The free enterprises system at work

[bob vernon]

https://www.castanet.net/news/Canada/34 ... f-pandemic

https://www.castanet.net/news/BC/347620 ... rice-hikes

Demand falls, prices increase. Do you still believe that Economics 101 BS?

[Glacier]

https://www.castanet.net/news/Canada/34 ... f-pandemic

https://www.castanet.net/news/BC/347620 ... rice-hikes

Demand falls, prices increase. Do you still believe that Economics 101 BS?

You do realize that government has forced oil companies cut production, right? Plus, we have more carbon tax and even worse, they have mandated that oil companies buy carbon offsets at the tune of 16 cents/litre.

[The Green Barbarian]

Weird how printing hundreds of billions of dollars is causing prices of things to rise. It's almost like this has been tried before with similar results.

[Glacier]

Weird how printing hundreds of billions of dollars is causing prices of things to rise. It's almost like this has been tried before with similar results.

*bleep*.jpg

[TylerM4]

https://www.castanet.net/news/Canada/34 ... f-pandemic

https://www.castanet.net/news/BC/347620 ... rice-hikes

Demand falls, prices increase. Do you still believe that Economics 101 BS?

Yes. Because economics 101 tells us that the law of supply and demand only applies to free markets. Gasoline is far from a free market. You really should take a basic course if interested in the topic.

https://www.investopedia.com/terms/f/freemarket.asp

[TylerM4]

Weird how printing hundreds of billions of dollars is causing prices of things to rise. It's almost like this has been tried before with similar results.

No, inflation is not the reason.

Inflation is normal, expected, and considered healthy for an economy. Too much inflation (1-2% is considered healthy we've seen more like 3-4% recently) is a bad thing - but it still doesn't explain the gasoline prices.

[nucksRnum1]

The whole big oil/big business - trickle-down ponzi scheme of gaming the system and keeping preferred aspects like wages artificially low - is the reason why it is such a big issue when the levee breaks. What we have is a perverse and prostituted system of free markets and capitalism. Which only serves big business. Not consumers or employees.

[d0nb]

It’s hard to imagine how a “trickle-down Ponzi scheme” works. Is it related to Biden’s proposed zero-cost multi trillion dollar inflation bomb?

[The Green Barbarian]

The whole big oil/big business - trickle-down ponzi scheme of gaming the system and keeping preferred aspects like wages artificially low - is the reason why it is such a big issue when the levee breaks. What we have is a perverse and prostituted system of free markets and capitalism. Which only serves big business. Not consumers or employees.

And I'm sure the professor that fed you this trash would be working at Tim Hortons right now if he didn't have that cozy sinecure from his taxpayer-subsidized "job". What a crock of nonsense.

[TylerM4]

And I'm sure the professor that fed you this trash would be working at Tim Hortons right now if he didn't have that cozy sinecure from his taxpayer-subsidized "job". What a crock of nonsense.

He's not wrong. I'd help explain what he's referring to, but I get the feeling it'd be a waste of time. Or perhaps you have an alternative explanation that doesn't cite inflation as the primary reason?

[rustled]

And I'm sure the professor that fed you this trash would be working at Tim Hortons right now if he didn't have that cozy sinecure from his taxpayer-subsidized "job". What a crock of nonsense.

He's not wrong. I'd help explain what he's referring to, but I get the feeling it'd be a waste of time. Or perhaps you have an alternative explanation that doesn't cite inflation as the primary reason?

Your explanation may be more helpful to us than any "gotcha". Why not give it a try?

[foenix]

He's not wrong. I'd help explain what he's referring to, but I get the feeling it'd be a waste of time. Or perhaps you have an alternative explanation that doesn't cite inflation as the primary reason?

Your explanation may be more helpful to us than any "gotcha". Why not give it a try?

Oh....the irony.

[TylerM4]

Your explanation may be more helpful to us than any "gotcha". Why not give it a try?

Alright. 1st off, I'll come right out and say I'm not an economics expert, nor am I intimately familiar with this market. However, there are a few easily observed manipulations in this market:
- There is an entire cartel than has been openly created to manipulate the market to their advantage and controls almost 1/2 of the world's oil supply. https://en.wikipedia.org/wiki/OPEC
- Supply is being manipulated. OPEC and others purposely limit supply when demand drops to artificially inflate prices/profits. One of the articles quoted even mentions this "OPEC may open the spigots"
- It's clear to any casual observer that price-fixing/collusion is happening at the pumps. All stations in town having the same price, all switching to a new price within hours of each other - that doesn't happen naturally.
- International treaties or national laws limiting export/import.
- Additional taxes placed on fuel/crude imports, often threshold based and always designed to protect the value (AKA Profit) of the domestic market.

Outside of this not being a free market, the articles themselves clearly state a large change in supply. The law of supply and demand says "Prices will increase as supply decreases". So the articles actually reinforce the supply/demand cost cycle more than they prove it's fictional. No idea how OP came to conclusion "Demand falls, prices increase" from those articles as the message clearly is "Supply has decreased increasing cost".

[hobbyguy]

Weird how printing hundreds of billions of dollars is causing prices of things to rise. It's almost like this has been tried before with similar results.

*bleep*.jpg

Friedman's drivel is always overly simplistic.

The supply/demand issues are indeed part of the picture. Monetary policy is indeed part of the picture - but not the whole picture.

When an item is in short supply, or when there is incomplete or no competition for a necessity item, then prices will rise. Prices will also rise according to "fashion" - which is often entirely irrational.

Oil and petroleum products are an obvious example of incomplete competition. OPEC is the surface of the depth of the informal price fixing that also limits supply. OPEC are deliberately limiting supply and pushing higher prices than would otherwise exist.

Commodities markets are artificial constructs that are subject to speculation "fashions". Not so much in terms of their original rather "sleepy" intent of balancing supply/demand between commodity producers and manufacturers/distributors - but much more so since the rise of speculation as a key ingredient that has been allowed by neo-liberal thinking that allowed hedge funds et al to jump into commodities markets in a big way. (It is said that as much as 20% of oil prices is driven by hedge fund type speculation).

There are many more examples of where Neo-liberalism has perverted the supply/demand equilibrium to the benefit of very small numbers of players.

[Glacier]

"Fashion" is increased supply, Hobbyguy.