08
May
08

The Coming Economic Jolt; Rice & Oil are Only the Beginning

I do not write this to be a “fear-monger” or to claim the world is ending tonight; but there are some things going on that if people do not wake up and make plans for, are going to cause great weeping and gnashing of teeth.  There is little anyone can do about situations happening in distant parts of this world, but it does behoove us to know what is taking place so as to plan accordingly.

FOOD SHORTAGES, ESPECIALLY RICE

There was a real problem with rice supply before the devastating cyclone tore through Myanmar.  Now, the 7th biggest producer of rice has lost their entire crop.  This not only spells disaster for the citizens of that country, but it places even greater strain on world supplies.  Rice is the overwhelming basic food for almost half of the world’s population.  With supplies running out and prices increasing, the frustration level is boiling over in various poorer countries.

On the same day that a huge tropical cyclone basically wiped Myanmar off the map, a volcano that had not erupted in 9,000 years suddenly erupts in Chile.  Huge agricultural areas are at risk of being permanently ruined by volcanic ash.  Much of the fruit and vegetables eaten by those in the United States during the winter months are grown in regions of Chile that may or may not survive the eruption.

Perhaps most troubling of all was an announcement today that fully one third of the honeybee colonies in the United States have collapsed since last year.  At first glance this story means absolutely nothing to most people.  What difference does it make to the average American if the honeybees colonies collapse.  It should make a huge difference if people took the time to get educated. 

Honeybees are the great pollinator of most fruits and vegetables grown in this country.  Without honeybees the blooms are never pollinated and there is no fruit.  The honeybee is perhaps the most important component in keeping the insatiable hunger for fresh fruits and vegetables satisfied in this country.  If the honeybee colonies continue to collapse, it will spell the end of the very foods doing the most to keep us healthy.

SPIKE IN OIL PRICES AND PETROLEUM BASED PRODUCTS

In one day, some governmental agency states that gasoline prices might hit $3.75 per gallon this summer; oil sets yet another record trading for the outrageous price of $123 per barrel.  I go to town and see the price of gasoline went up to $3.69 per gallon.  Who is kidding whom?  With the price of oil setting records almost every day, the inevitable raising of gasoline prices comes a week or two later.  When some economist says oil may hit $200 per barrel and it immediately causes a jump of $3 in the price of oil; it is time to seriously take stock of the situation.

As the inevitable $4 per gallon gasoline gets closer and closer to reality; those driving huge SUVs that get woefully low gas mileage are trying to sell their albatrosses and not finding much of a market.  It has taken awhile, but the shock of spending close to a hundred dollars to fill up one’s Hummer is making even those who are wealthy think twice about driving all over the place in time they wish.

Among the products using petroleum are many of the fertilizers farmers use on their huge corn, wheat and soybean fields.  Suddenly, these farmers are being hit with the double whammy of sky high diesel fuel to run their equipment along with the bigger problem of fertilizer costs that have jumped so far so fast the farmers were not prepared.  Without the fertilizers they will never get the yield they would get otherwise.  It is a truly a catch 22 situation for hundreds of thousands of farmers.

There is no way fuel costs can be as high as they have been for as long as they have without pressures sooner or later being forced on producers to raise prices to make up the difference.  With shipping costs quickly going up and more and more businesses putting surcharges on their services to cover for fuel; inflation is going to go up whether the government’s figures say so or not. 

FUTURE PRESSURE POINTS

The cyclone that has destroyed Myanmar followed the scenario many meteorologists in this county are extremely nervous about when it comes to the upcoming hurricane season.  The cyclone that hit Myanmar as a strong category 4 was only a minimal cyclone two days before reaching land.  The storm “ramped up” at the last minute and because it did, the storm surge was worse than to be expected and and the resulting flooding proved as fatal as a tsunami.

Last summer, the United States coastlines from Texas to Maine were spared any direct hits from some of the largest hurricanes ever to form in the Atlantic basin.  Many of these category 4 and 5 storms slammed into Mexico as they stayed just south of not only the United States mainland but also the oil platforms in the Gulf of Mexico. 

Remember that part of the reason Katrina caused such a dramatic spike in gasoline prices was that it shut down numerous oil refineries in Mississippi and Louisiana.  Remember also that Katrina was actually only a category 3 hurricane when it came ashore in Mississippi.  If a category 4 or higher storm followed Katrina’s path this year and shut down the oil rigs in the Gulf and the refineries on the coast; realistically we would be facing $7 per gallon gasoline or higher for weeks.

We get much of our oil from Mexico.  They are having major problems down there at the moment.  If a huge hurricane disrupted their oil production or transport systems there would be a dramatic spike in prices in this country.  Last year a “freak” cyclone struck the Persian Gulf for the first time in centuries.  If the same thing happened again and actually took out some oil facilities; the price or oil would jump in an instant.

We live in an age when data is transmitted instantaneously around the world.  When something happens in one part of the world, everyone knows about it immediately.   When a terrorist blows up a pipeline in Nigeria, the price of oil jumps that instant.  God Forbid a major conflict would break out among any of the nations producing major quantities of oil.  If one did, the price would shoot up to that $200 level so fast no one would have time to prepare.

CONCLUSION

We live in perilous times.  All that we hold so near and dear to us could change in a day or even an hour.  If there ever were a time to prepare for the worst while praying for and believing for the best, it is now.  If there ever were a time to plant a garden, this year is the year, before it is too late.  If there ever were a year to store a few 5 gallon containers of gasoline in a safe place in the garage it is this year.  If there ever were a time to cut back on frivolous expenses it is now.

Whether wet fields which have prevented farmers from planting much of the spring corn and rice crops in this country or the looming hurricane season which officially starts in a little over three weeks; there are ample reasons to feel a bit of apprehension about the upcoming summer.  God will provide and protect, but He needs His people to be smart and to be extremely circumspect.  If they are, then no matter what happens, there can be “corn in Egypt” just as there was in Joseph’s time and food in the pantry’s of God’s people.

 

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1 Response to “The Coming Economic Jolt; Rice & Oil are Only the Beginning”


  1. June 9, 2008 at 5:52 am

    Hi,

    A note to let you know about this article, a current issue being addressed by the Earth Vision project –

    “Why the Bees Are Dying”

    Using spiritual ecology to bring environmentalism to the next level, the EV project has several current newsworthy items.
    To access them, visit:

    Current Environmental Issues (on the Earth Vision site)

    Thanks for your attention,

    Josef Graf
    Earth Vision + Insight21
    answers for the 21st Century
    http://www.evsite.net + http://www.insight21.net


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