PeakTrader.com

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PeakTrader:

I wonder if that North Dakota fracking boom chart can get any steeper with the loss of ethanol?

Of course, Americans can ride bicycles or take the bus instead.

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Cost of ethanol:

Ethanol has two-thirds the energy of gasoline. So, adding 10% ethanol to gasoline reduces miles per gallon a little more than 3%. A vehicle that would get 20 MPG on gasoline would get 19.33 MPG with 10% ethanol.

However, it seems, currently, ethanol (in Nebraska) is cheaper per gallon than gasoline. From article:

“As of March 2013, the rack price of ethanol was $2.54 versus $3.05 for unleaded gasoline—a difference of 51 cents per gallon.”

http://www.neo.ne.gov/statshtml/66.html

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Gasoline would be more expensive without ethanol.

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If a depletable resource is in decline (even in a depression), a renewable resource (like ethanol) may be needed.

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The market may drive (oil) prices high enough to prevent a shortage and make alternative energy feasible.

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If an oil bust and an alternative energy boom is inevitable, why wait for the bust and boom?

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Vangel, government, whether fiscal or monetary policy, can “meddle” in the market for bad or good. I stated before:

When the U.S. was on the gold standard, a fixed exchange rate system, basically had a closed economy, and a small economy at the height of the Industrial Revolution from 1871-1914, when the U.S. had deflationary growth, per capita real GDP growth averaged 1.56% a year.

However, when the U.S. went off the gold standard, had a flexible exchange rate system, basically had an open economy, and a large economy at the height of the Information Revolution from 1982-2007, when the U.S. had disinflationary growth, per capita real GDP growth averaged 2.22% per year, which doesn’t include up to $800 billion a year trade deficits (i.e. the U.S. consuming more than producing in the global economy and in the long-run).

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Fiscal and monetary policy can smooth-out business cycles, because economic boom/bust cycles are inefficient both in the boom and bust phases.

For example, before the Fed, per capita real GDP growth averaged 1.36% a year from 1814-1910, and after the Fed, it averaged 2.13% per year from 1914-2010.

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It should be noted, an energy shock (whether supply or demand driven) will have a powerful impact on the economy.

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You’re just making lots of things up, while ignoring others, including a loss in purchasing power, because of (faster) real income growth.

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Ron, your statement and prior statements make me wonder if you know when an economist is talking about economics.

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http://www.aei-ideas.org/2013/04/quotations-of-the-day-on-ethanol-whats-to-like-abolutely-nothing-unless-youre-a-rent-seeking-corn-farmer/#comments

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PeakTrader:

Congress caused the financial crisis by creating a giant social program, it believed it didn’t have to pay for, along with promoting moral hazard and preserving “too-big-to-fail.”

Banks were forced into this program and were behaving rationally. The banks outsmarted the poorly created government policies, which made politicians angry when the inevitable result took place.

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PeakTrader:

I think, without the lobbying efforts of businesses, there would be more adverse or negative effects, and unintended consequences, for both businesses and markets.

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