Inflation and Oil Changes

Email Print
FacebookTwitterShare

They tell us inflation – the benign-sounding word used to euphemize the deliberate devaluation of our money by simply creating new money (pieces of paper) out of thin air and flooding the economy with it – is “only” running about 2 percent of so annually.

If so, why has the cost of a quart of oil gone up by, oh several hundred percent?

I’ve done a lot of oil changes over the years. A quart of high-quality non-synthetic oil cost less than $2 a quart when I was in college in the ’80s. That same quart of oil today costs three times as much.

On sale.

I picked up four quarts yesterday. $27.16 before taxes. $6.75 per quart. The usual price is higher.

Synthetics – the run of the mills such as Mobil 1 – cost closer to $9 a quart. If your car craves the top-of-the-line stuff, like Amsoil, the hit per quart is going to be over $11 a quart (see here if you dinna believe me).

And of course, you’ll need a filter to go with the oil. The decent ones cost about $10 per.

So, assuming the typical car engine’s five quart capacity, an oil change today will cost you anywhere from $35 or so on the low end (decent quality, non-synthetic oil bought on sale; middling quality filter) to $70-plus if you use the good stuff.

This also assumes you do it yourself, of course.

But is the cost real?

That is, are we talking about an actual increase in the intrinsic value of the items in question? Or are we talking about a decrease in the purchasing power of our money – aka inflation? Luckily, the same monopoly at gunpoint that manufactures money out of thin air – the legalized mafia called “government” – also provides an excellent way for us to gauge its slow-drip attenuation of the value of this manufactured money: The Bureau of Labor Statistics’ Consumer Price Index/Inflation Calculator (see here).

That $6.75 per quart I just paid? Filtered through the government’s own calculator – which probably fudges in its favor egregiously – that sum is equivalent to $3.37 in 1988 Fed Funny Money. But – as I or anyone else who was doing oil changes back in ’88 will gladly tell you – a quart of oil back then cost about $1.50. The current real price – what it costs us to buy with our constantly worth-less dollars – is therefore about double what it was when I was in college.

But the oil itself doesn’t cost more. The price is simply higher – reflecting the diminished value of the paper “notes” we’re compelled to use as a medium of exchange.

Read the rest of the article

Email Print
FacebookTwitterShare
  • LRC Blog

  • LRC Podcasts