A good friend of mine contacted my yesterday. He\u2019s one of the \u201cpole vault guys\u201d that I\u2019ve known for decades, and he\u2019s running a camp. One of his coaches might not be available, and he wondered if I was interested. <\/p>\n\n\n\n
I\u2019m always interested in coaching pole vault camps. I\u2019ve already done two this summer: the coaching is fun, and the conversation with other coaches makes me better every time. My default answer (after talking to my wife, of course) is yes. But there is one issue: it\u2019s four hundred miles away.<\/p>\n\n\n\n
My 2004 Jeep Wrangler is awesome: manual shift, four-wheel drive (when needed), soft top that can be completely removed, and a sound system that works, even at seventy miles an hour with the top off. There\u2019s one hang-up. On a good day, in two-wheel drive on the highway, the Jeep gets about sixteen miles a gallon. <\/p>\n\n\n\n
Round trip is 800 miles. Divided by sixteen miles a gallon \u2013 that\u2019s fifty gallons of gas. At somewhere around $4.70 a gallon, that\u2019s $230 in gas to get there and get home. Now I don’t coach camp for free. And a \u201cpit coach\u201d, my position, is well paid in the Pole Vault Camp world. Suffice to say though: it\u2019s a four day camp, and the first two days might pay for the gas.<\/p>\n\n\n\n
Yesterday the news world was all doom and gloom.\u00a0\u00a0The inflation rate was over 9%, higher than it\u2019s been in forty years.\u00a0\u00a0The newscasters went through each item:\u00a0\u00a0eggs, milk, airline tickets, bread, new houses, and, of course, gas prices.\u00a0 I didn\u2019t really need to watch the news to figure that out:\u00a0\u00a0Wednesday I paid $12 for a pound of sliced deli ham and almost the same for a pound of sliced deli cheese; almost twice what I paid three months ago.<\/p>\n\n\n\n
Like many Americans, I got a \u201cpay raise\u201d to my retirement this year, a 3% Cost of Living Allowance (COLA). That sounded great: but it looks like, at the moment, I\u2019m down 6%, not up three. <\/p>\n\n\n\n
But when I looked at the \u201clist\u201d of everything that costs more, it seems to me that they all have one thing in common \u2013 airline tickets and eggs, new houses and deli ham. All those things require, one way or another, gas. The eggs, ham, and cheese are transported from the \u201cfarm\u201d to the wholesaler to the store. The biggest continuing cost for airlines is jet fuel. And the materials for the new house came from the forest, to the processor, to the lumber yard, to the worksite.<\/p>\n\n\n\n
In short, inflation isn\u2019t about the cost of eggs, or the rest. It\u2019s all about the cost of the oil : oil made into the gas for the Jeep, or the diesel for the egg trucks, or the jet fuel for the Boeing 737\u2019s. The prime driver of our price increases is the increase in the cost of getting whatever it is to wherever it has to go.<\/p>\n\n\n\n
And why it the price of oil so high?\u00a0\u00a0Well, there\u2019s still a war going on in Ukraine.\u00a0\u00a0The Western world is boycotting Russian oil. The US had to replace 7% of our oil, and Europe is replacing 25% of theirs.\u00a0\u00a0If Russian oil isn\u2019t used, then the actual \u201csupply\u201d of oil on the world market gets smaller.\u00a0\u00a0In Economics 101 our first lesson <\/strong>was the \u201cmantra\u201d:\u00a0\u00a0when supply goes down, and demand remains the same, price goes up.\u00a0\u00a0So the cost of oil increased. We know: by the incredible new prices on our local gas pump, and at our grocery store, and all the other items that are moved by oil.<\/p>\n\n\n\n That\u2019s why President Biden is headed to Saudi Arabia today.\u00a0\u00a0Sure, we are still mad about the butchering of\u00a0Washington Post<\/em>\u00a0columnist Jamal Khashoggi, and the human catastrophe in Yemen.\u00a0\u00a0But the Saudi\u2019s have\u2026\u00a0 Biden needs the Saudis to boost their oil production. And in Riyadh – there’s always a way to make a deal.<\/p>\n\n\n\n There\u2019s no doubt that there are multiple causes of our inflation.\u00a0\u00a0The world virtually shut down during the Covid pandemic.\u00a0\u00a0Nations did their best to help their citizens through the crisis, pumping lots of money into their economies.\u00a0\u00a0And since those economies were slow, a lot of that money wasn\u2019t spent while we isolated from Covid.\u00a0\u00a0Once the economies opened back up, all of that \u201cextra\u201d money flooded back in.\u00a0\u00a0Lesson two<\/strong> of Economics 101:\u00a0\u00a0when the demand for goods goes up, and the supply of goods remains the same (or is low because production was slowed by Covid), prices will go up.<\/p>\n\n\n\n So we faced inflation anyway, no matter who was elected the President of the United States in 2020.\u00a0\u00a0But what\u2019s the difference between four or five percent and \u201crecord breaking\u201d nine percent?\u00a0\u00a0The cost of oil, that made the cost of gas at the pump sky-rocket. And it only feels worse by the contrast to the record setting lows of two years ago during the height of the pandemic shutdown.\u00a0<\/p>\n\n\n\n
\u201cwhat the world (still) needs now: it\u2019s oil, sweet oil.\u00a0\u00a0It\u2019s the only thing, that\u2019s there just not enough of\u2026\u201d (sorry, Burt Bacharach, and all my global climate change friends).\u00a0<\/em><\/p>\n\n\n\nNot Just Oil<\/h3>\n\n\n\n