Monday, June 9, 2008

First Comes Oil, Then Comes Famine (or "What's A Few Billion Lives Between Friends?")

Latest AP story on the Yahoo page tells of the impending troubles in the world food supply due to rising costs of non-organic fertilizers. The mainstream media has let the cat out of the bag; The "Green Revolution" was a hoax. Oh sure, it happened, but it happened because farmers stopped using what are now called "organic" methods like laying manure as fertilizer and started using the whiz bang stuff the science boys made out of petroleum: a petroleum Ponzi scheme of global proportion. India was thus saved from famine in the 40's the article tells introducing a rapidly depleting, non-renewable resource to increase (very temporarily) the planet's agricultural output and carrying capacity. The inevitable costs of overpopulation were deferred a bit, but now there are that many more people at the end of the chain who will have to pay the bill. Famine has been waiting patiently to perform the wonders as laid out by her prophet Mr. Malthus. And how delighted she must be; there are twice as many people to cull now as there would have been if she'd been called onstage half a century ago.

The suffering does its worst work among the most vulnerable in the Third World first, but it will reach us here. Oil feeds our bellies as well as our machines and we will give up the extreme machine dependence of hypertrophied suburban industrialism by necessity, mainly so we can afford to eat. Trust us to do the right thing when we're left with no choice. Alas it is far too late to do much good. Iacta alea est, as they say. Our suburbanism will unwind as the world's poorest starve, but at some point we'll find it hard to afford a meal, too. The Chinese and the Indians are replicating our mistakes by industrializing (adding machines as necessities to daily life) in overdrive. I wonder how long before someone invades somewhere to get something that someone else wants really bad. Does McCain (let's not kid ourselves about that) lob missiles at Beijing when a few million Chinese foot soldier march into Russia to secure the oil supplies for the world's largest People's Republic? I don't pretend to know what will happen in the geopolitical sense, but I do know that wars start over resources.

In any case, expect food prices to start to climb an awful lot more than most people are willing to believe possible. I've read of experts saying that food prices tend to move cyclically and that they stabilize after a few years. I really wouldn't count on that. I also wouldn't count on the dollar as a vehicle of savings. I've purposefully left any financial considerations or advice out of these musings so far, but that's becoming increasingly hard to avoid. I'll just say that there are certain forms of money that tend to hold their value against commodity prices (food and fuel) in times of extreme price inflation. More on that later.