America Motoring In direction of Financial Catastrophe
America has been motoring in direction of disaster ever since its financial system was structured around the vehicle and low cost energy supplies.
Now that energy is not at all low cost catastrophe is imminent. Like the airlines, with oil above $125 a barrel, and doubtless headed a lot greater as peak oil soon kicks in with a vengeance, the American business and way of life model is damaged
Gasoline costs at $4.00 a gallon have began to drive Individuals to chop back on their driving. Even middle class families are having a troublesome time making ends meet with rising fuel prices, rising meals costs, double digit will increase in the price of well petroleum based products being care, stagnant incomes, and falling home costs occurring all at the same time. So some effort at power conservation is finally underway.
Unfortunately, America and Individuals haven’t yet come to grips with the fact that massive modifications in the way that the typical American lives are going to be forced upon them. There isn’t one politician in sight who has the guts to inform Individuals that many of them face a long run discount of their commonplace of dwelling.
Driving a number of much less miles every week could assist some however it isn’t going to make a dent within the hard reality that the privileged position of The United States of America on this planet is in a state of transition. history Issues will never be fairly petroleum based products the identical as Individuals can be compelled by financial occasions to regulate the wasteful life-style that they have come to know because the “American Approach of Life”.
American politicians, like John McCain, boldly declare that “the American approach of life is non negotiable.” However, they appear to miss the truth that the US is hopelessly dependent upon international oil for over 60% of its supplies.
The drain each day of America’s wealth to pay for oil imports at $125 plus barrel oil is lots of of tens of millions a day. It’s not solely the outflow of money that’s the problem. Additionally it is the quite unfriendly nations that plenty of these oil fee funds are being transferred to.
We are supplying a lot of nations which are outright hostile to the United States with large amounts of funds. This leaves the US extremely exposed to all kinds of potential challenges, including the financing of acts towards US pursuits using what was our own cash for the funding of hostile operations.
Here is oil import information from 2006 (latest available) provided by the US Vitality Info Administration. I expect that the numbers are far worse for the US now. Definitely at $125 a barrel oil the total amount that we pay has gone by means of 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, vital contributions to U.S. petroleum provides came from pure fuel plant liquids, refinery gain, and alcohol fuels. However, we nonetheless wanted thirteen.7 MMbd of imported crude oil and petroleum products to fulfill U.S. demand. The United States additionally exported 1.Three MMbd of crude oil and petroleum merchandise throughout 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 other products. Nonetheless, most petroleum merchandise consumed within the United States had been refined here. Internet imports of petroleum other than crude oil had 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 costs. 12,400,000 x $125 = $1,550,000,000 a day leaving the country. How long can this go on Not eternally, of that I’m sure.
When you think about different outrageous costs, such as the 12 billion a month we’re spending to struggle the Iraq warfare, you possibly can see that America is on its method to changing into a poor nation in a relatively big hurry.
It’s time for Americas to wake up and put together themselves for a downsized future. The sooner that People begin to wake up and demand that politicians communicate the reality about such issues the higher off we will probably be. As soon as we admit that we have now an issue we can get on with the task of discovering ways to higher deal with it.
Unfortunately, no American politician appears to have the guts to admit that America does not have a particular proper to live past our means ceaselessly. For Americans, and for citizens of other highly developed nations, like the UK and Spain, the day of reckoning is shut at hand, like it or not.
Gerald “Taipan” Greene is a retired forex trader and portfolio manager who labored in Asia for over 20 years. The nickname was acquired in Hong Kong and is now used for various monetary, political, and Web enterprise related blogs. One in all them is at Daring Messenger