On the other hand, how cheap was gasoline in Venezuela? Did they not want to drive to Columbia to buy milk?

PDVSA might be earning about 300 million dollars a day if it sells all of the crude it pulls out of the ground for 100 dollars a barrel. That works out to 12 dollars a day per capita. However when you look at things like internal consumption and international deal making it is probably less.

(An inside source told me that PDVSA produces 3.1 million barrels a day, but it is heavy crude and sells for less than a hundred dollars a barrel. One type sells for 85 dollars a barrel, which would make it 10 dollars a day per capita.)

It spends a lot of money on making infrastructure (roads, railroads, factories, housing, re-nationalization, hydro-electric dams...) So money isn´t as free and easy as you might think.

They do have subsidized milk. It comes in through Mercal, the subsidized food stores. I beleive that any milk can qualify for the subsidy as long as its under a certain price and can come from any country.

You can get it every second week at the mega-market. The line is huuuuuge (they put up tents to protect people from the sun and rain, but you have to line up for a long time before you get in under the tent). And often you hear that the milk is gone before you get there. You´re limited to 1 kg per person every second week. Not to mention that its powdered (people here are used to that, but as a pampered north american it makes me say "guakala" in disgust).

A week ago a fairly politically neutral newspaper printed an article saying that Mercal would be able to provide 40% of the national demand. But when the constituional reform goes through they will be able to force companies operating in the country to sell a certain percentage of their production on the local market. The main goal of that is in the aluminum and steel markets, but won´t go amiss in the coffee, chocolate and milk markets either.

Firsthand experiences *especially* from outside the USA, are very valuable. We're really not trying to be US-centric here, it just seems that way.

Hello CrystalRadio,

Recall that I have been pounding away on biosolar mission-critical investing on the Yahoo Finance POT message board.

Therefore: If I was the Chinese Emperor....

I would be spending my massive, trilion dollar Sovereign Investment Fund [SIF] savings on gaining 'hen & NPK eggs' control of Elemental P & K mining resources. If I couldn't do it by peaceful financial means....well, 300 million footsoldiers with wheelbarrows will eventually get it done:

http://www.uni-kiel.de/sino/ar/sk/12a_1970s.jpg

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Don't know China well enough to answer.

It's probably a good thing that I have zero chance to become omnipotent dictator of anything. :-)

I do like their policy to reward traitors with a bullet in the back of the head though.

Converting dollars to Euros is not nearly as easy as it seems. If you are talking about future investments, the only real problem is that it will further drive the Euro up and dollar down. In that case, it would be a matter of time before the Europe and the US have a common position against China: the Yuan goes up, or trade barriers do.

If you are talking about taking China's existing treasury holdings and selling them into the market to buy new Euro demonimated assets, it would involve massive capital losses for China. As soon as they started selling treasuries, their value would plunge. China's average price would be very low. Smart observers would move into Euros in advance of China and so their average purchase price of Euro assets would be high.

Then they would have to try to sell their products to a broke US or an angry Europe. And don't tell me an export oriented economy doesn't care about exporting.

Yes, the US screwed the whole thing up. And yes, the party may be coming to an end, but the damage will be much broader and harder to estimate then you seem to think.

offsetting still enables people to buy gas without the requirement for fuel efficiency because it is without a financial penalty.

Absolutely true, but it provides them with an incentive not to do so. If you can save $500 a year by driving less, that's not a big deal - a cup of coffee a day; if you can save $3000, it becomes much more compelling. It's basically about making it worthwhile for people to conserve, and then letting them go find their own clever ways to do so.

A little regulation - like fuel efficiency standards for new cars - wouldn't go amiss, though. I'm a big fan of mixed solutions.

The US system is designed around cheap fuel and the increases in raw price on its own is hurting badly.

It doesn't sounds like it's hurting that badly - GDP growth is still very strong (3.5-4%, recovering from the slump earlier). There's enough excess money sloshing around in the US that I really think they'd be fine with much higher gas prices, given a couple years to adjust.

It's not that they all don't care about the problem, its that the majority don't know there is even one to begin with. Ask any american on the street about the state of the electrical grid and 90%+ won't be able to give you the correct answer. That many places are just one unexpectedly hot summer or cold winter away from rolling blackouts or load sheding(shutting off homes in favor of comapny's, warehouses, and manufacturing plants). Same goes for the water situation in some parts of the country or gas in other parts of the country.