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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: RealMuLan who wrote (5235)4/29/2004 10:41:30 AM
From: Wyätt Gwyön  Read Replies (6) of 116555
 
some real progress on renewable resources

sure, they will make "some progress". but renewable resources will never be as cheap or have as high a net energy yield as oil. basically, oil was history's gift to humans, a one-time gift. it is half used up, and the remaining half will be more difficult, AND EXPENSIVE, to extract, even as demand continues to grow.

due to the accidental way that history unfolded, Western nations were the prime beneficiaries of the world's oil gift, which allowed them to industrialize and hog the world's resources. even today, after years of rapid growth, America's per capita oil use is 20 TIMES that of China's. this means every American has the equivalent, in BTU terms, of some 300 hydrocarbon "assistants" working for him night and day--by contrast, the average Chinese person only has 15. with a 20:1 oil advantage, it is not surprising that Americans are more "productive".

the vast majority of industrial GDP growth is thanks to such hydrocarbon externalities, which will be largely leaving the world forever over the next two or three decades.

replacements by "alternatives" will mean a reduction in the per-capita energy "assistant" level from the current 300:1 to some 10:1 at best.

basically, the world has been living in a fantasy for the past 50 years and is going to wake up pretty soon and see that our lifestyle is unsustainable by more than an order of magnitude. forget cars--at the most basic level, a world without hydrocarbons can only sustain a population of 300-500 million if we look at human history prior to 1800. even if we assume that superior organization in the modern world, coupled with "energy alternatives" and the like, increase carrying capacity TENFOLD, that is still a world with only 3-5 billion people, compared to 6 billion-plus today. i.e., a reduction of 1 to 3 billion at a minimum. in such circumstances, it is worth considering who has the most weapons on the planet.
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