Been to the grocery store lately?? or received you bill for medical insurance? Take heart tho cause our gubmint tells us that there is NO inflation:lmao:
There is a really specific explantion. That is so the government does not have to pay cost of living adjustments on social security benifts because the annual adjusments are indexed to the "core" Consumer Price Index or CPI. CPI is the traditional measure of inflation. However, back in the early '80's Congress decided to exclude the more volitile food and energy component of the CPI that fluctuated over a very short time period as a way to keep from having to recalculat SSI payments on a monthly basis and potentially have to pay out more each month. So they came up with the "core" CPI (currently at 2.5% of GDP) which is of course much less than the "real" or acutal rate of inflation(estimated at 3.5% or more of GDP). This "real" rate of inflation is only half of the equation that Rich refers to in the value of the dollar being worth less and hard assets and commodities worth more. However, that does not explain WHY? The difference between core CPI and the real CPI rate is due to the calculation of cost of living adjustment to SSI with no credit given against the liablity to future beneficiaries AND is at the expense of current benefit recipients. Most people don't know this because based on the above government definition there is no ADDED benefit for either current or future benficiaries because there, "is no inflation".
Now to address the gasoline issue. As I am a student of the financial markets, (and if that last paragrapgh didn't convince you I don't know what will :hehehe
, I will give you my analysis. First off you do not put crude oil in your tank, so that is only the raw material input cost component of gas. The major integrated oil companies are profiting billions, yet the refiners are almost broke, so that is telling me the refiners are eating the majority of the cost increases of oil and passing on only a fraction of the input costs to customers.
Therefore; this analysis leads me to believe the following:
From my data stream provider shows that today's (2/25/2011) closing price of
wholesale gasoline is:
RBOB GASOLINE $2.7395 0.0228+ 0.84%
So if FL state ave is about $3.18 minus $2.7395 is a difference of about $0.4405.
For most convience store owners, the profit margin is so thin at $0.009 most consider it a loss leader to get you to by alcohol and cigarettes. That leaves $0.43 as the gas tax. .43 divided by 2.7395 is a 16% tax on gas more than double the regular 7% sales tax rate.
Thus ending the economics lesson for today.
