Quote:
It's basic economics, supply and demand. When the basic materials get too expensive, you find alternate materials or processes. Hopefully it will happen gradually. It's the sharp spikes in energy prices that cause problems with the economy. The experts will tell you that this recession was caused by sub-prime mortgages and poor lending practices. But why were people defaulting on loans that they could previously pay? Because there was a sharp spike in gasoline prices and subsequently food prices went. People were pouring more money into their gas tank. Food prices shot up because because the cost of transportation went up. Corn prices went through the roof as corn was being diverted to ethanol production.
Couldn't have said it better.
It's basic economics, supply and demand. When the basic materials get too expensive, you find alternate materials or processes. Hopefully it will happen gradually. It's the sharp spikes in energy prices that cause problems with the economy. The experts will tell you that this recession was caused by sub-prime mortgages and poor lending practices. But why were people defaulting on loans that they could previously pay? Because there was a sharp spike in gasoline prices and subsequently food prices went. People were pouring more money into their gas tank. Food prices shot up because because the cost of transportation went up. Corn prices went through the roof as corn was being diverted to ethanol production.