I would like to hear your opinion on how far will dollar fall?
Is it possible to stop USA economic collapse, and if it is, how?
Do those big international corporations have any interest to support falling US ecomony?

I would like to hear your opinion on how far will dollar fall?
Is it possible to stop USA economic collapse, and if it is, how?
Do those big international corporations have any interest to support falling US ecomony?I have started seveal threads predicting this fall - now at 14 year low against the pound. This friday it will drop several percent more. Soon (2 or 3 years at most) rasing interest rates will not finance the US deficits as foreigners who now do so will recognize falling dollar is giving a negative return on their purchase of Treasury notes & bonds, in terms of purchasing power even with high teens interest rates. The only* solution for the US will then will be to run the presses at the Mint, 24/7 and forget about trying to control inflation. At that point dollar's purchasing power will be 20% of what it is today. Most of what I still have in dollar assets is now in inflation protected US bonds. More in ADRs as that also protects.
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*Should not make foreign wars etc, but US elected GWB so a reasonable solution was not taken. (See also thread: "How DUMB can US voters be?")

Sell all our dollars now?

Sell all our dollars now?In a post of several months ago, which focused on the purchasing power of dollar in terms of commodities, I noted that if you had bought commodiities this a couple a years ago you your purchasing power for dollars by selling them now would have at least doubled. I have stared so many threads on this I am not sure, but perhaps that was in the thread with title somethink like: "Dow is NOT at all time high, dollar has dropped" (PS expect to see higher stock prices still by far, but that is not a very good form of protection. - ADRs are much better. - My ADR portfolio average has now nearly trippled and some have 600% gains.)

I have my funds in a Roth IRA, is that a good longterm investment for my retirement?

I also use a 401K, but is that a good idea?

Anyway the US dollar will continue to fall in value because the USA doesn't manufacter any goods, there isn't any reason to keep the value all that high if the nation produces nothing yet imports everything. The problem here is the US economy is built on a foundation that is flawed, and while other systems are equally limited the better would be to create an economy based not on currency but on acts. Thus if you are performing a function you will be provided a place to live, food, etc. When you want other stuff you get a 2nd job :-Z~

Buy Euros.

Ruin the USA.

The event is long overdue.

Roll on the 2nd Civil War.

Better they fight it out before the rest of the World is totally ruined.

The Euro masters do want a weak America, because Americans like to protect themselves, we may still like international borders, we export more Christian evangelism than any other country, by far, and we value the freedoms of speech and religion, which the Euro masters don't, so I too see the dollar dropping somemore.

Rather miraculous that America has stayed this strong this long, despite the weak currency, wouldn't you say? Probably has to do with the fact that we are Israel's best friend.

I would like to hear your opinion on how far will dollar fall?
I personally guess it will fall by 50%...

Is it possible to stop USA economic collapse, and if it is, how?
Yes, it is. But it must start immediatly, before the debt is larger then 70% of the GDP. Well, 80% might be possible too... but it would be way to hard on americans...

Do those big international corporations have any interest to support falling US ecomony?
I guess they could move elsewhere... but the US market is pretty big. 80% of the world's wealth is concentrated in North America. So, obviously, most of their revenues would be from North America. So, yes, I think they would want to support the US economy...

Buy Euros.

Ruin the USA.

The event is long overdue.

Roll on the 2nd Civil War.

Better they fight it out before the rest of the World is totally ruined.
I agree.

In a post of several months ago, which focused on the purchasing power of dollar in terms of commodities, I noted that if you had bought commodiities this a couple a years ago you your purchasing power for dollars by selling them now would have at least doubled. I have stared so many threads on this I am not sure, but perhaps that was in the thread with title somethink like: "Dow is NOT at all time high, dollar has dropped" (PS expect to see higher stock prices still by far, but that is not a very good form of protection. - ADRs are much better. - My ADR portfolio average has now nearly trippled and some have 600% gains.)
What are ADRs...? If you don't mind me asking...

How are Europeans handling the Islamic invasion of their land, do they feel safer than ever? And if America loses strength, will Europe feel and be safer?

How are Europeans handling the Islamic invasion of their land, do they feel safer than ever? And if America loses strength, will Europe feel and be safer?
It will continue to fall and much to do with GWBs' mad policies, not "Islamic" invasons.

What are ADRs...? If you don't mind me asking...American Depository Reciepts. I.e. stocks in foreign companies that are held, usually by a large NYC bank, for you and never delivered to you.

For example, the water company of Sao Paulo (largest in world as covers the entire state and treats sewer flow also - a market growing now much faster than population as many citys are still not fully served.) has ADR with symbol SBS.

I own quite a lot, bought at under US$5 less than four years ago, and it is now around US$30 / ADR share. If you look at the % gain on the Sao Paulo stock exchange it has only about 250%, (perhapse 300% - I do not deal there much as that would take the currency conversion hit.) not >600% up in these 4 years.

This is because it now takes many more dollars to buy it, even locally, after converting to Brazilian Real. - Now you get only 2.15 Reals for a dollar, when I bought you got ~R$4 for the dollar. - I.e. I have been protected form the falling dollar and profited by the 250 to 300% rise in the local market. (Part of this local rise is caused by others with dollars now trying to get out of dollars as I did begining 4 years ago.)

I stick to countries that publish their reports in English as I hope to do more than just protect against dollar losing it purchasing power by picking companies that will do well in their local market with out the "false" gain in dollars (I.e. get more dollars but they are not worth as much = "false gain." More on this at my thread "Stock Exchange is NOT at record high. - dollar has dropped.)

Hey, at least if the dollar falls, we will start getting our manufacturing jobs back! Woo-Hoooo! In-sourcing!

Hey, at least if the dollar falls, we will start getting our manufacturing jobs back! Woo-Hoooo! In-sourcing!Not necessarily true, but surely will help exports. Many foreigners are so angry at US policy (perhaps I should say GWB's stupid policy) that they will buy higher priced goods in preference to US made ones. - My wife will not drink Coke, even if free at parties - I can not bring it in the house, so do drink it at parties!

... we value the freedoms of speech and religion, which the Euro masters don't..

Where does that come from?

How come I hear this from Americans but never from anybody on the other side of the pond?

What did I miss?

Europe is much more pc than America.

Not necessarily true, but surely will help exports. Many foreigners are so angry at US policy (perhaps I should say GWB's stupid policy) that they will buy higher priced goods in preference to US made ones. - My wife will not drink Coke, even if free at parties - I can not bring it in the house, so do drink it at parties!

Sure it will. The poorer the country, the more they have to provide for themselves. What the out-source whiners never can grasp is that the fewer the manufacturing jobs, everything else being equal, the better that economy must be doing.

What I don't get is why all the America-Haters pretend to be sad when they are relating their doom-and-gloom predictions. At least be intellectually honest and tell us how happy you are that things look bleak. Because you aren't fooling me one bit!

Not necessarily true, but surely will help exports. Many foreigners are so angry at US policy (perhaps I should say GWB's stupid policy) that they will buy higher priced goods in preference to US made ones. - My wife will not drink Coke, even if free at parties - I can not bring it in the house, so do drink it at parties!

Unfortunately for your point, the Coke you're boycotting is not produced in America. It's produced in Brazil, and so it has no real effect on American jobs or exports. All you're doing is screwing over the Brazilians down the street who work out the local Coke factory. Which is unlikely to prove much of anything to George Bush.

Moreover, consumer goods only account for around 15% of US exports, so global anti-American consumer sentiment (to the extent that it exists outside of rhetoric) does not have a big impact on American exports. Also, half of that 15% consists of medicines, which I can't see anyone foregoing in order to make a political point. Most of the stuff that America exports is industrial supplies, machine parts, airplanes, telecommunications equipment, computers, etc. In many of those categories, there is no real alternative to the American supply, even if you're willing to overpay (which 99.999% of people aren't). For example, Intel and AMD are your only real choices when it comes to PC processors.

Anyway the US dollar will continue to fall in value because the USA doesn't manufacter any goods,

Just because America has a large trade deficit doesn't mean America isn't producing anything. American exports total almost $1 Trillion per year, which is about the same as Germany (the #1 exporter). Also note that annual US exports exceed those of China by about 30%. This drives home the point that while China has lots of factories, they produce mainly cheap junk (toys, clothes). While America is building fewer factories, they produce much more valuable things (computer processors and other advanced electronics, airplanes, etc.).

There's a tendency for people to think that America has been getting out of manufacturing, but this is a misconstrual of the decline in manufacturing *jobs*. As it happens, increased efficiency (robots, etc.) have more than made up for the decline in manufacturing employment. That is to say that, while America is employing fewer people in manufacturing jobs, the factories themselves are producing *more* than they ever have.

And that's without counting US military production and exports.

It's quite selfish of me, but I hope it gets extremely bad, then next summer I'll be able to have a cheap trip to the states.

I would like to hear your opinion on how far will dollar fall?
Is it possible to stop USA economic collapse, and if it is, how?
Do those big international corporations have any interest to support falling US ecomony?

Buy gold.

American Depository Reciepts. I.e. stocks in foreign companies that are held, usually by a large NYC bank, for you and never delivered to you.

For example, the water company of Sao Paulo (largest in world as covers the entire state and treats sewer flow also - a market growing now much faster than population as many citys are still not fully served.) has ADR with symbol SBS.

I own quite a lot, bought at under US$5 less than four years ago, and it is now around US$30 / ADR share. If you look at the % gain on the Sao Paulo stock exchange it has only about 250%, (perhapse 300% - I do not deal there much as that would take the currency conversion hit.) not >600% up in these 4 years.

This is because it now takes many more dollars to buy it, even locally, after converting to Brazilian Real. - Now you get only 2.15 Reals for a dollar, when I bought you got ~R$4 for the dollar. - I.e. I have been protected form the falling dollar and profited by the 250 to 300% rise in the local market. (Part of this local rise is caused by others with dollars now trying to get out of dollars as I did begining 4 years ago.)

I stick to countries that publish their reports in English as I hope to do more than just protect against dollar losing it purchasing power by picking companies that will do well in their local market with out the "false" gain in dollars (I.e. get more dollars but they are not worth as much = "false gain." More on this at my thread "Stock Exchange is NOT at record high. - dollar has dropped.)
Thank you :)

Unfortunately for your point, the Coke you're boycotting is not produced in America. It's produced in Brazil, and so it has no real effect on American jobs or exports. All you're doing is screwing over the Brazilians down the street who work out the local Coke factory. Which is unlikely to prove much of anything to George Bush.
Moreover, consumer goods only account for around 15% of US exports, so global anti-American consumer sentiment (to the extent that it exists outside of rhetoric) does not have a big impact on American exports. Also, half of that 15% consists of medicines, which I can't see anyone foregoing in order to make a political point. Most of the stuff that America exports is industrial supplies, machine parts, airplanes, telecommunications equipment, computers, etc. In many of those categories, there is no real alternative to the American supply, even if you're willing to overpay (which 99.999% of people aren't). For example, Intel and AMD are your only real choices when it comes to PC processors.I drink coke, mainly as I like it, but my wife is not as illogical as you imply. True, the workers at the Brazilian Coke-Cola plant are hurt by her refusal to buy from an American owned company, which will send profits back to the US, but the workers at the 100% Brazilian cola plant are helped and none of her soft drink money goes to the US when she drinks their products.

You are probably also wrong on the drugs, if not yet, very soon. I own ADR shares TEVA, the worlds largest maker of generic drugs and leading supplier of many in US market. (Down some this past year. - Perhaps too many people do not like what Israel did to Lebanon?) I also own some in US’s Barr; (Doing well, thank you.) probably because Barr has just bought Croatian drug company Pliva ($2.7billion) mainly to get its lower Eastern-Europe production costs and testing facilities in Goa, Indian.

Barr is now globally number four (or third?) in generic drugs and has a strong line of "branded products” for women, including "Plan B" the finally approved* “day after” pill and several birth control products, at least one that also safely extends the menstrual cycle to 120 days. Barr is already closing US drug plants. Some leading drugs are being invented in US still but even that is starting to fall. If not already true, soon US will be net importer of drugs. - Probably in less than a month after the new Congress permits cheaper mail order imports from Canada. (Big drug companies are among GWB’s strongest campaign contributors. - I hope GWB is now too weak to veto this to aid his rich friends make more at the expense of the poor, some who now do without drugs they need.)

Again, as always seems to be the case when we disagree, it is because you look at what “has been” (and assume it will continue) whereas I look at the trends and predict “what will be.” US is going down for the count when its dollar collapses and drags world into deep depression. - Thank GWB for this when it happens.
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*GWB and his right wing supporters blocked its OTC release for more than a year, probably causing a few thousand abortions and some deaths. Every scientific review recommend it be released Over The Counter, but his man in charge of FDA ignored science and people’s needs to please GWB’s strongest political support base, until after the election. Still not fully OTC as an under 17 “girl in trouble” needs a prescription** to buy.

**She may not be able to afford a doctor and probably too late when she gets an appointment, but even a male friend 18 or older can buy it, so not too many unwanted babies will be born for right-wing political reasons.

PS - I know almost all computers sold in US (and globally) are made in China. (The "HP" I am usings now was). I think the processsors are also mainly made in Asia also now. - Do you know where in US any processors are made?

I would not want you to be wrong on all your points! :D (This :D is susposed to be the big green grin - why it will not appear I do not knnow)

Buy gold.That is pure speculation, - gold is not productive, and may be a dangerous speculation as the above ground gold far exceeds the utilitarian (industrial and jewelry demand). US may need to dump its hoard when foreigners will not accept printed pieces of paper.

Also either you take big risk of losing it all if hidden in your house etc, or pay some firm to keep it. (I think some of these firms are using the fact that in normal times they need less than 5% in real gold to meet delivery demands - I.e. when world goes to hell, they simply fold up in bankruptcy.) I would never touch gold.

Much better are ADRs in growing Non-US companies that supply a need to wealthy people. (At least half of my portfolio is in life-critical drugs, but still in the development stages as that is where a few will hit it "big time" and more than compensate for those that fail to realize the developer's hopes. Also, it is lots of fun for me to learn about these new “magic bullets” some are developing.)

[qoute] as the above ground gold far exceeds the utilitarian (industrial and jewelry demand [/quote]

That's not true at all. Gold is not being used extensively in the chemical processing, microelectronics, research, etc. because of its prohibitive cost. There is little industrial demand for $500/ounce gold only.

...as the above ground gold far exceeds the utilitarian (industrial and jewelry demand)...

That's not true at all. Gold is not being used extensively in the chemical processing, microelectronics, research, etc. because of its prohibitive cost. There is little industrial demand for $500/ounce gold only.Good point. if gold were 10 cents per ton many things would be made of it. Even Lenin's statement: "Someday the floors of bathrooms will be paved with gold." would be true.

US dollar will decrease and make US exports more competitive. People will start purchasing US dollars again to buy cheap US products and the dollar will rise again.

You are probably also wrong on the drugs, if not yet, very soon. I own ADR shares TEVA, the worlds largest maker of generic drugs and leading supplier of many in US market. I also own some in US’s Barr;probably because Barr has just bought Croatian drug company Pliva ($2.7billion) mainly to get its lower Eastern-Europe production costs and testing facilities in Goa, Indian.

Barr is now globally number four (or third?) in generic drugs and has a strong line of "branded products” for women, including "Plan B" the finally approved* “day after” pill and several birth control products, at least one that also safely extends the menstrual cycle to 120 days. Barr is already closing US drug plants. Some leading drugs are being invented in US still but even that is starting to fall. If not already true, soon US will be net importer of drugs. - Probably in less than a month after the new Congress permits cheaper mail order imports from Canada.

All well and good, but this line of reasoning suffers from the same flaws as the earlier arugments about US production. Namely, the drugs America produces are newly-developed, difficult-to-manufacture drugs that command much higher prices than those produced by generic firms in third-world countries (generic versions do not become available until the patent expires, 20 years after filing). That is, while America might well import more actual *doses* of medicine than it exports, the dollar value of the drug exports will still exceed the dollar value of the drug imports by a wide margin (since the American-produced ones cost orders of magnitude more than the imports). If you look at the drugs being outsourced/imported, it's common stuff like birth control, antibiotics, etc. The stuff America is producing and exporting consists of the latest anti-cancer and anti-AIDS drugs, as well as other cutting-edge stuff like Viagra.


PS - I know almost all computers sold in US (and globally) are made in China. (The "HP" I am usings now was). I think the processsors are also mainly made in Asia also now. - Do you know where in US any processors are made?

Those computers aren't *made* in China so much as *assembled* in China. The high-tech components are mainly made in America, and the lower-grade components are made in other Asian countries (Malaysia, Vietnam, Taiwan). China does mainly manual-labor intensive stuff like screwing everything together and testing it. This is the typical pattern of industrial development in China, which focuses on low-skill, cheap-labor jobs. It will be a long time yet before they are a significant player in high-tech manufacturing (let alone design). For example, the Chinese government recently spent millions on a crash development program to get them designing and producing competitive microprocessors. This program showed some initial success until it was discovered that the professor in charge was simply repackaging imported processors:

http://news.zdnet.co.uk/hardware/0,1000000091,39269278,00.htm

Almost all of Intel's processors are manufactured in America, with some also coming from Israel and Ireland. They do have extensive assembly and testing facilities in other countries (notably in Asia), but the actual guts are made almost entirely in America. AMD's main production facility is actually in Germany, although they're in the process of opening major new facilities in America. They also have some licensed production in Taiwan.

The microchip economy is similar to the drug economy, in that while America does not produce anywhere close to the most total microprocessors, the processors it does produce are cutting-edge, and so orders of magnitude more expensive than the lower-performance units produced abroad. Thus, America can import many more processors than it exports, but it still doesn't add up to a trade deficit due to the huge differences in prices.

I hope your economy collapses.
I hope our economy collapses too.
I hope we all turn into wild-eyed wolf people, fighting over dead rats.

US dollar will decrease and make US exports more competitive. People will start purchasing US dollars again to buy cheap US products and the dollar will rise again.

Could be, but for this to happen, the average american salary should drop to $200/month or so.

Good point. if gold were 10 cents per ton many things would be made of it. if gold would be $20,000 or even $100,000/ton many more things would be made of it.


Even Lenin's statement: "Someday the floors of bathrooms will be paved with gold." would be true.
One can find golden bathrooms on many yahts (so I've heard).

Could be, but for this to happen, the average american salary should drop to $200/month or so.

Not really. US exports are very competitive in the world, especially in products that require advanced technology that very few countries have invested in. If the US dollar takes a small hit, those products will be more competitive, spurring economic growth and more US dollar demand. Then the dollar will increase in price again. Just simple economics.

I don't think the american salary will have to drop to THAT much.

But whatever, the market works in mysterious ways, so I'll wait to see what happens before making any judgements.

Not really. US exports are very competitive in the world, especially in products that require advanced technology that very few countries have invested in. If the US dollar takes a small hit, those products will be more competitive, spurring economic growth and more US dollar demand. Then the dollar will increase in price again. Just simple economics.

I don't think the american salary will have to drop to THAT much.

But whatever, the market works in mysterious ways, so I'll wait to see what happens before making any judgements.

I like your analysis.

If you look back over time, the economic situation of the entire world keeps improving by leaps and bounds. The argument that this is not sustainable has zero proof, and yet the pessimists like Billy T and Truthseeker seem to think that 5,000 years of precedent is going to be overturned in their generation. It is the typical hubris of doomsayers that the end of times will happen in their lifetime.

The worst economic catastrophe that most of us are familiar with is the Great Depression. Even then, if you invested at the worst possible time, at the very heights before the drop-off of the depression, you would have made a killing a mere 20 years later as long as you didn't take your money out.

Really, though, the collapse we had because of the tech bubble and 9/11 was many times worse, economically, than the Great Depression, and the standard of living didn't skip a beat. So I just don't see all the doom and gloom that these guys are *hoping* for. There is no precedent for their predictions.

Not really. US exports are very competitive in the world, especially in products that require advanced technology that very few countries have invested in. If the US dollar takes a small hit, those products will be more competitive, spurring economic growth and more US dollar demand. Then the dollar will increase in price again. Just simple economics.

I don't think the american salary will have to drop to THAT much.

But whatever, the market works in mysterious ways, so I'll wait to see what happens before making any judgements.
You mean that 40% drop in dollar value will increase twofold sales of the US made arms and planes. That's unlikely, one just needs that many of those things no matter the price. US doesn't manufacture much anymore. Besides, 80% or so of population is working exclusively for domestic market, but it buys lots of foreign made things (thanks to the dollar status as a world trade currency). If dollar will lose this status, let's even assume that American Exports will simultaneously increase twofold, will 20% be able to maintain current consumption levels of 80% due to this increase? It's highly unlikely.

I like your analysis.

If you look back over time, the economic situation of the entire world keeps improving by leaps and bounds. The argument that this is not sustainable has zero proof, and yet the pessimists like Billy T and Truthseeker seem to think that 5,000 years of precedent is going to be overturned in their generation.
I guess 20y.o. will not witness the collapse, their children might.

It is the typical hubris of doomsayers that the end of times will happen in their lifetime. Civilization collapses happened before, global civilization is not immune to the collapse either.

The worst economic catastrophe that most of us are familiar with is the Great Depression.
Collapse of USSR beats Great depression.

Even then, if you invested at the worst possible time, at the very heights before the drop-off of the depression, you would have made a killing a mere 20 years later as long as you didn't take your money out.
That's provided that the company you've invested in was still alive 20 years later.

Really, though, the collapse we had because of the tech bubble and 9/11 was many times worse, economically, than the Great Depression, and the standard of living didn't skip a beat. Why would be? Foreigners needed dollars to keep their trade alive. If that need will be diminished, standards of living will inevitably drop even without bubbles.


So I just don't see all the doom and gloom that these guys are *hoping* for. There is no precedent for their predictions.
Industrial civilization is doomed without warp drive and replicators, it doesn't matter when, in 50 or 150 years.

US doesn't manufacture much anymore.

For the last time people, American manufacturing output is at an ALL TIME HIGH, and growing at a healthy rate of around 3% (which is higher than any country in North America or Western Europe). Annual American exports are worth more than any country but Germany (although the figures are close enough that any significant drop in the dollar is likely to put America on top). Notably, America exports 25% more per year than China.

The fact that America has become a service economy does not imply that manufacturing has disappeared; it only means that manufacturing *jobs* are not growing as fast as the economy as a whole. Likewise, the fact that America runs a large trade deficit does not imply that America doesn't produce and export lots of things; it only means that we import even more than that. Moreover, if anyone thinks that increased imports imply reduced manufactured output, you're seriously misunderstanding how international trade works. Imports and domestic production are *positively* correlated, since the domestic factories need to import raw materials and components, and the resulting economic growth fuels consumer demand for all products, both imported and domestic.

Collapse of USSR beats Great depression.

Perhaps (although most of the damage is just fallout from decades of misguided Soviet central planning), but that scenario is simply not applicable to the economy of America today. The issues affecting the dollar (and America's economy generally) have nothing to do with political crises or transitions from a communist central-planned economy, and so the collapse of the USSR does not shed much light on the situation.

For the last time people, American manufacturing output is at an ALL TIME HIGH, and growing at a healthy rate of around 3% (which is higher than any country in North America or Western Europe). Annual American exports are worth more than any country but Germany (although the figures are close enough that any significant drop in the dollar is likely to put America on top). Notably, America exports 25% more per year than China.

The fact that America has become a service economy does not imply that manufacturing has disappeared; it only means that manufacturing *jobs* are not growing as fast as the economy as a whole. Likewise, the fact that America runs a large trade deficit does not imply that America doesn't produce and export lots of things; it only means that we import even more than that. Moreover, if anyone thinks that increased imports imply reduced manufactured output, you're seriously misunderstanding how international trade works. Imports and domestic production are *positively* correlated, since the domestic factories need to import raw materials and components, and the resulting economic growth fuels consumer demand for all products, both imported and domestic.

If USA manufactures that much, where are the hot spots of manufacturing industry? Ruins of Detroit maybe? All I hear is rust belt. I'll give you that all toilet paper, paper towels, personal hygiene items, etc., lots of foodstuff, printing paper are made mostly in the USA. Some other items like cars, trucks, John Deers tractors, etc. are assembled in states. Assembly includes lots of foreign made parts. There are chemicals (including petrochemicals), remnants of metallurgy, maybe some high-end stuff. That's about it. Content of store shelves as well as trucking industry's primary business partners (mostly retail and distribution) somehow don't go well together with boom in the US manufacturing. Oh, well, I don't mind being wrong.

If USA manufactures that much, where are the hot spots of manufacturing industry?

Well, to cite just a few examples:

Boeing (world's largest manufacturer of airplanes)
Caterpillar (world's largest manufacturer of farming equipment, engines and tubrines)
General Electric (world's 2nd largest company and largest producer of aircraft engines)
Intel (world's largest semiconductor company and largest producer of PC processors)
3M
Pfizer (world's largest pharmaceutical company)
Merck (one of the world's largest pharmaceutical companies)
Proctor & Gamble
IBM (world's largest IT company)
Dow Chemcial (world's largest chemical company)
DuPont (world's 2nd largest chemical company)
GM (Still the world's largest automotive company, although much production is outside the US)

Likewise, the majority of "Japanese" cars bought by Americans are manufactured in America. Toyota alone has 5 manufacturing facilities in the US.

As far as the "trucks and store shelves" bit goes, it bears repeating that 1 million cheap Chinese toys cost less than a single Boeing airliner. So, the preponderance of (extremely cheap) imported products does not have much impact on the manufacturing output in dollar terms, as the products manufactured in the US are many orders of magnitude more expensive.

BTW, GE CEOs was called "Neutron Jack" - for his skill to kill jobs and ship them out while leaving buildings intact. Basically, GE is only nominally American company nowadays as far as a Joe Doe concerned.

Even Boing get lots of parts from outside. Only pharmaceuticals will most likely stay here becasue of the politics involved. The rest are transnationals and hell knows how to split their outputs and assign each country involved a share.

Besides, since the manufacturing output in dollar terms is going into fewer and fewer pockets, from an average guy's standpoint manufacturing a million cheap toys is better. But hopefully Boing's employee will not mind consuming over the roof priced services so that the service workers could buy cheap Chinese stuff.

I have started seveal threads predicting this fall - now at 14 year low against the pound. This friday it will drop several percent more. Soon (2 or 3 years at most) rasing interest rates will not finance the US deficits as foreigners who now do so will recognize falling dollar is giving a negative return on their purchase of Treasury notes & bonds, in terms of purchasing power even with high teens interest rates. The only* solution for the US will then will be to run the presses at the Mint, 24/7 and forget about trying to control inflation. At that point dollar's purchasing power will be 20% of what it is today. Most of what I still have in dollar assets is now in inflation protected US bonds. More in ADRs as that also protects.
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*Should not make foreign wars etc, but US elected GWB so a reasonable solution was not taken. (See also thread: "How DUMB can US voters be?")

Electing George Bush may have been the best thing that could have ever happened for investors. Why? Because war economies are very predictable. The federal government is growing faster than ever, and this means it's making bulk purchases, and that means there are going to be profits everywhere.

It's a good time to be an investor. It's not such a good time to be a consumer. The economy is global now, everyone follows the money, so hedge your bets in the Euro and in Gold, if the US dollar collapses you'll profit from the collapse just like all the other investors. Gold tends to go up as the dollar goes down. The Euro also tends to go up as the dollar goes down.

The only thing keeping the dollar from crashing, is that oil is still traded in the dollar. A lot depends on what happens in the oil markets, so keep a very close eye on it, and keep a close eye on what oil companies are doing, if they start trading in anything other than the dollar, thats when you KNOW the end is near.
http://en.wikipedia.org/wiki/Petrodollar
http://www.energybulletin.net/7707.html

BTW, GE CEOs was called "Neutron Jack" - for his skill to kill jobs and ship them out while leaving buildings intact. Basically, GE is only nominally American company nowadays as far as a Joe Doe concerned.

I believe you're mistaken about where those jobs went. They weren't shipped out as much as simply eliminated: increased efficiency meant that the same level of production could be maintained with fewer employees. This has been typical of US industry in recent years, where job reductions are driven not so much by foreign competition but by increased efficiency and automation in the domestic sector (the foreigners simply serve as convenient scapegoats for politicians who are in bed with the executives of said companies). Moreover, the bulk of the high-value GE manufacturing (jet engines, turbines, etc.) still takes place in America, as seen here:

http://www.geae.com/aboutgeae/facilities/index.html

While GE certainly is a bonafied multinational with operations in many countries, the foreign operations concentrate on distribution, marketing, repairs and things like that.

Even Boing get lots of parts from outside.

Yes, many US manufacturers buy components from foreign producers, and many foreign manufacturers buy components from America. So what? Again, international trade *increases* domestic production, since American manufacturers are able to get their component parts for a lower price, and American producers of intermediate components have expanded markets for their products. The point is that the high-value steps of the production process (i.e., the profitable ones) are mainly done in America, since they require advanced manufacturing techniques and educated workers, while the low-value steps, which focus on cheap labor and are not very profitable, have been moved abroad. The end result is the leanest, meanest American manufacturing sector in history.


Besides, since the manufacturing output in dollar terms is going into fewer and fewer pockets, from an average guy's standpoint manufacturing a million cheap toys is better.

If you say so (China has a much lower standard of living and much worse levels of inequality than America), although it's certainly better than that to simply stop working in manufacturing and instead work in services, which pays more (this is what Americans did). Also, there is actually a *shortage* of manufacturing labor in the high-value sectors (i.e., people who can run advanced numerically-controlled machines), meaning that those jobs pay quite well. Moreover, we were talking about the dollar and US manufacturing sector as a whole, which is a different issue than what's good for the average American manufacturing employee. As the last decades have shown, the former can do very well even while the latter takes a big hit. The pertinent point here is that, since America is the 2nd biggest exporter in the world, we would indeed expect drops in the dollar's exchange rate to result in the usual stabilizing effects that terryoh described.

Also, lest we get hung up on manufacturing, let's remember that America is a huge exporter of food and services:

http://www.unzco.com/basicguide/c8.html

Which is to say that even if America did stop manufacturing things, the exports in other sectors would still be sufficient to get a stabilizing boost from a drop in the dollar's exchange rate. Indeed, service exports are probably *already* a bigger piece of the pie than commodities exports.

...war economies are very predictable. The federal government is growing faster than ever, and this means it's making bulk purchases, and that means there are going to be profits everywhere.
It's a good time to be an investor. It's not such a good time to be a consumer....Can be true for a few well off enough to be investing (Why wars generally appeal to Republicans more than Democrats.) However every one will suffer with the increased rate of inflation - War pumps out money into the economy but not goods the public can buy (actually reduces them as factories are converted from civil products to war production) More dollars chasing fewer good (and services as dress makers, and cooks etc go to work assembling bombs etc where the pay is better) is a sure receipt for inflation. (It can some times be deferred as it was in WWII by selling war bonds as a duty to support the troops etc, but the real reason is to delay the inflation by soaking up some of the money paying the war workers who provide not goods or services to soak up their salaries.

BTW Thanks for the second reference - I have not yet read his book, but know I hold the same views; However, just yesterday I realized that oil produced need not switch to selling oil for euros to destroy the dollar. They can and three already have, according to yesterdays Financial times, begun to almost immediately convert the dollars they gain from oil sales into Euros. According to the FT, this is why the dollar has dropped against the Euro 5% in slightly less than two months. - at this rate of fall investing in US bonds is giving a very negative return - so why do it central banks are beginning to ask and get out as quietly as they can - I now think the run on the dollar will surely begin while GWB is in power - he will get the "credit" he deserves for destroying the US economically and sending world into deep, rapid-onset, depression.

Can be true for a few well off enough to be investing (Why wars generally appeal to Republicans more than Democrats.)

Now you are buying into myths here. Not everyone who is rich is a Republican, and not every Republican is pro-war. It's more that people support profits over party affiliation, and a war economy usually is profitable for people who know how to work the markets.

However every one will suffer with the increased rate of inflation - War pumps out money into the economy but not goods the public can buy

The weapons and security industry usually grow during wartime, also energy consumption rises.

(actually reduces them as factories are converted from civil products to war production) More dollars chasing fewer good (and services as dress makers, and cooks etc go to work assembling bombs etc where the pay is better) is a sure receipt for inflation. (It can some times be deferred as it was in WWII by selling war bonds as a duty to support the troops etc, but the real reason is to delay the inflation by soaking up some of the money paying the war workers who provide not goods or services to soak up their salaries.

That was a different kind of war. The way this war was planned at least, it was supposed to be good for the economy.

BTW Thanks for the second reference - I have not yet read his book, but know I hold the same views; However, just yesterday I realized that oil produced need not switch to selling oil for euros to destroy the dollar. They can and three already have, according to yesterdays Financial times, begun to almost immediately convert the dollars they gain from oil sales into Euros. According to the FT, this is why the dollar has dropped against the Euro 5% in slightly less than two months. - at this rate of fall investing in US bonds is giving a very negative return - so why do it central banks are beginning to ask and get out as quietly as they can - I now think the run on the dollar will surely begin while GWB is in power - he will get the "credit" he deserves for destroying the US economically and sending world into deep, rapid-onset, depression.

You don't get it, this is much bigger than Bush. We are talking global economics here, it's bigger than politics. A worldwide depression will be the end of the world. Millions will commit suicide when it happens, not waiting for it to get worse. Those who survive will live in ghettos, and survive a life of unimaginable horrors. This will happen because the global economy was already inefficient as is, if the US economy finally is not on top, the US is going to fall apart quickly, because the only reason we get along with each other in this country is the fact that we profit off each other.

I'm saying we culturally will not be able to handle it. During the depression before, you had FDR in power, and it was during a time where the USA was not this divided. Right now the USA is more divided than it has ever been.The best thing you or anyone can do is take your money out the dollor and put it into the Euro before the crash takes place. Bill Gates already warned us about the dollor crash, as have many others. The real estate bubble is going to crash too, and the USA is going to have a hard time repairing this economy when its trillions of dollars in debt. It's not about Bush, most people will jump to blame Bush for the economy. It was like this before Bush came into office, the US economy was running on the petrodollar even then, go all the way back to Reagan and it was operating like this. It's been off the gold standard for a while, it's been in deficit spending for a while. Clinton tried to restore confidence in the US economy, but he went on to make errors of his own.

The more, the better, so that I can buy more for less on the internet.

(Why wars generally appeal to Republicans more than Democrats.)

Now you are buying into myths here. Not everyone who is rich is a Republican, and not every Republican is pro-war. It's more that people support profits over party affiliation, and a war economy usually is profitable for people who know how to work the markets....No I am not "buying into myths." You just do not seem to comprehend simple English, so I made two parts of my earlier comment bold to help you read it correctly.

When one uses the qualifier "generally" one is explicitly repudiating any claim that the rest of the statement is a “universal rule.” When one states more Rs than Ds hold view "W is good for economy" one is not stating that no D think "W is good" nor is one stating all R think "W is good for economy" - learn to read.

What I stated is that some significant difference exists between R & D such that more Rs (by percentage) than Ds think "W is good for economy" For example, but not stating this is the case, 3Rs for every 2Ds may think "W is good for economy" but I have no data from polls to know what the numbers are; however I am sure that what I said is correct and on average true.

Also I am sure that it is true that the average income of Rs is significantly greater than Ds. Also sure that more of the stock holders of Haliburton, etc. are Rs than are Ds etc.

Most of rest of your post is OK, but you need to learn to read better as even in remainder most all of your points are what I have stated here and been stating for more than a year in other posts. One place where you do error in the remainder is your failure to note that under Clinton: the US ran surpluses, did not start any wars and was paying down the deficit. GWB has reversed all that and is running deficit greater than any other president, even during WWII, did. He has destroyed the US and caused the coming global depression which will be not far from your description of it.

No I am not "buying into myths." You just do not seem to comprehend simple English, so I made two parts of my earlier comment bold to help you read it correctly.

When one uses the qualifier "generally" one is explicitly repudiating any claim that the rest of the statement is a “universal rule.” When one states more Rs than Ds hold view "W is good for economy" one is not stating that no D think "W is good" nor is one stating all R think "W is good for economy" - learn to read.

What I stated is that some significant difference exists between R & D such that more Rs (by percentage) than Ds think "W is good for economy" For example, but not stating this is the case, 3Rs for every 2Ds may think "W is good for economy" but I have no data from polls to know what the numbers are; however I am sure that what I said is correct and on average true.

Also I am sure that it is true that the average income of Rs is significantly greater than Ds. Also sure that more of the stock holders of Haliburton, etc. are Rs than are Ds etc.

Most of rest of your post is OK, but you need to learn to read better as even in remainder most all of your points are what I have stated here and been stating for more than a year in other posts. One place where you do error in the remainder is your failure to not that Under Clinton the US ran surpluses and did not start any wars and was paying down the deficit. GWB has reversed all that and is running deficit greater than any other president, even during WWII.

I'll learn to read when you learn not to generalize. Either be precise, concise and consistant, or why comment at all?

When you generalize, whatever you say loses all meaning because generalized data is just trends.

You have to realize, when it comes to politics, it does not matter which party you support, both parties passed the laws that made the current state of the US possible. It was not all on Bush, it goes back and back and back, all the way back to Reagan, and even before Reagan back to Nixon.

Democrats want to censor what you can say and think, and bring you gun control, and higher taxes.

So Democrats will outlaw violent video games and pass censorship laws banning racial slurs or whatever else is deemed politically incorrect. Because somehow Democrats believe that if people don't say something that they won't think it, when it's the exact opposite. Or if people don't see guns on tv they won't want them, when it's the exact opposite.

Republicans on the other hand, don't care what you say as long as it's profitable. So on some issues Republicans win and on some issues Democrats win, it's not like either party are the party of saints, or civil liberties. Both parties are going to increase the size and scope of government.Both parties are corporate financed, and follow the same agenda, with the difference being in the flavor.

What I'm saying is, the situation we are in now would not be possible without the help of the Democrats. To say it is all on the Republicans, you must be a Democrat if you think that. To generalize is inefficient. Show me the precise number of Democrats and Republicans who support endless war. The majority of fiscal conservative Republicans support tax cuts, reducing the deficit, and trade surplus, not the current setup we have now.

Neo-conservatives are not traditional conservatives.
Neo-conservatives are a completely different breed of Republican. Some Democrats may also be neo-conservative, or maybe neo-liberal, whatever the name is for Democrats that are hawks.

I'll learn to read when you learn not to generalize. Either be precise, concise and consistant, or why comment at all?

When you generalize, whatever you say loses all meaning because generalized data is just trends. You are going to remain literate then as generalizations are often useful, if clearly labeled as generalizations, as I did, that they are generalizations. Instead of being presented as if facts, as you do in the six below (taken from you last post alone):

(1) Democrats want to censor what you can say and think, and bring you gun control, and higher taxes.

(2) So Democrats will outlaw violent video games and pass censorship laws banning racial slurs or whatever else is deemed politically incorrect.

(3) Because somehow Democrats believe that if people don't say something that they won't think it, when it's the exact opposite. Or if people don't see guns on tv they won't want them, when it's the exact opposite.

(4) Republicans on the other hand, don't care what you say as long as it's profitable. ...

(5) Neo-conservatives are not traditional conservatives.

(6) Neo-conservatives are a completely different breed of Republican.

The U.S. currency yesterday {26 or 27Dec 06*} fell the most in a week against the euro after the United Arab Emirates said it will convert some of its U.S. currency reserves into euros. Some investors buy gold to hedge against a decline in the value of other assets denominated in dollars.
…
The United Arab Emirates' move exacerbated selling pressure against the dollar, which has weakened against 13 of the 16 most-active currencies tracked by Bloomberg this year on signs of slowing U.S. economic growth. The U.S. may report lower consumer confidence for a third month and further signs of a slump in the housing market later today, according to economists surveyed by Bloomberg News.
``Selling pressure will remain on the U.S. dollar,'' said Alex Sinton, a trader at ANZ National Bank Ltd. in Auckland, New Zealand. ``The housing market doesn't look particularly attractive.
From:
www.bloomberg.com/apps/news?pid=newsarchive&sid=aPx1oANzvjtE

---------------------------
*depends on where you live.

That is pure speculation, - gold is not productive, and may be a dangerous speculation as the above ground gold far exceeds the utilitarian (industrial and jewelry demand). US may need to dump its hoard when foreigners will not accept printed pieces of paper.

Also either you take big risk of losing it all if hidden in your house etc, or pay some firm to keep it. (I think some of these firms are using the fact that in normal times they need less than 5% in real gold to meet delivery demands - I.e. when world goes to hell, they simply fold up in bankruptcy.) I would never touch gold.

Much better are ADRs in growing Non-US companies that supply a need to wealthy people. (At least half of my portfolio is in life-critical drugs, but still in the development stages as that is where a few will hit it "big time" and more than compensate for those that fail to realize the developer's hopes. Also, it is lots of fun for me to learn about these new “magic bullets” some are developing.)


Alright give me some advice. Where should I, or in specific, where should we put our money?

You are obviously a smart investor. I understand investments, but If the dollar falls, what are normal folks supposed to do?

Alright give me some advice. Where should I, or in specific, where should we put our money?
You are obviously a smart investor. I understand investments, but If the dollar falls, what are normal folks supposed to do?I already have, long ago, but will repeat for you as it is still not too late. Buy ADRs in companies you think have a solid future. - that is first choice. Second choice is "your not needed soon" money in inflation protected bonds - do not expect to get much of an advance inpurchasing power here, probably will at times be a negative gain, but at least you will not lose half of its purchasing power, as you surely will in a few years, if it remains in the bank's CDs etc..

If you like to gamble AND your heart can take shocks etc, you can hedge the dollar directly in the foreign exchange (or gold /silver) markets - I do not do this and have no ADRs in Russia or China. I have several in India, but the gain is so large now I will probably take some off the table after 2006 ends.

It is ironic, but if you must take funds out of your retirement (I saved max permitted all my working life.) and have done well in your investments - you have a problem in taking profits without giving too much to the IRS.

I will probably give appreciated assets to Cornell (or JHU) as there are plans that have them return the assets after a decade or so to my grandchildren free of IRS taxes. - I need to look more carefully into these details.

What about the Euro?

What about the Euro?I have a few, left over from last trip there, but as with gold, I only like things that are productive ownership in growing firms - especially ones supplying critical needs to rich old people - they will still be buying the drugs they need even as the world goes in to depression - more than half my portfolio is there, but mainly in the companies that are developing new drugs.

The "Big Pharma" is now needing to buy these developers up as most of their patents are expiring soon. For example, Abbott just bought KOSP paying double the market price. I enjoy learning and researching - I can even hear live, via internet, their presentations and as I am retired, I have time to do so.

I spotted KOSP long before Abbott did. (I thought Phizer would buy it in a year or so - and they should have.) so even before Abbott stepped up I had a 300% profit. I also spotted RNAI and bought it at under $3 and Merck is offering $13/share for it now. (they are leader in the field of this years Noble prize) These two are the current “big winners” for me - but being honest - I have also "spotted" as "very promising" and bought into at least 15 others, which as of yet, have gone nowhere or some even declined.

I am a believer in the "efficient market theory" (except for illegal insider actions) So I ignore the prices, book values, etc and go deeply into the pipelines and action mechanism of the drugs being developed. - I love learning. It is not too important if I make money by doing so, but thus far I have. Several people active here know much more than me in the bio-tech /drug area and could do even better than I have, but I have >50 years of doing this sort of thing.

Democrats want to censor what you can say and think, and bring you gun control, and higher taxes.

So Democrats will outlaw violent video games and pass censorship laws banning racial slurs or whatever else is deemed politically incorrect. Because somehow Democrats believe that if people don't say something that they won't think it, when it's the exact opposite. Or if people don't see guns on tv they won't want them, when it's the exact opposite.

Republicans on the other hand, don't care what you say as long as it's profitable.
Bill Mahaer and Phil Donahue had their TV shows cancelled for being too liberal. Both of them had Nielson Ratings that would indicate that they were not cancelled for lack of ratings. Conservatives popularized the phrase politically incorrect but to my point of view conservatives have always been more determined to enforce their version of political correctness than liberals have been about enforcing their version of political correctness. McCarthyism was probably the most extreme form of enforced political correctness to oppress Americans during the last hundred years (unless you count "Jim Crow" as a form of pollitical correctness).

Coventional Wisdom says that as the dollar falls the trade deficit will get smaller and therefore the pressure forcing the Dollar to fall will decrease. In the long run conventional wisdom is correct but in the short run a fall in the dollar will increase the trade deficit because the dollar would have to fall a long way before manufacturing that has moved to China returns to the USA. As the Dollar falls Americans will have to pay more fore all the Chinese made stuff they buy in Wamart and therefore the trade deficit will increase. Oil may be priced in dollars but Americans would still have to pay more for imported oil as the dollar falls because the relative oil buying power of the of the rest world would increase compared to the US oil buying power.

As the dollar falls Boeing will take market share from Airbus but the few situations like that in which American producers gain market share from foreign producers as the dollar falls won't be enough to offset the rising costs of America's imports. Also, how long will it be before China replaces the USA as the producers of higher tech products like airliners? China is already manufacturing parts for Boeing.

Some say as the dollar falls the US will gain market share in financial services, but what what I see is that the financial services industry is starting to move from the USA to India. The dollar would have to fall a long way just to stop the trend of more good jobs in financial services, computer programing and other white collar occupations flowing out of the USA to India.

The Chinese, Japanese, Korean, and Saudi purchases of US Treasury debt and other American financial assets is propping up the dollar. If the foreigners ever stop buying more American financial assets than they sell, then the American economy will crash and the Dollar will crash. Until we hit bottom the long term downward slide in the dollar will continue.

Also, how long will it be before China replaces the USA as the producers of higher tech products like airliners? China is already manufacturing parts for Boeing.

A very long time, if ever. The ability to bolt together parts using imported manufacturing techniques and designs is a long way from the ability to successfully innovate new designs and techniques of production. Not only does America have a huge lead in this area, American investment in high-tech R&D exceeds that of China by a fantastic margin. China will have to surpass India, Japan and then Europe before thinking about taking on the American high-tech sector.

....Not only does America have a huge lead in this area, American investment in high-tech R&D exceeds that of China by a fantastic margin. China will have to surpass India, Japan and then Europe before thinking about taking on the American high-tech sector.Let examine this in light of current facts and trends.

First note that EU (or perhaps only England?) is in process of placing a carbon emission tax on airplanes (They contribute less than 10% of CO2 emissions but most of it is released up high so perhaps they are 10% of man's contribution to global warming) - I.e. Fuel efficient, full passenger loaded planes are the near term future. And Boeing is trying to improve theirs.

Note the in the 50 to 120 passenger range, the most efficient currently available planes come from the #3 producer in the world, Brazil's Embraer. (Just a couple of months ago bumped Canada's Bombadier (sp?) down to #4)

Embraer and China now jointly make some of these efficient planes in the factory at Harbin, China, which is better know for big pollution spill about a year ago and the fantastic annual ice sculpture displays. Planes are now coming out of the doors, but China will still be importing form Boeing for half a decade as it expands it local production of these planes better sized for lots of flights anywhere within China. (They can not cross the Pacific but the North Atlantic, or shorter hop from SA to Africa is with in their range.)

The next decades will require "green planes" - I.e. running on sugar cane's alcohol or bio-diesel. Embraer has sold several dozens small alcohol-powered ones already, used mainly for crop dusting, and Boeing has nothing, even in research for a "green plane." Now 80% of all cars sold in Brazil are "flex fuel."

US is no longer the "tech leader" of the world in all fields, and less so with each passing year now. (US designed robots can barely walk. -Japan has shown one ridding a bicycle, another climbing stairs while playing a bugle, others that look very human commercially serve as tour guides, answer questions in several languages and when seated at desk in lobby, look at you when talking with you, etc. so well that many people take half a minute to realize the are not speaking with a human receptionist, seated in the lobby.)

First note that EU (or perhaps only England?) is in process of placing a carbon emission tax on airplanes (They contribute less than 10% of CO2 emissions but most of it is released up high so perhaps they are 10% of man's contribution to global warming) - I.e. Fuel efficient, full passenger loaded planes are the near term future. And Boeing is trying to improve theirs.

It's the entire EU, I believe, but the emissions tax is somewhat beside the point. Increases in fuel prices are what's driving the push for more efficient planes. An emissions tax will simply mean fewer people flying in Europe.

There are three ways to improve the fuel efficiency and emissions of an airline. One is though more efficient scheduling and routing (more on this later), one is through improved aerodynamics, and the other is through improved engines. There isn't a lot of room for improvement in aerodynamics, which leaves improved engine design. The big engine producers are GE and Rolls-Royce. Boeing, Airbus, Embraer, etc. all rely primarily ono engines from these two companies. GE, it happens, has been on a major "green tech" program for several years now and, in particular, is releasing aircraft engines with greatly improved efficiency and emissions:

http://www.geae.com/engines/commercial/genx/

Rolls-Royce, however, does not seem to have a comparable program in place, implying that innovation at GE will be the major factor in improving aircraft efficiency and emissions.


Note the in the 50 to 120 passenger range, the most efficient currently available planes come from the #3 producer in the world, Brazil's Embraer.

Small jets are important to improving fleet efficiency, but not because they are terribly fuel-efficient or high-tech as such. Their utility lies in more efficient, local traffic routing, reducing the total number of miles that people fly to get where they're going. While the small jet market is a good one to be in, and Embraer is doing very well, that doesn't add up to a lead in high-tech manufacturing, or even much of a challenge to Boeing, which is focused on the mid-size market. A much better example of a foreign company taking a bite out of American airplane market share would be Airbus, although it should be noted that Airbus has staked its claim on super-large, fuel-inefficient beasts, while Boeing is pinning its hopes on super-efficient, carbon-fiber, mid-size planes (contrary to your earlier characterization of American vs. European strategies):

http://en.wikipedia.org/wiki/Boeing_787


Embraer and China now jointly make some of these efficient planes in the factory at Harbin, China,

It would be more accurate to say "assemble" than "make." Those planes are manufactured almost completely at the regular Embaer factories, then shipped to China to be bolted together. And, again, Embraer planes are not especially efficient. Their advantage is in low maintenance/training costs and low price. By the way, the major buyers of Embraer planes are US airlines; the majority of the ERJ145s (the plane the Chinese plant produces) in service today are flying Americans around the States.


US is no longer the "tech leader" of the world in all fields, and less so with each passing year now. (US designed robots can barely walk. -Japan has shown one ridding a bicycle, another climbing stairs while playing a bugle, others that look very human commercially serve as tour guides, answer questions in several languages and when seated at desk in lobby, look at you when talking with you, etc. so well that many people take half a minute to realize the are not speaking with a human receptionist, seated in the lobby.)

America has never been the tech leader in ALL fields. It's just the leader in all the big, important, profitable ones (computers, advanced manufacturing, aerospace, communications, pharmaceuticals, biotech, MEMS, nanotech, etc.). Also, you're thinking of androids, not robots. While Japan is certainly the world leader in androids, American robotics is top-notch. You may remember America landing robots on Mars, and operating them for months on end? Then there's the robots for automated manufacturing and military applications...

Low dollar=cheaper (therefore more) exports. USA is capable of sustaining productivity without the need for more massive imports; for a while anyway.

Hmmm...but the US already has a huge trade deficit.

How is getting less for their products and paying more for imports going to do any good?

IMHO, Posts 59 & 57 are good replies to 58 and 56 (mine) but one of my points quadraphonics did not touch on is fact that Embraer is (via a subsiderary) already selling alcohol powered plane. (They were one of the two important aviation advances to win Scientific American's award for "best in field" in 2004 I think it was. The other was the airbus 380.) Interestingly, alcohol is both more powerful and has lower maintaince cost than the aviation gas version, but with a little less range. They are mainly used as "crop dusters" so this is totally unimportant as plane must land and refill the dusting chemical tanks more often than the alcohol tanks. I do not know if they have enlarged the dusting chemical tanks to take advantage of the greater power or not. - I sort of doubt it as difference in power is less than 5% as I understand it. They also have kit for converting the older gas powered planes to alcohol. All this is because alcohol is cheaper and better in this service. - Not because it is reducing the CO2 emitted by 110%. (I don't think people spreading pesticides are too concerned with CO2. :( )

You are certainly correct that GE is making a push for more efficient engines, but I suspect the limit on this is about a 10% improvement. By going to alcohol fuel (produced from sugar cane) the improvement can be 110% ! (No error, 110% is correct as more CO2 is removed from the air than returned to it by burning the alcohol fuel.) Brazil is leading the world in use of alcohol fuel for vehicles and has been for 30 years!

Hmmm...but the US already has a huge trade deficit.

How is getting less for their products and paying more for imports going to do any good?

I've no idea, I'm just the kebab guy.

I'm just the guy that orders kebabs and eats them.

D'you want chilli sauce with that?

Embraer is (via a subsiderary) already selling alcohol powered plane.[...] Brazil is leading the world in use of alcohol fuel for vehicles and has been for 30 years!

There are some good things about alcohol fuel, although I'm not really sold on it as the big answer to future energy/emissions problems. The economics of production aren't very favorable outside of Brazil, and it's not clear to me that Brazil alone can ever produce enough to make a big difference in the global picture (at least without wrecking the environment of South America in the process).

Moreover, Brazil's efforts in this area, while laudable, have more to do with social policy (and climate) than technology or manufacturing prowess. The same alcohol fuel technologies have been available in America for decades; indeed, most of them were developed here (Ford has been selling alcohol/gasohol vehicles in Brazil for almost 30 years). America has long-standing alcohol fuel subsidies, and ethanol is used as a gasoline additive in many states (California alone consumes nearly as much ethanol fuel as Brazil). The cars in the Indy racing league all run on alcohol fuel. It's had every chance to take off here, but people have never gone for it. Maybe that'll change when oil gets more expensive, but rest assured that America is primed and ready to take advantage of any approach that will outperform the current system.

Also, Brazil (like America) still consumes much more gasoline than alcohol fuel (2 million barrels of oil per day vs. 280,000 barrels of ethanol). Maybe when they come up with a way to run a diesel engine on alcohol that'll change, but until then...

There are some good things about alcohol fuel, although I'm not really sold on it as the big answer to future energy/emissions problems. Why not? (Bio butannol* may be better and or bio-diesel, but all reduce the CO2 the more they are used. As for the cost, sugar cane Alcohol is competitive if oil is more than $30/barrel with out subsidies. US should trade for it with tropical countries, not just Brazil. Corn based alcohol requires at least as much energy in oil as produced, so it is just "converted oil." GWB's push for it will not hurt his friends in the oil industry. Look at any study not connected with the alcohol industry or a corn producing state's university. I.e. look at the Cornell or UCLA studies.

....The same alcohol fuel technologies have been available in America for decades; indeed, most of them were developed here...
Also, Brazil (like America) still consumes much more gasoline than alcohol fuel (2 million barrels of oil per day vs. 280,000 barrels of ethanol). Maybe when they come up with a way to run a diesel engine on alcohol that'll change, but until then... Almost sure first is not true and doubt the second, but if "oil" includes all its uses, then probably is true, but a distortion as used here.

Also almost sure alcohol cars were designed by Ford et al here in Brazil and evolved (as problems were noted they were fixed, by local engineers, etc.) Detroit specializes in style changes not efficient cars - made SUV and other gas hogs. You are correct that this was "market driven" Brazil is more "government driven" for example by end of 2008 (or during it - I forget) by law, all diesel sold will be 2% bio and by 2010 that goes to 10%. The 1973 oil crisis was meet by the government mandating the conversion to alcohol, but as there were problems and gas got very cheap ($10/barrel oil) it was relaxed to have both. 80% of all cars sold in dec06 were flex fuel (burn pure of either) and that would be higher if the imported gas only cars some of he rich buy are not counted.
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*www.usatoday.com/money/industries/energy/2006-06-20-butanol_x.htm?csp=34
Originally I had methanol by memory error - Thanks to spidermonkey I have this reference and corrected my memory error.

More on thread than last post:

Brazil and Argentina are in the final phase of plans to use local curriencies for all bilateral trade - drop the use of dollar with its silly twin conversions (into dollars from the buyer and back out of dollars to the sellers currency.) This alone is not gong to make the dollar collapse, just one more nail in the coffin. Much more important is the sale of oil and immediate converion of the dollars gained into Euros etc. The world is slowly realizing it does not need dollars any more.

Why not? (Bio methanol may be better and or bio-diesel, but all reduce the CO2 the more they are used.

Alcohol fuel as such is not better than gas in terms of CO2 emissions. The advantage is in CO and particulate emissions, of which alcohol fuel produces almost none. However, alcohol fuel and gasoline produce very similar amounts of CO2. If all of the ethanol was coming from biological sources, this would amount to zero net CO2 release (since the biomass producing the fuel would be capturing it from the atmosphere). However, lots of ethanol is actually produced from fossil fuel sources and all ethanol plants, regardless of the feed stock, produce nasty emissions.


As for the cost, sugar cane Alcohol is competitive if oil is more than $30/barrel with out subsidies. US should trade for it with tropical countries, not just Brazil.

Indeed, although it bears repeating that the environmental side-effects of the agricultural production (often fed with fertilizers derived from fossil fuels) and ethanol manufacturing are potentially very dire on a large scale, regardless of where it's carried out. Moreover, many tropical countries contain important rain forest masses that, if converted to agricultural production, would damage air quality and greenhouse gases much more than an alcohol fuel economy would help them. America has huge agricultural production, and doesn't have to chop down any rain forests to make room. It's more a matter of finding the right crop; corn is not a very good choice over all, but has dominated the policy debate in the US due to its extensive political influence. Sugar beets would be a better way to go.


Corn based alcohol requires at least as much energy in oil as produced, so it is just "converted oil."

Actually, much of the energy used comes from coal, not oil. Although it's still energy extracted from fossil sources, the point about oil as such is misplaced. More than half of the electricity in America comes from coal.


Almost sure first is not true and doubt the second, but if "oil" includes all its uses, then probably is true, but a distortion as used here.

Yes, I meant to say oil. Anyway, here's the source:

http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil

"Presently the use of ethanol as fuel by Brazilian cars - as pure ethanol and in gasohol - replaces gasoline at the rate of about 27,000 cubic metres per day, or about 40% of the fuel that would be needed to run the fleet on gasoline alone. However, the effect on the country's overall oil use was much smaller than that: domestic oil consumption still far outweighs ethanol consumption (in 2005, Brazil consumed 2,000,000 barrels of oil per day, versus 280,000 barrels of ethanol). Although Brazil is a major oil producer and now exports gasoline (19,000 m³/day), it still must import oil because of internal demand for other oil byproducts, chiefly diesel fuel (which cannot be easily replaced by ethanol)."


by law, all diesel sold will be 2% bio and by 2010 that goes to 10%.

That's great, although I'd point out that America consumes 30 million gallons of biodiesel per year (expected to hit 1-2 Billion gallons per year by 2010). Several US states have already passed similar legislation requiring 2% of diesel to be biodiesel, some as long ago as 2002. There is an extensive grass-roots movement in Washington state to locally produce and distribute biodiesel. Brazil, meanwhile, has only a single operational biodiesel plant, producing only 10% of what America does. Plans are ongoing to build similar biodiesel capacity as America *already* has, but it's doubtful they'll ever catch up with America in terms of biodiesel production.


80% of all cars sold in dec06 were flex fuel (burn pure of either) and that would be higher if the imported gas only cars some of he rich buy are not counted.

Flexfuel is useful to get people to transition to alcohol and reduce dependence on foreign oil, but is not terribly efficient as such. This is because alcohol has a much higher octane rating than gasoline, and so needs to be burned at substantially higher compression ratios to achieve proper fuel efficiency. However, because flexfuel vehicles must be able to burn both fuels, they run at an intermediate compression ratio, compromising fuel economy.

...If all of the ethanol was coming from biological sources, this would amount to zero net CO2 release (since the biomass producing the fuel would be capturing it from the atmosphere). Not true!!! Most certainly 75% of the carbon removed from the air does NOT end up in the alcohol fuel. I.e for evey pound of carbon coming out of the car's exhaust pipe four or more are removed from the air.

The growing fields of cane are like growing trees storing carbon. Much of the crushed is used instead of fossil fuel to distill the alcohol out of the water/alcohol solution - only fossil fuel is used in US. From a CO2 / global warming POV you are very wrong about the relative merits of getting the carbon from the air (alcohol) vs. from safely sequested deposits deep in the Earth (fossil fuels).

All of the carbon stored in alcohol in car fuel tanks, in distribution system tanks, in ocean transport tankers is also carbon that has been removed from the air.

Cane is a grass, and needs no fertilizer, but some is used to boost yields. Corn requires much more; especially if growth must be simulated to compensate for a short growing season. (Iowa freezes or has early morn frost nearly half of the year.) US could produce its own coffee also if that were as well subsidized And protected by tariff walls etc. but that too would be silly and very costly to tax payers.
...Moreover, many tropical countries contain important rain forest masses that, if converted to agricultural production, would damage air quality and greenhouse gases much more than an alcohol fuel economy would help them. America has huge agricultural production, and does not have to chop down any rain forests to make room...
http://en.wikipedia.org/wiki/Ethanol_fuel_in_BrazilThis is also a huge distortion. I will quote from your own source:

"Brazil currently devotes to sugarcane production amount to only about one-half of one percent of its total land area of some 8.5 million km². In addition, the country has more unused potential cropland than any other nation." A univesity study has shown that not one tree of rain forest needs to be chopped down - they are being cut down for the export of timber, the spoiled land is often not even used for new agriculture land, unless some local man tries to keep his cows there.

Contrast this to US where there is essentially no agriculture land not already in use. Brazil has enormous areas in pasture (has long been the world's leader in tons of beef exported and recent has passed Australia in value of beef exports to claim #1 by that measure also.) The price of corn on CBT is already at all time high. The tax payers of US will (and to some extent already are) pay more for their food as land in food crops is converted to fuel crops. Pay higher taxes to support growing corn (the largest of all farm subsides). Pay a gift to the rich of $0.54 for each gallon of alcohol produced. Loss current exports of corn, weakening the dollar more. Not reduce oil consumption (according to all studies not supported by "corn money") and perhaps slightly increase it. (GWB never does anything that will hurt his main source of campaign funds. - He is dumb, but not that dumb. :D )

"Brazil currently devotes to sugarcane production amount to only about one-half of one percent of its total land area of some 8.5 million km². In addition, the country has more unused potential cropland than any other nation."

It's true that there's room to expand, but we were talking about America replacing gasoline with imported ethanol. Brazil currently produces about 11 million gallons of ethanol a day, while America consumes 400 million gallons of gas per day. Supposing everyone in America switched to pure-alcohol cars (with appropriate compression ratios so that mileage was the same), Brazil would have to increase its currently production by a factor of almost 40 to keep up. Since 4.5% of cropland in Brazil is currently dedicated to ethanol, it would require a 50% increase in Brazil's farmland, with all of it dedicated to ethanol production, just to supply the US (let alone Europe, Japan, China, etc.). This would be 20% of the land area of Brazil. That might be possible if some of the wilder estimates of potential cropland in Brazil pan out, but even then it's a long way from enough to replace gasoline on a worldwide basis.

Another point that's missing here is the effect of nationalism. The drive to move away from oil has as much to do with reducing dependence on foreign sources of energy as with environmental concerns. Switching from Venezuelan oil to Brazilian alcohol may make sense from an environmental point of view, but would do nothing to improve American energy self-sufficiency. Which is why no policy-maker will ever call for such a move, no matter how much better a feedstock tropical sugarcane is than temperate corn. I strongly suspect that Brazilians would feel much less enthusiasm about alcohol fuel if they didn't happen to have a good domestic source.


A univesity study has shown that not one tree of rain forest needs to be chopped down - they are being cut down for the export of timber, the spoiled land is often not even used for new agriculture land, unless some local man tries to keep his cows there.

Indeed, rain forest land isn't really good for anything else, and the Brazilian policies that continue to promote deforestation are some of the most infuriatingly short-sighted and irresponsible actions in recent history. Brazil's efforts in bioethanol are a good first step at making up for collectively shooting mankind in the foot, although getting serious about preserving the Amazon would go a lot further.


Contrast this to US where there is essentially no agriculture land not already in use.

Although, as has been pointed out by you, much of it is used unproductively for subsidy and tariff supported activities. While there's not a lot of *unused* farmland, there is plenty of farmland as such (more than twice as much as Brazil currently has) that could be converted to more productive uses. At any rate, Americans are never going to get behind any alternative plan that doesn't involve a healthy dose of domestic energy production. So unless you've got some way to include that in your vision for an alcohol fuel economy, it's a non-starter.


Brazil has enormous areas in pasture (has long been the world's leader in tons of beef exported and recent has passed Australia in value of beef exports to claim #1 by that measure also.)

Of course, America is the #1 overall producer of beef (and exports nearly as much as Brazil). Also, American beef tastes better.

It's true that there's room to expand, but we were talking about America replacing gasoline with imported ethanol. ...Supposing everyone in America switched to pure-alcohol cars...Brazil ... would require a 50% increase in Brazil's farmland, with all of it dedicated to ethanol production, just to supply the US (let alone Europe, Japan, China, etc.). This would be 20% of the land area of Brazil. That might be possible if some of the wilder estimates of potential cropland in Brazil pan out, but even then it's a long way from enough to replace gasoline on a worldwide basis.Clearly Brazil alone is not going to supply a world converted to only alcohol as the fuel for all vehicles. (Why I always try to say "alcohol from the tropics." ) Even more certain is the more than half of world's vehicles will still be fueled by oil derivatives for at least two decades. In less than one decade, it is highly probable that "cellulose alcohol" will be in commercial production. (A few pilot plant scale units are producing now, but need more advances, mainly in biology, to be economically feasible.) Perhaps then with as much local production as possible, (recycled newspapers, saw dust, leaves, etc.), Brazil alone could supply all of the US and EU needs, if all of the pasture now producing beef were growing sugar cane or bio-diesel plants.

These facts combine to make a "crash push" to alcohol very desirable as land available will not be the limitation on the "critical path" of this highly desirable transformation of vehicle fuel system. Perhaps this is essential to avoid a self-accelerating (via ocean-floor and polar-land methane-hydrate decomposition) global heating that converts Earth into a colder version of Venus. That may exterminate all humans in less than a millennium.
.... the Brazilian policies that continue to promote deforestation are some of the most infuriatingly short-sighted and irresponsible actions in recent history. That is not fair. Brazil seldom sends rich people to jail (almost never if they are politically well connected or politicians), but has sent a few to jail for illegal logging. Areas larger than California are totally "off limits" to loggers. Because of the large profits possible by stealing trees, and the wide spread corruption, and size of the rain forest, compared to the law enforcement resources available, etc. some of rain forest is being lost each year. If you want to do something about that, do not buy any furniture etc that has Mahogany in it or help some organization that is buying up rain forest land or promoting "eco-tours" in it via boats that keep the people on board.


..At any rate, Americans are never going to get behind any alternative plan that doesn't involve a healthy dose of domestic energy production. ... Probably true. At least half (fortunately you are not among them) do not understand that "free trade" is a benefit to all practicing it (especially when there are dozens of different nations in the tropics that will compete to supply alcohol to US at less than half the cost of producing it from corn in Iowa). They would stupidly prefer to have higher cost food, taxes and fuel for their cars and run the risk of human extinction by delaying the conversion to alcohol.

You are intelligent - join me it my education effort. - The stakes are high, possibly very high.

I would like to hear your opinion on how far will dollar fall?
Is it possible to stop USA economic collapse, and if it is, how?
Do those big international corporations have any interest to support falling US ecomony?You mean against the Euro?

Clearly Brazil alone is not going to supply a world converted to only alcohol as the fuel for all vehicles. (Why I always try to say "alcohol from the tropics." )

Okay, but where else in the tropics is there enough spare land to make a significant contribution? Indonesia and the Phillipines don't seem big enough, and South/Southeast Asia seem to be using pretty much all of their farmland. Which leaves Subsaharan Africa, which has plenty of problems of its own... Without a good method for production in temperate climates (USA, Europe, Central Asia), it's hard for me to envision alcohol fuel being the decisive factor.


Probably true. At least half (fortunately you are not among them) do not understand that "free trade" is a benefit to all practicing it (especially when there are dozens of different nations in the tropics that will compete to supply alcohol to US at less than half the cost of producing it from corn in Iowa).

Well, to be fair, there are some legitimate reasons that people value energy independence. When you're dependent on others for your energy, you have much less ability to regulate the costs (or, more specifically, price volatility) and side-effects, environmental and otherwise, of your energy source. While it would probably be better to split the foreign dependence between multiple sources (oil and ethanol, say), it's better still to boost domestic energy sources. Biodiesel has the potential to be a big deal in America.

The biggest thing, at least in the short term, for improving the CO2 situation is to clean up coal-fired power plants. America, as well and China and India, are going to be getting a lot of their energy from coal over the next decades, so if clean coal doesn't get up and running, it won't really matter what we run our cars on in 2020. Coal technology is also something Americans can get behind, since we have so much of it.

<double post>

Okay, but where else in the tropics is there enough spare land to make a significant contribution? Indonesia and the Phillipines don't seem big enough, and South/Southeast Asia seem to be using pretty much all of their farmland. Which leaves Subsaharan Africa, which has plenty of problems of its own... Without a good method for production in temperate climates (USA, Europe, Central Asia), it's hard for me to envision alcohol fuel being the decisive factor.

There is no need to limit yourself to the tropics. An important crop in Europe is the sugar beet. From it you can make biofuels.

See for instance this
http://www.usatoday.com/money/industries/energy/2006-06-20-butanol_x.htm?csp=34

There is no need to limit yourself to the tropics. An important crop in Europe is the sugar beet. From it you can make biofuels. See for instance this
http://www.usatoday.com/money/industries/energy/2006-06-20-butanol_x.htm?csp=34Yes, better than corn, I think in terms of energy out as alcohol compared to enery in as fossil fuel, but still sugar cane is better, and cheaper from the tropics instead of southern France etc..

BTW your ref is about butanol being better that ethanol. I mention this in my post 65, now edited to include your ref. - thanks. I did not read your Ref, but hope it mentioned the fact that being less hydroscopic, butanol can be stored to smooth out growing season yield variations and also sent thru pipelines - both big advantages for butanol, which may well win the contest for vehicle fuel in the end, but is way behind ethanol now.

Sweet, my town was founded on sugar beets. Just too bad lots of the agriculture (prime area) is going away to build tons of expensive houses since this is a coastal city. Kinda hard to balance the two here.

- N

Using sugar beets for biofuels could also have another unexpected benefit. Now they are mainly used for making...sugar. And the sugar industry is pushing its sugar everywhere as a cheap food additive. An unhealthy one. If there would be a worthwhile market for biofuels from sugarbeets I would expect that the focus will switch. Sugar becomes more expensive. Sugar isn't so easily used anymore as a food additive.

well...the above is just hope. Not based on any economical assessment, because I have no skills for doing so.

Using sugar beets for biofuels could also have another unexpected benefit. Now they are mainly used for making...sugar. And the sugar industry is pushing its sugar everywhere as a cheap food additive. An unhealthy one. If there would be a worthwhile market for biofuels from sugarbeets I would expect that the focus will switch. Sugar becomes more expensive. Sugar isn't so easily used anymore as a food additive.

It's possible. One of concerns with scaling up biofuel usage is the amount of farm land it requires then isn't available for food production, driving up the price of ALL foods.

I think that there are options. I'm not too negative about it.

In Europe farmers actually can get paid NOT to farm their land. That's because there is overcapacity. So I speculate that at least within Europe there is still some leeway to switch to biofuels.

Maybe Europe is actually the best region to start an experiment on this besides Brazil. There is already a rich history of taxing fuels heavily and why not make it more alluring to produce biofuels by minimizing tax on biofuels, subsidize biofuel crops and even higher tax on non-biofuels.

And of course there could be a low tax on biofueled cars, and increase in tax on normal cars.

It's nothing Europeans haven't seen yet.

Nowadays it is possible in many European nations to choose if you pay for electricity made from environmental friendly energy generators or the standard ones. It costs a bit more of course, but many people are willing to do so. I for instance am using the higher cost/more environmental friendly electricity.

I'm sure Europeans would be willing to switch if the incentive was there.

... Maybe Europe is actually the best region to start an experiment on this besides Brazil. There is already a rich history of taxing fuels heavily...Very certainly, EU is greatly advantaged compared to US in the post peak oil era, in large part because these taxes have been used for more than 50 years to make gasoline cost at least twice as much in the US. There are three important results of this wise policy:

(1) Trains are better, faster, and more extensively used.
(2) Cars are significantly smaller and weigh less. (Go further on same amount of fuel.)
(3) Only the very wealth can afford to live far from work in "suburbia." (“Wall to Wall” adjoining “townhouses” are common far from town to conserver farm land.)*

In many prior post I have lumped these three and some lesser importance factors into "suburban infrastructure" - that is very developed in US and very unsuitable for the post peak oil era. It is a major reason, not yet recognized by many, why that the EU will prosper relative to the US. "Telecommuting" to work will help the US survive when many can not afford gas for their cars, but even that is more difficult and costly with "suburban infrastructure".

Some time ago, I posted a photo of a huge new building now being occupied in China. It was for about 5000 people, with everything one needs within walking distance. (As it is "3D", part of the "walking" is by elevators.) The article I read about it said that it would be possible to be born in the building's hospital, live your entire life inside it, and only leave it as ashes, perhaps scattered from the roof by your friends. (I do not know much about urban Chinese processes for getting rid of bodies.)
Building of course is completely wired for very high speed internet everywhere within it at about 1% of the cost of providing high speed service to Americans living in their "suburban infrastructure." Building makes a fantastic reduction, approximately 95%, in the liquid fuels required by those 5000 people. This is possible (and being done) because China has a "directed market economy." - I think the US "free market economy" could not produce this ecologically low cost life style.
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*Partially this is due to the historically reason that the medieval "walled village" had its the farms outside the village walls and wall-to-wall residences not found even in the cities of the original 13 (still British, cira 1700.) states on west side of the Atlantic because open land was abundant. Even today a "townhouse" is considered to be alower standard of living in the US. - My first was one. Wife wanted a "detached house", despite the higher heating bills, etc.)

In Europe farmers actually can get paid NOT to farm their land. That's because there is overcapacity. So I speculate that at least within Europe there is still some leeway to switch to biofuels.

The subsidies reflect not just spare capacity, but also a policy to encourage farmers not to utilize their lands too aggressively (which leads to soil depletion and hightened requirments for fertilizers). There's definitely room to expand in a variety of places, but it will take a LOT of sugarbeets to produce comparable amounts of fuel as we currently get from oil.

Of course the US could in principle cut its fuel use to European levels without even resorting to new technology.

That should already take care of some of the problems of biofuel production.

Just another example of why the dollar is doomed, Euro is rising:

Lilly said it will stop building the Prince William County, Virginia-based center because production can be handled by existing plants and a center being built in Italy. All 120 employees in Prince William will be given a chance to transfer or will receive severance packages.
The company also will offer exit packages to up to 250 employees at its small molecule, active ingredient plant in Lafayette, Ind. The plant has about 1,000 ...

It is not just the US auto industry that is closing US plants (about 30 in 2006) while spending billions to build them elsewhere.

If both production and services (any thing that canbe suppiled remotely vai internet) are leavig US at ever accelerating rate, soon only "intrinsically local jobs" such as cutting some one hair or delivering pizza will remain.

Except for the great US farm land potential; - however, that is being converted to bio-fuel alcohol which via corn may slightly INCREASE the need for oil imports and already has driven corn and some other food cost to all time highs. GWB would be US's worst president even if he had never heard of Iraq!