Monday, February 23, 2009

The Greening of America part 2

On my last blog, I briefly commented on the greening of America. This is a very special time for our future, since we finally, as citizens have felt the cost of dependency of scarce resources such as fossil fuels. When gas prices reached $4 + dollars per gallon, people started to conserve, indeed we did collectively. Why, because it hurt the bottom line, our earnings. This created a surplus on supplies that resulted in prices decreasing for a period of time. As a economist, we always refer to supply and demand, when demand decreased and oil production remain constant; it provided a surplus and thus lower commodity prices. Since then the OPEC group have decreased production thus lowering supplies to level fuel prices. It takes time to balance the supply and demand as the mechanisms take take to adjust to either side. One fact is that the more we conserve the better will be eventually. As green innovations and green government driven programs it will come with a price. Mostly, with any innovation requires time and money to make it profitable for companies creating new green products. (hint, invest in green research) Remember, Cells phones, computers, and televisions, these have gone through this process. We can get free cell phones, laptops for $300 or less and so on. The solar and wind industries will go through this phase; there is no free lunch in this life. So we all have to pay for it sooner or later. My take on the greening of America is to welcome innovation and support change. Going back to the Cuba peak oil crisis in the mid 1990's. This greening will be worthy news in the papers as the current financial market is nowadays. Future oil prices will be astronomical (scarce commodity) and commodities will be valued at imaginable prices. A good example of a scarce resource is gold; breaking the $1000 a troy ounce barrier (again). Oil prices for barrel will be approximately the same. Learning from the community spirit of the Cuban people during the 1990's as a micro example to what will happen to us; we can prepare smartly.
Suggestions: Buy land that you can use to grow crops, for personal and for profit. Utilize wind or solar power eventually, while converting existing energy use. Learn to farm with organic soils and products suitable to your area. We should go back to the traditional farming techniques. the soil will provide its own nutrients and greener harvests. This microeconomics philosophy is to help one's community. If you have children; propose degrees in agriculture economics. These will be the best paying jobs in America and the rest of the world. Currently there are only about 2 million farmers in the U.S. Remembering the philosopher Abraham Maslow and his Hierarchy of needs pyramid; the core elements are shelter, food, security, clothing at the bottom of the pyramid. Food will be paramound, who will be able to grow and produce food for commerce or consumption?. (locally) It may not come in 10, 20 or even 30 years, but it will come nonetheless.
Happy harvesting
Hannibal Chinchilla

No comments: