Tuesday, April 15, 2008

Understanding Ethanol

I've been writing about our biofuel/ethanol policies for awhile now. These policies appear to be taking us down a path which won't be helpful or sustainable. We've seen a boom in agricultural and fertilizer prices, and it is having major effects throughout the world. Inflation has pushed up the raw cost of food, and thus nearly every purchase the average consumer makes. Now third world countries are facing a hunger crisis partially because of these policies.

Here are two great articles you can read for more in-depth commentary.

First, a blog post from www.fundmymutualfund.com.

Second, a post from www.marketminder.com.

A couple of points:

1)Corn-based ethanol is inefficient and expensive to make.

2)Politicians are too worried about losing votes to stand up to a poor policy. This is especially true because of the amount of influence farmers have in government.

3)What will have to happen for us to consider other options? Will the new administration do it? Will it take a global food crisis?

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