With gas at $4 a gallon in the US and rising, and the ever increasing prices of food I have to wonder if we’re setting the stage for a period of massive inflation. So far energy and food increases are annoying but manageable, except for those at the very bottom rungs of the socio-economic ladder.
The prime driver here (IMO) is going to be the energy costs of hourly employees to get to work and back. For many entry level or retail workers the first hour or two of labor is going is be devoted to paying for the gasoline it costs to take you to and from work. I don’t see how this is sustainable for these hourly workers without a substantive wage increase, and if the cost of hourly labor increases I see this cascading throughout the economy.
Food price increases are less immediate but are going to also be cascading through the economy. It seems the era of cheap fuel and cheap food is drawing to a close and there are uncharted waters ahead.
Am I (and others) being alarmist, or is there really a tectonic plate level change underway in the global economy?
Actually cheap food is part of the problem. The US grows a fraction of the food it COULD grow if it wanted/needed to. But food is so cheap that farmers had to be subsidized in the past to grow some of it. If the price of food goes up then there would be more incentive for farmers to grow and sell it.
I doubt it but suppose it’s possible. Certainly the era of cheap OIL is coming to a close and from here on we will see a more or less steady increase in the price per barrel until we reach a level where something else comes along to replace it or we adjust to the new prices, and begin seriously developing/exploiting some of the more costly reserves (like tar sands or shale oil…or coal gasification).
Well, IMHO you and others are being alarmist, yes. Most of the problems you list are short term and have to do with sort of a perfect storm of converging issues. The dollar has finally had a much needed adjustment from it’s previous artificial level. With the housing market problem in the US our economy has slowed. With speculation of possible problems in the ME and it’s possible impact on supply, the price of oil has gone up (the US dollar also plays a part in this since oil is traded in dollars currently). On the food side there are equal convergence of issues (crop failures, wars, and recently attempts to use more bio-fuels thus converting food producing crop lands for use in those efforts).
All these things are short term problems, not vast sea changes in the global economy. JMHO though.
Heh. My husband and brother were discussing this just today. They feel that they were probably born 30 years too late, as the REALLY fun stuff is about 20 years away.
Stuff like global wars of scarcity (oil, sure, but then water and food, then maybe technology). Should be fun.
Oh, to be 25 and a bad ass when the revolution starts…
