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Originally posted by jluetjen
[B]True. But that's going to happen no matter what the US does. It will just be worse if the two countries have to butt up against each other for limited oil resources. The same applies to India. So the sooner that we ween ourselves off of a lot of oil, the better. Then we can let the Chinese and Indian economies suffer from being too addicted to middle-eastern oil. China's ecology is already suffering from the country using so much high-sulfer brown coal. I'll be able to describe it better from first hand experience after I visit China next month.
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I don't follow this point. The price will depend on supply and demand. But let's move on...
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Not a problem if the machinery is designed to accept ethanol. It hasn't been a problem in Brazil to date that I can tell. It's just a relatively straight forward technical problem.
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Do you know how much corn is plowed under, or purchased by the government and either destroyed or given away as food support? A quick glance at the USDA Web Site (do a search of the .pdf for "corn") reveals that our government is paying corn farmers (family farmers or corporate farmers -- they're the same to me as far as this discussion is concerned) direct payments of $0.28/bushel (11.8%) on top of the current market price of $2.37. That is money that we pay in taxes directly to farmers. This is just one of the many supports that the government provides to corn farmers -- you can read the minutia of the rest of the document at your leasure to learn about the low interest rate loans and other goodies. Having the price of corn go up as a result of extra demand, and getting fuel at the same time sounds like a good deal to me! Let's see, the government budget goes down by eliminating the corn subsidies, our taxes go down and our farmers get richer (and buy more electronics which is my industry, not to mention the increase in tax payments that they'll contribute) while the despots in obscure parts of the world don't get my oil money. Sounds good to me!
... which is owned by it's shareholders. So I guess that makes me a farmer if my investments include index funds that include corporate farming companies. I'll have to go check my prospectices.
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It's been said China is carefully watching what unfolds for us in the Mideast, and are poised to take over exporting if we cut and run. That we're there, somewhat, to protect our entitlement to that oil from the Chinese. I don't know; sounds strange but still possible.
Yes, the price will depend on supply and demand, which in the U.S. isn't going to plateau or reduce anytime soon.
Sure, new machinery will/could be designed for ethanol. But what about older vehicles, and those with older vehicles who can't afford or refuse to modify their vehicles for ethanol?
I've heard about the farmers' subsidies. But again, leave it to corporate America to spin it so that the corn, despite being in ample supply (like oil) is suddenly very expensive to refine, while other companies (like food companies), blame ethanol producers for corn shortages, thus jacking up the cost of food. That's the cynnic in me speaking. But at day's end, I do agree: I'd feel much better paying American despots rather than Arab despots.
Mixed portfolios are strange things - we love some of the companies our investments are in, and shudder at the thought of others we have invested in.