As the world faces an economic meltdown of apocalyptic proportions the idea that fuel efficient vehicles, trains, planes and electrical generation are all on the table is fascinating. The first thoughts in over 30 years that nuclear power plants, off shore oil rigs and even alternative energy wind, natural gas and biofuels….are all options – finally on the table again.
T. Boone Pickens has pointed out quite correctly that when the price for a barrel of oil rises….it directly benefits petty regimes or huge political bullies to a great degree. Venezuela, Iran and the Middle East, Malaysia, Russia and others become lottery winners in the game of payment transfers of cash. If we think about the fact that in July of this year…Oil was $147 dollars a barrel and the recipients of this windfall became this nasty regimes and world oil companies. Exxon-Mobil broke every corporate record for profits in the history of man. Why did they also profit? The reason was simple….if the actual production cost for bringing a barrel of oil to gasoline for the family auto….is between $28 dollars to $42 dollars….every penny above that level becomes “A Windfall Profit”.
The great marketing push to promulgate the theorem: that “oil is a finite resource and its disappearing from the face of the earth!”….That “China and India are going to compete for this valuable commodity and will drive the price up eventually to $250 to $500 dollars barrel.” The speculative lies are rampant. The truth is that when the day comes that the family vehicle gets 120 miles per gallon….when every country in the world has this standard and every country in the world moves away from the barrel of oil…..then we can start to worry!
When may the last days come? When will speculation in staple commodities be brought under control. Water, Transportation, Energy and Food are staples goods. We need these items to live. This is the serious purview of Governments around the world. It is the job of Governments to supply the basics of life to the people at a reasonable price. Our children need clean water to drink and use for sanitation. Our children need light to read and heating to stay warm in the winter, air conditioning for the summer and fuel to take them to school and for the family to go to work. What happens when the prices of these things exceeds the family income each month? We have shortages that cause price spikes! Enron artificially cornered the Natural Gas Market and wound up costing the people of the United States billions in speculated energy prices. Enron’s idea was to charge whatever the price will bear! The energy companies and oil producing countries including the United States….recently tried doing the same thing!
The concept to remember is….that Regulated Markets are not un-American. Until 1998, Energy Markets were Regulated. Until 1998, there were no Sub-Prime Mortgages, Credit Default Swaps or Leverage Buy-Outs of Bad Debt. The Price of oil was $28 dollars a barrel. The world needs to take a step back and realize that the last 10 years have caused our inflated sense of self and inflated Real Estate prices around the world. We sold the great Global Community a bill of goods……..and now we are going to have to recant. Government will now have to actually do its job!
We are going to have to reshape our Global Economic Community back to a time when reason and common sense ruled the day. A time when life long Pensions could not be found at the end of a person’s work at age 50! The concepts of a government free ride, lifelong government payouts and cheap paper towels may be over! People are going to have to work into their late 70’s and without a giant pension or perhaps without even Social Security at that. People are going to have to save our world environment for the many generations to come! The time has come to work together, help others and be part of the solution…rather than part of the problem.
$28 dollar a barrel Oil….will put those petty regimes where they belong, very respectful and willing to work together with all countries of the world. The cost of airfare, bus rides, train transportation, truck and shipping will not affect the prices of goods and services in a negative way. $28 dollar a barrel oil will keep the global energy speculators at bay! It will be “Welcome to America” again!
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