{"id":54651,"date":"2020-08-13T08:07:49","date_gmt":"2020-08-13T13:07:49","guid":{"rendered":"https:\/\/olduvai.ca\/?p=54651"},"modified":"2020-08-13T08:07:49","modified_gmt":"2020-08-13T13:07:49","slug":"dollars-purchasing-power-drops-to-lowest-ever-inflation-heats-up-as-fed-wants-after-simultaneous-supply-demand-shocks","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=54651","title":{"rendered":"Dollar\u2019s Purchasing Power Drops to Lowest Ever. Inflation Heats Up, as Fed Wants, After Simultaneous Supply &#038; Demand Shocks"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2020\/08\/12\/us-dollar-purchasing-power-drops-to-lowest-ever-inflation-heats-up-as-the-fed-wants-after-simultaneous-supply-shock-demand-shock\/\">Dollar\u2019s Purchasing Power Drops to Lowest Ever. Inflation Heats Up, as Fed Wants, After Simultaneous Supply &amp; Demand Shocks<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<h3><strong>\u201cWe\u2019re not even thinking about thinking about\u201d slowing the decline of the dollar\u2019s purchasing power \u2014 and thereby labor\u2019s purchasing power.<\/strong><\/h3>\n<p>A supply shock and a demand shock came together during the Pandemic, and it produced chaos in the pricing environment. There was a sudden collapse in demand in some segments of the economy \u2013 restaurants, gasoline, jet fuel, for example \u2013 and a surge in demand in other segments, such as eating at home, and anything to do with ecommerce, including transportation services focused on it.<\/p>\n<p>These shifts came together with supply-chain interruptions and supply chains that were unprepared for the big shifts, leading to shortages in some parts of the economy \u2013 the supply shock. There were empty shelves in stores, while product was piling up with no buyers in other parts of the economy.<\/p>\n<p>The sectors surrounding gasoline, jet fuel, and diesel fuel \u2013 oil and gas drilling, equipment manufacturers, transportation services, refineries, etc. \u2013 were thrown into turmoil as demand vanished, leading to a total collapse in energy prices. In April, in a bizarre moment in the history of the oil business, the price of the US benchmark crude WTI\u00a0<a href=\"https:\/\/wolfstreet.com\/2020\/04\/20\/holy-wtf-moly-wti-crude-oil-may-contracts-collapse-to-negative-35\/\" target=\"_blank\" rel=\"noopener noreferrer\">collapsed to negative -$37 a barrel<\/a>.<\/p>\n<p>Since then, the price of crude oil has risen sharply (now at positive +$41 a barrel), as\u00a0<a href=\"https:\/\/wolfstreet.com\/2020\/07\/23\/update-on-the-wtf-collapse-of-consumption-of-gasoline-jet-fuel-diesel\/\" target=\"_blank\" rel=\"noopener noreferrer\">demand for gasoline has returned to near-normal while demand for jet fuel remains in collapse-mode<\/a>, as people are driving to go on vacations, instead of flying, and as business travel is essentially shut down.<\/p>\n<p>As a result, for a few months, all of the inflation data was going haywire, with some prices plunging and others spiking. This is now being worked out of the system.<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Dollar\u2019s Purchasing Power Drops to Lowest Ever. Inflation Heats Up, as Fed Wants, After Simultaneous Supply &amp; Demand Shocks \u201cWe\u2019re not even thinking about thinking about\u201d slowing the decline of the dollar\u2019s purchasing power \u2014 and thereby labor\u2019s purchasing power. A supply shock and a demand shock came together during the Pandemic, and it produced [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,2326,426,659,1427,839,3650,4254,4255],"class_list":["post-54651","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-government-stimulus","tag-inflation","tag-purchasing-power","tag-supply-and-demand","tag-us-dollar","tag-us-federal-reserve","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=54651"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54651\/revisions"}],"predecessor-version":[{"id":54652,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54651\/revisions\/54652"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=54651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=54651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=54651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}