America Motoring In direction of Financial Catastrophe
America has been motoring in direction of catastrophe ever since its financial system was structured around the vehicle and low-cost vitality supplies.
Now that power is now not in any respect cheap catastrophe is imminent. Like the airlines, with oil above $125 a barrel, and probably headed much higher as peak oil soon kicks in with a vengeance, the American business and lifestyle model is broken
Gasoline costs at $four.00 a gallon have began to pressure Individuals to cut again on their driving. Even center class families are having a tough time making ends meet with rising gasoline costs, rising food costs, double digit increases in the price of health care, stagnant incomes, and falling home prices occurring all at the identical time. So some effort at vitality conservation is finally underway.
Unfortunately, America and Americans haven’t yet come to grips with the fact that large changes in the way in which that the typical American lives are going to be pressured upon them. There isn’t one politician in sight who has the guts to tell People that lots of them face a long term reduction in their normal of residing.
Driving a number of much less miles each week might help some however it isn’t going to make a dent in the arduous actuality that the privileged position of The United States of America on this planet is in a state of transition. Things won’t ever be quite the same as Individuals can be compelled by economic events to regulate the wasteful lifestyle that they have come to know because the “American Method of Life”.
American politicians, like John McCain, boldly declare that “the American method of life is non negotiable.” Nonetheless, they seem to miss the crude oil vacuum distillation process truth that the US is hopelessly dependent upon international oil for over 60% of its provides.
The drain day by day of America’s wealth to pay for oil imports at $125 plus barrel oil is tons of of millions a day. It’s not only the outflow of cash that’s the issue. It is usually the quite unfriendly nations that lots of those oil payment funds are being transferred to.
We are supplying quite a few nations which might be outright hostile to the United States with big quantities of funds. This leaves the US extraordinarily exposed to all kinds of potential challenges, together with the financing of acts against US pursuits using what was our own money for the funding of hostile operations.
Here is oil import data from 2006 (newest out there) provided by the US Energy Info Administration. I expect that the numbers are far worse for the US now. Certainly at $125 a barrel oil the total quantity that we pay has gone by way of the roof.
“The United States consumed 20.7 million barrels per day (MMbd) of petroleum products during 2006 making us the world’s largest oil shopper. The United States was third in crude oil production at 5.1 MMbd. Along with crude oil, significant contributions to U.S. petroleum provides got here from natural gas plant liquids, refinery acquire, and alcohol fuels. However, we nonetheless wanted 13.7 MMbd of imported crude oil and petroleum products to meet U.S. demand. The United States also exported 1.3 MMbd of crude oil and petroleum products during 2006, so our web imports (imports minus exports) equaled 12.Four MMbd.
Petroleum merchandise imported by the United States throughout 2006 included gasoline, diesel gasoline, heating oil, jet gasoline, chemical feedstocks, asphalt, and different products. Nonetheless, most petroleum products consumed within the United States were refined here. Net imports of petroleum apart 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.Four MMbd figure however at today’s prices. 12,400,000 x $125 = $1,550,000,000 a day leaving the nation. How lengthy can this go on Not forever, of that I’m sure.
When you consider different outrageous prices, such because the 12 billion a month we are spending to fight the Iraq battle, you possibly can see that America is on its technique to turning into a poor nation in a somewhat large hurry.
It’s time for Americas to wake up and prepare themselves for a downsized future. The crude oil vacuum distillation process sooner that Americans begin to wake up and demand that politicians communicate the truth about such issues the better off we will be. As soon as we admit that we have now an issue we will get on with the task of finding methods to higher deal with it.
Sadly, no American politician seems to have the guts to admit that America does not have a particular right to live past our means eternally. For People, and for citizens of different extremely developed nations, like the UK and Spain, the day of reckoning is close at hand, like it or not.
Gerald “Taipan” Greene is a retired forex trader and portfolio supervisor who labored in Asia for over 20 years. The nickname was acquired in Hong Kong and is now used for numerous monetary, political, and Web enterprise associated blogs. Certainly one of them is at Daring Messenger