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High Gas Prices Are Great for the Economy. New Inflation Index: TAI

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Talk of inflation is generally referenced by annual pricing: how much more was paid this year over last: 2%, 5% etc. Other times, it compares the cost of things from 10 to 100 years ago. Then there is the composite from a ‘basket of goods’ that offers the ‘average’ rate of inflation to them as a whole. And always to be heard, we have Fed critics and conspiracy buffs with a special focus on commodity pricing (like gold and oil). They compare prices from decades past against those paid today. Comparisons start at 1,000% for tall tales of doom from banking manipulations or the Federal Reserve’s takeover of US mint (money). Others point to the rate of capital to assets. The more dollars ‘chasing’ the same asset, faster the dollar falls.

We find all these to be outdated – if not entirely misleading. We propose the Cost-to-Income comparisons. This is further indexed against the cost of technology to income. We call this the Tech Affordability Index: TAI (as in Thailand). This offers a much better inflation model whether for economic review, monetary policy or conspiracy banter.

Tech Affordability Index: Cost to Income

Let’s first cover this Cost-to-Income index. Rarely is inflation talked about as a percentage of our income. Why? Income Indexed Inflation seems a more accurate reading or at least, a more useful one. It allows us to better chart spending, investment and lifestyle – as we show below.

Food and gas offer great examples. Let’s track food prices as a percentage of our income. By this measure, it’s actually (much) lower than most any other time in history. Food was significantly more expensive centuries ago though money was apparently ‘worth more’ (and gold much less). Workers of yore paid a larger portion of their income to eat a meal. They paid more through millennia’s of gold (backed) currency. We generally pay much less (by comparison) though we have ‘fiat’ paper money.

Ironically, food has never been cheaper then since Nixon took us off the gold standard.[1] In short, currency valuation is often a secondary factor to food prices. America personifies the point.

Ag Infrastructure vs. Fed

Food technology, distribution efficiencies and gov’t stabilization programs combined into a much larger role than the rate of inflation. Nixon dropped us from the gold standard, but our food technology improved dramatically by then. The 1970’s and 80’s saw the golden age of modern agriculture.

This infrastructure is not accounted for in today’s food index. It’s always about capital infusion rather than food production. This focuses upon the wrong end of food valuation and so distorts forecasts, narrows our options at the expense of more obvious and promising prospects.

We see this in today’s rising food costs. These price jumps have more to do with degrading infrastructure then fed printing (monetary policy).

Several examples:

· Petroleum based agriculture has finally peaked after decades of historic break-through. The age of petro-ag has finally begun its spiral of diminishing returns – at an exponential rate of decline.

· This coincides with billions of people coming online to access the global network of food production - once the sole purview of America.

· Third World countries are now Developing Nations closing off ever larger swaths of arable lands and other cheap production resources.

· Another billion people are making their way into ‘the middle class.’ This means resource intensive foods like meat and high fat diets in place of sustainable grains of traditional staples.

· This is further strained by severe climatic shifts of droughts, floods, fires and freezes that drastically undercut production and distribution even further.

Each one these would represent a setback to America’s food production. Combined, we have the makings of a food crisis unparalleled in modern history. These factors play a much larger role to rising food prices then Fed policies alone.

Let’s say food production held steady or even improved over this last decade. The cost of food would have also held steady (or also fallen against a sliding dollar).

Take milk as an example. Say the dollar lost 50% of its value. Let’s also say diary production doubled (and so its cost also fell by half). The cost to us would be the same though the dollar itself was half its original value. This happened to food prices once we left the gold standard after Nixon. America’s ag-tech dramatically expanded food production lowering food prices just as the dollar began to spike. The same would be true again if wages doubled. In either case, the affordability is not defined solely by the dollars rate of ‘inflation.’

In this example of milk, the falling dollar would only be the first variable. Rising milk production would be the second variable and a counter balance to it. This production off-set is not accounted for in today’s inflation model though it is often the larger factor of a tech based world.

Overlooking production has several liabilities. To begin, it misses all the important trends of production and so remains blind to their long term impact. More ominously, it presents a different set of remedies. If food prices are solely due to capital infusions, the ONLY solution would be reducing our money supply. Hence calls for public controls upon the fed. And yet, nationalizing the Fed (as banking critics call for), would have little impact upon today’s rising food prices. Nor would a stronger currency. Prices won’t be tempered until this food infrastructure has been resolved. Most fed critics miss this because the production side has been overlooked by their fed centric inflation model.[2]

Gas Cheaper in 80’s then 30’s

Gas offers another great example. In the 1980’s, gas was $1 a gallon. Oddly, this was actually cheaper then gas selling for 10 cents - 50 years before. Here’s how. My Grandma’s income was just $35 a week in the 1930’s. Gas cost her 10 cents a gallon back then. By the 1980’s, the weekly salary was $400 while gas was just a dollar a gallon. Gas was actually cheaper for us (than for Grandma 50 years before). Grandma paid 10 cents a gallon, but it took up more of her income then it did our own.

They call this ‘adjusted for inflation.’ That’s the clumsy way of recalibrating cost to income. This measure is used sparingly and often, only as an afterthought. However, this Cost to Income index may also prove less effective than one additional measure we add here.

Cost Per Mile – to Income

Grandma’s story presents us with a more accurate index: Cost Per Mile - to Income. Grandma paid more of her income (at 10 cents a gallon). And…., she also got fewer miles per gallon (then we did). Gas was 1,000% higher by the 1980’s and yet, our higher dollar cost took a smaller bite out of the average income. This was further supplemented with more miles per gallon than Grandma got from her car.

The old inflation model treats this as some kind of oxymoron or economic riddle - a higher number of dollars that still cost us less.

How?

Inflation divided by Technology

We finally cracked this riddle. It’s technology. Some call it ‘productivity,’ but technology sits center to this as well. Productivity is a round-about way of counting technologies improvements.

(Technology simply means things that allow us to do the same thing: better, faster, cheaper, larger, etc.)

This gives us a duel track for indexing inflation. On the one side, we have inflation eating away at the ‘purchasing power’ of the dollar. On the other, we have technology that keeps allowing us greater utilization of that very same dollar. Technology’s offset is overlooked by today’s inflation model. The auto industry gives us a superb demonstration how we can change this.

Tech Affordability Index

Here’s an easy way to incorporate technologies impact. Index technology by the Cost Per Mile as it compares to our income. This gives us a more accurate reference point to begin tracking our ‘true’ cost. It’s also far more useful than saying gas rose 1,000% over 50 years. A 1,000% price jump is fairly USELESS information. Actually, it’s completely misleading. It says we pay a lot more dollars for gas. ..And yet, it fails to show we spend less per mile (of our income).

How to compensate for this: We call it the Tech Affordability Index: TAI. The Tech Affordability Index of the 80’s supplied America with gas that was more affordable to us than the 1930’s. What a surprise this would be to most Americans (from the 80’s).

TAI then combines this Cost-Per-Mile with the Cost to Income. We would now say it took 4 minutes of work (in the 80’s) to go one mile. Or, 15 miles-per-hour-of-work. This could be compared to Grandma’s 7 minutes of work per mile (in the 1930’s). Grandma was getting 8 miles-per-hour-of-work as compared to our 15. Here we have a more accurate picture to the true cost of gas (to us) over the previous 50 years. (Working example)

This context is entirely missed with the present inflation index. This in turn grossly exaggerates liabilities and leaves us with miscued forecasts. Banking conspiracies are a case in point. Most fed critics are breed upon the natural conclusions of today’s inflation model. By their measures, most every year of the last 80 had us months away from complete economic collapse. Their forecasts are mostly based upon the amount of money released into the economy. They have only counted the first variable of our economic equation - inflation. They overlook the second one: technologies offset.

Such critics take credit for predicting a ‘Stock Market crash;’ but they skip the other 80 years of growth they overlooked. You’re bound to be right about a ‘market correction’ at some point over 80 years. That does not make for sound forecasting. They failed to account for the many phases of prosperity in between. The Tech Affordability Index can capture this side of the inflation offsets at long last.

‘Productivity’ Misses Consumer Tech

Today’s inflation model does offer us the ‘Productivity’ scale. Productivity measures some of tech’s impact in work performance, but it ignores much of inflation’s consequence upon consumers. This seems as intentional as it is the natural oversight of a capitalist based system. The greater crime is that it also misses much of technologies finest contributions to consumer budgets as well. Technologies biggest (inflation) offsets are right here on the consumer side. These benefits are entirely overlooked by today’s inflation model.

Worker Productivity had more bearing in a manufacturing based economy. It’s becoming ever more meaningless in a consumption based one. Productivity offers some indications for corporate planning, but it fails consumers miserably. TAI makes up for this. TAI becomes a critical index to understanding a consumption-based and technology driven economy.

Time & Income Demos

Measuring income to tech utilization offers a parallel track against ‘the rate of inflation.’ It gives us a more accurate picture and with it, a new set of options and tools.

Some examples:

· We work til April 15th to cover our taxes. This more clearly defines the impact of taxes upon our lives as it relates to both our income and the time it takes to pay for it. (Saying taxes cost 2,500% over the last 80 years is all but useless information on a practical consumer level.)

· The first two weeks of our paycheck goes to rent. This is a more accurate snapshot of housing cost to our daily lives as it pertains to both our income and the time it takes to earn it.

· We have the ever notorious shopping madness of Black Friday in October. Retailers are said to break-even on this day. They covered all costs for the year. Any money made thereafter is ‘all’ profit and so, stores offer their BIG SALES EVENTS: 25%; 50% and even 75% Off.[3]

Tech Beats Inflation

The best example of tech utility cost maybe in today’s high gas prices. Today’s high prices can run $4 against that $1 a gallon from the 1980’s. These prices are certainly more expensive than Grandma paid (as a percent of her income in the 1930’s). We do indeed pay more (per mile), and yet, it still cost less once compared with those of a hybrid.

Hybrids reset the Cost Per Mile once more. Hybrids cost less per mile then we paid in the 1980’s. We see hybrids hitting 300 miles per gallon.[4] That’s a penny a mile. Grandma was paying roughly 1 cent a mile[5] even before being ‘adjusted for inflation.’

Technology is a powerful offset against inflation and often, far more so then Fed (capital) policies. Technology can leapfrog ahead inflation and does so regularly. In the case of gas, hybrids are doing this now.

Hybrids outperform inflation by double (maybe triple). In other words, if gas prices doubled tomorrow, a hybrid would leave you paying less per mile than Grandma did (as compared to her income in the 1930’s). Put simply, technology is the overriding variable to inflation rather than the cost of gold alone. Welcome to America’s real minting press: US Innovation and technology.

Better Cost Per Mile is only the first of many hybrid benefits:

· The high cost of fuel has become the incentive for tech upgrades. Manufacturers and buyers are committing ever larger sums to hybrids.

· Technology is getting cheaper by the day. An ever growing number of drivers are able to afford it.

· This gives us a step for step replacement against oil inflation

· Tech is replacing foreign dependency with domestic technology

· Reducing oil imports (which use to run 20% all foreign imports).

Hybrids now afford us a very different dynamic. Today’s high gas prices have an inverse impact upon the economy. We no longer face the same disruptions from spiking oil prices as the nation once did. Instead, it spurs us to spend billions on investment. As a final bonus, this market hands us the next generation of jobs and innovation.

Technology has hit that tipping point wherein each successive oil spike is countered with the next wave of re-investment. This loops into lowering tech cost ever further giving us broader market utilization. Higher the price = greater the investment for the next generation jobs and innovation.[6]

The economics of expensive oil have now become the exact opposite of the 1970’s that so plagued Pres. Carter. Tech has crossed this extraordinary milestone and yet, it’s dreadfully understated by media, politics and academia alike. Why? It starts with our old inflation model. This old inflation index is so poorly equipped for understanding the economics of this new world and all the added factors at play upon it. This is but one of many such liabilities.

This maybe best personified by conspiracy buffs. They begin their narrative in measuring gas prices against those of 1930’s. It leaves us with these harrowing forecasts and desperate policy prescriptions:

· nationalize the fed or

· revert to the gold standard –

· preferably both, they say

· US dollar is going to collapse any day now (for the last 50 years).

On the other side, we have neo-cons calling for trillions in military spending for a ‘stronger presence’ in the Middle East – with the hope of cheaper oil through war and intimidation.

Compare these policies to our simple prescription for more hybrid investment. Nationalizing the fed, reverting to gold or further militarization of foreign policy would have a much smaller impact then hybrids could offer us.

A mere 1% the cost of military intervention of the Gulf Wars may allow hybrids triple the impact to American drivers (or so our solar industry would suggest - below). Rather than ‘cheaper’ gas, hybrids hand us a whole lot more miles per gallon.

Tech Replacing Colonialism

Tech utility represents one of history’s greatest power shifts of the modern era, if not millennia. Put simply, tech may become the official replacement to colonialism. A story not yet final or recognized.

Colonialism was built upon ever greater access to global resources. In this old paradigm, prosperity was largely decided upon by a nation’s access to commodities. It was a commodity based world; primarily won and secured through military might. Hence, the ever expanding military budgets and obsession with standing armies.

A market based, tech driven system replaces the role of military conquest with market gains won with hot, new products. Consumer and industrial tech are the guns of choice in this new paradigm. Products decide how much territory is lost or won in the power struggles of the modern day. Meanwhile, commodities are measured more by ones utility of them rather than our access to them. Put simply: Those with commodity riches or larger militaries are losing out to those winning over market share and building the latest gadgets and cutting edge tech.

A commodity rich country with a powerful army like we see of both Russia and Iran will lag those that are more tech and product proficient - like Japan and S Korea. A better example maybe the USA with its massive military but dwindling manufacturing base against China’s commercial rise that now translates into ever expanding influence far beyond its military might. It’s the dawn of a new era. Commodity utility will reign over its producers. Market reach offers greater influence over those of military might. Prosperity is decided upon production and product rather than colonial establishments. It’s a new paradigm the US has not yet fully comprehended. Yes, our military budget is based upon an outdated paradigm from the old imperial world that is as outdated as the kings before them.

Behold the 21st Century where guns and gold are no longer the baseline to power and prosperity. In this new world; commercial reach, tech savvy and marketing brawn are increasingly the deciding factor to wealth and influence. The soldier of this war is the worker and the victory is had through hot products. The Tech Affordability Index brings this new world into focus for the first time.

Herein presents TAI’s greatest contribution. TAI automatically tends towards this natural progression for gas optimization in place of today’s push for cheaper oil via militarization. It’s more than just recalibrating foreign policy. It gives us this whole new paradigm. This tech option becomes obvious only by transposing the old inflation model with TAI. We will find this true for a host of other industries as well.

The stunning success of our solar power industry gives us a superb example. Pres. Obama backed the industry with about $20 billion in federally guaranteed loans. Around $2 billion was lost when a number of these companies went bankrupt. Solyndra made national headlines. Republicans held this high to embarrass the President and condemn liberal policy. And yet, both they and Democrats overlooked the glory of this failing.

Solar prices imploded almost 75% in 3 years. They were selling for just 25% their original price. Solyndra could no longer compete at these give-away prices. This price collapse is a testament to solar’s grand success. Technology had reduced the cost of energy by nearly 80%. How both parties failed to see this leaves me stumped. Imagine; affordable, self-sustaining energy at long last. What could be a greater policy victory? It speaks to the power of technology and the critical role of gov’t’s investment in it. It holds a host of other such benefits. They too were overlooked (in part because of this old world inflation model).

Other benefits of solar:

· Collapsed the price of solar panels by 80% in less than a half decade.

· Solar has since created billions in new industries (manufacturing to instillation)

· Saved us trillions more in petroleum dependency over the coming decades.

· Transferred over hundreds of billions from Middle East oil producers and converted it into new equity for American homeowners.

(Property prices spike 20% to 50% in the 6 weeks it takes to install them. This equity comes out of the pockets of dictators abroad. It’s a very modern answer and a market led response to energy dictators.)

· Added taxes for gov’t and more business for contractors and banks (equity loans).

· Foreign policy priorities and military budgets reset along with it.

· Tax-payers got trillions in direct returns on their couple billion in solar ‘investment.’ Such is the nature of technology.

Let’s compare this $2 billion cost against those of the last 2 Gulf Wars. We spent $3 to $5 trillion defending ‘American Interest’ in the Middle East. (Yes, of course, we were there for oil.) Ironically, the wars left us paying twice the price for gas.

War (or at least the Gulf Wars), have a dreadful rate of return as compared to technology (at least as it pertains to hybrids and solar panels). This may only be true now that hybrid technology has reached this level of performance. From this point onwards, war (for oil) may likely prove a very poor substitute compared to tech investment. And yet, such wars seemed so critical by this old inflation model. Conspiracies and Neo-cons are similar in this way. Their policy prescriptions are victims of this old inflation model.[7]

Gold’s Cost to Technology vs. Dollars Cost to Gold

Solar demonstrates another and much larger advantage of tech over commodities. Commodities will eventual hit upon a phase of escalating prices. It’s the nature of any finite resource against rising consumption. Technology is just the opposite. Prices fall in direct relation to technologies expansion. [8]

This recast technology from one of indulgence, performance or utility and into the official answer to a world of fast diminishing resources. A commodity’s utility is multiplied by technology. Greater the technology, greater the multiple of a commodity’s utility.

This creates a direct and symbiotic relationship between the commodity and its tech counterpart. The real value of a commodity is not simply in how many dollars it takes to buy it, but also in how much more utility technology provides it. It’s therefore accurate to measure the commodity by our cost to than purchase its Tech Utility. And so, the measure of inflation is not solely in how many dollars it takes to buy gold, but rather, how much gold it takes to buy its corresponding technology.

How much gold did it take to purchase that same 1 mile of Grandma’s income as compared to a mile from a hybrid today? That’s where you find the true measure of inflation and the actual price of gold to the dollar. Our dollar can purchase a whole lot more miles via technology than Grandma ever could. Maybe calling this the Grandma Index would be a more fitting name. Welcome to the Grandma Index.

i-Phone Cost in Gold: Yesterday vs. Today

The technology of an i-Phone use to take up a whole room and cost millions (or many bars of gold). Today, the same gold can buy millions of such i-Phones. Or, you can get the same i-Phone for just a half ounce of gold rather than requiring several bars of it.

The same is true of solar panels (home energy), hybrids (transportation energy), super-foods (nutrition), e-books (education/communication), etc. Simply go through each industry and see the cost of gold to its tech counterpart. Then off set that cost against the time it takes the average worker to afford that technology. That’s your true rate of inflation for that commodity.

Each commodity would be indexed against its corresponding tech developments. Our index may have several more steps over the old one, but it leaves you with greater accuracy and a corresponding policy platform not possible with today’s inflation model.[9]

Hybrid Mile Cost in Gold

Let’s use hybrids again. They give us better miles per gallon, but most can’t afford it.

How much would $50 billion allow us to drop that cost?

($50 Billion: 1% cost of Gulf Wars.)

Solar’s $19 billion gov’t investment dropped the price 80% in 5 years. Would a similar investment do the same for hybrids?

By this scale of investment, hybrids would then also become affordable to the average buyer.

Solar’s total investment was $19 billion, but the actual ‘cost’ was just the $2 billion lost to bankruptcy. That’s 10% the total investment. Let’s say hybrids proved the same. A $50 billion investment would cost us $5 billion. That’s 0.01% the cost of the Gulf Wars. That’s a penny to every 100 dollars spent on war.

Tech Investments vs. War offers us the greatest contrast of cost efficiency. We have finally reached a point wherein tech investment can be 99% to 99.99% more cost effective then war. A new era has dawned upon us wherein ‘give peace a chance’ may find its new motto with ‘give tech a chance.’

Old Index: Middle East War: $5 TRILLION. Cost of gas = 10 cents a mile.

(If this war cost was added into the price of gas, it would likely double or triple that cost. Working figures)

TAI Index: Hybrids: $5 Billion. Cost of gas = 1 cent a mile.

These are the questions and policy leads we beget of TAI as compared to the old inflation model that otherwise lead to calls for (Gulf) Wars or nationalizing the fed. TAI’s effectiveness can be measured in the savings and efficiencies from this old brand of policy proposals against those of tech.

TAI hands us new options with a host of advantages:

· a fraction of the upfront cost (of war),

· multiple savings to the consumer (10 cents vs. 1),

· better for the economy (more jobs),

· stronger industry (tech enhanced)

· self-sustaining (cut out oil-dictators)

· falling cost (as tech cheapens)

Food Example in notes.[10]

Dollar to Utility vs. Commodity

This brings us to one of the big, big bonuses. A commodity’s rate of utility to the average American now resets the value of the dollar to this new standard of living. So though the dollar itself may buy a smaller portion of a given utility, the American worker can afford a far greater utility of it. That’s a wordy way of saying that affordable hybrids will up the dollar’s value – even if we ‘borrowed’ or ‘printed’ money to make it happen.

Remember, the value of the dollar is set by what the consumer can afford to buy with it. Greater utility means greater value to the consumer. That is all it takes to make the dollar worth more. That is why today’s ‘Productivity’ Index on worker performance is such a poor measure of inflation. It misses the consumer’s rate of tech utility.

This greater utility purchasing power is something of a back door to resetting the dollar’s value. We may have more dollars in the market place and yet, we can still buy more utility with it. Tech not only allows us to leapfrog ahead inflation, it also allows the dollar to do so as well. This little discovery will completely reset economic and foreign policy formulas.

This is the story of the US dollar ever since we left the gold standard. We keep dumping hundreds of billions of dollars into circulation and yet, we have found new technologies that allow us to buy more utility with less value. That is not just the story of the American consumer, but the American dollar too.

The other way to cut inflation is not simply in printing fewer dollars, but more so, through investing in more technology offsets to commodity inflation. This means hybrids not only provide new jobs and economic efficiencies, but it also impacts the value of the dollar in direct portion to that utility’s affordability.

Hybrids are not only more affordable then war, but they have a much larger inflationary offset then war. The other way of saying this is that printing up more dollars to invest in technology will have the opposite effect of Pres. Bush doing so for war. War gave us inflation. Technology will give us prosperity and a stronger dollar.

Gold -:- Technology x Income = Inflation

Here’s TAI’s Formula:

‘Adjusted for Inflation’ means:

Inflation – Gold -:- Technology x Income = Tech Affordability Index: TAI.

Step by step of TAI Equation:

Gold -:- Technology = would be the Cost Per Mile by a Hybrid

X Income = how much income it takes to buy a mile of performance from a hybrid car

- = Minus the amount in Gold to buy a mile of hybrid (technology) against the rate of inflation.

(It cost less this year then last).

Technology is the big reset button of commodity consumption. Asset pricing is no longer a stand-alone measure as we see of today’s inflation model. Skipping over tech’s offsets leaves us with a skewed view of our economic status and so leading us down the road of doom. It’s a muddled directional guide at best. How than, can they offer any effective monetary prescription, accurate projections or meaningful recourse?

TAI is far more telling of our present economic state and the growing promising dynamics in play upon the horizon. It offers a new picture very much different from those confined to the old world view. Greater accuracy translates directly into easier prescriptions for it starts upon the magic of the modern world: technologies growing opportunities over yesterday’s barriers long past. Welcome to the Tech Affordability Index: TAI.


[1] There was an initial price spike after Pres. Nixon dropped gold-back dollars. That inflation shifted as we transitioned into the ‘petro dollar.’ There was a whole lot more oil then gold and so the USA could print up a whole lot more money without the same inflation. There was always a new oil supply to back our latest wave of dollars. Nor was Gold consumed in such massive amounts like we see of oil. In contrast, oil has intensive demand from every country that consumed millions of barrels each and every year. This created far more demand for oil then we could ever get from gold. Simply put: The petro-dollar bought America trillions worth of value far beyond our own economic outputs. The big surprise: the petro-dollar of the ‘big bad’ banks and oil cartels created the basis of American prosperity over this last Century.

This discussion is for another article, but it presents a different context to the role of the oil and banking industries. America created the market for oil and then cashed- in upon that demand, first through sales and then as the foundation to our petro-dollar. The dollar then allowed other countries to print far beyond their own gold-reserves. The currency of these other countries was now based upon an ever expanding petro-dollar. This in turn provided hundreds of billions of added currency value for other countries to also issue against. Countries could develop based upon US loans and purchases –all possible from the oil reserves that the dollar was printed upon. Oil not only gave the US a gold-like backing, but it also served as the conduit for all other paper currencies that were tapping these same oil values - via the dollar. Yes, America went into other countries for oil, but the value they took in oil was based upon the added value the US created for that oil. It did not exist before the America created that market value. The USA did not leave those countries with less by taking their oil, but provided a whole new platform of wealth via the dollar’s oil backed money along with the larger value for the country’s oil reserve. America gave them this double value, first with the US dollar against the country’s own currency. This was on top the new found oil value the US was buying and selling for and from them – starting at 10 times oils original price. This banking and oil cabal did more then give us history’s cheapest energy source for decades. They also gave us history’s greatest ‘backed’ commodity for our own currency. Oil WAS so much better then gold. Oil was a major factor of our superpower status and ended up becoming the basis of all the worlds modern economy for the whole of the 20th Century. Simply extraordinary.)

[2] The controlling interest behind banks and the fed have themselves built a Federal Reserve Centric system (inflation or otherwise). They thought they (the feds and banks) sat center of all social economic issues. They have failed to realized that the new world order is not them, but technology, and it has left them as a second, third and in some cases, even a forth variable of influence upon our economy. They are far behind the curve on this for a growing number of industries and other areas of the economy. That is why they have an ever diminishing impact upon the economy no matter how much money they print up. They are third and forth party rather then sitting center as they use to. TAI resets our system upon the primary factor against inflation today – technology.

[3] Christmas ‘Super Sales’ highlight the difference of a time based index versus a capital one. Stores already covered all their cost (of inventory etc.) in the first 11 months of the year. The profit is then counted by the total sold in the last 6 weeks. They no longer count profit; nor even losses. A TV can sell for 20% below cost. Why? The cost was already covered in the first 11 months. The more sold, the more ‘profit’ to the bottom line – irrespective of profit margins. Imagine: selling at a 20% loss and still making a profit. How? Time scaled accounting versus price (or profit) based inventory. TAI will offer these kinds of insights, tools of planning and economic revamping over the old model of accounting inflation.

[4] Depends upon model and conditions such as driving less than 70 miles per day - which represents about 80% of all driving and so they only need to use gas the other 20% of the time or 300 miles per gallon.

[5] At 10 cents a gallon for 15 miles per gallon.

[6] Gov’t investment should be geared to building enough (technology) infrastructure to get an industry to this tipping point wherein market demands can now be offset with market investment of the countering technology. Hybrids have finally reached that point. Gov’t can and should play a decisive role in jumpstarting each industry into this ‘tipping point.’

[7] Stabilizing the currency was often the answer, but more often, things were related to Middle East ‘peace.’ Middle East politics became ground zero to ‘American interest’ that was best served by military might. This culminated with the two ‘Gulf Wars’ that were considered to be more oil based then moral or even geo-politically motivated. $2 to $5 trillion later, gas prices are up rather than down with federal deficits bearring the most obvious scars to a host of war cost liabilities.

[8] Each generation of tech is based upon (in part) how much more utility it can gain over its previous counterpart. Successive generations of cars allow us better gas millage until you hit a new tech leap such as hybrids. In the case of petro agriculture, it’s an oil commodity based technology and so they are now hitting that wall of diminishing returns as you get from any commodity based platform. Oil is hitting its exponential price hike. As such, the next trend in food tech will likely come from non-petroleum based production techniques. It appears that organic and small farm models would be examples to the kinds of new found tech for they are the least oil dependent.

[9] If housing is more expensive, Asians, as an example, do better given they share living space as compared to the more independent Caucasians. In other words, family is the technology offset to expensive housing. If it were food related, Cosco would be a deciding difference. If its fuel, hybrids would be. Technology is a critical comparable for it talks to capacity and individual empowerment. A smart phone has taken over a great deal of a secretaries functions of 50 years ago allowing the average person nearly as much organizational efficiency as a CEO of the 1980’s. This translates into reaching larger goals then our social economic counterpart from the 80’s. This is as true in business as it is in academia, the arts and many areas of lifestyle. Assuming we pay more in food and fuel, we find it offset in reaching our educational, vocational or personal goals. (Housing per square feet with modern equipment vs. the bulky furniture of decades past. Variety of food vs. cost alone.)

[10] We will find this once more with Food. Petro-agriculture provided production wonders that are now past their prime. It takes ever larger investments for ever smaller returns. This means that most new proficiencies are likely to come from outside petro-agriculture. That is best summarized in Organic produce (the definition of non-petro ag).

The same is also true of corporate agriculture. It’s another area of food infrastructure that has past its prime. It too has an accelerating rate of diminishing returns. Here again, the solution is most likely going to be found outside the corporate biz model. That would be small local farmers and home gardens. They are the likely counterpart to petro-corporate agriculture. Food prices would now be rated by the cost for an organic ‘Victory Garden.’ The small, home garden may be the new hybrid of food production.

The food Index would be further measured to a cost per ounce of protein and calories to income. A growing number of areas would find organic home gardens offering more protein and calories as compared to corporate petro ag. The ever rising cost of petroleum will continue to separate the price advantages between the two. These are the kinds of policy considerations TAI will lead us to.

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