[AT] was Ralph's rotary mower(now fuel price)

Henry Miller hank at millerfarm.com
Sat Jul 29 20:27:02 PDT 2006


On Saturday 29 July 2006 19:16, Lyle Myles wrote:
> The people knew twenty years ago that oil was
> becoming short and they wait until the last minute to find an alternate
> fuel source and I feel that it is now too late. 

As I recall a couple years back we had a discussion about ethanol, and it 
seems most of this list was against it then, even though the government was 
pushing it as an alternative to oil.   One thing is sure, All bio fuels are 
raking in the money now, but currently technology to produce enough to get 
rid of oil doesn't exist.  (If your tractor is old enough to run on kerosene, 
it will probably run great on one of the bio fuels, but some of the more 
middle aged tractors will need some adjustment)    That is why Bush said 
Cellulose ethanol last January - it shows potention that it could replace 
gas, and bring prices back down to a buck a gallon.   (Some corn ethanol 
plants have a cost of production of $.80/gallon - supply and demand means 
they can sell if for $2.50/gallon)

After adjusting for inflation, Gas is no more expensive than it was in the 
1950s, but we are all used to $1/gallon, so it seems expensive.  

This big problem however is not the US, but China.   They have been growing at 
11% per year, which most economist agree will lead to a bust in a few years.    
China however has enough command over their production that they can force 
companies to produce at a loss to keep jobs around.   Wait a few years, and 
all the iron will come back to the US, at prices lower lower than they bought 
it as companies forced to produce something for which there isn't demand 
lower prices trying to get anyone to buy it.   China is also likely to sell 
all those US dollars they have been buying, in an attempt to prop up their 
currency (they are buying now to try to keep it down).    Unfortunately this 
is likely to mean China will drive the world into trouble in trying to keep 
themselves out. 

What will happen?    God only knows.   I can point out some worrying signs 
that you ought to consider, and some bright signs.   I cannot add things up 
with any surety, and nobody else can either.  

One thing is sure: no government has ever proved trustworthy in the long run.    
If your choices when gas was $1/gallon didn't prepare you for $3/gallon, you 
have only yourself to blame.   You had (if you did the research) exactly the 
same information that everyone else did back then.



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