Blueberry, suggesting that we are using less oil and gas is opposite to what is actually happening. We have a gas supply problem caused by overproducing gas for a few years. That resulted in prices plummeting which caused producers to halt production from many wells. Then we had the pandemic starting 2 years ago which caused a drastic reduction in consumption. Now the pandemic is having a lot less effect and pent up demand is pushing production capacity to the limits. Fortunately, the higher prices will eventually bring more production into the picture which will tend to push prices down again. Its complicated.
Gas (natural gas, etc) … prices are up due to cutbacks in productions (fracking).
But demand is up.
I’m not sure about your question…as Sherlock Holmes says, It’s elementary. There is an easy connection in my mind…and I’ve had college economics classes.
After a decade of little ability to increase prices due to a terribly recalcitrant economic recovery…businesses are seizing the opportunity to raise prices.
I think that’s the correct explanation.
'22 may bring recession…and that could put a stop to rapid price increases…stay tuned.
Every economic expansion is ended by an economic recession. The last big one was 2007/2008 when the economy went into a mega recession. The fundamental reason for that recession was a massive bubble in housing. When it collapsed, the banking industry was caught high and dry and nearly fell all the way into bankruptcy. Ask yourself where we have a bubble now? I submit that it is a massive fed moderated money bubble from keeping interest rates artificially low while pumping unprecedented amounts of cash into the economy via quantitative easing and other measures that upped the amount of fractional reserve currency loaned by banks. It is impossible to pump that much money into the economy without triggering massive inflation. We could very easily see the return of double digit interest rates along with double digit inflation levels. If anything, the pandemic prolonged the current economic expansion by suppressing economic activity for most of last year.
But…The bubble now is the lack of turning over of money (velocity).
And…similar to 2000 and 2008, people are borrowing like crazy to participate in the run-away stock market…when ‘tulip mania’ hits, there is always an eventual recession!
