Everything I know about Alternate Energy Fuels Part 1

Well I am going to spill everything I know... about alternate energy fuels. These are the ones to replace gasoline or diesel fuel. Well first of all, why is this even necessary?

We are a nation rapidly becoming totally dependent on foreign fuels. So what... you might say. Why is this important?

Well it is important because when the federal government or the big wall street investors talk about the deficit, they are concerned because these are dollars that we are all earning that are going out of our country possibly never to return. Now lets assume that these dollars leave and the same number come back. Then we have no problem. We have a trade balance and we can go on this way for decades with no drop in our standard of living. But now if the trade balance starts to change, lets say $100.00 leaves the country but only $90.00 returns the some day way out in the future, you will run out of money. But lets say $100.00 leaves the country and only $10.00 returns to us. Then this process is going to happen much sooner. We can never run out of money, because the government prints more to replace what is lost but you have is a dilution effect and the dollar becomes worth less and less each year.

We have plenty of dollars here in the US but buying foreign goods will cost much, much more as time goes by. The other thing that is happening during this process, is that we will find we have less and less buying power, meaning doing big new projects like space exploration, gene research and building processing plants to produce alternative fuels will dwindle. This is precisely the state we are in now. Our buying power is being reduced and our ranking as a major world player is diminishing. There are people concerned about this and they have written some interesting articles about this subject and what things we can do to stop this trend. One solution is to create some incentive in foreign countries to buy more US goods. Warren Buffet of Berkshire Hathaway believes this to be a big problem also so I have quoted the first two paragraphs of his article from Fortune magazine.

“I'm about to deliver a warning regarding the U.S. trade deficit and also suggest a remedy for the problem. But first I need to mention two reasons you might want to be skeptical about what I say. To begin, my forecasting record with respect to macroeconomics is far from inspiring. For example, over the past two decades I was excessively fearful of inflation. More to the point at hand, I started way back in 1987 to publicly worry about our mounting trade deficits -- and, as you know, we've not only survived but also thrived. So on the trade front, score at least one "wolf" for me. Nevertheless, I am crying wolf again and this time backing it with Berkshire Hathaway's money. Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies. I won't give you particulars; in fact, it is largely irrelevant which currencies they are. What does matter is the underlying point: To hold other currencies is to believe that the dollar will decline.
1. Both as an American and as an investor, I actually hope these commitments prove to be a mistake. Any profits Berkshire might make from currency trading would pale against the losses the company and our shareholders, in other aspects of their lives, would incur from a plunging dollar.”
This article really needs to be read to understand everything he has to say about this subject and he proposes a solution to this problem. And I think it is a good one. It is basically creating a credit system where for every dollar of goods we buy from a foreign country, they must purchase the same amount of US goods. So please take a moment and read the article:Squanderville versus Thriftville (Warren Buffet).

So where do alternative fuels come into the picture. Well, it becomes important because if we could become energy self-sufficient then we immediately stop the oil dollars from leaving the country putting us in an energy trade balance. But this is not all. It would also stop those energy dollars from landing in the hands of terrorist and countries that support them.

There are many other benefits to us as a nation, but these are two that are very important. With the cost of two war engagements plus our national security hanging here, then it becomes even more important. So tell your congressman how you feel about this. Vote for energy freedom and independance. Give a future generation a country that is worth inheriting.