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Inflation Will Continue UPDATE September 14 2026
The age old inflation hedge
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The middle east crisis continues and oil spiked north of $100/bbl. last week. A client of mine showed me a report on the gasoline supplies in various areas of the United States and it was not encouraging.
Petroleum Reserve crude inventories fell to 311.45 million gallons in the week ending July 17, which is the lowest level since 1983.
With inflation’s relentless climb since the Covid shutdowns, doing the math on the money created to finance the massive bailouts, I am of the opinion that the price of oil will not come down significantly any time soon.
I would say “if at all” as it relates to oil’s future price, but knowing the resilience of the oil industry, if not constrained, it can ramp up enough production to at least get the price back under $100/bbl. and perhaps even in the $80/bbl. range.
Any lower than that I think is out of the question as the inflation we have been experiencing since Covid is baked into the cake and therefore prices of everything will stay elevated for years to come.
Barring an economic collapse that is, which could happen, given the ongoing erosion of the consumer’s pocketbook due to the same inflation.
Not to be too negative mind you, but prices have always risen over time since about the 1900’s due to the policies of modern governments, and the latest round of inflation in the past few years has been particularly egregious.
Tariffs are estimated to have added 235 billion to retail costs. The increase in oil prices has done further damage to consumer pocketbooks. Covid bailouts dwarf the latter costs at an estimated 5 trillion. The Federal Reserve also increased its balance sheet by an estimated 4.5 trillion. That’s a fancy way to say it financed a good portion of that bailout money by creating dollars out of thin air. More monies went into financial `system` to address liquidity concerns that also occurred because of the shutdowns.
Can you say bank bailout?
Right or wrong, experts will certainly debate the whys and how’s of the whole mess for years to come.
Subsidies to both consumers and businesses alike have pretty much run the gamut since the 1960s’ and show no signs of stopping.
Whether one agrees with subsidies to either group is highly debated but the effects are clear. Government spending that exceeds government income is known as deficit spending. Most, if not all governments of the world, practice deficit spending on a grand scale.
And the scale gets grander seemingly every year.
As such, inflation is accelerating and this analyst sees no relief to that acceleration.
On many of my past radio shows, I often ended many economic discussions with “You ain’t seen nuthin’ yet.”
And sadly, once again, I am afraid you still haven’t.
“Watching the markets so you don’t have to”
This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance.
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