About three hours ago, the BLS (Bureau of Labor Statistics) released their November 2021 report on CPI (Consumer Price Index) one of the broadest measures of Inflation…
If you have noticed your grocery basket smaller and more expensive, this is why….
This report has a ton of factors in it, as can be seen at the top of the chart from the BLS report, below….
The year over year print was 6.8% increase!
A very large portion of the CPI is Energy…
Have you noticed a LOWER bill to fill your tank lately?
The BLS report is lagging, below is a current Oil price, which is over 10% LOWER currently… hence the cheaper refills…
Very likely peak in CPI as measured by the BLS, next month which will be released in early January, we will take a peak and keep you updated…
Ok, another slightly heavy Friday, BUT the FOMC is watching this very closely and making decisions based on this increase, which may be peaking/lagging already…. Let’s stay tuned!
With a Holiday shortened week and being out of the office … we still could not keep our fingers off the keyboard….
After multiple talks recently about Solar, Solar Panels, Use, and the Creation of Solar Power…. this neat chart from you guessed it our friends at Visual Capitalist here hit our in box….
With a quick search on YouTube, a neat how panels work video follows at the bottom….
Here is the top ten detailed breakdown…
As mentioned above, this animation from a neat YouTube site called Lesics and explains how Solar Cells work.
With a lot of followers/clients being Oil Experts due to long careers in the Oil Industry (For the record we find the industry wildly interesting!) we are welcoming the feedback as we make the following charts and stats available….
We did not make the chart, our friends at Howmuch.com and the World CIA Facebook (an interesting resource topic for another discussion) are the creators of this one:
Oil Reserves by Chart Size
Here are the actual statistics in legend format –
Rank
Country
Oil Reserves (Barrels)
#1
🇻🇪 Venezuela
300.9 billion
#2
🇸🇦 Saudi Arabia
266.5 billion
#3
🇨🇦 Canada
169.7 billion
#4
🇮🇷 Iran
158.4 billion
#5
🇮🇶 Iraq
142.5 billion
#6
🇰🇼 Kuwait
101.5 billion
#7
🇦🇪 United Arab Emirates
97.8 billion
#8
🇷🇺 Russia
80.0 billion
#9
🇱🇾 Libya
48.4 billion
#10
🇳🇬 Nigeria
37.1 billion
#11
🇺🇸 United States
36.5 billion
#12
🇰🇿 Kazakhstan
30.0 billion
#13
🇨🇳 China
25.6 billion
#14
🇶🇦 Qatar
25.2 billion
#15
🇧🇷 Brazil
12.7 billion
Interesting comments – read between the lines on long term Oil usage…
“There’s little doubt that renewable energy sources will play a strategic role in powering the global economy of the future.
But for now, crude oil is still the undisputed heavyweight champion of the energy world.
In 2018, we consumed more oil than any prior year in history – about 99.3 million barrels per day on a global basis. This number is projected to rise again in 2019 to 100.8 million barrels per day.”
While headlines as recent as five years ago predicted the end of oil reserves from depletion, the belief now by the smart folks, is that we will move from Oil to renewable long before we run out of oil, making for very interesting company pivots in the future.
Could an insert your favorite energy company be the leader in some type of renewable energy resource? Not beyond the realm of a reasonable doubt if their long term viability is dependent!
Things we are constantly thinking of for opportunities and loss avoidance!
Not so many quarters ago with oil booming and the price of oil going to $144/barrel many including ourselves may have missed the importance of Energy Companies on the US as well as global economy.
Here we reiterated that we thought the trickle down effect may be much greater than many had once thought.
Another Great View from Visual Capitalist
Take a moment to let this chart digest…it truly is amazing.
If you have been following us long you know we love to mix different opinions especially when they point the same direction- this from Factset..
Without Energy, the S&P 500 earnings would be much less.
Before complaining about that fill up… remember these two items.
Most of next week I will be traveling to a water surrounded state for business. Tethered heavily with technology via planes and automobile as well as great coverage back home, we will not miss a beat.
The Newsletter is out – actually on its way to you now. If you do not have time to read the Newsletter or prefer my personal thoughts, take a look – well listen.
This article, originally scheduled for the Q 3 Newsletter, accidentally hit the cutting room floor. Here is an abbreviated version, with the full article to come in the Next Newsletter.
Energy our Lowered Price Friend
Airlines, heavy energy-consuming companies and summer vacationers are all cheering the lower price of oil, which tumbled dramatically in the fall of 2014. Lower energy prices act as a wage increase for most as in some way a lowered price of energy helps as a “consumer.”
As an Investor or worker in the Oil and Energy field, more of a Foe
As mentioned at the end of our Earnings Article in our Q3 Newsletter, energy has made up a great deal of the drop in earnings for the entire market as a whole. Just as vertical drilling and the various Shoal plays came on-line strong, the price as dropped like a rock.
This from FactSet: EPS estimates for 2015 — Energy is the far right diving down!
Energy and Oil Related, Friend Again
So as a consumer we are happy, but greatly overshadowed if we invest, work or have any related dealings with the energy area.
Hold on, not all is lost—
FactSet 2016 Expectations
Yep…that’s Energy expectations roaring back next year.
Welcome to our monthly Economic, Capital Market, and Financial Planning tip of the month.
This months Financial Planning Tip of the month, may help you earn extra dollars this coming year!
For those new to our writings, we touch on the most pertinent Financial “stuff” along with a video of my mug that has even more specialized details of the latest month as well as this post.
Another Financial Planning Tip: Spread retirement contributions Evenly
Spread Evenly
Due to control of investment options (not great) and regular contributions (that’s your dollars) spread your contributions over the year and attempt to max your retirement plan out in December.
By doing this you will lower the worry of less control of your investments AND dollar cost average into your plan throughout the year.
Remember, if it’s a new plan or your contributions are making up the majority of the account, making it a beast (aggressive) may be best.
Oil drops like a lead balloon
This ETF called USO (US Oil) is a reasonable proxy for oil prices. Don’t you think it’s hard to believe the world’s oil prices can change that fast? Of course it is. You never know if they were over priced to begin with (for a LONG time) or if they are overshooting on the downside. Our bet, the latter. We are certainly aware asset classes can stay out of favor for some time.
Here is another good example of a basket of commodities (Gold, Silver, Oil, Beef…etc) that we really like and include in portfolios for diversification. Hmmm …. looks pretty silly holding these as they fall like a rock ? Buy low!
Let’s go back to 1-1-14 and see what this same basket looked like. While not always easy to hold, rest assured they don’t always go in just a downward direction. We trimmed these positions as they weights became too heavy for portfolio allocations. Sell High!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
$treet-¢ents 
CPI (Consumer Price Index) Prints 6.8% Year over Year Increase, Quick Analysis on Likely Peak … Friday
About three hours ago, the BLS (Bureau of Labor Statistics) released their November 2021 report on CPI (Consumer Price Index) one of the broadest measures of Inflation…
If you have noticed your grocery basket smaller and more expensive, this is why….
This report has a ton of factors in it, as can be seen at the top of the chart from the BLS report, below….
The year over year print was 6.8% increase!
A very large portion of the CPI is Energy…
Have you noticed a LOWER bill to fill your tank lately?
The BLS report is lagging, below is a current Oil price, which is over 10% LOWER currently… hence the cheaper refills…
Very likely peak in CPI as measured by the BLS, next month which will be released in early January, we will take a peak and keep you updated…
Ok, another slightly heavy Friday, BUT the FOMC is watching this very closely and making decisions based on this increase, which may be peaking/lagging already…. Let’s stay tuned!
Have a Great “Friday CPI Analysis” Day!
John A. Kvale CFA, CFP
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Posted in Economy, Forecast, General Financial Planning, Investing/Financial Planning, Market Comments
Tagged BLS, Bureau Of Labor Statistics, Consumer Price Index, CPI, Energy