years. And the big mistake they made then was once inflation started to recede, they almost immediately dropped rates to where they were before. So in 1972, inflation was a relatively modest 3.2% after a few high years, but they had dropped interest rates from ~9% to ~3%, and it just started back up again stronger than before and was then spurred on by high energy prices.

That whole cycle happened again in the mid-'70s, except this time the floor for inflation and interest rates was even higher. The only way they finally solved it was ridiculously high interest rates in the early '80s that were sustained well above the rate of inflation for years on end. For a while in the '80s, you could get 10% bank interest rates while inflation was in the 3% range.

So at least they're acting relatively quickly now, though it was obvious that they should have been raising rates more in 2017 and 2018 when inflation was above the target rate. But yeah, I think it's pretty optimistic to think that 3-4% interest rates are going to cure inflation, but I guess you never know. I have seen some compelling arguments that our current situation has more in common with the 1950s inflation than the 1970s. The start of the Korean war led to a pretty quick shift in the economy and there was a supply crunch for a lot of things which drove inflation. But once those began to be sorted out, supply and demand came back into balance and inflation dropped quickly.

[_Q_]

A few months ago my favorite pizza place stopped doing buy one get the second pizza for 50% off. So the price of 2 large pizzas went up from about $45 to $60. When I asked them why they did this, they said the cost of everything has gone up, including labour and they just couldn't make it work with that deal in place.

Last night, I ordered from them and noticed that they brought the 50% off deal back.

So yay for fixing inflation BOC?

[blankall]

Originally Posted by PeteMoss

I think its obvious if we threw more money at developing the batteries they would be further along.

Companies need an ROI in a certain time frame. Very few companies (if any) are going to throw endless amounts of money that isn't going to return anything for 20 years. You need either government incentives or a disruptive new company (Tesla) to come in and force existing companies into action.

Except not. The Lithium Ion battery was a game changer, and the first company to get to the finish would have absolutely cornerned the market. You had all the major electronics companies competing with each other. The ROI was so massive that, and the technology had been close but not there for decades. Companies like Toshiba, Sony, Mitsubishi, and GE had snapped up all the top researchers.

Then in the early 2000s companies like Apple jumped in. Apple went around snapping up whatever top engineers they could find. They needed a way to compete with Walkmans, and the answer was a solid state drive that did not require replaceable batteries. They took technology from Toshiba and improved upon it. Do you want to put new double A batteries into your cell phone every few days? That's all the public pressure these companies needed.

Also, if you're basing your argument on the premise that government is always more efficient at developing technology, because they aren't worried about ROI, you're doomed from the start. If that were true, history would show us that almost all innovations come from the public sector, and nothing could be further from the truth.

Even now the competition for better batteries in the consumer electronics market is massive, and all the major players are throwing huge amounts of money at it.

[PeteMoss]

Originally Posted by Enoch Root

The fact that you, as someone who follows this topic reasonably closely, doesn't know that answer to that, is a pretty good illustration of the misinformation we see coming from the environmentalists in this country.

The entire process matters, with respect to extraction, refinement, and delivery. And Canada is one of the most responsible nations in these regards. But that doesn't suit the narrative that Canadian oil and gas is the devil.

I'm not sure the group of people that think that Canadian oil and gas is the devil inside of Canada is that large. I doubt there are many people who are against oil and gas in this country who are pro oil and gas in Saudi Arabia or something.

I'm sure there is US oil and gas propaganda that says their oil and gas is cleaner than ours (just like is being said here).

[PeteMoss]

Originally Posted by blankall

Except not. The Lithium Ion battery was a game changer, and the first company to get to the finish would have absolutely cornerned the market. You had all the major electronics companies competing with each other. The ROI was so massive that, and the technology had been close but not there for decades. Companies like Toshiba, Sony, Mitsubishi, and GE had snapped up all the top researchers.

Then in the early 2000s companies like Apple jumped in. Apple went around snapping up whatever top engineers they could find. They needed a way to compete with Walkmans, and the answer was a solid state drive that did not require replaceable batteries. They took technology from Toshiba and improved upon it. Do you want to put new double A batteries into your cell phone every few days? That's all the public pressure these companies needed.

Also, if you're basing your argument on the premise that government is always more efficient at developing technology, because they aren't worried about ROI, you're doomed from the start. If that were true, history would show us that almost all innovations come from the public sector, and nothing could be further from the truth.

Even now the competition for better batteries in the consumer electronics market is massive, and all the major players are throwing huge amounts of money at it.

The private sector is going to develop these things, but with incentives and support from the government.

[blankall]

Originally Posted by PeteMoss

The private sector is going to develop these things, but with incentives and support from the government.

So the answer to global warming is for the governments to give more money to the companies creating the CO2 in the first place? Also, how is more money going to help a team of scientists in Japan solve complex engineering and chemistry problems that take time to solve.

[jayswin]

Originally Posted by PeteMoss

I'm not sure the group of people that think that Canadian oil and gas is the devil inside of Canada is that large. I doubt there are many people who are against oil and gas in this country who are pro oil and gas in Saudi Arabia or something.

Wanna bet? Canadian Oil being dirty and in need of being shut down to help the world actually is a prevailing opinion when you go to most major cities outside of Alberta. Absolutely. I see and hear it all the time in BC and Ontario, with Quebec being on another level completely.

Now do they flat out make the connection that Saudi or American or whatever energy is better or call themselves "pro Saudi Oil"? No. But actions are all that matter and if they contribute to demonizing Canadian energy and their provinces get their energy from places like Saudi Arabia then the result is the same.

[PeteMoss]

Originally Posted by jayswin

Wanna bet? Canadian Oil being dirty and in need of being shut down to help the world actually is a prevailing opinion when you go to most major cities outside of Alberta. Absolutely. I see and hear it all the time in BC and Ontario, with Quebec being on another level completely.

Now do they flat out make the connection that Saudi or American or whatever energy is better or call themselves "pro Saudi Oil"? No. But actions are all that matter and if they contribute to demonizing Canadian energy and their provinces get their energy from places like Saudi Arabia then the result is the same.

The bolded is an accurate statement. At this point we aren't anywhere near ready for it.

As for Canadian oil - again I doubt the number of people who think Canadian oil is worse than other oil is pretty slim in Canada. I'm sure more complain about it because it is something they can actually influence a tiny bit vs complaining about oil in Iran.

[blankall]

Originally Posted by PeteMoss

The bolded is an accurate statement. At this point we aren't anywhere near ready for it.

As for Canadian oil - again I doubt the number of people who think Canadian oil is worse than other oil is pretty slim in Canada. I'm sure more complain about it because it is something they can actually influence a tiny bit vs complaining about oil in Iran.

There are large segments of Canadian society who think the oil sands should be totally shut down immediately. I don't know if its a majority of Canadians, but it might be.