paying more in a no oil future

Influx Insights — 2008-07-01T19:37:13Z

There's a provocative piece by George Monbiot in today's Guardian, where he talks about the failure of politicians to grasp the concept that there are either higher energy costs from renewable sources or no energy at all.

People are still thinking about alternative energy as alternative to oil, but what if there isn't one? Higher prices are the likely new reality.

Brands thinking about the future are going to have to realize that consumer's disposable income is going to decrease based on increased expenditures on items that we've previously taken for granted; fuel, energy and food. In addition, the knock on impact of this on costs of goods will be significant.

The prospect of decreasing standards of living looms large, but this appears to be the price we are paying for a reliance on an oil-based economy.

"Almost everyone seems to agree: governments now face a choice between saving the planet and saving the economy. As recession looms, the political pressure to abandon green policies intensifies. A report published yesterday by Ernst & Young suggests that the EU's puny carbon target will raise energy bills by 20% over the next 12 years. Last week the prime minister's advisers admitted to the Guardian that his renewable energy plans were "on the margins" of what people will tolerate.

But these fears are based on a false assumption: that there is a cheap alternative to a green economy. Last week New Scientist reported a survey of oil industry experts, which found that most of them believe global oil supplies will peak by 2010. If they are right, the game is up. A report published by the US department of energy in 2005 argued that unless the world begins a crash programme of replacements 10 or 20 years before oil peaks, a crisis "unlike any yet faced by modern industrial society" is unavoidable.

If the world is sliding into recession, it's partly because governments believed that they could choose between economy and ecology. The price of oil is so high and it hurts so much because there has been no serious effort to reduce our dependency."

Posted by Ed Cotton

food stockpilling in the us

Influx Insights — 2008-04-28T17:07:12Z

The Daily Show puts the idea that Americans are now hoarding and stockpilling basic supplies like rice, into very sharp focus.

Sam's Club now restricts rice purchases to four bags per visit.

Of course, we know The Daily Show's stock in trade is satire, but the WSJ?

"I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.

No, this is not a drill.

You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.

Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster.

"Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)

Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax."

Could Americans be so scared and fearful of rising prices that this Summer we will see mile long lines at gas stations and riots in the grocery aisles over bread, pasta and rice?

Posted by Ed Cotton

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paying more in a no oil future

food stockpilling in the us