Friday, May 23, 2008

Oil: Next up, Inventors and Investors.

Are oil prices the result of a commodities "bubble", each buyer gambling that next month prices will go even higher? Or, classic supply and demand? The emerging markets of India and China creating demand for fewer resources resulting in higher prices.

I suspect mostly the latter with commodities speculators going along for the ride, but I really do not know.

I do know this:

If prices for gasoline stay at these levels Adam Smith's "invisible hand" will spur entrepreneurs, investors and consumers to find alternatives. And that is the silver lining in this cloudy storm. Now there is real incentive: money to be made by investors and a challenge for inventors. It won't happen this year or next, but before too long someone will find a plentiful and less expensive energy source. The money is out there looking for it as we speak.


This is not the solution but I love American ingenuity. Make your own ethanol auto fuel.

Company owner, Tom Quinn, "It's so simple, anyone can make their own fuel." Depending upon the cost of electricity and water, he says, the MicroFueler can produce ethanol for less than $1 a gallon. Quinn likens the MicroFueler to the personal computer and says it will cause the same sort of "paradigm shift."

Like I always say . . . God, I love this country.

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