caroline: i'm caroline hyde. today we are focused on inflation, whether it is the price of your used car or how expensive it is to fill that car up at the pump. prices paid by consumers in the u.s. still climbed in july, just not as much as june.

5.4% year is alive. president biden thought the cpi was good news, but the administration is still putting pressure on opec to lower gasoline prices that have been pinching the middle class and the u.s.. wherever you are experiencing price pressers, investors have come to terms with inflation, not expecting imminent fed lift off, evidence of an expanding economy. there is a vocal minority. katie greg feld has been writing about it. romaine: we talk about these headline numbers. the 0.5% in july when you look under the hood and what we have been looking at, there is the used car segment. you are paying more.

planning to propose to your girlfriend? you are going to pay about 10% more for that diamond ring. gaming chairs are up 9% on the day. the price of new vehicles up 1.7% in july, stronger than the three month average. the prices for used cars and trucks are still skyrocketing, but not going to the moon like they were earlier this year. let's bring in jessica caldwell to talk more about what's can -- what's been going on in the auto space. let's talk about the used car market. it has been on fire for well over a year. while we did see some moderation, it didn't suggest price pressures are going to abate anytime soon. jessica: for anyone looking for a used vehicle, new vehicle inventories are so tight so people are turning to the used

market for an alternative. a lot of people want to be more fiscally conservative, so they are thinking, i am going to go for used car when i would have normally bought a new car. with low interest rates, people are taking advantage of that on the used car side, not relying on the 0% or 0.9% offers you sometimes see on used vehicles. caroline: look at the forecast of second order earnings. the biggest platform for buying and selling used vehicles, beating on every front. it speaks to the desire for everyone to be purchasing. is there any easing from your perspective? do supply chain issues seem to be going anywhere anytime soon? jessica: that is unfortunately the case. i think later this year some supply chain issues will abate. we are not going to be back to

normal until at least 2022, but it should ease up in some segments. if you look at the use value, those are through the roof. good earnings from detroit automakers, but the issue is they don't have any. >> if we look at new vehicle inventory, it is about a third of what it normally is. i am curious about the persistently high prices we have been seeing. is it more about supply and demand? jessica: it is a bit of both. supply is the biggest issue because we have never had a situation where there are too few cars for people who want to buy them. we are also seeing unexpected search in demand with the vaccine rolling out across the country and people wanting to

get out after being in lockdown. people are thinking about their commutes, going back to college, and that requires a car. i have heard from people in the auto industry that they have never seen demand this high. romaine: i am going to sell katie my used buick for about 110% more than what i paid for it, so there is some upside. when we talk about some longer-term changes, you have a president trying to push eeev's and alternative fuel vehicles as a mandate for the auto industry. you also have a shift in the type of vehicles americans prefer. i am curious if that puts upward pressure on prices going forward, because when i hear ev's, i think that has more impact than a gasoline fueled car. jessica: people want to buy

larger vehicles. very few want a compact car. i think this is causing a shift in who is buying new cars. because transaction prices are so high and because what is on offer is going to continue to be on offer, people are outside the market because the prices of what is on offer have gotten too high. that will put increased pressure on the used market. what we are seeing now is going to continue, maybe not as much of an exclamation point as it is now with the supply chain issue. caroline: you always used to think the minute you bought a new car, you drive it off and the value would plummet by about a third. at the moment you are seeing the secondhand market drive it higher and the luxury end getting hit as people have decided, i'm not going to wait six months for my new car.

i will buy a secondhand luxury motor. will people long-term change, decide we don't need new cars, we are cool with? secondhand vehicles? ? jessica: i don't think that's going to be the case across the industry. the way we buy cars, we need instant gratification, unlike other countries where they pick up months later. we are a country who picks up vehicles when we want them. we don't know if the automakers are going to come back. people would rather buy something now, something they don't necessarily want as much, but it is better to have it now then to wait until 2022. caroline: jessica caldwell, thank you so much. coming up, pain at the pump, but

talk about the other area where you are feeling the pressure as a car owner. will prices be more affordable going forward? white house warning opec they must do more to ensure the energy supply. this is bloomberg. ♪

romaine: we are focused on inflation. one area we have seen it big, commodities. the biden administration calling on opec, opec countries, and u.s. regulators to do more to ensure stable energy supplies with a focus on what people pay put gasoline in their cars. the president speaking earlier.

pres. biden: we are taking action to address gas prices. today gas prices are lower than they were earlier in this decade, but still high enough to create a pinch on working families. romaine: he is right, 3:18 dollars is the average, well above a couple of years ago but well below longer-term averages. let's bring in the leader of bloomberg oil analysis. give us a sense of what the u.s. government can do to pressure foreign governments contribute to drop in our gasoline and oil prices. >> oil and gasoline markets are in a bit of attention. prices have been rising, crude oil and gas prices at the pump, which the administration is focused on. this is largely due to americans getting back on the road. gasoline demand is nearly back

to pre-covid levels. the question is, how do you make sure supply catches up? the administration has only so much they can do on the supply side. the biggest sources of short-term flexible supply are u.s. shale producers and opec, the historic balancer of the market. opec is the one that can most readily respond to turn on the taps. it looks like the administration is trying to put as much weight as they can behind opec to encourage that to happen. katie: it seems like the request to opec is at odds with the biden administration's clean energy focus. how do you reconcile those two targets? >> this is definitely a pinch point between short-term markets and long-term targets. in the long term, the biden

administration doesn't want to transfer the economy -- does want to transfer the economy to clean energy and reduce dependence on oil and gas. in the short term, he recognizes this is a price point americans have to pay. you can't ask people to stop driving fossil fuel vehicles tomorrow. there is a balance between ensuring the fuels needed today are affordable while also trying to ensure long-term sustainability. that's where the administration is having trouble. some policies, like canceling the keystone xl pipeline, is great when it comes to long-term switching off of oil dependency, but not so great for situations like these where it would be nice to have more crude coming from canada. caroline: in the short term, the impact of covid is interesting. we are reporting about getting

vaccinated, going back to work, and how delta is muddying the waters. refineries shot because of covid and that led to some supply-side issues. is that likely to again unfold or is that not a worry? >> refining is another big issue in the u.s. oil market broadly. some refineries shut down during covid. others started switching to renewable diesel production, which goes back to the dichotomy between the long-term clean energy plans and the short-term need for conventional fuel. renewable diesel and renewable gasoline are great because they can clean up our aviation fuel, trucking fuel, etc., but they do cost a lot more. it goes back to the question of lower prices at the pump versus cleaner fuels. romaine: anastacia giving us an update on the efforts of the

biden administration to address inflationary pressures in the market. next, we speak with the freight out ceo and founder on inflation. it is the anniversary of when we dropped the gold standard in the united states, which was all about controlling inflation. now here we are again. we are going to speak to zvi shriver. -- . ♪

>> it's a positive that some inflationary pressures are moderating. it is not racing out of control. >> my biggest fear is on the labor side. >> we are in the midst of an asian heatwave. >> inflation will -- of an

inflation heatwave. >> inflation will prove transitory. >> i don't think it will all be transitory. >> a good sign. >> it gives justification for the fed to delay tapering. >> they should be getting ready to raise interest rates. >> a one in three chance they hike next year. >> if inflation stays high, they will have the opportunity to raise rates against that firm economy. caroline: we have to keep the battle between transitory and non-transitory. there are some of the key guest throughout the day. many investors see it as evidence of an expanding economy, but katie says maybe it is different here. romaine: you wrote a whole story, i think there was sta gflation in the headline.

apparently this chart is telling me stagflation is coming. katie: it is a heated topic because there are painful memories associated with the 1970's. the money supply growth we have seen is one reason you are hearing more about stagflation. we can argue the definition, but investors we spoke to are starting to move their portfolio based on it. romaine: back to the 1970's, money supply have risen about 10%. this brings us to an interesting anniversary. we want to bring into the conversation zvi schreiber, who we have spoken with before about the freight industry. he is the author of a new book called money going out of style. i don't know if you time the release of this book to correspond with august 15, which for a lot of us -- i was not born yet in 1971 -- but that was the day we finally broke free

from the gold standard. this 50 plus year experiment we have had with the current monetary system, fiat currency, would you say it has run its course? zvi: absolutely it was time to coincide with the anniversary. this weekend is exactly 50 years from when nixon unlinked the dollar from gold. for thousands of years, money was linked to a commodity and suddenly, a half-century ago, it became an intriguing intangible thing. i did time the book to coincide with that anniversary. caroline: fiat currency is trying to be overtaken by even more cutting edge crypto related currency. i am interested in what you think is going on in terms of fiat currency. would you say it is having a midlife crisis? printing too much of it, erosion

of the dollar? what is it you see? zvi: i think it is a combination of printing too much and money not getting spent. in the 1970's -- katie referenced stagflation -- the central banks printed too much money and that resulted in inflation. the last 30 years, central banks have printed vast amounts of money and it has not caused inflation. there has been a little the last couple of months, but the amount of money printed the last 30 years is staggering. it has increased from $1 trillion in 2008 to $6 trillion, so it has gone up 500%. spending on goods and services has only gone up 50%. 13 years ago each dollar was spent about 10 times a year. it was paid as a salary and spent on goods and services 10 times a year. now it is only about once a year. when i called the book money

going out of style, i was referencing the fact that in the last decade plus, money is just not being spent. katie: i want to bring it back to the bond market because you seemed concerned about negative real interest rates. at the bond market, we have not seen positive real interest rates on the 10 year since march 2020, so it seems like a new normal. why are negative real interest rates so worrying? zvi: that's a great question. i am worried about negative real interest rates. they have been with us for a decade almost consistently. today if you lend money to the u.s. government on inflation protected bonds for 10 years, you are guaranteed to get back 1% less than what you invest today. that doesn't sound very attractive. this is a reversal of the way the economy works. through history, if you were saving, you were rewarded for

saving. if you were borrowing, you saved for the privilege of borrowing. the last 10 years, that has been reversed. after inflation, you are paying for the privilege of saving, whereas you can borrow, if you have good credit, you can borrow for next to nothing. in europe you can borrow for less than nothing. that is a scary reversal of the value of time. people are paying a premium to have things later. romaine: we are talking about the idea that we have a lot of fiscal stimulus coming down the pike. this means more debt potentially being issued by the treasury. earlier we spoke with chris brightman, cio and cio at a research affiliate. here is what he had to say. >> if you have the treasury wire transferring trillions of dollars of newly created money

into people's bank accounts, it's going to reduce the value of dollars relative to goods, services, and stuff. romaine: this seems to be the issue a lot of people in the market are concerned about, the treasury continuing to bump money out, the idea that over time this could devalue the dollar. that hasn't happened yet. with negative real yield, all the concerns, that hasn't materialized. when, if at all, do you think we get to the point when that becomes a material factor? zvi: i think it may have materialized in nonobvious ways. for the last decade plus the fed and other central banks have been printing money at an incredible rate. textbooks say that could -- that should cause inflation and that has not occurred, or only relatively slightly. instead a lot of that money has increased the prices of stocks

and properties and cryptocurrency. you have this ironic situation where a lot of money is being printed and instead of driving up the prices of goods and services, it is driving up the price of stocks and other investments. in the book i explore whether this is related to increasing the extreme inequality. if you give money to someone who needs more goods and services or someone who already has all the goods and services they want, they spend the money on speculative investments. caroline: great to have you on, zvi schreiber, author of money going out of style, timed for august 15, 1971. the fda set to approve a third dose of the vaccine, pfizer and moderna vaccine's, for the immunocompromised tomorrow. this is reporting from nbc.

we are watching pfizer and moderna shares after hours. tomorrow we are deep diving on the disney earnings release, talking hospitality, reopening, labor. you don't want to miss it. that does it for what you miss -- for what it you miss. katie: bloomberg technology is next. ♪

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announcer: from the heart of where innovation, money, power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ emily: i am emily chang in san francisco. this is "bloomberg technology." coming up, a bird, a plane, maybe an air taxi? one company promises a commercial