Are we in the early stages of a New COMMODITY based WORLD WAR ?Is the United States playing a DANGEROUS GAME with the Middle East by COUNTERING worldwide OIL price hikes with worldwide increases in the cost of FOOD ? I'm no 'conspiracist' but consider some quick observations :
The FUEL Side
* Supply Manipulation ? --> Crude oil supply is primarily controlled by the Middle East via the OPEC Cartel. Per Wikipedia, the 13 members of OPEC control about 2/3 of the world's crude oil reserves + approx 36% of the world's total current crude oil production. FYI, OPEC members include many countries that fundamentally dislike the United States for many reasons including its often criticized ties to + support of Israel...OPEC 'troublemakers' include countries like Iran, Libya and Venezuela.
* Principle Fuel Commodity --> About 40% of the total energy consumed in the U.S. in 2007 was crude oil. The U.S. is the world's largest consumer of oil and consumes about 21 million barrels of crude oil a day - 3 times the daily amount consumed by 2nd place China (for a top 5 list on the largest consumers of crude oil please refer to my 5/21/08 reference post titled 'REF - World's Largest Oil Consumers). The U.S. imports about 70% of its annual crude oil needs and at $140 oil, is primed to spend over $700 Billion this year on importing Oil into the U.S. (this is 5 times the annual cost of the Iraq war!!).
* PRICE Manipulation ? --> The price of Crude Oil has risen over 700% since November 2001...from $17.50 a barrel to about $140 a barrel today.
The FOOD Side
* Supply Manipulation ? --> The U.S. is the world's largest producer and exporter of Corn. According to Wikipedia, the U.S. is responsible for producing about 40% of the World's total annual corn supply (in 2005 the U.S. produced 280 of the World's total 692 ton harvest). Due to subsidies following the U.S. government's 2005 ethanol from corn 'flex-fuel' mandate, the U.S. now allocates about 30% of its total annual corn crop to the creation of corn-based ethanol...a fuel that supplies less than 5% of the country's annual automotive energy needs.
* Principle Food Commodity --> Corn is a principle food commodity used by farmers for feeding the world's livestock (cattle, chickens, etc.)...therefore an increase in the 'input' cost of corn results in higher costs for maintaining livestock and ultimately results in higher prices for foods like beef, chicken, ham, goat, etc. While the average U.S. consumer spends about 15-20% of their disposable income on FOOD and groceries, the average consumer in emerging nations like Iran, Venezuela and even Saudi Arabia (minus the royal family of course) spend roughly 40-50% of their total disposable income on food. Therefore, while food price inflation in the U.S. is annoying, it's downright CRIPPLING for a majority of emerging countries that often have high levels of income disparity among their respective populations.
* PRICE Manipulation ? --> The price of Corn has risen 250% since September 2006...from $2.25 a bushel to today's price of around $7.86 a bushel.
Data Courtesy: Wikipedia + previous posts
Posts
