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To: dybdahl who wrote (62552)	4/7/2010 8:51:53 AM
From: elmatador	Respond to of 219673

Risk is cost of capital. In this thread, because we share information our risk go down. Sugar cane bio fuel: If all inputs you put in, generates more, you have a return on your capital. It does not matter how you price the fuel along the chain. Or even if you subsidize, i.e., you take from one sector of the economy and tranfer to another, along the supply chain. Your capital is better employed than buying oil to power the vehicles. If another country is using corn as bio fuel: If all inputs you put in, generates less, you do not have a return on your capital. No matter what, the country is getting poorer, for it is not getting a return on its capital. In this case of corn, the subsidies are taking from ma productive sector to be lost in an unproductive sector of the economy.