This has irked me from the day it began. A local product consumed locally should have a price minus the cost of global opportunity.
Oil and gas are both cheaper in Alberta than just about everywhere else. That's the differential oil and gas firms and the government are always complaining about.
One unfortunate result of the global nature of oil as a commodity is that the current situation is not benefitting Canadian O&G as much and the WCS to WTI discount/differential is ever growing.
Biden opening up US strategic Petroleum reserves and the ability for unsavory countries to buy super-cheap Russian old has left Canadian Oil back in a +$20 discount over WTI as there is less demand for our sour and pipeline challenged Oil Sands product.
Well SCO is trading at $7 premium to WTI so its not all bad for Oil Sand companies. The widening WCS differential will hopefully be short lived once the SPR stops releasing heavy sour and switch's back to light sweet. And a $20 differential on $120 WTI is a lot different for companies then on $45 WTI.
Is it me or does the reported inflation numbers for Canada seem really low? When you look at groceries, gas and natural gas alone, the number 6.8 seems low. That doesn't include things like vehicles which are up 15-20% etc.
It's just an average, and people experience inflation differently depending on their situation. Someone who drives a big vehicle a lot, has a variable rate mortgage, and a large family to feed will be feeling the crunch far more than a retiree with a a paid off house who fills their gas tank once a month.
Some people argue that alternative inflation measures are more accurate, but none that I've seen withstand any real back testing. For instance, this chart always gets posted:
But if the Alternate CPI was accurate, then we would have seen inflation of about 700% in the last ~20 years, which is obviously not even close to reality.
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The inflation pain train started long before the war in Ukraine. The war is just the cherry on top.
And just before anyone thinks it, no, it's not all Biden's fault. The way his administration has been managing inflation/energy policy has been terrible...but it's a a culmination of years (decades?) of bad Western policy, mixed with a black swan Covid event that shook how the world does business. Yes, the war has made it worse, but even if the war would end tomorrow, many of the issues are not going away until the issues of supply are fixed.
The uptick in inflation as shown on that chart coincides almost perfectly when COVID stimulus would have started really flowing through the economy.
It really shouldn't surprise anyone that injecting TRILLIONS of dollars into the economy would have inflationary results.
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The inflation pain train started long before the war in Ukraine. The war is just the cherry on top.
And just before anyone thinks it, no, it's not all Biden's fault. The way his administration has been managing inflation/energy policy has been terrible...but it's a a culmination of years (decades?) of bad Western policy, mixed with a black swan Covid event that shook how the world does business. Yes, the war has made it worse, but even if the war would end tomorrow, many of the issues are not going away until the issues of supply are fixed.
I'm talking about gas prices. Not inflation as a whole.
There is no doubt the US over shot on their recovery funding in the last batch.
The uptick in inflation as shown on that chart coincides almost perfectly when COVID stimulus would have started really flowing through the economy.
It really shouldn't surprise anyone that injecting TRILLIONS of dollars into the economy would have inflationary results.
Sure, but given that this is basically everyones "first pandemic" what would you have had them do here? Just let chaos reign? The problem is if you aren't going to inject crazy amounts of money into the system in 2020, you are going to have rioting and chaos almost certainly. You have a massively deflationary event (Covid) and need inflation at that time.
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Curious to hear what people are receiving this year for a raise and if employers are recognizing the huge rise in prices that their employees are facing. We finally received our first increase in 8 years. Cost of living increase and it was 3%.
5% additional from the CEO plus another 3% is standard every year unless you are not performing so I should be around 8% this year which just about covers inflation on food and gas.
Sure, but given that this is basically everyones "first pandemic" what would you have had them do here? Just let chaos reign? The problem is if you aren't going to inject crazy amounts of money into the system in 2020, you are going to have rioting and chaos almost certainly. You have a massively deflationary event (Covid) and need inflation at that time.
I didn't say anything about what I would "have had them do", just that people shouldn't be surprised.
As PeteMoss alluded to, in hindsight, it's pretty clear the relief funding was overshot... And now we all get to enjoy the results.
The inflation pain train started long before the war in Ukraine. The war is just the cherry on top.
And just before anyone thinks it, no, it's not all Biden's fault. The way his administration has been managing inflation/energy policy has been terrible...but it's a a culmination of years (decades?) of bad Western policy, mixed with a black swan Covid event that shook how the world does business. Yes, the war has made it worse, but even if the war would end tomorrow, many of the issues are not going away until the issues of supply are fixed.
Labeling the pink 'Biden' is pretty funny. It would be far more informative to start at April, 2020 (right at the bottom), and label it 'Covid'
A video from a youtuber not know for these videos and more about educational videos. Relate to US economy but just as other graphs the Canadian money printing looks essentially the same
I didn't say anything about what I would "have had them do", just that people shouldn't be surprised.
As PeteMoss alluded to, in hindsight, it's pretty clear the relief funding was overshot... And now we all get to enjoy the results.
It's interesting though...in 2008-09 I heard the same arguments about how inflation was going to be out of control and how they were putting too much money into the system. This time, the issue seems to be supply-chain issues and concerns though, and the money printing seems more coincident?
The uptick in inflation as shown on that chart coincides almost perfectly when COVID stimulus would have started really flowing through the economy.
It really shouldn't surprise anyone that injecting TRILLIONS of dollars into the economy would have inflationary results.
It hasn't at other times. There were periods in the '60s and the '80s where the money supply increased significantly over a relatively short period of time, but inflation remained relatively low.
If you look at the US money supply over the last 60 years on a logarithmic chart, it's relatively stable. There's a bump up in the first half of 2020, but it's not as dramatic as people seem to be suggesting. People throw around stats like "40% of all money was created in the last 2.5 years", but that's not all that abnormal. 35% of all money at the time was created in a 3-year period in the mid-60s and almost 40% of all money at the time was created in a 3-year period in the mid '80s. Current inflation has more to do with cheap debt that was maintained for far too long and commodity price spikes.
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It's interesting though...in 2008-09 I heard the same arguments about how inflation was going to be out of control and how they were putting too much money into the system. This time, the issue seems to be supply-chain issues and concerns though, and the money printing seems more coincident?
Way more money in the last 2 years than in 08/09.
Also, that was during a financial collapse - we would have had deflation, probably massive deflation, if not for the stimulus.
This time we have massive spending, along with supply chain issues, and a global recovery, with a war cherry stuck on top - kind of a perfect storm.
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Also, that was during a financial collapse - we would have had deflation, probably massive deflation, if not for the stimulus.
This time we have massive spending, along with supply chain issues, and a global recovery, with a war cherry stuck on top - kind of a perfect storm.
Yeah, that amount of money that everyone was up in arms about in 2008-09 is paltry in comparison, no question. But again, what would you have had them do in March 2020? Once the decision was made to put the economy into hibernation (which was completely uncharted territory(, there weren't many choices aside from sending out a lot of cash. If that doesn't happen, you almost certainly get civil unrest as people are starving and have no way to provide for themselves.
It's interesting though...in 2008-09 I heard the same arguments about how inflation was going to be out of control and how they were putting too much money into the system. This time, the issue seems to be supply-chain issues and concerns though, and the money printing seems more coincident?
They are all inter-related, I would think. Trump's tax cuts added money to the economy at a time when it was already in danger of over-heating. That increased the conditions for risk. COVID money itself was probably just a temporary pressure on prices, but made the risk of inflation higher. I don't know how much the covid relief impacted the job market, but the lack of supply of workers definitely added to the snowball of pressuring prices upwards. Then the supply chain issues came, then the war in Ukraine.
All of it is to blame really. Some of these things have to be temporary, you would think? It seems we'd be getting close to the point where prices at least stabilize at a new normal. Once they stabilize (even at a high price point), then inflation is no longer a problem, and some of the inflation fighting measures can stop.
