Brad

Could the preferred mode of action be protection of the status quo; stasis based on not rocking the boat so no one has to face the possibility of getting wet?

As for the question of why the USA got the help which the emerging markets didn’t – let’s think about it; invrestors pulling out of the emerging markets kaputt could invest elsewhere considering the relative damage of a domino effect was relatively small compared to the tidal wave the world faces shopuld the USA go belly up- bit like Ahab watching Moby. Schadenfreud takes second place to prsactical concerns, crash and burn is bad for everyone.

2fish:
Make the case to whom? As long as the rest of the world accommodates Chinese behavior that the defacto global norm is that what China is doing is OK.

Hmm, the moral of the story could well be – don’t annoy the creditor?

RebelEconomist

aah, but deficits are a troublesome thing. The problem is that to finance a deficit you have to find a fool with deep pockets but fools are a dying breed. This means that when you find a fool, you are effectively “locked in”, much like microsoft software (sorry, that was hard to resist!) – to maintain that source of finance, you can’t use that $ in ways that will effectively hijack your creditor’s existing investment- not being able to save your creditor’s investment asset is very different from deliberately sabotaging them.

Gasoline Car Math:

Current US Car fleet is about 250 million vehicles about 60% passenger cars and 40% light trucks, SUV etc.

Fleet fuel mileage is about 20MPG

Total Vehicle Miles Traveled per year ballpark 2.8 trillion (The gov published vehicle miles traveled for trucks buses and car and this is around 3 trillion per year so I knocked off some to get to cars)

Total gasoline 390 million gallons per day. (per EIA rounded up actual is less now)

At 20 MPG 7.8 billion miles per day or 365 * 7.8 = 2,847 billion miles per year which is around the estimates from the DOT vehicle miles per year.

GM volt math:
The first 40 miles of driving per charge is on the battery so no gas.
It takes 8KWH of electric to fuel the battery to this level. (the Imiev claims a distance of 100 miles from the same charge but is a much smaller and less powerful car and perhaps not big enough so will stick with the more conservative GM claim)

Operating Cost Comparisons:
Current cost at 20MPG and $4 gasoline is 20 cents per mile.
At 10 cents per KWH (average US retail price) 40 miles is 80 cents or 2 cents per mile.

Energy Efficiency:

1 KWH (kilowatt hour) = 3.6 MJ (mega joules)
.2 KWH = .72 MJ = 1 mile traveled in Volt
1 Gallon Gasoline = 132 MJ per gallon
6.6 MJ per mile in gas car
6.6 / .72 ~ 9 times more efficient energy use in Volt than average car

Electrical energy needed to replace 100% of vehicle miles assuming all electric:

7.8 billion miles per day * .2 KWH / mile = 1.56 billion KWH per day

1GW Power plant produces 1 million KWH per hour or 24 million KWH per day. Put in some down time and you get maybe 20 million KWH per day. Leaving out peak effects it would required about 80 1GW Power Plants to provide enough electrical energy to fuel the entire car fleet assuming it ran on battery power.

Power Plant Costs:
AP1000 (Westinghouse) $1.4 per watt to build (ex regulatory madness) So ballpark $100 billion dollars (few months in Iraq so a no brainer)
Average US operating Costs per nuclear KWH is 2 cents. Of the 2 cents .5 cents is fuel with .2 of the .5 cents being actual uranium cost.

So the math is pretty straight forward.
If you electrify the US car fleet you cut oil consumption nearly in half.

If you simply replace existing cars at the new car run rate it would take about 8 years to replace half the fleet though in reality newer cars are driven disproportionately more to older cars so you would probably replace significantly more than half the gas usage if you replaced half the fleet.

There is very little that actually needs to be done to get this going. The battery technology exists and will only get better. The power generating side also existing and it too is getting better (Westinghouse has announced plans for a 1.7 GW version of the AP1000)

The only real impediments to this process are political. If this was outlined clearly to the American people I believe it would take on a life of its own especially if the car production was moved onshore. If I was running someones political campaign this would be my sole platform. If we cut our oil imports by 9 million BPD over the next 10 years a lot of our foreign policy will take care of itself.

BTW, taken to conclusion around the world this will also end greenhouse gas emission and the whole global warming problem.

I agree (for my version of the argument see http://reservedplace.blogspot.com/2008/04/us-economic-policy-shot-in-foot-2.html): It’s not how big your current account deficit is, it’s how you use it!

At this point China has enough financial leverage to play a part in setting global norms.

bsetser: If china believes that the world’s norms should change to accomodate its exchange rate regime andits desired buildup of foreign assets, it then needs to make the case.

Make the case to whom? As long as the rest of the world accommodates Chinese behavior that the defacto global norm is that what China is doing is OK.

A recent post from Dave Cohen, one of the sharpest Hubbert’s Peak-aware analysts greatly strengthens this case.

Dave points out that today a wind farm construction plan of that scale is simply unfeasible because of PHYSICAL constraints, those of steel production being the foremost.

Which adds further support to the case for bringing suburban McMansion construction to a screeching halt. Like in WWII, when residential construction and car production were stopped to direct all resources to the war effort. Sure enough, 100% of electricity from renewables is unfeasible, but the higher percentage that can be achieved, the better.

MOSCOW, July 28 (Reuters) – Russia has approximately halved to less than $50 billion its exposure to U.S. mortgage lenders Fannie Mae and Freddie Mac , a senior central bank official told Reuters on Monday. “It’s now less than $50 billion,” central bank first deputy chairman Alexei Ulyukayev said, when asked about Russia’s investments in the agencies.
Russia held about $100 billion at the start of 2008. (Reporting by Yelena Fabrichnaya, writing by Robin Paxton)

http://www.reuters.com/article/rbssConsumerFinancialServices/idUSL863553320080728