Pizza And Beer Now Cost An Arm And A Leg

[jpeyton]

Still, your hypothetical situation doesn't really add up. To offset the hundreds in extra gas costs a typical consumer would face from rising prices, they would have to invest a significant amount of money in oil stock. If they had that much money to invest in the first place, they are not the income class that will be most affected by food and gas price increases.

The problem with your "invest or suffer" mentality (which is shared by others on this forum) is that these problems affect everyone equally, even people who invest. A good percentage of the federal taxes deducted from each of your paychecks will go to pay for social services for people that can't afford it themselves (cost of living, health care, prescription drugs, etc.). If we're not going to look for solutions to the problem, we're all going to continue paying for it...even those of us with enough capital to invest in stock.

 

[LegendKiller]

Originally posted by: WhipperSnapper

Originally posted by: LegendKiller

And, as oil becomes more expensive it is dropped as a primary source of energy. Alternates are found as economics takes hold. Entrepeneurs pour money into R&D, alternatives are found, rolled out, and deployed en masse.

I love how gloom and doomers think on a one-track mind. People like that have the brain capacity of a sand flea.

You're making a huge assumption. Surely a guy who's so smart and who feels that his intellect is so superior to those of others that he's willing to make ad hominem attacks shouldn't miss that assumption.

You're assuming that there are comparable alternatives to be found and that they will be found and developed in time to prevent a significant reduction in our standard of living. In the meantime, as our nation's population explodes and as the rest of the world begins to use the world's finite petroleum resources, we have less and less time to find and develop alternatives.

In the case of oil, we hope that R&D finds and develops viable alternatives that provide just as good or nearly as good of an Energy Return on Investment (EROI).

I don't disagree that alternatives of lesser EROI can be found nor that the free market will spur that development. However, for such an intellectually potent guy you sure do seem to have tremendous amounts of faith that viable alternatives will be found and developed in time to prevent a significant decrease in our standard of living. I hope that that is the case, but I don't have that faith. Alternatives are currently available but they are also very expensive, which is why we are not currently using those alternatives in mass.

Perhaps folks who accept free market economics as a religious dogma and who have faith that technological advances driven by the free market will magically be able to outpace the forces of Malthusian biology are the ones with the brain capacity of a sand flea.

It's not an assumption, it's an inevitability. I know people like you want this country to fail to match your own miserable outlook and lives, but you miss one point, there's always something different that will be able to replace what has become overly costly.

This is akin to the company who can now print solar cells. Sure, they aren't the most efficient, but they breach a cost barrier that was previously thought impossible. Personally, I think the government should give them a grant to create more efficient cells and tax breaks to corporations and builders who slap them up on every highrise made.

There's also coal liquification, fission, fusion, all of which can replace our massive amount of petrolium energy production, oil shale and sand technology that is booming and is hitting the right pricepoints as we speak.

Naturally all of these situations are impossible to change, since you don't want them to. Look at your own link in your sig, you really want a third world country. I bet you've never even been to one.

 

[Lalakai]

several inputs are causing farmers to raise their prices: diesel costs, and fertilizers. Those increases will be passed along.

Corn and bean prices are increasing due to their being in demand for ethanol and bio-diesal (neither of which are highly efficient use of corn and soybeans).

reference made to soil erosion isn't completely accurate. for a farmer to participate in USDA subsidy programs, their erosion levels must be at acceptible levels (usually the soil's "T" value); this erosion level combines both wind and water erosion. some states have skewed the numbers by allowing erosion rates of 2T, and in these cases the erosion taking place exceeds the soil's ability to naturally rebuild itself.

with more demand being placed on corn and beans, wheat ground had been shrinking, causing a reduced crop. combine the reduced acreage with a poor growing year, and the market reflects the results.

have prices increased; yes. Will they continue to increase; yes. Does the US have the capability to provide suffiecient feed to the US population; yes.

currently the US has approximately 35 million acres of cropland in the Conservation Reserve Program, which initially targeted highly erodible land, but in subsequent signups looked at production levels. It would take an act of congress to break those contracts and allow that land back into production, but it could be done, which would allow a significant increase back into the production line. Except for a few select markets (sugar, peanuts, tobacco, ect.) the American farmer has been living on the edge, with many farms going into foreclose each year. Even with these high prices, not alot of that money is getting back to the farmers, so don't blame them.

 

[KrispyKreme50]

Originally posted by: jpeyton
Still, your hypothetical situation doesn't really add up. To offset the hundreds in extra gas costs a typical consumer would face from rising prices, they would have to invest a significant amount of money in oil stock. If they had that much money to invest in the first place, they are not the income class that will be most affected by food and gas price increases.

The problem with your "invest or suffer" mentality (which is shared by others on this forum) is that these problems affect everyone equally, even people who invest. A good percentage of the federal taxes deducted from each of your paychecks will go to pay for social services for people that can't afford it themselves (cost of living, health care, prescription drugs, etc.). If we're not going to look for solutions to the problem, we're all going to continue paying for it...even those of us with enough capital to invest in stock.

I'll try to provide an example to clarify my points. Let's take a conservative estimate and say that a family experiences $1000 in increased costs as a result of the rise in oil prices. Assume that they were only aware of large companies and invested in Exxon Mobil as a result.

From 2003 to the 2007, the price of Exxon's stock nearly tripled. With a starting investment account of only $1500 ($3000 with margin), they would have had a account value of $8084.23 ( ($3000 x 3) - 5 years of 10% in carrying costs which would be $915.77) by the end of 2007. That would have been more than enough to offset the increase in costs. Also, something that is almost never mentioned is that under President Bush's tax cuts, families earning under $50,000 (not sure of exact number) pay no taxes on capital gains.

Let's take another look at what would have happened if a family had wisely done some due dilligence and had decided to invest in Apple in the same time period. They would have earned a 2766% gain on their investment and this translates to an account value of $82064.23 ($3000 x 27.66 - $915.77 in carrying costs). The stock market is open to anyone who wants to invest, and these two cases show that opportunities exist to those who are willing to evaluate economic conditions with an open mind.

 

[WhipperSnapper]

Originally posted by: LegendKiller
It's not an assumption, it's an inevitability. I know people like you want this country to fail to match your own miserable outlook and lives, but you miss one point, there's always something different that will be able to replace what has become overly costly.

This is akin to the company who can now print solar cells. Sure, they aren't the most efficient, but they breach a cost barrier that was previously thought impossible. Personally, I think the government should give them a grant to create more efficient cells and tax breaks to corporations and builders who slap them up on every highrise made.

There's also coal liquification, fission, fusion, all of which can replace our massive amount of petrolium energy production, oil shale and sand technology that is booming and is hitting the right pricepoints as we speak.

You're missing my point. I don't disagree that alternatives can be developed. The issue is whether they can be developed in time to provide the same energy return on investment that we get from petroleum. Sure--alternatives become practical as the price point for energy rises. The rising price point and its concomitant decreased standard of living is the problem.

Naturally all of these situations are impossible to change, since you don't want them to. Look at your own link in your sig, you really want a third world country. I bet you've never even been to one.

Uh...no...I don't want to live in a third world country nor do I want the U.S. to become a third world country. My concern is that the U.S. is transforming itself into an overpopulated and impoverished third world country.

Where do you get the notion that malcontents such as myself want the country to fail? Are you open to the possibility that people can point out how the nation is failing without their wanting it to fail? If I wanted the nation to fail, why would I try to make people aware of the nation's many problems? It's almost as though you've turned your ideology into a religion where those who question free market dogma and the myth of mericotracy are sinners who worship the Devil.

 

[Midnight Rambler]

Ethanol

Corn and bean prices are increasing due to their being in demand for ethanol and bio-diesal (neither of which are highly efficient use of corn and soybeans).

Precisely. Sorta shocking it took this thread so long to mention this. I live in an area which has some of the most fertile soil in the country and know a lot of farmers, most of whom are concentrating solely on corn now.

While we don't have the climate for sugar cane, switch grass is a much better answer than corn for ethanol. Native to North America, and esp. the Midwest.

 

[KrispyKreme50]

Originally posted by: Midnight Rambler

Ethanol

Corn and bean prices are increasing due to their being in demand for ethanol and bio-diesal (neither of which are highly efficient use of corn and soybeans).

Precisely. Sorta shocking it took this thread so long to mention this. I live in an area which has some of the most fertile soil in the country and know a lot of farmers, most of whom are concentrating solely on corn now.

While we don't have the climate for sugar cane, switch grass is a much better answer than corn for ethanol. Native to North America, and esp. the Midwest.

The sad thing is that ethanol is not a viable source of energy in the long run. Without dramatic improvments in production technology, ethanol will never be competitive with p etroleum.