America Motoring In the direction of Economic Disaster
America has been motoring towards disaster ever since its economic system was structured around the car and low-cost vitality provides.
Now that vitality is no longer in any respect low cost catastrophe is imminent. Like the airways, with oil above $125 a barrel, and possibly headed much greater as peak oil soon kicks in with a vengeance, the American enterprise and lifestyle mannequin is damaged
Gasoline costs at $4.00 a gallon have started to drive People to cut back on their driving. Even middle class families are having a tricky time making ends meet with rising gasoline prices, rising meals costs, double digit increases in the price of well being care, stagnant incomes, and falling house costs occurring all at the same time. So some effort at vitality conservation is finally underway.
Sadly, America and Americans haven’t but come to grips with the truth that large changes in the way that the everyday American lives are going to be compelled upon them. There isn’t one politician in sight who has the guts to tell Individuals that a lot of them face a long term discount of their commonplace of residing.
Driving a couple of less miles every week may help some but it surely isn’t going to make a dent in the laborious reality that the privileged position of The United States of America on the earth is in a state of transition. Issues will never be fairly the identical as Individuals shall be pressured by financial events to adjust the wasteful life-style that they’ve come to know as the “American Method of Life”.
American politicians, like John McCain, boldly declare that “the American manner of life is non negotiable.” Nonetheless, they appear to miss the truth that the US is hopelessly dependent upon overseas oil for over 60% of its provides.
The drain every day of America’s wealth to pay for oil imports oil sands refinery process example at $125 plus barrel oil is lots of of tens of millions a day. oil sands refinery process example It’s not solely the outflow of cash that is the problem. Additionally it is the relatively unfriendly nations that plenty of those oil fee funds are being transferred to.
We are supplying a variety of nations which are outright hostile to the United States with enormous amounts of funds. This leaves the US extraordinarily uncovered to all sorts of potential challenges, together with the financing of acts against US interests utilizing what used to be our personal cash for the funding of hostile operations.
Right here is oil import information from 2006 (newest obtainable) equipped by the US Vitality Info Administration. I anticipate that the numbers are far worse for the US now. Certainly at $125 a barrel oil the entire amount that we pay has gone through the roof.
“The United States consumed 20.7 million barrels per day (MMbd) of petroleum merchandise during 2006 making us the world’s largest oil consumer. The United States was third in crude oil production at 5.1 MMbd. In addition to crude oil, important contributions to U.S. petroleum supplies came from pure gasoline plant liquids, refinery achieve, and alcohol oil sands refinery process example fuels. Nevertheless, we nonetheless wanted 13.7 MMbd of imported crude oil and petroleum merchandise to meet U.S. demand. The United States additionally exported 1.3 MMbd of crude oil and petroleum products during 2006, so our net imports (imports minus exports) equaled 12.Four MMbd.
Petroleum merchandise imported by the United States during 2006 included gasoline, diesel gas, heating oil, jet gas, chemical feedstocks, asphalt, and other products. Still, most petroleum products consumed in the United States have been refined here. Net imports of petroleum aside from crude oil have been 17% of the oil consumed within the United States during 2006.”
Let’s do the math utilizing the 2006 12.4 MMbd figure but at today’s costs. 12,400,000 x $125 = $1,550,000,000 a day leaving the country. How long can this go on Not perpetually, of that I’m positive.
When you consider other outrageous prices, such as the 12 billion a month we’re spending to battle the Iraq struggle, you possibly can see that America is on its option to changing into a poor nation in a somewhat massive hurry.
It’s time for Americas to wake up and put together themselves for a downsized future. The sooner that Individuals begin to get up and demand that politicians converse the truth about such issues the better off we will probably be. Once we admit that we’ve got a problem we are able to get on with the task of finding ways to better deal with it.
Sadly, no American politician appears to have the guts to admit that America does not have a special right to reside beyond our means perpetually. For Americans, and for residents of other extremely developed nations, just like the UK and Spain, the day of reckoning is shut at hand, prefer it or not.
Gerald “Taipan” Greene is a retired forex trader and portfolio manager who worked in Asia for over 20 years. The nickname was acquired in Hong Kong and is now used for various monetary, political, and Web enterprise associated blogs. Certainly one of them is at Daring Messenger
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