Questioning the bigger picture

As Bermudians we are so caught up in our own issues that many often forget that there is a larger world out there.  If you were to ask any random Bermudian on the street what our most critical issues are you would likely hear mostly internal ones: racism, housing, high cost of living, corrupt leadership, overpopulation; the list goes on.  Do we have a tendency to become so caught up in life on our little rock that many fail to consider the bigger picture?

The US Federal Reserve is rushing to slow their fast growing economy and clamp down on a swift rise in cost of living called inflation.  The US Congress and Senate are in the middle of debating energy policy yet are seemingly unable to put together anything with teeth that will shield the US from the looming energy crisis as global consumption of oil increases and production diminishes.

One core issue that is not addressed in Bermuda politics is how do we survive the long term?  Bermuda is heavily oil dependant and yet few realise how dependant we really are.  Our electricity is generated from diesel fuel and while we have pipe dreams of creating underwater turbines, it is largely an unproven technology.  We are a mass importer and at present would be severely unable to sustain ourselves if we encountered any disruption of imports.  We rely on oil powered container lines and airplanes to keep our economy going, our vehicles are oil based as is most of our way of life.

The US faces similar issues on a larger scale and are largely throwing money behind the wrong horses.  Heavy investment in corn based ethanol is having severe implications for a variety of reasons.  Corn prices have been driven up forcing prices of all foods reliant on corn to rise with them.  Farmers have been so quick to jump on the high prices of corn that they've jumped off of other crops like wheat (Wheat prices hit 11-year high), cotton (Cotton Extends Rally to Three-Year High)  and soybeans (Corn, Soybeans Rise).  Corn is a volatile and unreliable crop in comparison to others, requiring a longer growing cycle and better weather.  It also requires more fertilizer and better farm equipment which requires more fuel to power.  If the ethanol gamble doesn't play out very well we could see oil (Oil Rises to Nine-Month High) and food (Cost of Gas and Food Rose Sharply Last Month) prices skyrocket here in Bermuda in the coming months/years because we are so heavily tied to the US economy.

How do we ensure that Bermudian cost of living does not spiral out of control as the growing energy crisis impacts various staples of the Bermudian economy?  Is this even on the books and do our politicians even have the capacity to understand the bigger picture?

Comments

[Burnell]

Right on
The use of vegtable based fuels is an attempt to keep in place the fuel economy that has been so profitable for the power brokers. The future is hydrogen but the powers that be have not figured out a way to control this yet and will continue to block real progress in this field. We are heading to a western oil crisis of the like that will forever change the way we live.

[De Onion]

Um.

The cost of living already has skyrocketed - for us the cost of the base commodities is not nearly as much as the shipping, tax, and necessary business markup. For us the relevant question is more how to ensure that higher costs of living can be borne by families to ensure that their children aren't condemned to a life of poverty.

Also the fed is hardly "rushing" to raise rates. We're all oil dependent, but in real terms prices are nothing special - and could easily head down for the mid term. Intrinsic value of oil is still relatively low.

There's the short and mid-term big picture, and the long-run big picture, and what commodity markets and the global economy do are (within reason) not a big deal to Bermuda, because at least in part our economy has a strong pillar in an uncorrelated asset class (reinsurance).

A bit disjointed, but yeah...