During the recent election campaign, Inflation, including the high price of gasoline, was one of the huge issues on which Republicans focused as they fought to overtake Congress.
"Rubbish," says energy expert and author Jack L. Kerfoot, when asked on the Lean to the Left podcast if it was legitimate to blame increasing prices on President Biden.
"I think it's important to realize that inflation is not a US issue," Kerfoot says in the podcast interview, now streaming. "When people talk about, it's because of the president, my comment response is rubbish," he declares.
Kerfoot pointed out that the US produces about 1.1 million barrels of oil a day, more than any other country in the world, but that we consume about 1.8 million barrels a day. "So when we have Covid, demand drops, when we have higher gas prices, demand drops as well. But we have to realize, if we look at inflation from January of this year through November of this year, inflation in the US is about 7.1% compared to 12% in Russia and Italy, 11% in the United Kingdom, 10% in Germany, 7.3% in Australia, 7% in Canada, and 4% in Japan," he explains.
"So, what we're seeing is inflation is a global issue for multiple reasons. The real issue with oil and gas right now, or fossil fuels is the volatility because we are seeing the demand surge. When people think the demand for oil is gonna go up, the price goes up, and when it doesn't, then it, drops as well.
"A year and a half ago, just to show the impact of supply and demand, oil producers in Texas were trying to sell oil to the refineries in the Houston area, but they actually had to pay the refiners $30 a barrel to take the oil. And the reason for that is the, storage tanks were completely full," he says.
"And the refiners, the only way they could take the oil is to rent cargo ships, and they had to pay a significant price for that. So we've actually seen oil drop as low as minus $30, and we've seen it jump as high as almost 150, $160 a barrel. It's a commodity, and so we're going to see that yo-yo back and forth.
"For businesses, when you're trying to plan your business and you're trying to figure out what your heating costs are going to be, or fuel costs are going to be, how do you forecast that? Sure. So you tend to put in a little bit of additional extra cost in there, anticipating the volatility. That uncertainty contributes to it as well.
Kerfoot points out that another factor in play is Covid in China, the largest manufacturer of goods around the world. Because of their Covid policy, in the major port city of Shanghai with over 30 million people, "when they had over a few hundred cases of Covid, they locked down the entire city. All the businesses were closed, all the apartments were locked in. People couldn't go out and unless they had special passes to the grocery store, everything was locked down."
"They've been doing that for years, which is why when we read about the shortage of the Apple phones, particularly the Apple iPhones that were being made in China, all of a sudden there was all this concern because the whole plant was shut down because of outbreaks of Covid," Kerfoot explains. "Additionally, now they've now gone the other 180 degrees in the other direction and basically said Covid is not no longer a problem. We're not worried about it" despite somewhere around 40 to 50 million cases of Covid today.
"So that's disrupting the supply chain, and then of course, if we look at the industrialized countries, let's start with the US. When our economy was coming out of covid, businesses were looking to rehire and to staff back up. And the desire for people to come back into the workforce. They were tentative, which is understandable. And as a result, they were having to pay bonuses and increase salaries to entice people back. And that was passed on to the people as well. So if you actually look at our inflation rates, that we have in the US, more than half of that was increased wages to workers because of the necessity of a supply shortage, the worker coming back to the businesses.
"So can President Biden impact any of that? Of course not," Kerfoot declares. "He can't, nor can any president, whether he's red or blue. From that standpoint. So I, it causes me concern when I hear that because we're not talking about facts and not, we're not looking at the real issues at hand. We're just trying to throw mud at somebody because we don't like of their political persuasion."
Watch the video clip above: https://youtube.com/watch?v=b-35mPF2DxI&si=EnSIkaIECMiOmarE
Watch the complete interview: https://youtube.com/watch?v=0JbHf0OBwyQ&si=EnSIkaIECMiOmarE
Listen to the complete podcast: https://www.spreaker.com/user/13695798/episode-535-jack-kerfoot-good-news-on-gl