Wednesday, 29. July 2009, 16:47:44
farmer, wealth, Amish, community
I take exception with those that have elaborate schemes for living a green life style. A certain group of people have been living a green life style for many years and amassing real wealth in the process. By real wealth I mean real estate, all of the needs for living, family, caring neighbors, living a clean, moral life and a strong sense of community. That group is the Amish.
The Amish have been living the green life style long before "Green" was discovered by the rest of us. An Amish farm is 100% green. You won't see a garbage truck stopping at an Amish farm. Everything has a purpose and is either recycled or reused after its "first" life. The Amish farmer wouldn't know what to do with chemical fertilizers or pesticides. Hundreds of years of learning to live in harmony with the land has taught the Amish how to live and proper without destroying the earth. That prosperity is always shared with the family and the community.
Harvests are usually a cause for Amish neighbors to socialize and get in the crops. The Amish would never consider letting crops rot in the field. The Amish barn-risings, that Hollywood likes to glamorize, happen often and, again, are a reason for the community to get together and socialize.
Many of the Amish have other businesses and some work on their business during the winter months. The Amish bring their religion into their work. An Amish business man considers it a sin to make and sell shoddy products and they believe that they will have to answer to God for the shoddy products. Amish furniture and buildings are prized for their sturdiness and beauty.
Don't live green-Live like the Amish!
Thursday, 15. May 2008, 18:37:04
energy, Oil, raw materials, Corporations
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This second part of “Welcome To The New World” will touch on what we might expect in the near future with energy and raw materials. I will include food in this section as well.
In the first section I wrote a pretty dismal outlook for the near future but I feel that my predictions will probably come true. This second section will outline why I feel that these events will happen and soon.
Oil has been going through the roof and many of the analysts are saying that it is because we have hit peak oil and we are running out of oil. This is partly true but not 100% true. Several factors unrelated to oil production are driving up the price. Think for a minute. Oil prices have, since the year 2000, have risen from about $23 a barrel to over $125 a barrel. Has oil become 5 times scarcer in the past eight years? USA oil consumption in that time period went from about 20,000,000 barrels a day to about 21,800,000 barrels a day. This too much but it is not a huge increase in 8 years.
One of the big problems is that India and China are starting to grow at record paces. This growth is creating a demand for energy and the things that a robust economy produces. While it was rare for the average citizen of China or India to own a car, now many Chinese and Indians either have a car or a car is in their near future. Industry, which is fueled by oil, is booming in China and India. China is paying premiums for oil futures and will buy all of the oil it can lay its hands on to fuel the meteoric growth of their economy. India is not far behind in their quest for oil. Although the citizens of both countries work for less than Americans, these countries would still import American jobs. India and China do not put the environmental concerns and the human rights of its citizens ahead of creating jobs. Their citizens demand jobs and feel that if they have jobs they can purchase a better life.
Africa is just starting to grow and analysts expect Africa to replace India and China as one of the major growth areas of the world. As soon as the political climate of Africa stabilizes, as it must and will, Africa will boom. Africa will then compete fiercely for the world’s oil though not quite as aggressively as India and China.
The Mid-East oil-producing nations are awash in cash and they are looking for ways to make their cash grow. They are investing in other than oil technologies and they don’t dicker too hard on price since they have so much cash. American companies are being bought up with oil money and the oil money is financing the reckless spending of the American people through the purchase of our debt. The American people are blindly allowing our leaders to mortgage our future. I see little hope that this will change. Democrats will never vote for a Republican and visa versa. The politicians of the other party, whichever one that is, are evil.
Another reason for the spike in oil prices is the commodities markets. With the fall of the American dollar, which had been one of the most stabile and safe currencies in the world, countries and individual investors are looking for better returns on their money. Oil countries have a huge amount of cash to invest and can dominate any market they desire. Pension plans also have huge amounts of cash to invest and they are getting into the commodity markets in a big way. The pension plans have little patience with the volatile stock market we have seen lately.
The raw materials that we all need to live the lifestyle that we have come to expect are getting much harder to find. The political instability of certain governments is forcing the markets to place a premium on the raw materials. Investors, with that huge cash stockpile, are bidding up the price of commodities. Once a commodity hits astronomical figures that figure becomes the normal price and it is hard to get the price down to historical levels.
The huge stockpile of cash that some countries and investors have has given them much power to control prices. Investors will buy a commodity, hold it until the prices rise because of a perceived shortage, and then the commodity will be sold at a huge profit. By holding the commodity until the public perceives a scarcity the profit can be several times what it would be in a normal market. Some countries are holding commodities for their own citizens as we recently experienced with Viet Nam withholding rice from the world’s markets. This caused panic in the rice markets and rationing and shortages.
One thing that could affect the commodities market, but it hasn’t been used as greatly as it will in the future, is if countries withhold commodities to advance their political agenda. This could lead to wars for commodities and is pretty much inevitable.
The black market will be used more and more in the future by legitimate players. If you want a certain commodity and it is necessary for the profitable operation of your factory you will purchase the commodity from where ever you can even if you have to pay a huge premium. You will just pass the premium on to your customers.
One other thing that is driving up prices is that fact that some corporations have more power than the countries they do business with. There is a tremendous amount of wealth controlled by corporations and these corporations know how to maximize profits. Corporations can manipulate prices, working conditions, jobs, elected officials, environmental hazards and even our courts. If it gets too hard to do business in one country they just cross the border and set up shop in a friendlier country. Just a few corporations control much of the wealth of the world.
Food prices have been affected by the commodities market but there are other factors involved. Ethanol is being blamed for the rise in food costs. Ethanol has had little effect on food costs. The cost of food is dictated by the major food corporations and the corporate farms. Americans also have a hand in higher food costs because our demand for prepared foods, fast food restaurants, genetically modified crops that allow tomatoes all one size and picked the same day, foods that are out of season and perfect produce in our supermarkets. The waste of food in most American households is criminal but we refuse to give up our cantaloupe in December. We never think that that cantaloupe was shipped from Chile at a huge cost in oil.
The outline of what is driving the rise in prices might lead you to believe that there is little we can do since we cannot compete with the mega-dollars of the moneyed people or the corporations. The next installment of Welcome To The New World will deal with what we can do to ease the pain.
PLEASE NOTE: I would love to know what you think about my observations. Leave a comment and let me know if you think that I’m right or wrong. By necessity this little treatise is abbreviated to say the lest. There are many good sites that will expand on the ideas that I am putting forth here.
Tuesday, 13. May 2008, 18:42:57
education, future, wealth, globilization
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Welcome To The New World
(It’s Going To Be A Wild, Bumpy Ride)
Welcome to the new world. Are you ready for it? Our politicians are promising the moon and stars to each and every one of us if we only vote for them. I want the moon and stars so now the problem is to pick which one of those promise makers can best deliver on their promises, right? If we elect the right person things will just get better and better, right? We will never have any problems if we elect the right person.
I watch the campaigning and see the supporters of the candidates staring glassy-eyed at their candidate and it’s obvious that the supporters are hanging onto every word the candidate utters and the supporters feel that those words are “gospel.” In their eyes, the other two candidates, whoever they might be, are evil monsters. Often, I’m afraid, the supporters haven’t even thought about the candidate’s positions and that the main criterion for their vote is that the candidate be from the proper political party.
Let’s look at the future a bit. First we’ll talk about money. I’ll be the first to admit that future predicting is a very inexact and usually flawed exercise. But let’s try it anyway with the facts that we know to be true.
Economic Growth-Economists get ecstatic when the economy grows by 3% a year but the politicians juggle the figures around to prove that the economy grew much large than that. Even if they can’t juggle the figures enough to show that the economy grew faster than the economists say it did; the politicians try to show that their 3% is quality 3%. We have been led to believe that the economy will grow forever and that is good. Can the economy really grow forever?
At a modest 3% per year the economy will double every 23.33 years. This means that we will have to produce twice as many goods and services as we do today. Taking into account the available raw materials, available buyers and the available energy resources it quickly becomes evident that this goal of sustained economic growth is going to be extremely hard or impossible to maintain.
If the economy cannot grow forever what is the downside? Inevitably, some people are going to be left behind. As it becomes harder and harder for the economy growth to match the population growth more and more people will be left behind. Usually the ones left behind will be the people with less education, the poor and people needing help to survive such as the handicapped and the older citizen.
The education level of our citizens will be a big factor in determining the amount of pain that the new world inflicts on us. There is an ever increasing amount of knowledge available to our students and it will become necessary to determine what an acceptable level of scientific and technical knowledge is sufficient for each particular student. By that I mean that I expect that testing of students will start much earlier than at present and some students will be taught at a lower level, for purely economic reasons, than other students. This will cause huge conflicts and probably lawsuits. What parent will accept that their child doesn’t have the intelligence to become a doctor? How many times have we heard about the student that was considered “dull” has gone on to become a great scientist or business leader? Expect the educators and politicians to cave in to the parents very fast. Educating the brighter students will become harder and harder as teachers will be required to teach down to all students to make accommodations to the students that have a harder time learning.
The poor will be left behind because it is so hard to break the cycle of poverty. The poor do not contribute to political campaigns so the resources (taxes)of the states, which will become increasingly harder to come by, will be shunted to the more affluent citizens. This will result in a growing sense of disempowerment and more and more bitterness among the poor people. Education of the poor will be sporadic at best and this lower quality of education will cause more crime and more demand for governmental assistance and services. States will be hard pressed for tax revenue to support these demands and taxes will, of necessity, be increased over and over again.
The handicapped and the senior citizen that never had the chance to amass that million dollar retirement will be hit the hardest. The states will cut services to these citizens over and over again because of the ever decreasing supply of tax revenues and the burden will be shifted to the families and the insurance companies; that is if the handicapped and seniors can afford to buy the insurance.
While many have put their faith in the Social Security programs and other government entitlement programs it will become increasingly hard to fund these programs.
The Social Security program was started when the average life expectancy was around 46. It was strictly a retirement plan for someone that lived to be 65 or older. Today the program covers retirees, disabled persons, children of deceased parents, burial benefits, supplemental SS income, children of deceased grandparents in some cases, prisoners and illegal immigrants who have paid into the system. There are others that are eligible and the US Embassy in Mexico City advertises that Mexican citizens that have paid into Social Security can get information about SS and apply for benefits at the Embassy.
The Social Security Fund is to be depleted by 2080. Any excess money collected now is invested in Treasury Bonds. Economists say that this is like loaning yourself money out of your paycheck and then paying yourself interest on that money.
There are many other programs that are entitlements, such as Medicare, Medicaid and the Prescription Drug Plan, that can not be stopped or decreased without an action by Congress. What politician is going to cut your benefits; especially in an election year.
The USA is a debtor nation. We owe over 8 trillion dollars to other countries. With the fall of the value of the US dollar these countries are looking for somewhere to invest their money for better returns. Right now these countries have invested heavily in the commodities markets. This is one of the main reasons for the spike in oil prices. When it becomes too hard to sell our debt, services will have to be cut and inflation will take a much larger bite out of our wallets.
The reasons for this debt are many but the main reason is that the Federal Government has been living on credit for many years. Expect the bills to come due very soon. We have become the policemen of the world and the military-industrial complex that Eisenhower warned us about is intent on raping the country. This is an age of billion dollar airplanes and trillion dollar wars; all paid for with a government IOU. To over-simplify the damage that war does to a country’s economy; think of this. You have an argument with your neighbor. You buy a $3 brick and throw it at your neighbor’s house. The brick breaks into pieces. Your $3 is now gone forever.
The Federal Government is the largest land owner in the country; owning millions of acres of parks and military installations. Many states complain that this cuts into their tax base and there have even been calls to allow the states to be able to be compensated for the loss of tax revenue. Look for fees for access to public lands to skyrocket. Mining, oil, forestry and mineral rights on public lands will come under increasing pressures from the mining, forestry and oil interests. I feel that it is only a matter of time before our public lands are opened up to oil, forestry and mine interests. It will be sold to us as being in the “National Interest.”
The children of military people are educated in the states where the military installation is located. The Federal Government pays the state for a certain amount of money for each child of the military person. The military base is exempt from property taxes so this helps compensate the states for the cost of the child’s education by the state.
Globalization will cause further pain in the future. Globalization is a fact and will never go away regardless of what the politicians tell you. The countries that have taken the American jobs will eventually lose jobs to any country’s workers that will work for less. This is the law of capitalism. The jobs that do remain in any country will be high tech jobs and other jobs that will require an excellent education. Globalization will compound the pain caused by the other forces listed above.
The next post will deal with raw materials and energy.
WIDGETIZE