Gas hasn't changed in value since 1950s

[Plow]

Your evidence is from 2007 and most likely uses misleading inflation measures. Besides, what exactly am I wrong about? Can you explain that at least?

Gas hasn't changed in value since 1950s

Adjusted for inflation gas in the 50's was around $2.25 a gallon.


Misleading inflation measures like "lawlz silver is at x compared to y?"

[guartz]

Adjusted for inflation gas in the 50's was around $2.25 a gallon.
Misleading inflation measures like "lawlz silver is at x compared to y?"

True, I guess my theory is shot if you believe the official 3-4% inflation rates.

But lets be a little more sheepish and look at other dates. 2007,

Gas prices at their highest in 2007 were $3.20
Silver at it's highest in 2007 was $15

oh look at that.

Wanna do 2006? 2005? 1990?

[Ashira]

Mmm.... am I reading the inflation graph wrong then? I don't see it as much of an indicator of where inflation stood - wouldn't all charts over time tracking the difference between the cost of something nominally vs the value in today's dollars essentially have the same opposing lines as the years increased and they reached the point of "now" where the nominal cost and today's value are the same? The biggest marker of inflation

Or maybe I read Plow's comment wrong, and he actually meant the value of gas went down, which yes, I *do* see. Still interesting.

Don't think Plow and the OP will see eye-to-eye on this argument though.. OP is arguing about how lack of a standard causes price rises and that the fed is evil.. Plow will be disputing that administrations and capitalism are evil. :D Not mutually exclusive, just different foci. :D

[guartz]

And alternatley, many of us are smart enough to know that your thread is provoking the sentiments of a community with a fact that may or may not be true but doesn't actual even equate to what they are angry about; Just that the wording implies that it might.

I'm not sure I follow Zoot, are you saying that I'm wrong to suggest inflation is the cause of our economic woes?

[guartz]

Mmm.... am I reading the inflation graph wrong then? I don't see it as much of an indicator of where inflation stood - wouldn't all charts over time tracking the difference between the cost of something nominally vs the value in today's dollars essentially have the same opposing lines as the years increased and they reached the point of "now" where the nominal cost and today's value are the same? The biggest marker of inflation

I just want him to realize that his chart is wrong, whether it has any relevance to what I said originally is another matter.

[Plow]

Mmm.... am I reading the inflation graph wrong then? I don't see it as much of an indicator of where inflation stood - wouldn't all charts over time tracking the difference between the cost of something nominally vs the value in today's dollars essentially have the same opposing lines as the years increased and they reached the point of "now" where the nominal cost and today's value are the same? The biggest marker of inflation

That's the issue with the argument he's trying to make. He's trying to attribute gas prices 100% to inflation, which is quite simply not the case as can be seen clearly by even simply watching the prices at the pumps day to day.

What he fails to realize is that inflation is more a result of gas prices than vice versa, as lowering wheat prices, for example, won't lower gas prices, whereas lowering gas prices will directly lower wheat (and everything else you ever use, like... ever, anywhere.. pretty much) prices.

Or maybe I read Plow's comment wrong, and he actually meant the value of gas went down, which yes, I *do* see. Still interesting.

Don't think Plow and the OP will see eye-to-eye on this argument though.. OP is arguing about how lack of a standard causes price rises and that the fed is evil.. Plow will be disputing that administrations and capitalism are evil. :D Not mutually exclusive, just different foci. :D

We won't see eye to eye because he doesn't see anything, he regurgitates what he hears without even actually listening to it.


To say inflation determines gas prices is to ignore reality.

[Khamsin]

When I clicked this thread, I thought this was going to be a conspiracy theory on how gas is still 25 cents per gallon, but we just get charged $5 because they can.

[guartz]

He's trying to attribute gas prices 100% to inflation, which is quite simply not the case as can be seen clearly by even simply watching the prices at the pumps day to day.


What he fails to realize is that inflation is more a result of gas prices than vice versa, as lowering wheat prices, for example, won't lower gas prices, whereas lowering gas prices will directly lower wheat (and everything else you ever use, like... ever, anywhere.. pretty much) prices.

I lol'd, and I think I'm being trolled. So a weaker dollar has no bearings of how much gasoline it can purchase. No sir.

[Zoot]

I believe you are smart enough to know the type of response you're going to get isn't the type of response that is a valid conclusion from your argument. The title of the thread is a pretty clear indication that you're just looking for someone to say, "Oh but gas prices are so high! You're wrong!" So you can flourish your facts in their faces. But what you are saying is irrelevant; The price of gas is something that has people very heated, I believe you are, as usual, trying to start a fire.

And yes, inflation is one of many causes of gas prices being so high; But it's not the only one. The price fixes on them and highs and lows, as the nation experienced in the 80's, and the energy consumption which has changed drastically since 1950 which has caused this actual need for large amounts of oil, opec, and the fact that the oil is a limited resources have caused the problem. Saying that the only perpatrater is the devaluing of the dollar is misleading. The cost of living has risen and the gas prices have lagged behind and shot up in unproportianal degrees, but the final result is that we got too used to cheap gas prices and our energy consumption is not proportional to our wages.

[Plow]

he's also using misinformation intentionally, average price in the U.S. since may til today are at 4.0-4.1


hence all the "roughly," easier to make an argument when you change the facts to say what you want them to

I lol'd, and I think I'm being trolled. So a weaker dollar has no bearings of how much gasoline it can purchase. No sir.

How much it costs for the gas it uses to produce and distribute everything you ever use in your entire freaking life has no effect on how much those things cost, right?

[Maxxthepenguin]

Here's the problem guartz: The market adapted to cheap gas. A lot of prices were based on that. A lot of products were based on gas being that affordable. The issue is less in the price being higher, it's that it was so amazingly sudden. Other countries have public transport systems set up because they didn't have gas at stupidly low prices, we are left with an infrastructure and culture based on the low price of gas and that fucks people up.

Also, you need to prove that silver is a good indicator. You also need to show how silver has done in the intervening years.

[Quixotic]

You realize that Fed printing bills isn't the only source of inflation, it can also happen due to foreign exchange markets selling their holdings on US currency (which...is a valid thing to do these days), right? Just putting that out there.

[Bingbong]

Also throw in the industrialization of India and China and the rise of energy demands that goes with that, and you sling that old X graph up, given that supply hasn't kept up with that rise in demand all that much in the last 10-12 years.

Complex issue with no easy answer.

[guartz]

Also, you need to prove that silver is a good indicator. You also need to show how silver has done in the intervening years.

Look at it yourself. Silver and Gas have been going up at a similar pace.

Since our trucks and foods don't rely on silver, per say, I say it's a very good indication of inflation.


edit: I realize that gas is very volatile (no pun intended lol) so there is some discrepancy, but considering that 50+ years, it's very minor.

[Tristam]

Also, you need to prove that silver is a good indicator. You also need to show how silver has done in the intervening years.

No single thing is a good indicator of inflation, a good indicator of inflation would be to measure the prices of hundereds of things that are common to a variety of households, maybe more.

The issue isn't just the price of gas, the issue for consumers with large paychecks is the price of the gas you use per month relative to your paycheck, which decreases spending power. This is why gas prices drive inflation, everything on earth that consumers buy has to travel to get somewhere it is sold. High gas prices cause prices of transporting those goods to rise, and the price to the consumer rises in tandem. this is why people on a fixed budget are getting really nervous. Whether the price of gas relative to inflation was higher or lower in 1950 dosen't matter a whiff if the bottom line is that people are going to see dramatic drops in spending power which cripples the economy.

[Plow]

Also, you need to prove that silver is a good indicator. You also need to show how silver has done in the intervening years.

Over the last 100 years the price of silver and the gold/silver price ratio have fluctuated greatly due to competing industrial and store-of-value demands. In 1980 the silver price rose to an all-time high of US$49.45 per troy ounce. By December 2001 the price had dropped to US$4.15 per ounce, and in May 2006 it had risen back as high as US$15.21 per ounce. As of 2006, silver prices (and most other metal prices) have been rather volatile, for example, quickly dropping from the May high of US$15.21 per ounce to a June low of US$9.60 per ounce before rising back above US$12.00 per ounce by August. In March 2008 silver reached US$21.34 per ounce.

wiki sauce
http://minerals.usgs.gov/minerals/pu...modity/silver/

[guartz]

No single thing is a good indicator of inflation, a good indicator of inflation would be to measure the prices of hundereds of things that are common to a variety of households, maybe more.

The issue isn't just the price of gas, the issue for consumers with large paychecks is the price of the gas you use per month relative to your paycheck, which decreases spending power. This is why gas prices drive inflation, everything on earth that consumers buy has to travel to get somewhere it is sold. High gas prices cause prices of transporting those goods to rise, and the price to the consumer rises in tandem. this is why people on a fixed budget are getting really nervous. Whether the price of gas relative to inflation was higher or lower in 1950 dosen't matter a whiff if the bottom line is that people are going to see dramatic drops in spending power which cripples the economy.

Yes. Good point. But gas is made from crude oil, which is purchased using dollars. If the fed prints lots of money, dollar weakens, which means you need more dollars to purchase the same amount of crude oil. Which causes the scenario above.

It's a vicious circle.

[Khamsin]

How much it costs for the gas it uses to produce and distribute everything you ever use in your entire freaking life has no effect on how much those things cost, right?

Not that I necessarily agree with guartz, but European truckers have been throwing shitfits recently over this very issue. Gas goes up, but they can't charge more for their services, meaning that the end consumer doesn't absorb the price... the trucking companies do.

[evilpaul]

I think the point that guartz and other people are making that some aren't following is that people are sitting on the deck of the Titanic (or whatever your preferred sinking ship is for the purpose of this analogy) and commenting, "Boy the ocean's water level sure is rising fast!" "Yeah, must be global warming!"

The ocean isn't changing visibly in real time, the ship is sinking. In the same respect, isn't it possible that it isn't just demand for gasoline increasing or the supply (or anticipated future supply) decreasing, but instead the value of the dollar is decreasing because there's a lot more dollars?

If you increase the supply of something, other things being equal, the per unit value of it drops.

If you are the Federal Reserve and create trillions of new dollars the value of each of those dollars is going to drop.

If a dollar isn't worth as much now, but the value of a gallon of milk is basically the same, then you're going to need to trade more dollars for a gallon of milk.

I don't know what a gallon of milk costs now or what it cost 5 or 10 years ago because I never drink the stuff and rarely use it for cooking, but if it's $4/gallon now and was $2/gallon a few years back the price doubled because it costs more to ship it?

Granted it's mostly water which is bulky and heavy and requires constant refrigeration, but the math there isn't working for me. Farmers are pretty stupid if they're making $0.05 per gallon on the stuff and it's all shipping.

Can someone explain that?

[Plow]

Yes. Good point. But gas is made from crude oil, which is purchased using dollars. If the fed prints lots of money, dollar weakens, which means you need more dollars to purchase the same amount of crude oil. Which causes the scenario above.

It's a vicious circle.

The issue is not inflation-- inflation itself is good. The issue is that gas has a massive effect on inflation, and huge changes in gas cause huge changes in inflation-- fast changes in inflation are not good.

Inflation gives you a reason to actually spend extra money you have, while allowing for investment to provide a similar result to "sitting on your money" if there was no inflation.

Hyperinflation results in producers not being able to afford the resources required to produce, do I really need to go into what happens then?


edit: pretty much covers khamsin's comment too