Acceptable Energy Inflation and Dieoff fears and Children

I was thinking today about energy prices - specifically that I personally could deal with a factor of 4 time increase in gasoline and natural gas prices. Say $8/gallon gasoline, and $2.80/therm natural gas. That is we can pretend my consumption is about $1500/year for gasoline for transportation, and maybe $2500/year for natural gas (heating). Really no problem.

I mean that's under $4000/year, a fraction of my income. Paying bills is annoying, but I've got the disposable income to handle it.

Would I change my consumption? I admit I'd more seriously look into investing in more insulation and perhaps energy efficient windows. I'd also look at lowering my winter thermostat a bit more. I'd also look into using electricity to supplement "space heating" over central heating. On driving, well, I don't actually own a car at the moment, but share one with my girlfriend. Since she pays for fuel, I'm sure she'd cut back her driving as needed.

So why not do these things now? Well, basically it comes down to short term optimizing costs. I know if I pay down my mortgage now, I'll have more money later to invest. If I find myself unemployed later and can't pay my mortgage, it doesn't really matter how efficient my home heating is since I'll have to sell it and likely won't make back the investment costs.

So PERSONALLY, I see when energy is cheap, AND I'm in debt, energy inefficiency in the short term is an acceptable expense.

I've always had a relatively fuel efficient car - Toyota Tercel and Honda Civic, both I could usually get 30-35mpg, a bit less in the winter. However I've considered if I don't drive very much, fuel costs don't really matter much. I DEFINITELY accept this in regards to buying a new car - driving 3000 miles/year will NEVER recover the extra costs of buying a Civic Hybrid, at least within all projectable price increases. Of course same logic true for buying any new versus used vehicle - again within the current market depreciation of cars. A ~5 year old car is optimal for balancing purchase price with maintenance costs.

Well, I should mention of course a 4 fold increase in fuel prices won't just increase prices for my personal transportation, heating, and electricity, but everything that I buy that requires energy. Fortunately energy prices are yet so cheap that they are a relatively small fraction of cost of things. Therefore a 4 fold energy price spike perhaps might cause only a 40% increase in price in goods and services I purchase.

The whole balance of my home economics is based on my employment income being steady and smooth, and I'm more worried medium term that my job is in danger before price increases can seriously hurt me. If I suddenly had to take a $10/hour job, I'm not sure I could make ends-meet. I CERTAINLY would have nothing left over for extra mortgage payments like I do now - while trying to beat the curve of a ARM, 60 month fixed rate mortgage. I've got breathing room, especially with savings, but my job is at the moment not optional. I COULD take 6 months off and live from savings, like I've done before, but again, it would eat everything, and so I'm stuck.

So, I don't know anything about my biggest risk, and I expect I'm much better off than most, but I'll definitely be happier when I can get my mortgage paid down. My fears are mild ones compared to most, but it does make me cautious with not immediately necessary home improvements to cut my energy costs.

I imagine most businesses are in a similar trap - cheap energy means we have the luxury of taking on debt for growing rather than a more conservative approach of paying down debt at every step before proceeding.

If I were a farmer, especially an "Agribusinessman", I'd look at the numbers and probably see gains in "efficiency" of the next big tractor, and adding another 640 acres, and it can pay off if energy prices stay low. However if energy costs rise WHILE I'm budgeting my debt, I can easily find myself two steps behind viability.

I imagine not only will energy price spikes cause wide spread bankruptcy of persons, it'll do even more to the businesses that depend on low energy prices for their margins.

Confidence in low energy prices would seem foolish in my opinion, but it would seem to take a long time to reverse this false confidence.

There is no "right" view to believe. There's risks on every direction. The problem is just that we're not in a good position to judge our risks.

Who will start a business with high inflation? Well, I assume a variable interest rate. Who will loan money for fixed interest rates with high inflation?

Anyway, I'm convince higher energy prices MUST come, greatly higher, and those who don't heed the signs will have a tougher time later. They're taking a big risk for their future.

I don't see the optimistic side as hoping prices will stay low. The optimistic side is to hope we can muddle our way through higher prices, that we can keep the social safety nets on the bottom.

I'm neither type of optimist. I accept the pessimistic view that "We're going down", and we're NOT coming back up any time soon. Whatever we become in the next 50 years (my hopeful lifetime remaining), it will be the most challenging falls that humanity has yet faced.

I'm a pessimist enough to see it unlikely that a majority of us will make it through the transition alive. I don't believe in our ingenuity that it can flawlessly carry us into the next great time of prosperity.

The dieoff theories are perhaps useless to imagine. People are dying now, people will die later. What's the difference? Well, I guess it's easiest to suggest that the life expectancy will be heading DOWN again. Maybe close to 75 years old now. It was closer to 40 in the past, and it may return there.

How might this happen? I can't say. I imagine common things we can cure/heal now will be again left to natural law. That said, it suggests some personal responsibility is helpful. Now in a time of abundance, we can ROT in our comfy chairs and fast-food, and expect doctors to cure us when things stop working. People who are able to learn the lessons of healthy behavior sooner may be more likely able to make it to older age.

I thought about this a little biking home last night - my body is yet strong and able, but I might not be as capable of pushing myself as I get older, and maybe won't be able to abuse my body without sooner consequences. I thought that just in regards to minor aches and pains that I didn't know 10 years ago.

It is an interesting idea that perhaps "WORKING HARD" now to get ahead may amount to nothing when things come crashing down, while learning good habits now might be the biggest factor in my future. Who can say?

Obviously best to keep many doors open to success and perhaps some combination will do the trick.

The biggest door yet open, but hardest of all is children - I will die, sooner or later. Having my own children won't necessarily be more of a legacy than anything else, but certainly playing the safest game now may lead me to a life where I forget what I'm sacrificing for.

Well, more of a good thought of what risks have the best rewards. I accept children are a pretty good deal when you can raise them. Parents got a good shot of success, at least in America these days.

I just don't know. I'm very grateful for the children in my life now. It can as equally as not seem selfish to bring more children into the world while there's already plenty to share.

I don't yet regret not having children of my own genes. I don't know if I ever will. Probably yet best to end this line of genes - is voluntary childlessness a form of sucide? If so, perhaps it is heroic too...