Excllent 'old' article on Foreign Policy r/ cost to protect oil

[CarZin]

Protecting oil infrastructure is not only a waste of our soliders time and lives, it is outrageously expensive. This couple year old article was before the EV was released, and I think makes the point quite well on what we spend to protect the global infrastructure.

http://www.foreignpolicy.com/article...decomments=yes

[MikeMc]

As I read more about these sorts of things, I recognize that the widespread yearning for coming anywhere close to the less expensive car travel costs of yesteryear will never be realized other than by new engine technologies.

The middle eastern oil producing countries are getting rich from more expensive oil, sure, but they also need oil to be a certain price per barrel to even exist. So while their level of existence might, currently, be fairly ritzy, there is no turning back from being a country whose primary source of income, and only lucrative export, is petroleum. They can diversify investments, but they can't invent an export that generates the same revenue.

If oil was to fall to the price where we could have gas at less than a dollar a gallon again, these countries could not sustain themselves and the oil industry could not sustain further exploration. So, from now on, the only oil we can have is expensive oil.

We should plan to convert all farming equipment to operate using alternate energy, like biodiesel. If farmers could grow their own fuel, we would decouple food production costs from the price of oil. If more and more personal and commercial traffic becomes electric and based on non-petroleum fuels, then we start to decouple the cost of living from the price of oil. Once oil becomes less essential to typical American life, it becomes less essential to protect it because it becomes less essential for anti-American elements to grab it.

It's ok that oil producers should be able to charge what the market will bear for their product, that's the way of the marketplace, but that is all the more reason for the US to avoid basing our prosperity on its continual availability.

[DCFusor]

What's interesting is the price of oil in say, old silver dimes, gold or some other currency. It's actually gone down the entire time since gas was $1 a gallon - it's the dollar we print recklessly going down that makes oil expensive. You could argue this printing is used at least in part to fund military adventurism - and it is. But also medicare....and so forth. You can still buy a gallon of gas with two silver dimes...

I think it's ignorant to use the army for this job, myself. I'd use stronger language if I could here. All we do is make enemies.
But I'd note that while even in the middle east, one country is exporting computer chip designs, while the oil exporters are still working out potato chips. Something about "resting on laurels"? It's gotta be hard on the ego for those guys to only have the one product, and only have that because we showed them how and helped in the first place. People with wounded egos are dangerous, and using our military to make enemies seems unwise.

[DonC]

But I'd note that while even in the middle east, one country is exporting computer chip designs, while the oil exporters are still working out potato chips.

It's a well known fact that the fewer resources you have the more likely you are to develop human capital. You not only see this in the Middle East but also in Africa, especially East Africa. After WWII most experts predicted Africa would do much better than Asia given the edge Africa had in infrastructure and natural resources. Didn't work out that way.

Couldn't disagree more about currency and oil prices. Oil prices adjusted for inflation have gone up quite a bit over time. For example, in 2011 dollars the price per barrel before the run up in 1973 was $20/bbl. Lots of places you can find this data. This is just the first one that popped up: http://inflationdata.com/inflation/i...ices_chart.asp What this chart doesn't show is that, while oil prices have gone up, prices for just about everything else have gone down. So it's a double whammy.

[DCFusor]

If you believe government inflation numbers, I feel for you. I go with facts, instead. Sorry, don't mean to be curt, but c'mon. I'm a professional trader, and I have to have the facts to do my job daily. All of us - no exceptions, consider those numbers humor at best, and most people not rich enough to buy a Volt do as well, since they actually spend significant % of their income to just get by - and they see the real thing.

Just for a couple stupid examples. Computers get twice as fast - hedonics in the government calx says they went down 50% in price - even if you can't get one at half price and speed. When beef goes up, they sub chicken in the cost of living. They are averaging in price of homes to make inflation look lower. Yeah, that really helps existing homeowners...and on and on and on. It's total BS in other words.

And you really can still buy a gallon of gas for two silver dimes. And that $20 gold piece will still buy you a gun, a suit, and a night on the town. Just sayin. You can choose blindness, but you don't have to.

[DonC]

I believe that if the price of computing doubles then yes, if the nominal prices stays the same, that is a price decrease. How else do you account for increases in quality? Computing numbers like inflation is neither straightforward nor easy but by and large I think they do a pretty good job of it.

The whole gold and silver fixation is silly IMO. They're just commodities. The difference is that unlike most commodities, less than 50% of the gold produced has a useful purpose, the rest just is used for "investment" aka speculation. Nothing wrong if you like to do that sort of thing but it's just a zero sum casino. It doesn't represent anything economically meaningful. Every commodity that goes up will come down. Right now that $20 gold piece may be able to buy you a lot of things and a suit, but when gold goes back to 2002 levels it won't even buy you a suit.

My own view is that inflation never goes away, it just moves around. In the last ten years we've seen inflation reflected in internet stocks, then housing, then oil, and at present "precious metals". It's just the most recent tulip mania.

[mikeg3]

Protecting oil infrastructure is not only a waste of our soldiers' time and lives, it is outrageously expensive.

That, in a nutshell, is the one irrefutable argument for electric vehicles. It's a shame that GM, Nissan, or the US government can't make it. But we can.

We can win the War on Terror without losing one more American hero. Just stop burning gasoline and help China and India do the same. Get the word out.