What happens to an America built on cheap energy when energy is no longer cheap? It's a question that most Americans do not want to confront. Especially the slick talking politicians.
The fact is that most of the way America was built depends upon cheap energy supplies. The love for the automobile, the vast suburbs that surround America's majors cities, the neglect of a high speed railway system, huge suburban shopping malls and office parks, American agriculture with its dependence upon fertilizers, pesticides, and massive diesel fuel driven combines and tractors, the aviation industry, and the trucking industry, all were constructed on the back of cheap energy.
Now that energy is not cheap what will happen to the American lifestyle? Optimists look towards the development of alternative energy sources. Some of these possible aids to the energy crisis will be helpful, such as solar and wind power, and some will be counterproductive, like ethanol production using corn as the energy source.
However, in time the optimists will learn that we are nowhere near to replacing a significant percentage of our total energy needs with alternative energy sources. Time is already up. We are going to have an energy shortfall and the energy that we do have will be very expensive.
We live in a world designed for cheap energy inputs and energy is no longer cheap. We are already transferring hundreds of billions of Dollars a year to oil producing nations with no end in sight. America is going broke.
American citizens will be feeling the pain of this fact for a long time to come, perhaps from now on as the American standard of living drops as expensive energy pricing takes its toll. It is hard to imagine the many changes that will be taking place in the way Americans live.
Unfortunately, your imagination will not have to be active for very long. The unpleasant changes that are coming will happen will stunning speed. Food shortages and the collapse of the America trucking and air transportation industries may occur by the end of 2008. The next American president will likely began his term with a full blown crisis on his hands.
The end of a lifestyle based upon cheap energy resources is likely over. The adjustment to a lifestyle of serious energy conversation and reduced expectations will not be easy. American leadership has been weak for a long time. Leadership will be severely tested in the near future as will the strength of the American people.
I'm confident that America and Americans will survive and adapt but it is impossible to predict the shape of the coming transformation of America as it adjusts to a world of expensive energy and decreasing resources.
However, one thing is very clear. The sooner that America comes out of denial and addresses the energy problem in a realistic way the better off we will be.
Gerald "Taipan" Greene is a retired forex trader and portfolio manager who worked in Asia for over 20 years. He now writes for a number of financial, political, and Internet business related blogs. One of them is at Article Discovery News Analysis