99.999% of the effects of peak oil are still in the future. And governments subsidize local oil use will have severe problems as the oil price rises and local supply drops.

But first, peak paper money will kill a few governments…

How right you are. A bushel of corn grown in 2009 is expected to cost between $4.00 and $5.00 to produce. Expected return on that same bushel of corn? $3.00…or less.

Other crops project the same no-win senerio.

How long before farmers, and their bankers, buckle under the weight of back to back losses…two years? Three?

Americans foolishly beleive there will always be food, as much as they want, whenever they want it.

But if I were them I’d take heed of what I overheard at a recent gathering of farmers who had just been told it was their moral duty to feed the ever-expanding world population.

“People will starve before I raise a crop at a guaranteed loss.”

When Dick and Jane America are fighting their neighbor over that last loaf of bread on the grocery shelf they’ll be sorry we’re gone, but until then they won’t give agriculture a second thought.

As they say, “You don’t miss the water until the well runs dry.”

And it’s going to be very dry indeed.

A Nebraska Farmwife

Fortunately today’s socialists prefer to keep the market structure intact, using taxation and subsidy for their economic planning. As long as we have functioning markets I imagine the only effect a commodities bull market will have is higher food prices and richer farmers. This will naturally lead to greater investment in farming operations, and there is plenty of under used land (think Ukraine, Kazakhstan, South America…)

As long as some semblance of a market system remains intact globalization will continue to chug along, though certainly more slowly than would have been the case had governments not fouled things up so badly.