Big Meat. Supermarket chains. Mom and pop gasoline stations. Computer chips. Russian President Vladimir Putin. What do these all have in common? They are, according to President Joe Biden, the reasons he’s currently overseeing the worst bout of inflation in four decades. This has become the current U.S. administration’s go-to tactic, targeting a scapegoat and blaming that individual or thing for across-the-board sky-high prices. The mainstream media is ostensibly joining the fun and rejecting reality, too.
Biden and Media Blame Putin for Inflation
Speaking from the White House on Feb. 22, President Biden warned the American people that “defending freedom will have costs,” adding that the escalating conflict in Eastern Europe “will blunt gas prices.” In other words, brace yourself. Higher energy costs are coming!
But were U.S. shoppers already bearing the brunt of higher consumer prices, from food to energy to apparel? Perhaps the president misspoke and meant to say that “defending freedom will add to the surging costs that were already unfolding under my administration.” This would be a more accurate statement emanating from Biden’s lips.
The latest tactic from the blueprint of denial is suggesting that the inflationary environment was improving. Why, if it were not for the Kremlin, the 7.5% consumer price index (CPI) would be easing. Of course, this is nonsense since one glance at the Bureau of Labor Statistics’ (BLS) monthly CPI report highlights broad and fierce inflation pressures. As legendary economist Thomas Sowell once wrote, “If the government were to pass a law against lying, there would be an eerie silence in Washington.”
A couple of occupants of the Fourth Estate are already peddling this narrative. CBS News published an article titled “How the Ukraine crisis is already hitting Americans’ wallets.” The cable news network purported that, were Russia to invade Ukraine, “the economic impact could also move beyond the gas pump.”
While it is inevitable that geopolitical tensions 5,600 miles away would trigger devastating effects on U.S. and global energy markets, it is mendacious to suggest conditions were improving before the upheaval of the Ukraine-Russia border. Many of the Wall Street titans and Liberty Nation had previously forecast $100-plus oil amid supply failing to meet demand and tight conditions. In addition, oil and gas firms have refrained from increasing output amid regulatory uncertainty from the White House’s green agenda.
The Biden administration will navigate rugged terrain ahead of the midterm elections in November. The Oval Office is exploring every avenue and looking under every rock to locate a solution to ballooning energy costs and rampant inflation. Reports indicate the president wants to release more supply from the strategic petroleum reserves (SPRs), a tool he exhausted last year when he pumped 50 million barrels into international markets and failed to rein in prices. His team is also negotiating a new nuclear deal with Iran that is obviously a ploy to prevent $100 oil since Tehran would inject between one and two million barrels per day (bpd) into the marketplace.
The U.S. is no longer energy independent, transitioning back to being a net energy importer. America will again depend more on foreign sources for powering the nation, including Russia. Moscow presently supplies the U.S. with 10% of the nation’s crude demand. If this is removed due to sanctions and war, not only will prices trend higher, the supply-demand imbalance will widen over the next several months.
In addition, because Europe is desperate for fossil fuels now that the green experiment has been a failure, the bloc is importing immense volumes of liquefied natural gas (LNG) to prevent power outages. Biden has been clear that he wants to mitigate a disaster overseas by coordinating with other countries and companies to expand capacity and ensure the region will have enough stocks to survive. Although the U.S. maintains vast amounts of natural gas, the latest Energy Information Administration (EIA) storage report highlighted that domestic inventory levels were 17.5% and 11.6% below the one- and five-year averages, respectively.
“Although high prices would in theory trigger a burst in tight oil production, acute supply chain bottlenecks, a lag between price signals and its impact on production, and winter weather-related disruptions will slow growth. Added to this are expectations that spot sand prices will rise to a $50-$70 per ton range – a level unheard of in the industry’s modern history – which will hit operators’ wallets,” said Artem Abramov, Rystad Energy’s head of shale research, in a note.
Bidenflation Running Wild on America
Consumers, economists, and market analysts anticipate red-hot inflation will linger for much of the year. West Texas Intermediate (WTI) and Brent crude contracts are inching toward $100. The national average gasoline price is heading to $4 per gallon. The U.S. economy shows signs of stagnation. President Biden’s approval rating is in the same basement as his 2020 presidential campaign. Everything that could go wrong with Biden’s presidency is coming to the surface. When he was handed the keys to 1600 Pennsylvania Avenue, the left predicted he would be the next FDR, and the right prognosticated he would be the next Jimmy Carter. Neither side was correct. Biden is just, well, Biden. Whether this is a good description or not might depend on your political affiliation.
~ Read more from Andrew Moran.