#inflation #prices #shopping #rent #gasoline #groceries
If something costs too much, don’t buy it.
That can’t be said for everything, since we all need housing (rents), fuel for cars (gasoline), medication and food (groceries).
But, according to Christopher Rugaber, business and economics reporter for the Associated Press, companies are starting to lower their prices because people just aren’t buying their products in the volume they would like, at the prices they want to charge.
Apparently, it’s working. Last week, inflation dropped below 3 percent for the first time since 2021.
Rugaber’s article on the subject was published August 13, 2024, in The Atlanta Journal-Constitution.
Before Rugaber’s article, McDonald’s reportedly started lowering their prices on some of its most popular items because there were too few diners at many of their restaurants. It showed in their earnings report.
It’s good also to remember that government has little leverage in bringing down prices. It can do what it can for things it can regulate, such as bringing down the cost of insulin to $35 for senior citizens. One big lever they have is allowing Medicare to negotiate prices. This has helped bring down the government’s cost for 10 popular drugs.
But, what really helps bring down prices is the lack of buyers.
It’s simple economics. Set a price, see whether the market will bear it and adjust as the market adjusts.
For businesses, particularly small businesses whose product is not an absolute necessity, it’s a much tougher decision. Usually, these businesses know what prices the market will bear for their finished product. But, can they produce that product at a cost that not only covers what it costs them to make it, but also puts a little profit in their pockets?
It’s a struggle for some of these businesses, many of whom are facing labor shortages. When workers are few, they will demand higher wages. Can these businesses keep their workers happy, pay for ingredients that produce high quality products, pay for their workspace AND make a profit?
The bigger corporations have more pricing flexibility. If they, like McDonalds, see less traffic in their retail spaces because of prices, they usually can adjust to that more easily.
Sometimes that doesn’t work well for some of those who work for them, since labor is one of the places that corporations adjust.
In all, reports say that, given the labor shortage, most workers have seen their pay rise. A lot of the things we buy are priced higher to pay workers more. In most cases, workers’ raises are more than the price increases they are paying for necessities.
As Rugaber’s article implies, consumers are working hard at changing what markets will bear – whether they realize it or not.
So, here are some handy rules for buying: If it is something you need to survive, try to use less of it. (Don’t drive around in a 4X4 pickup truck if you don’t need to haul anything). If it’s something you want badly, but don’t absolutely need, look for bargains. It may not pay to drive five or six miles to save two cents on a gallon of gas, but it might make great sense to shop around if you’re in the market for, say, a big-screen TV.
Another rule: don’t long for the days of the pandemic when prices on just about everything were lower because people weren’t going anywhere. The disease was too much of a cost just to have lower prices. (By the way, the air was also cleaner during the pandemic, but that’s a story for another day).
Inflation ultimately adjusts when fewer people buy. So, work hard at your job, make as much as you can and try to spend carefully. Also, try to pay yourself first by saving a little of that paycheck for your future.
Peter
Tag Archives: gasoline
TRANSITIONS CAN BE HARD AND MESSY
#transitions #energy #CleanEnergy #FuelPrices #gasoline #ElectricCars
Transitions can be hard.
But, many must be gradual. Otherwise, they get messy.
Take energy. We are in transition from primarily burning fossil fuels to cleaner alternatives.
Trouble is, one cannot flip a switch – yet – and go from one to another.
When we move too quickly to change, we have the mess we have today. We are urging oil-producing countries to pump more oil to bring down prices, while we are urging energy users to move toward cleaner alternatives.
Again, transitions can be messy.
We can’t go to all-electric cars on a wide scale, without having the ability to charge them quickly mid-trip.
Currently, you can drive X miles in your electric car, then you have to recharge it.
That’s fine driving around town. Once your charge gets low, you can go home, plug your charger into your engine, let it sit overnight and it will be charged by morning.
To take that same car on a long trip requires having rapid-charging stations as abundant, or nearly so, as gasoline stations. One can’t afford to wait multiple hours to recharge a car mid-trip. That hasn’t happened yet, but it will.
Here’s another rub. Many states’ and countries’ economies depend largely on fossil fuel production. It won’t be easy for them to transition to clean energy, or some other form of economic prosperity.
Energy consumption in general went down during the pandemic, so fossil-fuel producers produced less. Now they are being asked to ramp up production as the post-pandemic economy starts to bounce back. The result: energy prices are rising. Do they produce more of the dirty stuff, only to have demand drop – again – as the economy ramps up and cleaner energy conversions take place? They have tough decisions all around.
All this begs the question: are you in transition now? Did your job go away during the pandemic, and now your employer wants you back, but you are not sure you want to go back?
When you lost your job, did you find a better one? Are you still looking?
If you are still looking, and don’t want to go back to the job you lost, know that there are many programs out there that can enable you to earn a potentially great income. You could even go back to your old job, if it’s still there, and do something new part time in your off-work hours. That could allow you to quit your old job sooner rather than later.
No specific education, experience or background is required for these programs. You just have to be willing to look at something you may have thought you would never do.
To learn about one of the best such programs, message me.
Transitions, be they societal, economic or personal, can be messy. But, in most cases, the reward on the other end is a better life for you, and, potentially, many others.
You should not look at these transitions as losses, though sacrifice is usually required. You should look at them as if you were participating in a sport. Games have their ups and downs, but they eventually end. Though we all want to be on the winning end, there will be some losses for everyone.
You need to have the grit within you to see the positives of transitional outcomes and work toward them.
Peter
IS THE END NEAR FOR OIL AND GAS AS FUEL?
#oil #gas #gasoline #coal #fuel
Denmark is phasing out oil and gas extraction from the North Sea by 2050.
The Czech Republic, meanwhile, plans to phase out the use of coal by 2038.
The Associated Press reported these forecasts in two separate articles. They were published Dec. 5, 2020, in The Atlanta Journal-Constitution.
Just a few decades ago, these commodities, in some cases, were scarce and expensive.
But over those decades, cleaner, more renewable forms of energy evolved in terms of pricing. In other words, when these clean energy forms were introduced, they were too expensive to compete with fossil fuels, even though fossil fuels are among the worst pollutants in an industrialized world.
Now, the progress with clean and renewable energy has brought the prices to a more competitive level. That has resulted in less use of fossil fuels and more use of clean energy over time.
That has caused the fossil fuel market to price itself downward, perhaps permanently.
When you pile a pandemic on top of that, you have a near collapse of the fossil fuel market.
During the pandemic, businesses were closed or limited, people didn’t drive or travel as much, and that brought a natural decline in fossil fuel use.
Where will this all lead? If you work in the fossil fuel industry, which decades ago paid very well and promised a prosperous future, you need to be concerned.
In fact, ANY legacy industry workers need to be concerned. Almost daily, technological advances punch holes in what many thought were forever businesses.
These changes in energy, and other industries, will produce different kinds of jobs. Are you ready for that, if you work in a legacy industry?
If you haven’t thought much about what your next life will bring, know that there are many programs out there that can produce a potentially lucrative income for anyone, regardless of education, experience or background. The main requirements are that you are coachable and are willing to open your mind to check out something you may have never thought you would do.
To learn about one of the best such programs, message me.
Meanwhile, we all need to keep watch on our own jobs, industries and businesses. We have to continue to ask ourselves: will there be a need for this in five years? What other thing could come along, or be invented, to do what we do? Is my company looking to downsize, or otherwise reorganize, to prepare for these changes?
Remember, if you can see trends and changes from where you sit, it won’t be long before your bosses will see them. And, they won’t hesitate to act on them.
The world of employment is changing, not just in the energy sector. Workers cannot expect that someone, or something, will bail them out if they are suddenly put on the street. To complicate matters, you are unlikely to know when you will be put on the street, until you are.
Therefore, it’s best to plan ahead. Have a Plan B in place, ready to go when that day comes, or before. You may smile as you get tossed out of your job, if you plan ahead.
Life as we know it changes by the day. Perhaps we all need to change with it.
Peter
CHEAPER GASOLINE PUMPS ALL OF US UP
#cheapoil #OPEC #gasprices
The elements of an improving economy may not be obvious to everyone.
But the shrinking price of gasoline certainly is.
In fact, gasoline is as cheap as it has been in many years.
Why is it so cheap and how long are these prices expected to last?
On Thanksgiving Day 2014, OPEC (the Organization of Petroleum Exporting Countries) decided not to cut crude oil production to raise prices.
On top of that, the United States, Canada and other regions are producing more oil, according to an article by Rick Jervis for USA Today. His article appeared in the Tennessean newspaper in Nashville Nov. 23, 2014, prior to the OPEC meeting on Thanksgiving.
Jervis’ article pointed out that while OPEC could still influence the oil market, it doesn’t have as much clout as it did years ago. In fact, a decision by OPEC – whatever that was – would have made the front page of every U.S. newspaper years ago. On Friday, newspapers ran the story but most ran it on the inside, or on the front of the business section.
Sure, we are loving paying less at the pump. It’s real money going back into our pockets. Still, the oil industry doesn’t like these low prices. OPEC was between a rock and a hard spot. If it cut production to raise prices, it would encourage more oil exploration in the United States and elsewhere. Getting oil out of the shale and tar sands of North Dakota and Texas, though it has been a blessing for us consumers, is still more expensive than getting it out of the deserts of the Middle East.
The lower prices are discouraging more exploration here and, as Jervis’ article pointed out, OPEC was keenly aware of that. The oil industry is not in business to give us cheap gasoline, though that has been the result of alternative oil sourcing.
Another big bonus for the United States is that it is not so reliant on countries who may not like us much. Though any new skirmish in the Middle East could send oil prices soaring again, it would also encourage more exploration here.
Also, we are using less oil and gasoline here. Vehicles are more fuel efficient. Many vehicles are only partially fueled by gasoline. Some vehicles are not fueled at all by gasoline. Less demand keeps prices down.
And, as The New York Times recently reported, alternative fuels, such as wind and solar power, are becoming nearly as cost-effective as coal and natural gas. That will trend well toward keeping oil and gasoline prices down.
In the last several years, many of us have been hurt by a troubled economy. We’ve been hurt so badly that we don’t see what’s good about today’s economy.
What should we do? First, put the money you are saving at the gas pump into a savings vehicle. It will take you a while to see financial recovery that way, but it would be a start.
Second, if you truly aren’t feeling the good economy, check out the many other ways there are to make money outside of a job. For one of the best, visit www.bign.com/pbilodeau. You’ll find average people making above-average incomes, and helping others do the same.
Just because you can’t see everything happening in the economy doesn’t mean they aren’t happening. The gasoline prices are obvious to all of us. The rising stock market may not be obvious to all.
The lesson for all of us is to be optimistic about the future. Don’t let the naysayers tell you we are heading for hell in a hand basket. The future looks bright. And, you can make your own future bright by taking action you may never have thought of taking. Go for it! You won’t know what there is to gain until you look for it.
Peter