Saturday, April 26, 2008

Main Culprits: Droughts and Falling Dollar

Main Culprits:Droughts and Falling Dollar.
If we boil down the two main causes of high gas, diesel and oil prices and high food prices we find two main causes.
First, in regard the droughts and Global Climate Change(this is specific to high food prices) there are many things that could be done that haven't been implemented or even thought of yet. The second problem is the falling value of the dollar. Because of the wealth and the basic stability of the dollar over the last 50 to 60 years people have counted on it to remain as a stable currency. However, the Iraq war, the War in Afghanistan and now the Subprime fiasco has battered the dollar and it lost about 40% of its value during the last 5 years. This sent panic waves throughout the world because no one wants to lose 40% of their investment. It is less of a problem for Americans who stay in America because everything we buy here that is made here costs the same to us basically. It is only when we travel outside the 50 US States or buy anything imported that it becomes a problem. But for people outside the US heavily invested in US Stocks calibrated in dollars it is a very big problem. So investors have gone to invest in Commodities like Oil and grains in desperation.

These investors unknowingly are causing people to die of starvation because as they moved their investments into commodities like food and oil it caused those prices to move up in crazy ways. For example, it was mentioned on CNN on tv that a barrel of oil without these panicked oil investors should only cost about 80 dollars a barrel instead of almost 120 dollars as it does now. The same is true of those investing in rice, wheat, soybeans, wheat and corn and other commodities as a hedge against a falling dollar. Rice, for example has risen in price 120% or more worldwide and Sam's Club in the US is limiting to 4- 20 pound bags of rice per customer. This doesn't mean that US Customers can't get all the rice they want. It just means it won't be cheap past those 4- 20 pound bags of rice.

As the world discovers the one thing they can fix to save lives is the dollar I think nations will pump up the dollar as a way to save millions of lives by drawing worldwide investors money back to the dollar and dollar based investments as a way of reducing the price of commodities (oil, rice, wheat, corn, soybeans etc.)worldwide. If you can think of other ways to solve the world starvation problem we are facing at present please blog your ideas online or whatever way to spread the word to others and do whatever you can to implement your ideas to save lives as people are dying worldwide from the high prices right now!

In regard to oil there are many other factors: first it is much harder to get out of the ground because we have already gotten(worldwide) the easiest to get so what is left is much harder so much more expensive to get out than before. Second, India and China's booming economies demand for oil and to manufacture oil based products is out of sight. In fact, China is now not only the world's largest polluter(recently surpassing the US) but also china is on a par with the United States in internet users(even though China's internet is not connected directly to the rest of the world. So even if everything was great and oil was (only?) 80 dollars a barrel like it should cost now, it still would continue to rise with no end in sight for anyone on earth.

So, everyone's survival depends long term on energy sources other than oil.
Without other types of energy sources like wind, ocean wave and solar power being implemented not only for home use but also for plug in electric cars in cities, all of us are in for it much sooner than anyone thought.

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