Watching the crisis develop

I like it when someone uses actual numbers to assess received wisdom. Here is a clear and concise treatment of hybrid cars:

According to a report released by the U.S. Department of Energy’s National Renewable Energy Laboratory, fuel efficient electric-gasoline cars like the Toyota (TM) Prius and Honda (HMC) Civic have saved a grand total of 5.5 million barrels of oil over the past eight years. On the other hand, the U.S. was importing 8.5 million barrels of oil a day in 2003 to power cars and light trucks.

More important, U.S. oil consumption is currently 21 million barrels per day. In other words, eight years of hybrids gave us another six hours of breathing room.

Meanwhile, I’m still waiting for a solid treatment of how the tight interconnectedness of the global economy makes it susceptible to being thrown out of equilibrium. This article isn’t it, but it is one of the few I’ve run across which illustrates how one factor spinning out of control, namely inflation, can lead to cascading sequences of bad consequences:

The U.S. produces 11 billion bushels of corn a year. In 2005, 1.5 billion bushels were sequestered for ethanol production. This leapt to 2.3 billion bushels in 2006 and an estimated 3.3 billion bushels in 2007. The price of corn has risen. The Mexican diet is heavily tortilla-ized, especially at the lower income stratum. Riots scarred the early months of President Felipe Calderon’s term of office. He slapped price controls on tortillas. Borrowing from the book of Castro, Calderon warned, “We won’t tolerate monopolists and speculators.” His Cuban counterpart made more sense when he declaimed the “sinister idea of converting food into fuel.”

The little man is also exposed in the United States. Farmland and grazing land are being rotated to the highest-priced crop. Cows are no longer fashionable. Thus, domestic milk prices have risen 63% over the past year. According to Andy Lees at UBS in London, world milk prices have risen 60% over the past six months (measured by the price of skim milk powder, commonly used as the benchmark). The U.S. has no surplus milk powder. It had 2.7 billion pounds in storage in 1983; the last 27 million pounds were sold last year. European warehouses are empty. Other food prices are rising by double digits. (Most everyone knows the government trumpets a consumer price index that does not include food and energy. Less well known is the absence of commodities such as milk, eggs, butter, and cheese from the seasonally adjusted CPI number that does — purportedly — include food and energy.)

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2 thoughts on “Watching the crisis develop

  1. Let’s not forget that there could also be knock ons in terms of stress to the land, and water resources in the medium term. In the longer term ethanol/biofuels from cellulose could offer a better solution, but the real need is for Americans to conserve gasoline and buy more fuel efficient cars.

  2. Rick, thanks for an eye opening post. The world’s pagan economic system of debt-based, fiat currency driven corporate monopolization is utterly unsustainable, being cursed of God, as it is in total violation of His Law. The fact that it has completely globalized means that when one of the participants or major components slides off the edge of the cliff that everything and everyone attached goes with it. Seeking solutions within it will only prolong and deepen the chasm in which it will fall. It’s hard for us Americans to imagine let alone accept this reality, but we are already sliding into it. The answer lies in a fundamental cultural paradigm shift brought one by true biblical reformation, which will be painful and slow going. What technologies will emerge the Lord only knows, but many of the present ones that are reliant upon the corporate state and globalism will not, Lord willing. I believe various means of transportation will develop based upon local economies and limited forms of government that fit within the confines of the scope and parameters the Lord built into His creation, the earth and it resources.

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