| ??? 07/23/06 17:02 Read: times |
#120882 - I used to Responding to: ???'s previous message |
Richard Erlacher said:
I've long been a follower of the "doom and gloom" school of economics. I used to believe that stuff, too. Not so much anymore. These guys successfully predicted the $2/gal price of unleaded regular, and they successfully predicted the $3/gal price. They've projected the further increase in the price, and, of course, they've concluded that it will be plenty high enough to warrant buying a car with gas in it when yours runs out of gas, once the pump price exceeds six figures, which it will do sooner than anyone anticipated, simply because of the rapid decline in the value of the US$. Are these guys predicting a boom on the order of 5 orders of magnitude in the cost of gas, or are they predicting a complete collapse of the U.S. dollar? Neither seems probable to the degree of 5 orders of magnitude. The mean price of food has gone up by over 10% around here in the past year because so little food is produced locally that everything is trucked in from elsewhere, all of which costs considerably more to transport. This will continue until, finally, people stop driving those large, gas-guzzling pickup trucks and "sport-utility" vehicles when a motor scooter would meet their need. People will start using bikes and scooters long before gas costs $100k a gallon. Gas will rise to the price people, collectively, are willing (and able) to pay. And not a penny more. $100k is far more than anyone is willing or able to pay. The guys who so accurately predicted the jump in the price of gasoline have predicted $5 within the next year or two (depending on which one you ask) and $15 within the decade, with the panic-driven price rising exponentially. I might believe $5/gallon, but seriously doubt $15. Demand for gas will collapse before then. Going from $2 to $3 might mean a change in monthly cost from $160/month to $240/month for the average budget. That's annoying, but manageable for most people. But going from $3 to $15 is a monthly cost jumping from $240/month to about $1200/month. Very few people will be able to absorb a $1000/month increase in gas, demand will collapse, and gas prices will fall to the price that people are willing and able to pay. The supply of petroleum is finite. The demand in the U.S. is not. The obvious result will be a steep increase in price until it does impact demand. As it stands, before the end of the next decade, by which time this electric car will be warranted at $5E7 because of the price of gasoline, only a hundred or so people in the U.S. will be able to afford to drive one. They will own all the housing, all the food production capability, and all the rest of us will be out on the street with our guns, hunting one another for food. Nonsense. A rich person can only stay rich if others have money to spend on what they're selling. If everyone else is on the street killing each other, the rich people's wealth is unsustainable. It's not in their interest. The price of gas and the move to nuclear energy is not an all or nothing proposition. As the price of gas increases, more and more demand will be placed on electricity and, to support that, there will be a move to nuclear energy to generate electricity and, in turn, create hydrogen for hydrogen fuel cells. There will be a gradual, not sudden, move away from gas and to nuclear-generated hydrogen fuel cells. This will also reduce demand for gas which will keep the price in check until nuclear energy is essentially 100% of our power supply and the price of gas will drop to $1E-05 rather than $1E05. When no-one needs it, it will be of no value at all. The higher prices of gas is a much-needed motivation to invest in nuclear energy and related infrastructure and end our dependence on a limited natural resource that is not finite and for which we depend on others. The current high price of gas very likely will ultimately be a blessing, not a curse. Regards, Craig Steiner |
