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US inflation rate at 8.3%, Dow Jones average drops over 1,200 points

sayak83

Veteran Member
Staff member
Premium Member
If you believe that and think U.S. inflation should be brought down, then you should support measures to make the U.S. less interdependent on global markets. You can start by supporting U.S. energy independence (which we had under Trump) through full on domestic oil production. This would include allowing drilling and moving forward with pipelines. You should also support re-shoring of manufacturing. This would include semiconductor manufacturing, auto production, etc. You should also support disruptive actions such as aggressive conversion to electric vehicles until inflation is under control.

By the way, the total U.S. commitment to the Ukraine for fighting its war has been just over $15 billion. How did $15 billion in spending cause 8.3% inflation in an economy with a size of $25,000,000,000,000?
Best way to gain energy independence is to shift to solar and wind energy based generation systems.
Global oil and gas prices have increased due to Russian sanctions and food prices have increased due to disruption in wheat imports from Ukraine. Ukraine is also the largest producer of Neon gas which is an essential component in all electronic manufacturing. So cost of electronics have increased because of this as well as due to supply chain disruptions caused by Chinese lockdowns.

Etc
 

Shaul

Well-Known Member
Premium Member
Best way to gain energy independence is to shift to solar and wind energy based generation systems.
Global oil and gas prices have increased due to Russian sanctions and food prices have increased due to disruption in wheat imports from Ukraine. Ukraine is also the largest producer of Neon gas which is an essential component in all electronic manufacturing. So cost of electronics have increased because of this as well as due to supply chain disruptions caused by Chinese lockdowns.

Etc
“Best way”? Like every form of energy solar and wind have pros and cons. They are certainly no panacea. They certainly can’t be a response to an immediate energy shortage. They take literally decades to develop. On the other hand oil production in the U.S. could be ramped up quite quickly.
 

sayak83

Veteran Member
Staff member
Premium Member
“Best way”? Like every form of energy solar and wind have pros and cons. They are certainly no panacea. They certainly can’t be a response to an immediate energy shortage. They take literally decades to develop. On the other hand oil production in the U.S. could be ramped up quite quickly.
The high oil prices have nothing to do with self sufficiency at all. Oil is globally traded (like food, electronics etc) and shortage anywhere in the global will lead to a cost increase everywhere.
This article explains it
Why the U.S. needs oil from other countries
Kaufmann explained that U.S. oil imports were not the decisive factor in deciding how much Americans pay for a barrel of crude oil.

"The quantity of oil that the U.S. imports has little to no effect on the price we pay for crude oil," Kaufmann said. "There is one global market for crude oil. That global price sets the price for all crude oils, plus or minus a couple of dollars depending on transportation costs and the quality of the crude oil.

Suppose the U.S. was self-sufficient in oil and that oil was selling for $70 a barrel, as it was before Russia invaded Ukraine," he said. "The invasion raises the price for crude oil on the global market to $110."
Would U.S. producers sell U.S. consumers oil for $70 per barrel when they could sell that same barrel overseas for $110? Of course not!"



So unless you want US to be a socialist economy by nationalizing the oil industry and moving it and other commercial enterprises out of the hands of corporations, you are stuck with high prices whenever there is a global shortage of anything regardless of how much US is producing.
 

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Shaul

Well-Known Member
Premium Member
The high oil prices have nothing to do with self sufficiency at all. Oil is globally traded (like food, electronics etc) and shortage anywhere in the global will lead to a cost increase everywhere.
This article explains it
Why the U.S. needs oil from other countries
Kaufmann explained that U.S. oil imports were not the decisive factor in deciding how much Americans pay for a barrel of crude oil.

"The quantity of oil that the U.S. imports has little to no effect on the price we pay for crude oil," Kaufmann said. "There is one global market for crude oil. That global price sets the price for all crude oils, plus or minus a couple of dollars depending on transportation costs and the quality of the crude oil.

Suppose the U.S. was self-sufficient in oil and that oil was selling for $70 a barrel, as it was before Russia invaded Ukraine," he said. "The invasion raises the price for crude oil on the global market to $110."
Would U.S. producers sell U.S. consumers oil for $70 per barrel when they could sell that same barrel overseas for $110? Of course not!"



So unless you want US to be a socialist economy by nationalizing the oil industry and moving it and other commercial enterprises out of the hands of corporations, you are stuck with high prices whenever there is a global shortage of anything regardless of how much US is producing.
And this totally ignores where the money for that oil goes. With U.S. produced oil it circulates within the U.S. economy. With foreign oil there is a net capital flow to outside the U.S. This also ignores the transportation costs. Obviously it is cheaper to transport domestically produced oil to market than oil which must be transported from outside the country. Finally there is the issue of control and dependency. Using domestic sources gives far greater control and shelters us from foreign disruptions. That process control is independent from any market price impacts. For example it lowers the amount we would need in our strategic oil reserves.
 

sayak83

Veteran Member
Staff member
Premium Member
And this totally ignores where the money for that oil goes. With U.S. produced oil it circulates within the U.S. economy. With foreign oil there is a net capital flow to outside the U.S. This also ignores the transportation costs. Obviously it is cheaper to transport domestically produced oil to market than oil which must be transported from outside the country. Finally there is the issue of control and dependency. Using domestic sources gives far greater control and shelters us from foreign disruptions. That process control is independent from any market price impacts. For example it lowers the amount we would need in our strategic oil reserves.
Oil companies and their share holders have certainly become rich. The rest...not so much.
Just so you know, USA is actually a net exporter of oil in 2021 for which full data is available. So your claims do not make sense.
Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA)

"
In 2021, the United States imported about 8.47 million barrels per day (b/d) of petroleum from 73 countries. Petroleum includes crude oil, hydrocarbon gas liquids (HGLs), refined petroleum products such as gasoline and diesel fuel, and biofuels. Crude oil imports of about 6.11 million b/d accounted for about 72% of U.S. total gross petroleum imports in 2021, and non-crude oil petroleum accounted for about 28% of U.S. total gross petroleum imports.

In 2021, the United States exported about 8.63 million b/d of petroleum to 176 countries and 4 U.S. territories. Crude oil exports of about 2.98 million b/d accounted for 35% of total U.S. gross petroleum exports in 2021. The resulting total net petroleum imports (imports minus exports) were about -0.16 million b/d in 2021, which means that the United States was a net petroleum exporter of 0.16 million b/d in 2021.
 

pearl

Well-Known Member
Your understanding is sketchy. The Biden Administration has not allowed drilling in areas that actually have oil. Instead they offer leases on large areas that are known to not have oil. So they can misleadingly say “We’re allowing drilling.” Then pretending it is the fault of oil companies when they know it isn’t.

That leasing was in place long before Biden.

It is about what is best for both the economy and the environment.

And the pipeline has proven to be the best for neither.
 
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