America Motoring In the direction of Financial Catastrophe
America has been motoring in the direction of catastrophe ever since its financial system was structured around the car and low-cost power provides.
Now that energy is no longer at all low-cost disaster is imminent. Like the airlines, with oil above $125 a barrel, and doubtless headed a lot increased as peak oil quickly kicks in with a vengeance, the American enterprise and lifestyle model is broken
Gasoline costs at $four.00 a gallon have started to force Americans to cut back on their driving. Even middle class families are having a troublesome time making ends meet with rising gasoline prices, rising food prices, double digit increases in the cost of health care, stagnant incomes, and falling house costs occurring all at the identical time. So some effort at energy conservation is finally underway.
Sadly, America and Americans have not yet come to grips with the fact that huge adjustments in the way that the everyday American lives are going to be forced upon them. There isn’t one politician in sight who has the guts to inform Americans that lots of them face a long term reduction in their customary of living.
Driving a number of much less miles each week could assist some nevertheless it isn’t going to make a dent in the onerous actuality that the privileged place of The United States of America on the earth is in a state of transition. Things won’t ever be fairly the identical as Americans shall be compelled by economic occasions to adjust the wasteful way of life that they’ve come to know because the “American Way of Life”.
American politicians, like John McCain, boldly declare that “the American method of life is non negotiable.” Nonetheless, they seem to miss the fact that the US is hopelessly dependent upon overseas oil for over 60% of its supplies.
The drain daily of America’s wealth to pay for oil imports at $125 plus barrel oil is a whole lot of thousands and thousands a day. It’s not solely the outflow of money that is the problem. It is also the reasonably unfriendly nations that plenty of these oil cost funds are being transferred to.
We’re supplying quite a lot of nations which might be outright hostile to the United States with large quantities of funds. This leaves the US extremely uncovered to all types of potential challenges, including the financing of acts in opposition to US interests using what was our personal cash for the funding of hostile operations.
Right here is oil import data from 2006 (latest obtainable) supplied by the US Energy Data Administration. I anticipate that the numbers are far worse for the US now. Certainly at $125 a barrel oil the whole amount that we pay has gone by means of the roof.
“The soybean oil refinery plant United States consumed 20.7 million barrels per day (MMbd) of petroleum merchandise throughout 2006 making us the world’s largest oil shopper. The United States was third in crude oil manufacturing at 5.1 MMbd. Along with crude oil, vital contributions to U.S. petroleum supplies got here from pure fuel plant liquids, refinery achieve, and alcohol fuels. However, we still wanted 13.7 MMbd of imported crude oil and petroleum merchandise to meet U.S. demand. The United States also exported 1.Three MMbd of crude oil and petroleum merchandise throughout 2006, so our web imports (imports minus exports) equaled 12.4 MMbd.
Petroleum merchandise imported by the United States throughout 2006 included gasoline, diesel fuel, heating oil, jet fuel, chemical feedstocks, asphalt, and different products. Nonetheless, most petroleum products consumed within the United States had been refined here. Net imports of petroleum other than soybean oil refinery plant crude oil had been 17% of the oil consumed within the United States throughout 2006.”
Let’s do the math utilizing the 2006 12.4 MMbd determine however at today’s costs. 12,400,000 x $125 = $1,550,000,000 a day leaving the nation. How long can this go on Not eternally, of that I’m positive.
When you think about different outrageous costs, such as the 12 billion a month we’re spending to fight the Iraq war, you’ll be able to see that America is on its solution to turning into a poor nation in a relatively massive hurry.
It’s time for Americas to get up and put together themselves for a downsized future. The sooner that Americans start 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 now we have an issue we are able to get on with the duty of discovering ways to raised deal with it.
Unfortunately, no American politician appears to have the guts to admit that America does not have a special right to stay past our means endlessly. For Individuals, and for citizens of different highly developed nations, like the UK and Spain, the day of reckoning is close at hand, prefer it or not.
Gerald “Taipan” Greene is a retired forex trader and portfolio supervisor who labored in Asia for over 20 years. The soybean oil refinery plant nickname was acquired in Hong Kong and is now used for a number of financial, political, and Internet business associated blogs. Certainly one of them is at Bold Messenger
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