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 * U.S. Economy
 * Top News




CONSUMER PRICE INDEX RISES 3.7% Y/Y IN AUGUST, FUELED BY GASOLINE, HOUSING
PRICES

Sep. 13, 2023 8:32 AM ETBy: Liz Kiesche, SA News Editor478 Comments

miniseries

Consumer prices heated up again in August, as the prices of gasoline and housing
contributed to the Consumer Price Index. For the month, the measure increased
0.6%, the same as the 0.6% expected and surging from +0.2% prior.

On a year-over-year basis, the CPI rose 3.7%, outpacing the 3.6% consensus, and
accelerating from 3.2% in July.

The price of gasoline was the biggest contributor to the month's increase, as
expected, accounting for more than half of the rise. The energy index rose 5.6%
in the month and the food index increased 0.2%.

Housing also added to the upward pressure on inflation. The shelter index rose
for the 40th straight month, the U.S. Bureau of Labor Statistics said Wednesday.

Core CPI, which excludes volatile food and energy prices, increased 0.3% during
the month, exceeding the 0.2% rise expected and compared with +0.2% prior. +4.3%
Y/Y vs. +4.3% expected and +4.7% prior.

SA Investing Group Leader Lawrence Fuller points to the slowing Y/Y pace of core
CPI as evidence of "the disinflationary trend that began last summer. The fact
that shelter costs continue to be the largest contributor to the increase in the
core rate is encouraging, because we know that new rental rates, where price
increases are negligible, will bring that number down meaningfully in the year
ahead. The Fed's rate-hike cycle most assuredly ended in July."

The segments that contributed to the monthly increase in core CPI included rent,
owners' equivalent rent, motor vehicle insurance, medical care and personal
care. Indexes for lodging away from home, used cars and trucks, and recreation
declined in August, the BLS said.



The food index increased 4.3% over the last 12 months, while the energy index
declined 3.6%.


MORE ON THE U.S. ECONOMY

 * Next Recession Not Likely a Disaster
 * Data on U.S. Treasury, TIPS Yields and related ETFs
 * Experts fear auto workers' strike could have major ripple effects, worse than
   2019 strike
 * U.S. government shutdown looms amid political impasse in House
 * Consumers see inflation roughly stable in August, but job outlook dims: NY
   Fed



SharePrintComments (478)

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COMMENTS (478)

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Robert NYC
21 Sep. 2023, 3:43 PM
Premium
Comments (5.93K)
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WOW! That dot-plot was BRUTAL.



Higher for longer indeed1
ReplyLike
SenoraMatadora
21 Sep. 2023, 3:50 PM
Comments (1.75K)
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@Robert NYC You're only now seeing the Dot-Plot?



One would think a professional trader would have read the presser and watched
Chair Powell's Q&A yesterday afternoon.



Perhaps a refresher course in the fundamentals of trading is in order.
ReplyLike(1)
Robert NYC
21 Sep. 2023, 4:50 PM
Premium
Comments (5.93K)
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@SenoraMatadora Actually, the one I looked out came out yesterday. Your point?
ReplyLike
SenoraMatadora
21 Sep. 2023, 4:59 PM
Comments (1.75K)
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@Robert NYC What one did you look at yesterday and why is its import only
registering 24 hours later? The point is timing in trading is paramount, not so
much in revisionist history.
ReplyLike
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Robert NYC
19 Sep. 2023, 6:44 PM
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Comments (5.93K)
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Inflation is caused by too much money. Volcker in the 1980s basically dressed
down Congress asking them to stop spending as he fought inflation.



Here is a chart from The Fed about federal spending. You can see the COVID spike
in 2020, and then clearly see the 30% increase base level since Biden was
elected. It is pretty simple as to why we have inflation if you believe in
Milton Friedman.



fred.stlouisfed.org/...
ReplyLike
A
Announcer56
20 Sep. 2023, 8:02 PM
Investing Group
Comments (127)
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@Robert NYC Friedman was right, inflation is always and everywhere a monetary
phenomenon. What so many fail to understand is that it is a hidden tax on fixed
dollar value assets - bank accounts CDs, bonds, etc. The poor and middle class
disproportionately have their wealth in these. . It is therefore a regressive
tax.
ReplyLike
A
Announcer56
20 Sep. 2023, 9:21 PM
Investing Group
Comments (127)
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@Robert NYC Inflation is everywhere and always a monetary phenomenon.
ReplyLike
B
Blue Goose
20 Sep. 2023, 10:01 PM
Investing Group
Comments (4.83K)
|
+ Follow
@Announcer56 Friedman admitted later he was wrong. Inflation is almost entirely
a supply-side creation.
ReplyLike
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T
Tileman7
16 Sep. 2023, 10:54 AM
Premium
Comments (332)
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Bidenomics it’s what’s for dinner
ReplyLike(3)
D
Dirtooooo
15 Sep. 2023, 12:07 PM
Premium
Comments (492)
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There are honestly so many items that feel like they are twice as expensive as
they were in 2021.
ReplyLike(6)
thumb.ai
15 Sep. 2023, 5:19 PM
Comments (3.66K)
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@Dirtooooo Feels like my experience for products that don't have much
competition. If a local supplier shut down or just stopped making that product,
the remaining suppliers can jack prices. e.g. NPR radio had on a small ice cream
maker in New England, saying they used to get black rasberries delivered for
$2,000 that now costs $6,000, and for cookies 'n cream the ice cream maker now
has to drive 2.5 hours to the remaining cookie supplier who apparently won't
deliver.



But products I can cross-shop from multiple manufacturers getting cheaper.
ReplyLike(1)
T
Tileman7
16 Sep. 2023, 10:54 AM
Premium
Comments (332)
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@thumbsoup and your point is …….
ReplyLike(1)
J
JRS5
14 Sep. 2023, 3:45 PM
Investing Group
Comments (1.5K)
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+ Follow
Ironically, Biden has embraced his mess of an economy and gleefully branded it
"Bidenomics." In doing so, Team Biden has sought to spin this demonstrably bad
economy as really not bad at all. In fact, according to Biden, it's doing great.



Leftmedia talkingheads mostly go along with the gaslighting. In early August,
Newsweek published an article declaring: "Biden's Economy Is Booming. Here's Why
You're Not Feeling It." The article quoted a former economic adviser for Ronald
Reagan, Arthur Laffer, who said, "If I were a Biden economist today, I'd be
smiling." Why? Well, according to Laffer, "Inflation numbers are coming way
down, employment numbers appear to be strong, real wages for the first time
appear to be increasing, the GDP number is 2.4 percent — that at least in recent
historical context is pretty damn good — the stock markets had 11 straight days
of positive."



At that moment, he was right, but today's economic news is telling a different
story. Inflation has reversed course and is rising again for the second straight
month. It's now back up to 3.7% over last year after a monthly jump of 0.3%.
Meanwhile, for the third straight year, Americans' inflation-adjusted median
household income has decreased, down another 2.3% from last year.



The reality is that Bidenomics after a pandemic is making Americans poorer.
Everything costs increasingly more in Biden's America.



Speaking of being poorer, that "lowest unemployment" rate Biden boasts about
hasn't translated into reducing the poverty rate. Last year, poverty in America
rose to double digits, coming in at 12.4%, which was up from 7.8% in 2021 and
5.2% in 2020. For Democrats who have a long history of complaining over any kind
of wealth gap in America, Biden has been far worse for the country than Donald
Trump ever was with those supposed "tax cuts for the wealthy."



It's not just Biden's massive spending programs that have resulted in this
negative economy; it's also his war on fossil fuels. The price of gas hit an
all-time high last summer and has still not come back down to anywhere near the
price when Trump was in office. Last month, overall energy prices rose 10.6%,
which was the leading factor contributing to the jump in inflation.



Meanwhile, Biden keeps pumping money into his EV crusade, as he seeks to push
Americans into buying expensive vehicles that the majority can't afford and that
are simply not practical enough for their everyday needs. Just this week, the
Biden administration announced another $100 million in federal funding to
bolster the availability of public EV charging stations.



According to Transportation Secretary Pete Buttigieg, "This funding represents
the latest step toward building a convenient, affordable, reliable charging
network that reaches every corner of our nation." His "generosity" is too late
for Energy Secretary Jennifer Granholm and her EV misadventure, but this income
redistribution will help ensure that inflation continues to be a problem for
Americans into the future.



Despite economic reality, the Leftmedia continues to go to bat for Biden with
pieces like this from CNN: "Why Biden's strong economy feels so bad to most
Americans." Evidently, the growth that counts the most to Americans — paychecks
and bank balances — is what all these Bidenomics apologists ignore.



This Leftmedia attempt to gaslight the American public on the "success" of
Bidenomics has been failing because, no matter how hard they try to sell it,
that stink Americans are smelling isn't perfume.
ReplyLike(8)
f
fifth.green
15 Sep. 2023, 7:58 AM
Premium
Comments (5.23K)
|
+ Follow
@JRS5 I disagree. Go out and open your eyes, new cars on the road, supermarkets,
restaurants jammed with people. Amazon deliveries clogging The streets. The
AirBNB people are having there best years, lots of descretionary ncome. Like
Herman non vaxed Cain said, if your not getting rich its your own fault, not
Bidens.
ReplyLike
M
MichaelW_R
15 Sep. 2023, 8:50 AM
Investing Group
Comments (1.48K)
|
+ Follow
@JRS5 How true! I have been perusing the Federal Reserve Board Regional
Manufacturing Surveys recently. Although input prices has been steady
manufacturers are taking the opportunity to help their profit margins by raising
prices. The story here is all about margins. So the inflation that the Fed is
trying to tame has a long way to go and I haven't even touched on services. The
job additions that Biden likes to crow about are nothing more than rehires from
the pandemic.
ReplyLike
f
fifth.green
15 Sep. 2023, 9:00 AM
Premium
Comments (5.23K)
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@MichaelW_R we are a service economy not manufacturing. Yes Biden should put
strict control over companies profits right?
ReplyLike
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k-ski
14 Sep. 2023, 10:40 AM
Comments (1.87K)
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ppi came in hot soooo do we get the normal .5-1% rally OR will it be a face
ripper 2% up day??
ReplyLike
Dale Roberts
14 Sep. 2023, 3:48 AM
AnalystPremium
Comments (23.65K)
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Got oil and gas stocks?
ReplyLike(1)
f
fifth.green
15 Sep. 2023, 1:26 PM
Premium
Comments (5.23K)
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+ Follow
@Dale Roberts its easy financials are toast in rising interest rates. go with
the flow!
ReplyLike
k
katmandu100
13 Sep. 2023, 5:28 PM
Investing Group
Comments (9.11K)
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Interesting info.
ReplyLike
SivBum
13 Sep. 2023, 2:20 PM
Comments (8.83K)
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Silver lining, the COLA social security benefits were up 5.9% FY2022, 8.7%
FY2023 and projected to be 3.2% FY2024. That is 6.6% average:



www.cnbc.com/...
ReplyLike(1)
thumb.ai
13 Sep. 2023, 1:03 PM
Comments (3.66K)
|
+ Follow
Shelter decreased Month over Month. From 0.4 in July to 0.3 in August.



Good news, right?



Shelter, third row from bottom in the table:
www.bls.gov/...



Rent is negative:
www.apartmentlist.com/...



Fed research report estimates declining Shelter thru 2024. Problem solved!
www.frbsf.org/...



But the Fed may increase Shelter inflation if they raise rates again, in my
opinion.



- When the Fed quickly raised rates to 5%, that increased mortgage rates to 7%



- most of the supply is existing homes, and "rate locked" existing owners with
3% mortgages don't want to sell when they have to buy in a 7% rate market



- which constrained house supply and therefore drove prices higher
fred.stlouisfed.org/...



Raising interest rates again may raise the Shelter index for inflation. Which
leads to more calls to raise rates again...
ReplyLike(4)
Shamanski
13 Sep. 2023, 1:14 PM
Premium
Comments (4.65K)
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@thumbsoup
Great point on rents and CPI.
People do not want to listen, but when the CPI reports finally start to show
shelter dropping or staying flat, they will listen.



Rents are flat or decreasing in most of the country, but that is not showing up
yet in the CPI reports only because of how they calculate everything. Soon
enough that will show up, just in time to give rate cuts.



People need to understand what is going on here, or don't and cry when they cut
rates !
ReplyLike(1)
f
fifth.green
13 Sep. 2023, 1:39 PM
Premium
Comments (5.23K)
|
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@thumbsoup I once had a 10% adj rate, did not hurt me in the end. Its called
leverage. You got to get your foot in the door with a cheap home and keep moving
up with the equity. Yep the first one is the hardest, nothing new there.
www.rocketmortgage.com/...
ReplyLike(2)
k
kmi
13 Sep. 2023, 5:11 PM
Investing Group
Comments (13.81K)
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@thumbsoup



Section 8 rent subsidies jumping like $300-400 for 2024 in NYS as illegals
compete with Americans for housing driving rents skywards.



The push-pull on workforce housing is dragging middle class housing costs up
with it



Great time to be a NY landlord right now.
ReplyLike(1)
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H
Harsh Truth
13 Sep. 2023, 12:58 PM
Comments (2.78K)
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Monthly inflation rate in August was 0.6% and the way oil prices (which affect
prices of ultimately everything) are rising, the projected yearly inflation rate
in August 2024 would be 0.6 x 12 = 7.2 % that is a huge number and almost 3
times FED's goal of 2% yearly inflation.
ReplyLike(4)
howard2374
14 Sep. 2023, 8:06 AM
PremiumInvesting Group
Comments (1.07K)
|
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And the price of food in the grocery stores has really gone up quickly.
ReplyLike(1)
VoiceofSanitySometimes
13 Sep. 2023, 12:38 PM
Investing Group
Comments (6.64K)
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+ Follow
Hypothesis: The Fed is now more the cause of inflation than they are the
solution.



Rapidly raising interest rates has effectively created a tax on everyone who
borrows, and that is pretty much everyone (individuals and businesses). In the
case of businesses, that "tax" has to get passed on to customers to sustain ROIs
(and to make matters worse, target ROIs increase as interest rates increase).



For consumers, the Fed has killed the housing market. Supply is low because very
few people can afford to leave a 3% mortgage and buy a new home with an 8%
mortgage. The effect is that the inelastic baseline of demand is meeting low
supply and driving up prices on deals transacted (which weighs heavily in the
"imputed rent" portion of CPI).



Similarly, auto sales are in decline (almost 17MM in 2019 down to under 14MM in
2022). Manufacturers have cut supply in response. Used cars are ridiculously
expensive since fewer people are trading in their existing cars.



I could ramble on, but hopefully you get my drift -- it is possible the Fed is
creating a form of stagflation. The monetarists will say I'm nuts, but I'm not a
monetarist so I don't mind.



Comments?
ReplyLike(6)
Kent Thune
13 Sep. 2023, 12:56 PM
AnalystInvesting Group
Comments (949)
|
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@VoiceofSanitySometimes I believe your hypothesis is mostly correct, and that's
why I believe the Fed will want to pause rates and will hope that the U.S.
consumer will finally slow the spending spree before having to raise rates
again. Consumers continue to complain about higher prices, but they're still
paying for travel, leisure, and other Summer experiences like concerts and
movies.



I'm thinking that record credit card debt at higher interest rates, an end to
the student loan moratorium, and an end to the Summer post-Covid pent-up demand
spending, will all contribute to lower spending in the aggregate in coming
months.



That said, I wouldn't be surprised if consumer spending remains elevated through
the holiday season. After that, I think it's mostly downhill...



2024 will look different than 2023.
ReplyLike(6)
f
fifth.green
13 Sep. 2023, 1:41 PM
Premium
Comments (5.23K)
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@VoiceofSanitySometimes but do not forget when someone collects interest
payments they pay taxes too.
ReplyLike
v
vxmike
13 Sep. 2023, 5:47 PM
Premium
Comments (7.73K)
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@VoiceofSanitySometimes I think you’re half right. The other half is 5%+
interest payments to short term Treasury and money market holders is creating an
influx of cash into the economy. The interest is being printed by the issuance
of more debt not being removed by taxation.



Also workers are simply making a lot more money with the labor market changes.
UPS workers and soon UAW workers have no problem paying inflated prices!
ReplyLike
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toddkaz
13 Sep. 2023, 12:30 PM
Comments (1.44K)
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You aren't getting that money unless you fire the prosecutor investigating the
company my son works for! - Joe Briben.
ReplyLike(10)
f
fifth.green
13 Sep. 2023, 1:42 PM
Premium
Comments (5.23K)
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@toddkaz go after the big money Jerrod and the Arabs! Biden is small potatoes.
ReplyLike
J
Jasper Hodgson
13 Sep. 2023, 12:18 PM
Investing Group
Comments (119)
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“Ultimately this release showed that there is real work to be done to get
inflation back to the Fed’s 2 percent target, however the higher than expected
consumer inflation in August is not expected to lead to a rate hike at the Fed’s
meeting next week” buy the rumor, sell the news
ReplyLike(1)
jsantmyer
13 Sep. 2023, 12:05 PM
Investing Group
Comments (3.42K)
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Soft landing? ROFL…
ReplyLike(4)
toddkaz
13 Sep. 2023, 12:04 PM
Comments (1.44K)
|
+ Follow
So inflation was 2% when Biden took office and gas was 2 dollars a gallon. The
other side will say thats because the economy was shut down! Well then that
means Joe didn't create all those jobs either. If Joe didn't create those jobs
and they were already their it means Joe's economy has been one big dumpster
fire.
ReplyLike(19)
jo blo5664
14 Sep. 2023, 10:29 AM
Comments (106)
|
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@toddkaz It's gone beyond 'dumpster': The whole landfill is ablaze.
ReplyLike(3)
toddkaz
13 Sep. 2023, 11:02 AM
Comments (1.44K)
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Is it normal for a president to have multiple shell companies with money going
to multiple family members?
ReplyLike(24)
eschlanser
13 Sep. 2023, 11:39 AM
Investing Group
Comments (207)
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@toddkaz Not according to Trump! $2 billion to Ivanka and husband from MBS.
ReplyLike(4)
B
BMC-USA
13 Sep. 2023, 12:01 PM
Comments (938)
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@eschlanser fake news
ReplyLike(12)
F
Finding Your Retirement
13 Sep. 2023, 12:04 PM
Investing Group
Comments (7.14K)
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@toddkaz most of congress does it. Even lizzie warren who makes 175k a year is
now worth over 70M. bernie? forgetaboutit



and don't tell me they invested well. Tell me a hedge fund that can turn 175k to
70M within 10 years. Even buffet couldn't do that
ReplyLike(12)
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C
CPAinMD
13 Sep. 2023, 10:54 AM
Investing Group
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Don't worry everyone, this is just transitory.
ReplyLike(13)
r
rkw29
13 Sep. 2023, 10:26 AM
Comments (5.03K)
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+ Follow
Inflation is inflation. Taking pieces of it out like energy and food and saying
it is not that bad minus that is like saying except for your failing heart and
liver, you are very healthy.
ReplyLike(31)
I
IntrinsicValue1
13 Sep. 2023, 10:30 AM
Comments (108)
|
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@rkw29 When it comes to the Fed deciding to raise, hold or lower the rate, it's
extremely important to know what's driving the increase. Do you think they're
more likely or less likely to raise rates if energy is the main driver?
ReplyLike
S
SPDY84
13 Sep. 2023, 10:58 AM
PremiumInvesting Group
Comments (457)
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@IntrinsicValue1 Oil prices eventually creep back into the price of everything
else.
ReplyLike(4)
Beyond Saving
13 Sep. 2023, 11:22 AM
AnalystPremiumInvesting Group
Comments (5.89K)
|
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@rkw29 Inflation excluding energy and food is currently a good bit higher than
inflation including everything.



The reason energy and food are excluded is because they are very volatile month
to month and both have prices that are subject to numerous factors that have
nothing to do with interest rates. Policy would be bouncing like a superball if
it tried to follow it and it wouldn't do much good - hike interest rates all you
want, it isn't going to make the Saudis pump more oil. If you want to influence
oil prices, that is much more of a political/international relations issue than
a financial one. The Fed can't control international politics or energy policy,
they can only raise or lower interest rates. Similar issue with food, prices are
usually influenced primarily by the weather and its impact on production. No
amount of Fed hiking is going to prevent a drought. The Fed can only influence
inflation that is caused by financial factors, so it is useful to try to isolate
the inflation that is primarily caused by financial factors.
ReplyLike(7)
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A
Alfredo Martinez
13 Sep. 2023, 10:25 AM
Comments (1.34K)
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Good thing Biden just shut down a bunch of Alaska oil projects.



Now we can pay more for our energy and Russia gets more of it!
ReplyLike(28)
jsantmyer
13 Sep. 2023, 1:35 PM
Investing Group
Comments (3.42K)
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@Alfredo Martinez yes, the Socialists are trying to show everyone just how GREEN
and ECONOMICALLY DESTRUCTIVE they can be before the next election.
ReplyLike(6)
f
fifth.green
13 Sep. 2023, 1:48 PM
Premium
Comments (5.23K)
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@Alfredo Martinez we already export 50% of our oil.
ReplyLike
A
Announcer56
14 Sep. 2023, 7:15 PM
Investing Group
Comments (127)
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@fifth.green Not true. US production is less than domestic consumption. However
US imports a lot of Canadian crude. That allows for some exports, mostly refined
products.
ReplyLike(3)
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