Saturday, April 30, 2011

73.9 Million More Chinese and $4 Gasoline

Since 2000, China's population increased 5.8% or 73.9 million people, reaching 1.34 billion, raising demand for oil and other commodities.

The 5.8% growth rate was the slowest in 50 years but, when it is applied to the base population of 1.26 billion of 10 years ago, the result is still a lot more people.

Indeed 73.9 million people is close to 25% of the USA population and more than all the people in Prince William's and Kate's kingdom.

Look no further than rising populations in China, India, Brazil and other emerging economies plus rising living standards that are being powered by burning primarily coal and oil for why gasoline is $4.  Demand for oil is increasing and pushing oil prices up, up, and up again.

$4 gasoline will likely be replaced by much higher prices over the next 10 years.  The USA economic growth will be cut substantially if we remain addicted to oil.

Fortunately, electricity, biodiesel, and natural gas are all good substitutes for gasoline.

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