These are prices that consumers often have in mind. What does the liter of gas cost and what do I pay for a chocolate bar, comparatively a scoop of ice cream? Find out how this information should fundamentally change your investment behavior.
Talking about money: What lessons from everyday life could teach us.
For your money, it’s the burden of the 20th and 21st centuries: inflation. In the past, when money consisted mostly of comparatively rare precious metals such as gold and silver, rulers or states had few options to increase the money supply. For example, Emperor Nero has reduced the silver content in coins to as much as one-twentieth. Another alternative was raiding, but they were usually too expensive. The result was often: deflation.
The population or supply of goods is increasing and the money supply remains the same, making the money more valuable. This entices you to hoard money – and economic crises are inevitable. The advantages of paper money are manifold. Since there is no gold cover, the money supply can be adjusted to the actual needs. Usually a little more is produced than is needed, so that a moderate inflation arises.
Prerequisite is an independent body, which is not tempted to secure the next election victory in the short term. And you should always keep this inflation in mind when making your investment decisions. Because it does not appear evenly. You can tell that at the gas station.
Hardly any price rises for commodities like oil
Inflation-adjusted, the price of oil has hardly moved since 1864. This still costs about $ 50 (paid with today’s dollars). When you refuel, you pay hardly anything for the refined oil, but above all taxes. About 70% of the gasoline gas is mineral oil tax, eco tax and VAT. On the other hand, the chocolate bar or, optionally, the scoop of ice cream on the ice cream parlor have pushed up prices by as much as 700% since 1984.
How does this difference come about? Basically, it has only been worthwhile in the past to rely on price increases for raw materials. High prices have always attracted smart engineers who either offered a good substitute through the use of new materials and materials or invented new processes to get raw materials out of the ground more cheaply.
The price of oil among the largest US oil producer
Recently, US engineers achieved oil fracking. And impressive. The US will become the world’s largest oil producer in 2019, leaving Saudi Arabia behind. Within just ten years, US oil output has doubled. Thus, the US has drawn the price power. OPEC has lost the price-setting power as a cartel. This is also reflected in the fact that the United States has just decided to impose antitrust sanctions on those oil cartels. Such a procedure can only be carried out by a state that has achieved sustainable energy independence. The price of oil should therefore be capped for a longer period of time.
Now ice and chocolate are also made from agricultural commodities. So what is the difference? Oil and gas are an exchangeable good. The decisive factor is the price alone. A candy bar is often of an established brand that consumers are loyal to – even if the price goes up. At the ice cream parlor, there are also the labor costs that make it necessary for prices to rise.
What investors can learn from chocolate bars
The smart investor should therefore make the following points in his article Consider investment behavior: