First, by plotting two variables (X and Y) on a graph, one could conclude that:
A) X causes Y, or
B) Y causes X.
Are you making the claim that inflation happens BEFORE higher prices for oil? That is, CPI goes up then the oil gods say "Hey, we need to raise our prices too and take advantage!"
There is obviously insufficient information to conclude one or the other, or that X and Y are related at all (there are lots of other things you could plot which would follow the same rough pattern, but for which it would be ridiculous to conclude a relationship).
Show us one other item that has inflation (CPI and core CPI) tracking its ups and downs better than energy prices.
Show us one other variable that went down in price then was followed by lower core and headline CPI numbers every time it went down.
It turns out that, for the worst kind of inflation, both A and B have to be true.
Yes, but the discussion was about Brinker saying higher prices doesn't cause inflation, which is wrong.
Obviously, the economy is a closed loop system which means any small change causes other areas to compensate. I am not arguing that higher priced oil won't slow the economy similar to how raising taxes or interest rates slows the economy because it does.
My "proof" was to show that Brinker's repeated statement that higher prices doesn't cause inflation is flat out wrong.
Higher prices for anything reduces purchasing power which is the definition of inflation. Buying less jumk food at Walmart and taking the bus rather than driving is how some people react to loss of buying power, AKA inflation.
Finally, Oil prices finished last month at $74.50, up $0.50 or up 0.7%
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