Da Energy Prices Plastic

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High Energy Prices High Energy Prices......................................................................................................................... .............1 1NC Efficiency Shell (1/2).................................................................................................... ......................3 1NC Efficiency Shell (2/2).................................................................................................... ......................4 Internal Link – High Prices – Key to Efficiency............................................................................... ...........6 Impact – Efficiency – Solves Global Warming............................................................................. ...............7 Impact – Efficiency – Solves Global Warming............................................................................. ...............8 Impact – Efficiency – Solves Global Warming............................................................................. ...............9 Internal Link Booster – Consumers Spend Money............................................................ ........................10 Internal Link – Consumer Spending – Key to Economy.................................................................... ........11 1NC Electronics Shell (1/2).......................................................................................................... .............12 1NC Electronics Shell (2/2).......................................................................................................... .............13 Uniqueness – Electronics – Down Now................................................................................................. ....14 Internal Link – High Prices – Key to Innovation in Electronics................................................................. 15 Internal Link – Electronics – Key to Economy.............................................................................. ............16 1NC Plastic Innovation Shell (1/2).......................................................................................... ..................17 1NC Plastic Innovation Shell (2/2).......................................................................................... ..................18 1NC Bioplastic Shell.......................................................................................................... .......................20 Internal Link – High Prices – Key to Bio-plastic Development........................................................ .........21 Internal Link – High Prices – Key to Bio-plastic Development........................................................ .........22 Internal Link – High Prices – Key to Bio-plastic Development ...................................................... ..........23 Internal Link – High Prices – Key to Bio-plastic Development........................................................ .........24 Internal Link – High Prices – Key to Bio-plastic Development........................................................ .........25 Internal Link – High Prices – Key to Bio-plastic Development........................................................ .........26 Internal Link – High Prices – Key to Innovation in Plastic Industry....................................................... ...27 Internal Link – High Prices – Key to Innovation in Plastic Industry....................................................... ...28 Internal Link – High Prices – Key to Innovation in Plastic Industry....................................................... ...29 Internal Link – High Prices – Key to Innovation in Plastic Industry....................................................... ...30 Impact – Landfills – Global Warming.................................................................................................... ....31 Impact – Bio-plastics – Solve Oil Dependence................................................................................. .........32 Impact – Landfills Module (1/2).................................................................................................... ...........33 Impact – Plastic Solar Panels Module (1/2)............................................................................... ................35 Impact – Plastic Solar Panels Module (2/2)............................................................................... ................36 Internal Link – High Prices – Increased Consumer Costs............................................................... ...........37 Internal Link – High Prices – Increased Consumer Costs............................................................... ...........38 Impact – Bio-plastic – Turn: Global Warming........................................................................... ................39 Impact – Bio-plastic – Can’t Accommodate..................................................................... .........................40 Impact – High Prices – Turn: Russian Corruption............................................................. ........................41 Internal Link – High Prices – Key to Innovation................................................................... ....................42 Internal Link – High Prices – Key to Innovation................................................................... ....................43 Internal Link – High Prices – Key to Innovation................................................................... ....................44 Internal Link – Innovation – Key to Industry Survival........................................................ .....................45 Impact – US Slowdown – China Module (1/2).............................................................................. ............46 Impact – US Slowdown – China Module (2/2).............................................................................. ............47 Internal Link – High Prices – Going Green Doesn’t Help............................................... ..........................48 Internal Link – High Prices – Don’t Drive Innovation....................................................................... ........49 Impact – High Prices – Pakistan Turn (1/2)............................................................................ ...................50 Impact – High Prices – Pakistan Turn (2/2)............................................................................ ...................52

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1NC Global Economy Shell (1/3)................................................................................................... ...........53 1NC Global Economy Shell (2/3)................................................................................................... ...........54 1NC Global Economy Shell (3/3)................................................................................................... ...........55 Uniqueness – Gold – Investment Now.................................................................................................... ...57 Uniqueness – Gold – Investment Now.................................................................................................... ...58 Uniqueness – Gold – Investment Now.................................................................................................... ...59 Uniqueness – Gold – Investment Now.................................................................................................... ...60 Uniqueness – Gold – Investment Now.................................................................................................... ...61 Uniqueness – Gold – Investment Now.................................................................................................... ...62 Uniqueness – Gold – Investment Now.................................................................................................... ...63 Uniqueness – Economy – On the Brink........................................................................................ .............64 Uniqueness – Economy – On the Brink........................................................................................ .............65 Internal Link Booster – Gold.................................................................................................... .................66 Internal Link Booster – Gold.................................................................................................... .................67 Internal Link Booster – Gold.................................................................................................... .................68 Internal Link Booster – Gold.................................................................................................... .................69 A2: Increased Supply = Inevitable Price Collapse – Takes too long.......................................... ................70 A2: Weak Economy = Inevitable Price Collapse – Empirically Denied.................................................... .71 A2: Backstopping – OPEC won’t........................................................................................... ...................72 1NC Russia Shell (1/3)............................................................................................................ ..................73 1NC Russia Shell (2/3)............................................................................................................ ..................74 1NC Russia Shell (3/3)............................................................................................................ ..................75 Uniqueness – Russia Gold Reserves Strong Now........................................................................... ...........76 Uniqueness – Russia Gold Reserves Strong Now........................................................................... ...........77 Impact Ext – Russian Economic Collapse goes Global.............................................................................. 78 Link – Oil prices key to Gold prices.......................................................................................... ................79 Link – Oil prices key to Gold prices.......................................................................................... ................80 Link – Oil prices key to Gold Prices................................................................................................ ..........81 Link – Oil prices key to Gold Prices................................................................................................ ..........82 Link – Oil prices key to Gold prices.......................................................................................... ................83 Link – Oil prices key to Gold prices.......................................................................................... ................84 No Internal Link – No Correlation....................................................................................................... ......85 Turn – Elections.................................................................................................................................... .....86

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1NC Efficiency Shell (1/2) A. Uniqueness – High energy prices driving energy efficiency now The Economist, the premier online source for the analysis of world business and current affairs. May 8, 2008. (“The elusive negawatt,” http://www.economist.com/displaystory.cfm?story_id=11326549) By and large,

energy intensity is, not surprisingly, lower in countries where electricity prices are higher. It is no Among American states, for every cent per kilowatt-hour by which prices exceed the national average, energy consumption drops by about 7% of the average. George David, the boss of United Technologies, a conglomerate that makes air-conditioners, lifts and aircraft engines, among coincidence that Denmark has both high power prices and an energy-efficient economy.

other items, argues that higher fuel and power prices are the only motor needed to drive energy efficiency.

B. Link – cross apply from the affirmative – they lower energy prices C. Internal Links

1) Energy efficiency means consumers save more money U.S. Department of Energy: Energy Efficiency and Renewable Energy. December 2000. (“Report Confirms Benefits Of Energy Efficiency Programs,” http://www.eere.energy.gov/state_energy_program/project_brief_detail.cfm/pb_id=42)

The Massachusetts Division of Energy Resources (DOER) released its report, "1998 Energy Efficiency Activities in Massachusetts." Major findings include: (1) Participants save an estimated $19 million annually in electricity costs. (2) The cost to conserve electricity will be 60 percent less than the cost to buy it over the productive life of the efficiency measures. (3) Average annual participant savings for low-income customers was 13 percent, all other residential customers 6 percent, commercial customers, 6 percent and industrial customers 7 percent. (4) Energy Efficiency measures reduced emissions of harmful pollutants.

2) Key to consumer spending AmosWEB, an Internet-based resource of economics. 2008. (“Induced consumption,” http://www.amosweb.com/cgibin/awb_nav.pl?s=wpd&c=dsp&k=induced+consumption)

Consumption expenditures are induced because people are prone to spend the income they have. If they have more income, then they are inclined (that is, induced) to spend more. If they have less income, then they spend less. Induced consumption simply means that income is the most important factor affecting consumption expenditures. Other factors are important, but income is at the top of the list. People cannot buy if they have no income.

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1NC Efficiency Shell (2/2) 3) Consumer spending key to US economy – other sectors are failing to contribute American Society for Quality 2007 (ASQ is the world's leading authority on quality. With more than 100,000 individual and organizational members, this professional association advances learning, quality improvement, and knowledge exchange to improve business results, and to create better workplaces and communities worldwide. “Consumer Spending Growth Likely to Remain Strong as Customer Satisfaction Hits All-Time High,” http://www.asq.org/media-room/pressreleases/2007/20070220-acsi.html, 02/20/07, Accessed 07/21/08)

Customer satisfaction with the goods and services that Americans buy reached an all-time high in the fourth quarter of 2006, according to a report released today by the University of Michigan’s American Customer Satisfaction Index (ACSI). The Index climbs to 74.9 NN ARBOR, Mich. (February 20, 2007) –

on the ACSI’s 100-point scale, up 0.7% from the previous quarter, and up almost 2% from the previous year. This is the highest score the Index has had since its first measure in 1994 (74.8). CSI has consistently predicted future consumer spending

and is an indicator of financial performance at both the company and industry level. The latest ACSI data suggest that satisfied consumers will continue to prop up the economy, driving consumer spending growth of between 3.5% and 4.1% for the first quarter of 2007. “In view of these results, it is not surprising that the consumer continues to lift the economy despite the housing slump,” said Professor Claes Fornell, director of the University of Michigan’s National Quality Research Center, which compiles and analyzes the ACSI data. The economy may not be coming in for a soft landing. With the confluence of a number of favorable economic factors, there may be no landing at all. Rising wages, little inflation, and falling unemployment combined with

higher customer satisfaction and strong consumer confidence suggest the trend in spending growth will continue to drive economic growth,” said Prof. Fornell. Every fourth quarter, ACSI measures customer satisfaction for the retail and financial services sectors and e-commerce. Improvements in customer satisfaction occur across the board with 9 of the 13 industries measured in the fourth quarter showing improvements.

D. Impact – US economic slowdown causes global nuclear war Nyquist 2005 [Jeffrey, Columnist for Financial Sense and WorldNetDaily and renowned expert in foreign policy and geopolitics, February 4, “The Political Consequences of a Financial Crash,” http://www.financialsense.com/stormwatch/geo/pastanalysis/2005/0204.html, Accessed 07/20/08]

Should the United States experience a severe economic contraction during the second term of President Bush, the American people will likely support politicians who advocate further restrictions and controls on our market economy – guaranteeing its strangulation and the steady pauperization of the country. In Congress today, Sen. Edward Kennedy supports nearly all the economic dogmas listed above. It is easy to see, therefore, that the coming economic contraction, due in part to a policy of massive credit expansion, will have serious political consequences for the Republican Party (to the benefit of the

an economic contraction will encourage the formation of anticapitalist majorities and a turning away from the free market system. The danger here is not merely economic. The political left openly favors the collapse of America’s strategic position abroad. The withdrawal of the United States from the Middle East, the Far East and Europe would catastrophically impact an international system that presently allows 6 billion people to live on the earth’s surface in relative peace. Democrats). Furthermore,

Should anti-capitalist dogmas overwhelm the global market and trading system that evolved under American

Nationalistic totalitarianism, fueled by a politics of blame, would once again bring war to Asia and Europe. But this time the war would be waged with mass destruction weapons and leadership, the planet’s economy would contract and untold millions would die of starvation.

the United States would be blamed because it is the center of global capitalism. Furthermore, if the anti-capitalist party gains power in Washington, we can expect to see policies of appeasement and unilateral disarmament enacted. American appeasement and disarmament, in this context, would be an admission of guilt before the court of world opinion.

Russia and China, above all, would exploit this admission to justify aggressive wars, invasions

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and mass destruction attacks. A future financial crash, therefore, must be prevented at all costs. But we cannot do this. As one observer recently lamented, “We drank the poison and now we must die.”

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Internal Link – High Prices – Key to Efficiency High energy prices mean energy efficiency Richard G. Newell et al. 1998. (Newell is a Gendell Associate Professor of Energy and Environmental Economics and received a PhD from Harvard. “The Induced Innovation Hypothesis And Energy-Saving Technological Change,” National Bureau of Economic Research, the nation's leading nonprofit economic research organization. Sixteen of the 31 American Nobel Prize winners in Economics and six of the past Chairmen of the President's Council of Economic Advisers have been researchers at the NBER. The more than 1,000 professors of economics and business now teaching at universities around the country who are NBER researchers are the leading scholars in their fields. NBER Working Paper Series, http://www.nber.org/papers/w6437.pdf)

It follows from Hicks' induced innovation hypothesis that rising energy prices in the last two decades should have induced energy-saving innovation. We formulate the hypothesis concretely using a product-characteristics model of energy-using consumer durables, augmenting Hicks' hypothesis to allow for the possibility that government efficiency standards also induce innovation. Through estimation of characteristics transformation surfaces, we find that technological change reduced the total

capital and operating costs of air conditioning by half and water heating by about one-fifth. Although the rate of overall innovation in these products appears to be independent of energy prices and regulations, the evidence suggests that the direction of innovation has been responsive to energy price changes. In particular, energy price increases induced innovation in a direction that lowered the capital cost tradeoffs inherent in producing more energy-efficiency products. In addition, energy price changes induced changes in the subset of technically feasible models that were offered for sale. Our estimates indicate that about one-quarter to one-half of the improvements in mean energy-efficiency of the menu of new models for these products over the last two decades were associated with rising energy prices since 1973. We also find that this responsiveness to price changes increased substantially after product labeling requirements came into effect, and that minimum efficiency standards had a significant positive effect on average efficiency levels. Nonetheless, a sizeable portion of efficiency improvements in these technologies appears to have been autonomous.

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Impact – Efficiency – Solves Global Warming Energy efficiency can solve global warming The We Campaign, a project of The Alliance for Climate Protection -- a nonprofit, nonpartisan effort founded by Nobel laureate and former Vice President (and elected president) Al Gore. 2008. (“Enhanced Energy Efficiency,” http://www.wecansolveit.org/content/solution/enhanced_energy_efficiency/) Solving global warming isn't only about installing majestic wind turbines and glistening solar energy systems in the desert. One

of the cheapest, most effective, and safest ways to reduce global warming pollution is to increase our energy efficiency. In fact, by using energy efficiency technologies and today's know-how, we could cut our global warming pollution by a third.

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Impact – Efficiency – Solves Global Warming Energy efficiency can delay global warming John Armstrong and Henri-Claude Bailly. 1990. (“Energy Efficiency: A Strategy For Delaying Global Warming,” Energy Conversion Engineering Conference, 1990. IECEC-90. Proceedings of the 25th Intersociety , vol.4, no., pp.381-385, http://ieeexplore.ieee.org/iel4/5796/15509/00716520.pdf?isnumber=15509&prod=CNF&arnumber=716520&arSt=381&ared=385&arAuthor=Ar mstrong%2C+J.%3B+Bailly%2C+H.) Such an

enormous and fast change necessitates that action be taken now to mitigate the threat of global warming. Because about 60 percent of the contribution to global warming comes from energy production and use, energy conservation, and hence efficiency, is the most immediately available and politically acceptable response to this threat. And while most of the present concentrations of atmospheric CO, result from fossil fuel combustion in industrialized nations, developing countries will account for 48 percent of the world's primary energy use by the year 2025. It is thus imperative that both developed and developing countries work together to improve energy efficiency and meet the challenge presented by global warming.

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Impact – Efficiency – Solves Global Warming Energy efficient homes fight global warming Distributed by PR Newswire on behalf of National House-Building Council, a council that inspects and insures UK houses against malfunctioning. May 28, 2002. (“Energy efficient new homes help fight global warming,” http://www.prnewswire.co.uk/cgi/release?id=85777)

domestic energy use makes up approximately a quarter of all the country's carbon dioxide emissions. The good news is that energy efficiency in homes is improving each year as builders help create modern houses that meet high efficiency targets. Statistics show that

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Internal Link Booster – Consumers Spend Money Almost every dollar Americans get is spent Mudry, economist at SF reserve bank, 2008 (“American and Japanese Personal Consumption and Saving Habits,” http://economics.about.com/cs/moffattentries/a/us_and_japan_5.htm, Accessed 07/21/08) Personal savings as a percentage of disposable income is described in column 5. U.S. personal savings rates have experienced a sharp decline over the period. From the 70's through the mid-eighties, U.S. citizens saved steadily around 9%-11% of their disposable income. From the mideighties to the present there has been a drastic decline, with the sharpest decrease coming during the mid-nineties on, dropping below 5% and almost coming to a complete stop at 1% in 2000. This is strange considering what an economic boom the United States was experiencing in the mid-nineties. The trend seems to be the more disposable income earned, the less as a percentage is saved. This surely hurt many Americans from 2001 until the present considering the drastic turnaround our economy has experienced. This data shows the average American's marginal propensity to consume has increased. The marginal propensity to consume refers to how much of every additional

dollar earned will be spent rather that saved. (Mankiw, 538) The benchmark for America had been .9, however this data shows that number has increased since the nineties and from 1999-2001 has averaged almost .98! That translates to for every additional dollar earned by Americans from 1999-2001 almost 98 cents of it was spent rather than saved. This is a startling figure. Consumer spending indicators like this surely keep the economy as a whole booming, however in slower times like these, a lack of savings of that magnitude can have drastic effects on personal finances.

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Internal Link – Consumer Spending – Key to Economy Consumer spending key to economy – other sectors are failing to contribute Knowledge at WPCarey 2007 (Knowledge@W. P. Carey is a bi-weekly online resource that offers the latest business insights, information and research from a variety of sources. These include analysis of current business trends, interviews with industry leaders and W. P. Carey faculty, articles based on the most recent business research, book reviews, conference and seminar reports, links to other web sites and so on. “Continued Consumer Spending Key to U.S. Economic Growth,” http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1521, 12/05/07, Accesed 07/21/08) Spotlight on consumers Recent economic data have come in strong, Wyss notes. Real Gross Domestic Product rose 3.9 percent in the second quarter and payrolls increased by 166,000 in October. The third quarter numbers do reveal a troubled housing market, but

this has been counterbalanced by improvements in the U.S trade deficit. Looking ahead, Wyss says, the biggest variable is the behavior of the American consumer. "So far the consumers have been hanging in there, supporting the economy in the good old-fashioned American way of living beyond their means," he says. Whether consumers will continue to spend is the big question. "Consumers are getting squeezed -- between higher mortgage costs, mortgage payments, falling home prices, and rising energy costs," Wyss says. "I don't think it's going to stop them, but it's going to slow them down a bit." Glassman and Wyss have both taken a hard look at the rapidly rising price of oil and what it might mean for the U.S. economy. Wyss says he expects the price of oil to go down but has little confidence in the prediction. "If I've discovered anything over the last few years it's that I'm really bad at forecasting oil prices -- and so is everybody else," he says. The good news, according to Glassman, is that although the price of oil has quadrupled, the effects have been contained. "The world wants more oil so oil is going to be more expensive -- but it's not driving other prices up because we have a lot of spare capacity," he says. Retailers and manufacturers have found ways to keep consumers spending. "We find that the more I've got to pay at the pump, the more Wal-Mart has to offer concessions or the more the auto industry has to make concessions," Glassman says. "This is not exactly your classic inflation problem." All eyes on the Fed Wyss sees some inflation risk, linked to the dollar's slide, which he expects to continue at least into the first half of 2008. "It raises directly the price of imported goods and also it gives domestic manufacturers some cover to raise their prices," he says, adding, "Inflation is not at the top of our list right now. What's closer to the top of our list unfortunately are the problems of the financial markets." The Federal Reserve appears ready to set aside concerns about inflation and attack the problems of financial markets, according to the analysts. The board's vice chairman Donald Kohn said in a recent speech that the panel was prepared to be "flexible and pragmatic" in dealing with the credit crisis -- a statement that caused many analysts to believe rate cuts were coming. "When you have moments like that you say to yourself, 'Well, it's dangerous, it's uncertain, but maybe if the Fed recognizes it in time and is willing to be aggressive, it can defuse much of the danger,'" Glassman says. Wyss predicts the Federal Reserve will cut interest rates twice in the coming months. "That will help. Whether it will help enough, we'll have to see," he says. Bottom Line: The subprime mortgage collapse and problems in credit markets have created an air of uncertainty around the U.S economy despite strong second and third quarter data this year. Economic growth in other countries has helped the United States withstand the troubles in credit markets and other areas. Growing economies elsewhere have a greater demand for U.S. goods and services. Consumer spending is a key to U.S. economic growth. Consumers are being squeezed by higher oil prices and mortgage costs, and a slowdown in consumer spending is possible. Even with the recent oil price hikes, inflation does not appear to be a pressing issue now. The Federal Reserve appears prepared to cut interest rates to ease the current credit problems.

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1NC Electronics Shell (1/2) A. Uniqueness – High energy prices are driving electronics companies to develop new energyefficient technologies. Reuters. July 5, 2008. (Reuters is the world's largest international multimedia news agency. “High oil prices spur demand for low energy electronics,” http://www.reuters.com/article/technologyNews/idUSSEO15076620080706?feedType=RSS&feedName=technologyNews&sp=true, by Rhee So-eui)

With oil at around $145 a barrel and electricity costs jumping, consumers are becoming preoccupied with keeping down their power bills. Electronics makers that develop energy efficient product lines and market them effectively to customers may get an edge in a gloomy global economy, firms say. "Going green is not only ecofriendly but crucial for business," said Kim Jik-soo, a spokesman at LG Electronics Inc. "This goes beyond just products, extending throughout the development and manufacturing process." From washing machines that use steam instead of hot water, to fridges that use low energy compressors, to low power computer screens, electronics firms are furiously developing energy efficient products and heavily promoting lines already on the market that use less electricity than competitors' brands. B. Link – cross apply from the affirmative – they lower energy prices C. Internal Links

1) Innovation is key to industry survival Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety 2007 (The Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety is Germany’s official sector for environmental affairs. “Environment – Innovation – Employment,” http://www.eu2007.de/en/News/download_docs/Juni/0601-U/035Arbeitspapier.pdf, 06/03/07, Accessed 07/15/08)

Environmental performance plays an increasingly important role when it comes to competitiveness, too. Today, the demand for ecologically sound and resource-efficient goods is growing fast. This is largely due to sharp increases in the price of energy and raw materials, as well as the increasing investment necessary to sustain environmental standards. The demand for environmentally friendly products and services is set to increase still further in future. As globalisation continues and ever more technologically advanced countries compete over growth, employment and resources, the ability to serve green markets will be a crucial factor in maintaining competitiveness. For European industry, ambitious environmental protection policies are essential to unlock emerging international markets.

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1NC Electronics Shell (2/2) 2) Electronics industry is key to the economy Business Wire, the global market leader in commercial news distribution. April 2, 2008. (“Trade Fuels $1.4 Trillion Consumer Electronics Industry, New CEA Report Finds,” http://findarticles.com/p/articles/mi_m0EIN/is_2008_April_2/ai_n24968637) ARLINGTON, Va. -- Fueled by international trade, the

consumer electronics (CE) industry is poised to generate $1.4 trillion in direct business activity in 2008, while directly employing more than 4.4 million Americans, according to a new study released today by the Consumer Electronics Association (CEA[R]). Burgeoning international trade is helping grow the sector, driving 14 percent of the CE industry's total output and 16 percent of its total employment. The study, conducted by PricewaterhouseCoopers, LLP, defined the consumer electronics industry as the manufacture of electronics products, the creation of services and content for these products, and the distribution of these products, services and content throughout the economy.

Beyond its significant direct impact on the economy and job market, the CE industry also spurs billions of dollars in additional indirect economic benefits in the form of industry purchasing and consumer spending in related industries. The CE sector also helps to support millions of additional jobs in related industries. Taken together, the CE industry will directly and indirectly produce $2.6 trillion in output, contributing $1.3 trillion to the economy in 2008 and supporting 15.4 million jobs in related industries, researchers estimated. In addition to tracking national trends, the study also assessed the impact of trade on a state-by-state basis. A copy is available at www.CE.org.

D. Impact - US economic slowdown causes global nuclear war Nyquist 2005 [Jeffrey, Columnist for Financial Sense and WorldNetDaily and renowned expert in foreign policy and geopolitics, February 4, “The Political Consequences of a Financial Crash,” http://www.financialsense.com/stormwatch/geo/pastanalysis/2005/0204.html, Accessed 07/20/08]

Should the United States experience a severe economic contraction during the second term of President Bush, the American people will likely support politicians who advocate further restrictions and controls on our market economy – guaranteeing its strangulation and the steady pauperization of the country. In Congress today, Sen. Edward Kennedy supports nearly all the economic dogmas listed above. It is easy to see, therefore, that the coming economic contraction, due in part to a policy of massive credit expansion, will have serious political consequences for the Republican Party (to the benefit of the

an economic contraction will encourage the formation of anticapitalist majorities and a turning away from the free market system. The danger here is not merely economic. The political left openly favors the collapse of America’s strategic position abroad. The withdrawal of the United States from the Middle East, the Far East and Europe would catastrophically impact an international system that presently allows 6 billion people to live on the earth’s surface in relative peace. Democrats). Furthermore,

Should anti-capitalist dogmas overwhelm the global market and trading system that evolved under American

Nationalistic totalitarianism, fueled by a politics of blame, would once again bring war to Asia and Europe. But this time the war would be waged with mass destruction weapons and leadership, the planet’s economy would contract and untold millions would die of starvation.

the United States would be blamed because it is the center of global capitalism. Furthermore, if the anti-capitalist party gains power in Washington, we can expect to see policies of appeasement and unilateral disarmament enacted. American appeasement and disarmament, in this context, would be an admission of guilt before the court of world opinion.

Russia and China, above all, would exploit this admission to justify aggressive wars, invasions and mass destruction attacks. A future financial crash, therefore, must be prevented at all costs. But we cannot do this. As one observer recently lamented, “We drank the poison and now we must die.”

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Uniqueness – Electronics – Down Now Electronic industry down now – low demand USA Today. July 16, 2008. (“Housing slump suppresses appetite for electronics,” by Michelle Kessler, http://abcnews.go.com/Technology/Story?id=4418507&page=1)

The tough real estate market isn't just affecting home sales — it's also prompting consumers to buy fewer TVs, digital cameras and other electronics. Experts weigh in both sides of the housing market -- buying and selling. Sacramento, Phoenix, Tampa and Detroit were the four metropolitan areas with the biggest drops in consumer-electronics spending in the fourth quarter of 2007, compared with the previous year, says a study out Monday from researcher NPD. The study examined retail sales in the 40 largest urban areas in the USA. Those four cities were also among the top 10 major markets for declines in housing prices, says the National Association of Realtors. Sacramento posted the biggest drop in both electronics sales and housing prices. Nearly every area with a decline in electronics sales also had falling home prices, says NPD analyst Stephen Baker. That's a big change. Unlike many other products, electronics sales have weathered all downturns in recent years. U.S. sales rose 72% from 2000 to 2007 — a period that included the dot-com bust, says the Consumer Electronics Association, a trade group. People began to think of electronics "like plumbing and air

conditioning — something you had to have," says Baker. But now signs of weakness are appearing. "You see a lot more tire-kicking: customers coming in but not really buying," says Leon SooHoo, owner of Paradyme Sound & Vision in Sacramento. Customers "are much more choosy," he says.

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Internal Link – High Prices – Key to Innovation in Electronics High energy prices are driving innovation in the electronics industry Military & Aerospace Electronics Magazine, providing daily international business and industry-related news. July 25, 2007. (“Global fuel cell demand to reach $8.5 billion in 2016,” http://mae.pennnet.com/articles/article_display.cfm?article_id=300834)

Commercial demand for fuel cell products and services -- including revenues associated with prototyping, demonstration, and test marketing activities -- will expand nearly sixfold to $2.5 billion in 2011 and reach $8.5 billion in 2016. Despite the small size of fuel cell technology's current commercial footprint, a number of viable markets are expected to develop over the next 10 years as technological advances and economies of scale help drive costs down to competitive levels. High energy prices and environmental concerns will also contribute to fuel cell commercialization activity and market gains. As additional products enter the marketplace, commercial sales will make up CLEVELAND, Ohio, 25 July 2007.

an increasingly large share of total fuel cell expenditures. However, it will take time for fuel cells to penetrate markets now served by other power sources, and commercial demand will continue to account for less than half of all fuel cell spending in 2016. These and other trends are presented in "World Fuel Cells," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

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Internal Link – Electronics – Key to Economy Electronics industry is key to US economy AT&T Bell Laboratories, which consists of some of the world's best scientists and engineers who conduct research relevant to AT&T. September 1992. (“SEMICONDUCTORS: A KEY TO THE NATION’S COMPETITIVENESS,” Electronics Manufacturing Technology Symposium, 1992., Thirteenth IEEE/CHMT International. By Troutman, W.W. and Barrington, C.G., http://ieeexplore.ieee.org/iel3/5088/13880/00639914.pdf) Semiconductors lie at the heart of this nation’s industrial might and national security. Semiconductors are the building blocks of electronic products; and most industries, whether they manufacture products or deliver services, depend on electronics for their competitive advantage. Global competition in semiconductors and electronic products is fierce. But, the rewards are great.

Electronics, a $750 billion global enterprise, employs large numbers of people with a broad set of skills. It is not fortuitous that many governments have been quick to realize the economic implication of a strong electronics sector and have set about developing policies and practices to both develop and nurture their domestic sectors. This paper traces key market trends in both semiconductors and electronics, and root causes are offered to explain the loss of US. market share in the various product areas. Linkages will be identified between semiconductors, electronic products and the broad set of industries that depend on electronics. And, an argument will be set forth that strength in these three sectors depends on strength in each component (the chain being as strong as the weakest link). Finally, the proposals of the National Advisory Committee on Semiconductors, aimed at assuring robustness in semiconductor and electronic product markets, will be sketched. These proposals address a number of key issues, such as: improving industrial investment in plants and equipment, stimulating high-volume electronics manufacturing, and renewing the commitment to high- quality manufacturing skills. These proposals are broad enough that, if acted upon, they would greatly enhance the global competitiveness of many US. industries. The Case for Semiconductors The U.S. semiconductor industry is a critical base for the hightechnology industry that, in turn, is vital to the country’s well- being. Land, labor, and capital once determined the economic strength of nations. Today, technology must be added as a fourth contributor. The standard of living and security of industrial nations have

been linked to the success of high-technology industries, including aircraft, computers, telecommunications, and consumer electronics. To maintain its prosperity, the United States (both private industry and the various, relevant government departments and agencies) must take the necessary steps to assure that a process is in place that enables a continuous creation of a competitive advantage in such industries. High-technology industries are critically linked to each other and to their underlying technologies by a number of customersupplier relationships. Customers must stimulate suppliers with abundant leading-edge systems applications and a market large enough to support investment in the suppliers’ people, technology development and manufacturing facilities. Suppliers must be easily accessible and willing to work closely with customers to provide timely delivery, improve their products, and to be responsible as the customers’ needs change. Suppliers must also offer state-of-the-art performance, cost, and constantly improving quality in their products and services. There is a critical customer/supplier feedback loop that must be healthy and interactive. A weakness in any link of these hierarchical relationships can undermine the whole industry. Electronics is a key link in the economic chain. Almost every product of high-technology

industry is dependent on electronic systems for its production or operation. The U.S. electronics industry is, today, the nation’s largest employer. Semiconductors, in turn, are the vital components of electronics.

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1NC Plastic Innovation Shell (1/2) A. Uniqueness – High oils prices spurring innovation in a rapidly expanding plastic industry FoodProductionDaily.com 2006 (FoodProductionDaily.com provides daily news on food processing and food packaging. “ADM jumps into biodegradable plastic market,” http://www.foodproductiondaily.com/news/ng.asp?id=65825-adm-biodegradable-polymer, 02/15/06, Accessed 07/14/08) Archer Daniels Midland (ADM) has jumped into the growing market for biodegradable plastic, saying yesterday it will start production of polyhydroxyalkanoate (PHA) in a joint venture with a biotechnology company. Over the past year packaging suppliers have

been introducing various forms of biodegradable plastics made from a variety of plants, in the main corn, based on projects that there will be a growing demand for environmentally-friendly packaging driven by consumers and recycling regulations. With the rise in oil prices, the cost of petroleum based plastics have come more into line with that of the biodegradable natural alternatives. Some companies are predicting that the market for the alternative plastics will grow by about 20 per cent a year. ADM and Metabolix, a biotechnology company that has developed a form of PHA, will begin production of what they call a "new generation of high-performance natural plastics" at one of ADM's plants in North America. The plant was not identified. The companies said PHA plastics had "excellent shelf life and resistance even to hot liquids, greases and oils." The plant will have an initial annual capacity of 50,000 tons per year. The plastic will be produced under a joint venture with Metabolix, a biotechnology company that has developed a form of PHA. "As the world's demand for petroleum continues to increase, ADM believes that this facility is a positive step towards producing renewable plastics that offer the global marketplace an alternative to traditional petroleum-derived plastics," the company stated. PHAs are polymers are synthesized in the bodies of bacteria fed with glucose, such as corn sugar, in a fermentation plant. The process produces a range of plastics that are durabile during use, but are compostable and biodegradable. ADM's plant will produce PHA natural plastics that have a wide variety of applications in products currently made from petrochemical plastics, including coated paper, film, and molded goods. In 2004, ADM and Metabolix announced a partnership to commercialize the company's PHA technology. ADM is one of the world's largest processors of soybeans,

Hikes in the oil price has made biodegradable polymers more attractive as a packaging material. Food packagers last year faced price hikes of between 30 per cent to 80 per cent for conventional plastics due to the increased cost of petroleum. With the increases some bioplastics products reached full price competitiveness with the traditional oil-based packaging. In 2005, sugar and starch were less expensive raw materials than mineral corn, wheat and cocoa. The Illinois-based company also produces soy meal and oil, ethanol, corn sweeteners and flour along with food and feed ingredients.

oil. Over the past year a number of major packaging manufacturers have released biodegradable products. One is Amcor, which has teamed up with Plantic Technologies to develop a biodegradable, flexible plastic packaging for confectionary. Another is US-based NatureWorks, part of Cargill. NatureWorks is one the main mover behind the biodegradable packaging trend with its introduction of polylactic acid (PLA), a corn-based polymer. Others include Danish-based Danisco, which announced this year that it has produced a plasticiser from hardened castor oil and acetic acid. It is colourless, odorless and completely biodegradable. Another company competiting in the biodegradable packaging market is UK-based Stanelco. The company markets a natural, biodegradable food packaging based on starch, called Starpol 2000. Germany-based BASF has also announced it will launch a biodegradable plastic based on renewable raw materials in a bid to meet what it believes will be a growing demand for environmentally-friendly packaging. The company's Ecovio plastic is made up of 45 per cent PLA from NatureWorks. The other component is BASF's existing biodegradable plastic Ecoflex, which is derived from petrochemicals. BASF forecasts that the world market for biodegradable plastics to grow by more than 20 per cent per year. Companies like US-based Naturally Iowa have been using PLA for packaging products like organic milk. Retailers like Delhaize in Belgium and Auchan in France have also been testing PLA for various food packaging.

B. Link – cross apply from the affirmative – they lower energy prices C. Internal Links 1) Innovation is key to industry survival Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety 2007 (The Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety is Germany’s official sector for environmental affairs. “Environment – Innovation – Employment,” http://www.eu2007.de/en/News/download_docs/Juni/0601-U/035Arbeitspapier.pdf, 06/03/07, Accessed 07/15/08)

Environmental performance plays an increasingly important role when it comes to competitiveness, too. Today, the demand for ecologically sound and resource-efficient goods is growing fast. This is largely due to sharp increases in the price of energy and raw materials, as well as the increasing investment necessary to sustain environmental standards. The demand for environmentally friendly products and services is set to increase still further in future. As globalisation continues and ever more technologically advanced countries compete over growth, employment and resources, the ability to serve green markets will be a crucial factor in maintaining competitiveness. For European industry, ambitious environmental protection policies are essential to unlock emerging international markets.

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1NC Plastic Innovation Shell (2/2) 2) The chemistry/plastic industry is key the US economy – its output is the size of China’s economy Andrew Liveris, CEO and Chairman of the Dow Chemical Company, 2006 (No title, http://news.dow.com/speeches/20061030_liveris.pdf, 10/30/06, accessed 7/14/08) Surely the indispensable part of this indispensable nation is the power of its mighty economy. For it is the American economy that underpins the international system that has guided this unprecedented era of stability and prosperity ... and that holds so such promise for humanity’s future. And that’s what worries me ... because today I believe the American economy is under siege, and though I do not dismiss the many geopolitical threats at large in the

here I will cite the threat to this country’s most underappreciated economic pillar: the manufacturing sector, which includes something near and dear to my heart: the 2 trillion dollar (global) chemical and plastics industry, as well as the 50 billion dollar Dow Chemical Company. But please, don’t misunderstand. I am not worried about my world, I believe the greatest threat to the United States – and its world leadership – is internal, not external. And

industry’s and my company’s future per se. We will continue to produce essential products and continue to do well. What concerns me is this question: Will the chemical industry and other manufacturers continue to be a part of the American economy? I think that is a crucial question for policymakers in this country. I am well aware there are those who believe that manufacturing is part of the “old economy” ... that making things is a low-value proposition. Many cite the decline of manufacturing as a percentage of GDP ... which 50 years ago accounted for 25% of GDP and today is about 12%. In fact, I had the dubious pleasure of being at a meeting in Washington not long ago where I listened to a banker hold forth on why manufacturing isn’t very important at all ... I think his exact words were “manufacturing has been deemed irrelevant.” I had to bite my tongue until it just about bled.

“Irrelevant” is an odd characterization for a sector whose output is $1.5 trillion ... about the size of the entire economy of China and equivalent to the 8th largest economy in the world. It is an odd characterization when you consider that manufactured goods make up over 60 percent of U.S. exports. And it is a particularly odd statement when you consider that manufacturing directly employs more than 14 million people in the United States, and that one in six of all private sector jobs depends on manufacturing. Odder still when you consider that manufacturing productivity consistently outpaces productivity growth in other sectors. Since 1987 manufacturing productivity

productivity is the single most important determinant of higher wages and benefits, it is not surprising that manufacturing jobs pay on average 25 grew by 94 percent, 2 ½ times faster than productivity for the rest of the economy. And considering the fact that

percent more than non-manufacturing jobs ... in my industry, for example, an average job pays about $70,000 ... about half again the median household income in the United States. Finally, “irrelevant”

is an odd characterization for a sector that is responsible for over 70 percent of non-governmental R&D. D. Impact - US economic slowdown causes global nuclear war Nyquist 2005 [Jeffrey, Columnist for Financial Sense and WorldNetDaily and renowned expert in foreign policy and geopolitics, February 4, “The Political Consequences of a Financial Crash,” http://www.financialsense.com/stormwatch/geo/pastanalysis/2005/0204.html, Accessed 07/20/08]

Should the United States experience a severe economic contraction during the second term of President Bush, the American people will likely support politicians who advocate further restrictions and controls on our market economy – guaranteeing its strangulation and the steady pauperization of the country. In Congress today, Sen. Edward Kennedy supports nearly all the economic dogmas listed above. It is easy to see, therefore, that the coming economic contraction, due in part to a policy of massive credit expansion, will have serious political consequences for the Republican Party (to the benefit of the Democrats). Furthermore, an economic contraction will encourage the formation of anti-

capitalist majorities and a turning away from the free market system. The danger here is not merely economic. The political left openly favors the collapse of America’s strategic position abroad. The withdrawal of the United States from the Middle East, the Far East and Europe would catastrophically impact an international system that presently allows 6 billion people to live on the earth’s surface in relative peace. Should anti-capitalist dogmas overwhelm the global market and trading system that evolved under American leadership, the planet’s economy would contract and untold millions would die of starvation. Nationalistic

totalitarianism, fueled by a politics of blame, would once again bring war to Asia and Europe. But this time the war would be waged with mass destruction weapons and the United States would be blamed because it is the center of global capitalism. Furthermore, if the anti-capitalist party gains power in Washington, we can expect to

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see policies of appeasement and unilateral disarmament enacted. American appeasement and disarmament, in this context, would be an admission of guilt before the court of world opinion. Russia and China, above all, would exploit this admission to justify aggressive wars, invasions and mass destruction attacks. A future financial crash, therefore, must be prevented at all costs. But we cannot do this. As one observer recently lamented, “We drank the poison and now we must die.”

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1NC Bioplastic Shell A. Uniqueness – High gas prices are fueling bioplastic competitiveness, which is the key sector for spillover Dairy Reporter 2006 (Dairy Report provides daily news on dairy industry and dairy equipment. “Biodegradable packaging moving into the mainstream,” http://www.dairyreporter.com/news/printNewsBis.asp?id=65744, 10/02/06, Accessed 07/17/08) Over the past year packaging suppliers have been introducing various forms of biodegradable plastics made from a variety of plants, in the main corn, based on projects that there will be a growing demand for environmentally-friendly packaging driven by consumers and recycling regulations. Some companies are predicting that the market will grow by about 20 per cent a year. Harald Kaeb, chairman of Berlin-based International Biodegradable Polymers Association & Working Groups (IBAW) says the increasing interest in the technology is due in part to the improved functionality of bioplastics and their growing market share. "Moreover, the risks created by imports and increasing costs for fossil raw materials play as much a role as climate change, whose negative effects are becoming increasingly pronounced," Kaeb said in an analysis of the sector published by the organisation. "In consequence the plastics industry is putting more and more emphasis on the use of renewable raw materials." In general, the price difference between materials made of renewable raw materials and standard plastic materials has decreased considerably Food packagers last year faced price hikes of

between 30 per cent to 80 per cent for conventional plastics due to the increased cost of petroleum. With the increases some bioplastics products reached full price competitiveness with the traditional oil-based packaging. In 2005, sugar and starch were less expensive raw materials than mineral oil. Kaeb believes that with improved manufacturing processes and cost-competitiveness of the future, the long-term perspectives for bioplastics are promising. The number of manufacturers of bioplastic products is worldwide strongly increasing and more competition will give further momentum to the development of the sector, he stated. In some important areas, technical developments have allowed bioplastic materials to achieve the quality of conventional products made of mineral oil. "A new trend is the combination of commercialised biomaterials, thus creating new functional characteristics and special benefits," he stated. Other development efforts are focused on multi-layer films with altered characteristics that could for example improve the barrier characteristics of packaging materials. "In view of the long development cycles for plastics that usually take 20 to 30 years from invention to widespread application, we must look for alternatives in time," Kaeb stated about the opportunities being presented to the fledgling bioplastics sector. The bioplastic industry also faces considerable risks, since bioplastics still only have niche markets. Kaeb says experts estimate that today's bioplastics have a potential to capture about 10 per cent f the present plastic market of 40 million tonnes in Europe. This figure includes packging for food and other consumer goods "In order to exploit this potential, investments of several billion euros will be required, especially for building larger manufacturing plants," he stated. Another factor will be legislative support for the sector. Compared to renewable energies and biofuels, there is less support for products made of renewable raw materials, Kaeb noted. One of the first measures to promote the technology is the exemption given to biopackaging in the German Packaging Ordinance of May 2005. The association is asking for further measures that will pave the way for a widespread market introduction," he stated. According to Kaeb, the bioplastics industry is at the leading edge of

a development that will spread to other oil-dependent industry sectors in the coming decades. B. Link – cross apply from the affirmative – they lower energy prices C. Impact – Turns the case – bio-plastics key to solve global warming Trends in Japan 2003 (Trends in Japan is a site that introduces the latest developments in Japanese business, entertainment, fashion, science, society, sports, and more. “Eco-friendly material has a bright future,” http://web-japan.org/trends/science/sci031212.html, 12/06/03, Accessed 07/17/08)

When ordinary plastics made from petroleum are burned, they release the carbon dioxide contained in the petroleum into the atmosphere, leading to global warming. Bioplastics, however, are made from plants that grow by absorbing carbon dioxide from the atmosphere, so when they are burned, the level of carbon dioxide in the atmosphere does not change. Because petroleum is not used, emissions of carbon dioxide are cut, and a contribution is made to the fight against global warming. In addition, bioplastics are biodegradable. If something made of bioplastic is buried in the ground, microorganisms will break it down into carbon dioxide and water. Since this material is environment-friendly, interest in bioplastics is high, and the materials have been the subject of research and development both in Japan and abroad. Bags made of bioplastic can be thrown away and buried with other biodegradable garbage, and there are a growing number of other uses for the materials as well, including artificial fibers, medical products, and construction materials.

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Internal Link – High Prices – Key to Bio-plastic Development High oil prices are forcing companies to look to bio-plastics International Herald Tribune 2007 (The IHT is the global edition of the New York Times, which has won 92 Pulitzer Prizes. “A business that’s growing,” 11/03/07, Accessed 07/17/08 through Lexis-Nexis) For Dennis McGrew, chief executive of NatureWorks, the high price of crude oil and natural gas is not unwelcome news. NatureWorks, formerly Cargill Dow, produces a plastic made from plant stalk, not fossil fuel. McGrew, a former plastics executive at Dow Chemical, says that as prices for fossil fuels soar and as the environment becomes an ever larger concern,

ecofriendly plastics are becoming increasingly competitive, though they still remain a niche market. That bioplastics are trending upward is clear. In the past month, a number of large chemical concerns have increased their commitment to market segment, including Braskem, the largest Brazilian petrochemical group, and Dow Chemical. In September, Plantic Technologies of Australia announced that DuPont would market its starch-based resins and sheet plastics in North America, a new market for a company previously limited to selling in Europe and Australia. Investors looking for an early upside in this emerging market have their work cut out for them, as the near-term profit potential is uncertain. 'I think what you are seeing is a more pull-driven event, where a lot of different

companies in materials and packaging are looking to green up their own operations using alternatives to hydrocarbon plastic materials - hence the pull on the Dows and DuPonts of the world,'' said Ben Johnson, lead chemistry industry analyst for Morningstar, the equity research company. Robert von Goeben exemplifies that market pull. Early next year, von Goeben, who went from the world of venture capitalism to become a toymaker in San Francisco, is scheduled to launch Green Toys, a line of plastic toys including a 17-piece tea set that would sell for upwards of $20, made from bio-based renewable plastics. Though he admits that bioplastics are

a ''challenging technology'' in that their quality is not always consistent, von Goeben sees a pull in the consumer market for plastic goods, toys included, that do not wreak havoc on the environment. He said his risks were reduced because he was able to step into an established product category. ''We don't have to convince people to buy a tea set,'' he said. ''When you can apply new technology to existing demand - or in our business, an existing play pattern - that's where you have a win.''

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Internal Link – High Prices – Key to Bio-plastic Development High oil prices spur interest in bio-plastic British Plastics and Rubber 2006 (British Plastics and Rubber is the monthly magazine for polymer processors in the UK. “High oil prices spur growing interest in bioplastics,” http://www.polymer-age.co.uk/archive95.htm, 02/01/08, Accessed 07/14/08)

Last year's increases of 30 - 80 per cent in the prices of oil-sourced plastics has given a fillip to producers and users of bio-sourced plastics. The bioplastics and biodegradable polymers industry association IBAW says that the price difference between materials made of renewable raw materials and standard plastic materials has decreased considerably, and in 2005, sugar and starch were less expensive raw materials than mineral oil making the long-term perspectives for bioplastics 'promising'. The association signed up a record number of new members last year and noted that these included not only manufacturers and processors of bioplastics, but major brand owners and agricultural feedstock companies as well. It has

not been purely the rocketing cost of oil that has made bioplastics more attractive. IBAW says that in technical terms they are now equalling the performance of some conventional materials. Main areas of interest have been in the packaging, agriculture and disposables sectors, but last year some manufacturers of mobile phones, computers and audio/video equipment revealed developments in the use of bioplastics, with a growing trend to use bioplastics in blends with other conventional materials to reduce their overall consumption of oil-based plastics. Other developments are in multi-layer films with altered characteristics that could improve the barrier characteristics and other properties of packaging materials. But there is still a way to go. IBAW says that bioplastics have

potential to replace about 10 per cent of the present 40 million tonnes of plastics consumed in Europe, but to exploit this potential would need investments of 'several billion Euros'. There is, however, the chance to avoid farming set-aside programmes in Europe and instead to use the land to produce 'millions of tonnes of plastics'.

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Internal Link – High Prices – Key to Bio-plastic Development High oil prices are forcing a switch to bio-based plastic Sustainable Business 2006 (SustainableBusiness.com provides global news and networking services to help green business grow, covering all sectors: renewable energy, green building, sustainable investing, and organics. “Plastic from Plants, Not Petroleum,” http://www.sustainablebusiness.com/index.cfm/go/news.feature/id/1363, 08/14/06, Accessed 07/15/08)

Government facilities, colleges and universities, and corporations are jumping on the bioeconomy bandwagon by switching from petroleum-based plastic take-out items to compostable products made of renewable resources at their cafeterias. While greening lunches on the run might not seem like front-page news, these smaller efforts are paving the way for a larger transformation to a zero-waste green revolution, fed by corn and sugar. One of the major barriers to switching from petroleum-based plastic to biobased to-go products has been cost. But with oil prices rising, and the market for biobased products growing, many expect the price gap to narrow. Traditional foam "to-go" containers are made of polystyrene, while the clear plastic containers and bottles we see everywhere are made of polyethylene terephthalate (PET), polystyrene or polypropylene -- all petroleumbased plastic polymers. The ubiquitous paper coffee cup, and the paper take-out containers we see everywhere, also use a petroleum-based plastic coating to make them waterproof. According to Green Seal, in 1997, 120 million pounds of foam polystyrene hinged containers were used in the U.S. food packaging industry and each American throws away an average of 100 polystyrene cups each year. Green Mountain Coffee Roasters recently estimated that last year Americans used 14.4 billion hot paper cups (placed end-to-end, this many cups would circle the world 55 times). Not only do these plastic cups and take-out containers create garbage that ends up in the landfill for centuries to come (a polystyrene cup has an expected lifetime of over 500 years), they are made from non-renewable petrochemicals, and styrene, a key ingredient of polystyrene, is a suspected carcinogen and known hazardous substance.

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Internal Link – High Prices – Key to Bio-plastic Development High energy prices spur innovations in plastic – there’s now a more effective plastic made out of soybeans Andrew Liveris, CEO and Chairman of the Dow Chemical Company, 2006 (No title, http://news.dow.com/speeches/20061030_liveris.pdf, 10/30/06, accessed 7/14/08)

Against this backdrop, manufacturers like Dow are doing the best we can. We have improved our energy efficiency. We have raised prices as much as our customers will allow. We’ve shut down inefficient plants. We have also looked to innovation. For example, we have developed a plastic made from soybeans that, for many uses, like mattresses, is a better product than a plastic made from petroleum. So by no means do we think that fossil fuels are the ultimate answer. They’re not. But until we, as a country, can improve the scale and efficiency of alternative fuels, we must use fossil fuels wisely, balancing their economic, security and environmental impact.

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Internal Link – High Prices – Key to Bio-plastic Development High oil prices fueling bio-plastic progress Taipei Times 2005 (The Taipei Times is one of the three major English-language newspapers in Taiwan. “High oil prices boost ecofriendly plastic,” http://www.taipeitimes.com/News/feat/archives/2005/11/26/2003281886, 11/20/05, Accessed 07/15/08)

A few years ago, scientists at Cargill Inc learned how to make rigid, transparent plastics from corn sugars. There was just one problem: They cost a lot more than the oil-based plastics they would replace. But that was before the price of oil shot up and companies came under pressure from consumers and investors to find economically sound ways to adopt "green" packaging and other environmentally friendly products and processes. This year, Wal-Mart, Wild Oats Market, and a host of other retailers, as well as food suppliers like Del Monte and Newman's Own Organics, have all embraced corn-based packaging for fresh produce. Sales at NatureWorks, the Cargill subsidiary that makes the plastic, grew 200 percent in the first half of this year over the period last year. "The early adopters were more influenced by environmental concerns than costs," said Kathleen Bader, chairman of NatureWorks. "But now we're competitive with petrochemicals, too." Cargill is one of several companies profiting from the concerns -- of shareholders, communities, and consumers alike -- about global warming, leaking landfills, and other potential environmental hazards. Huge companies like General Electric and Chevron now have separate businesses to market what they are calling environment-friendly products. And new companies and university projects appear each day. Cornell University's College of Engineering, for one, expects to have a commercial process for using bacteria to recoup energy from wastewater treatment within three years. "There are a lot of creative types looking for the next big thing," said Robert Sheppard, deputy director for corporate programs at Clean Air-Cool Planet, a nonprofit environmental education organization. "Well, these days, environment is it." It is impossible to quantify the environmental industry. Many of the newer companies are privately held. And many "green" products -- more efficient power generators, say, or biodegradable plastics -are parts of other industries. But investors are clearly funneling ever more money into green technologies. Last year, the California Public Employees Retirement System, or Calpers, said it would invest US$200 million in what it called the "burgeoning environmental technology sector." This year, 27 members of the Investor Network on Climate Risk promised to invest US$1 billion in companies with green products. "The environmental industry is about to take off, as more investors realize that they can reap returns from

cleaner technologies," said Dan Bakal, director of electric power programs at Ceres, a coalition of investors and environmental organizations that runs the investor network.

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Internal Link – High Prices – Key to Bio-plastic Development High oil prices spur innovation in plastic – now we have stronger water bottles Beverage Daily 2008 (Beverage Daily provides daily news on the beverage industry and beverage equipment. “Corn-based plastic additive makes bottles stronger,” http://www.beveragedaily.com/news/ng.asp?id=58912-corn-based-plastic, 05/23/05, Accessed 07/14/08) A new plastic additive made from corn, designed to make plastic bottles more rigid and stronger than ever before, has been developed, writes Anthony Fletcher. The research, conducted by Iowa Corn Promotion Board (ICPB) and Battelle, which operates the US department of energy's Pacific Northwest national laboratory in Washington State, could help further strengthen the plastic industry's ability to counter high oil prices and develop more environmentally friendly packaging materials. The ICPB claims that the compound, isosorbide, has been found to make plastic bottles more rigid and stronger than regular plastic bottles. According to the board, preliminary cost estimates show that isosorbide from this technology is competitive with petroleum based building blocks used to make plastics. Commercialising this product could therefore provide benefits to both the consumer and the grower. "The use of renewable corn derived isosorbide will reduce the amount of petroleum necessary to make plastics," said PNNL programme manager for bioproducts Todd Werpy. "Incorporating isosorbide into plastic will improve the properties of the plastic and reduce our dependence on foreign oil." Indeed, the packaging materials industry is highly susceptible to fluctuations in the price of oil. Raw material costs increased dramatically after oil prices struck $50 a barrel for the first time since November last month, prompting traders to forecast a return of the record prices seen last autumn. Steadily increasing costs over the past 12 months have been absorbed to the extent that general polystyrene prices increased by nearly 70 per cent last year. ICPB entered into a Cooperative Research and Development Agreement with PNNL to develop this process for converting corn into isosorbide. ICPB funded its tasks under the CRADA with Iowa corn checkoff investment funds while PNNL's tasks were funded by the US Department of Energy through the Office of Energy Efficiency and Renewable Energy. "The grower will benefit by creating new uses for corn and new jobs for rural economies," said ICPB director of research and regulatory affairs Rod Williamson. "Isosorbide could consume another 30 to 40 million bushels of corn annually." "We have made a commitment to developing cost-effective processes for obtaining high-value chemicals from biomass," said Werpy. "The key is to make a low-cost product that will compete in a petroleum-based plastic market." The past three years have seen the worldwide market introduction of renewable packaging, and the rapid growth in both range of products and number of users demonstrates the market potential. In Europe, such packaging is now to be found in numerous supermarkets. Leading retail chains, particularly in France, Great Britain, Italy and the Netherlands are testing these types of products and have already converted sections of their product lines. Indeed, many analysts believe that this sector of the packaging market has a bright future.

Growing environmental awareness and consumer power coupled with the inexorable rise in pre-packaged disposable meals means that food manufacturers and packagers are increasingly being targeted to improve their environmental performances.

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Internal Link – High Prices – Key to Innovation in Plastic Industry High energy prices forcing plastic industry to innovate Packaging Magazine 2004 (Packaging Magazine provides information on packaging services, design, jobs, and supplies for companies. “Industry Viewpoint,” 09/23/04, Accessed 07/15/08 through PowerSearch)

THE packaging films industry - like most of the packaging sector - has more than its fair share of pressures. Rising costs of raw materials and energy and the consequent pressure on cash flow have significantly affected what were non existent or wafer thin margins, and will force significant price increases for plastic films. This will result in the industry accelerating the drive of technology and innovation that it is so good at delivering in order to keep the effects to a minimum. However, the challenges are not just profits and cash flow. Despite the fantastic contribution flexible packaging films make to the quality of life and society, they are increasingly being blamed for the anti- social behaviour of consumers when discarding waste. It has long been a popular pastime to "bash" packaging, but be in no doubt there are parties out there capable of damaging our businesses, through either ill-informed or totally dishonest propaganda about the products we produce. As I take over the reins as chief executive of PIFA from October 1, I am more conscious than ever of the need to be pro-active in ensuring we obtain a fair hearing in the face of political pressure and media spin. This will be achieved by presenting the truth about our industry with a combination of factual debate, honesty and the highest integrity. This not only reflects our members' culture but also continues the standards PIFA has so earnestly worked for under the marvellous stewardship of Jim Pugh. The association has highly effective communications with its members throughout the supply chain, including regular meetings with raw material suppliers, major packers, retailers, legislation formers and government bodies. If you are involved in the production or use of packaging films I invite you to join us to protect and promote your future. You cannot do it alone, and we cannot do it to best effect without you!

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Internal Link – High Prices – Key to Innovation in Plastic Industry High oils prices spurring innovation in a rapidly expanding plastic industry FoodProductionDaily.com 2006 (FoodProductionDaily.com provides daily news on food processing and food packaging. “ADM jumps into biodegradable plastic market,” http://www.foodproductiondaily.com/news/ng.asp?id=65825-adm-biodegradable-polymer, 02/15/06, Accessed 07/14/08) Archer Daniels Midland (ADM) has jumped into the growing market for biodegradable plastic, saying yesterday it will start production of polyhydroxyalkanoate (PHA) in a joint venture with a biotechnology company. Over the past year packaging suppliers have

been introducing various forms of biodegradable plastics made from a variety of plants, in the main corn, based on projects that there will be a growing demand for environmentally-friendly packaging driven by consumers and recycling regulations. With the rise in oil prices, the cost of petroleum based plastics have come more into line with that of the biodegradable natural alternatives. Some companies are predicting that the market for the alternative plastics will grow by about 20 per cent a year. ADM and Metabolix, a biotechnology company that has developed a form of PHA, will begin production of what they call a "new generation of high-performance natural plastics" at one of ADM's plants in North America. The plant was not identified. The companies said PHA plastics had "excellent shelf life and resistance even to hot liquids, greases and oils." The plant will have an initial annual capacity of 50,000 tons per year. The plastic will be produced under a joint venture with Metabolix, a biotechnology company that has developed a form of PHA. "As the world's demand for petroleum continues to increase, ADM believes that this facility is a positive step towards producing renewable plastics that offer the global marketplace an alternative to traditional petroleum-derived plastics," the company stated. PHAs are polymers are synthesized in the bodies of bacteria fed with glucose, such as corn sugar, in a fermentation plant. The process produces a range of plastics that are durabile during use, but are compostable and biodegradable. ADM's plant will produce PHA natural plastics that have a wide variety of applications in products currently made from petrochemical plastics, including coated paper, film, and molded goods. In 2004, ADM and Metabolix announced a partnership to commercialize the company's PHA technology. ADM is one of the world's largest processors of soybeans, corn, wheat and cocoa. The Illinois-based company also produces soy meal and oil, ethanol, corn sweeteners and flour along with food and feed ingredients. Hikes in the oil price has made biodegradable polymers more

attractive as a packaging material. Food packagers last year faced price hikes of between 30 per cent to 80 per cent for conventional plastics due to the increased cost of petroleum. With the increases some bioplastics products reached full price competitiveness with the traditional oil-based packaging. In 2005, sugar and starch were less expensive raw materials than mineral oil. Over the past year a number of major packaging manufacturers have released biodegradable products. One is Amcor, which has teamed up with Plantic Technologies to develop a biodegradable, flexible plastic packaging for confectionary. Another is US-based NatureWorks, part of Cargill. NatureWorks is one the main mover behind the biodegradable packaging trend with its introduction of polylactic acid (PLA), a corn-based polymer. Others include Danish-based Danisco, which announced this year that it has produced a plasticiser from hardened castor oil and acetic acid. It is colourless, odorless and completely biodegradable. Another company competiting in the biodegradable packaging market is UK-based Stanelco. The company markets a natural, biodegradable food packaging based on starch, called Starpol 2000. Germany-based BASF has also announced it will launch a biodegradable plastic based on renewable raw materials in a bid to meet what it believes will be a growing demand for environmentally-friendly packaging. The company's Ecovio plastic is made up of 45 per cent PLA from NatureWorks. The other component is BASF's existing biodegradable plastic Ecoflex, which is derived from petrochemicals. BASF forecasts that the world market for biodegradable plastics to grow by more than 20 per cent per year. Companies like USbased Naturally Iowa have been using PLA for packaging products like organic milk. Retailers like Delhaize in Belgium and Auchan in France have also been testing PLA for various food packaging.

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Internal Link – High Prices – Key to Innovation in Plastic Industry High oil prices force the plastic industry to innovate or else they’ll lose profits Plastics Engineering 2007 (Plastics Engineering is a premier magazine that focuses on industry news and perspectives, and the latest developments in machinery, processing, and materials technology. “Price knock-on for converters: escalating material costs can no longer be absorbed by converters says EuPC,” November 2007, Accessed 07/15/08 through PowerSearch)

the Brussels-based trade body for plastics converters, is warning that high oil prices are threatening the recovery of the industry. "The price of plastic products will have to increase in the coming months," says Alexandre Dangis, EuPC's managing director. "The two main reasons for this are the increasing raw material prices following on from the high oil prices and a shortage of raw materials in Europe." EuPC states that since December 2006, polymers EuPC,

and additives costs have reached record levels, or are close to doing so. On average it says prices have increased from 50% (for PP) up to 100% (for PS) since the beginning of 2004. Looking to the immediate future it forecasts further 15% to 20% increases. Dangis fears a reaction from customers, especially from multinationals and large enterprises. "Their dominant position in the market means that converters will not be able to recover their own raw material cost increases," he says. "This will put further pressure on profitability. Recovering raw

material price increases is absolutely necessary to guarantee the appropriate levels of investment and innovation by plastics converters." EuPC points to an impressive response so far by converters. It says the industry is innovative and has absorbed recent price increases by gains in productivity efficiencies, energy savings, product innovation and new market developments. "However, these efforts don't make up the increase in raw material prices and wages," states Dangis. "Despite overall economic growth, profit recovery has failed to appear and the future health of the sector now depends on the passing on of costs." Dangis is also concerned about the uncertainty of supplies: "For the past two years our manufacturers have been unable to rely on their orders of raw materials being executed. No delivery due to declarations of 'force majeure' by the raw material supplier occurs on a regular basis, whilst the partial delivery of 80 to 90 percent of the purchase orders for certain raw materials is a widely accepted fact of life. "The problems this causes are obvious," he continues, "resulting in a failure to live up to commitments, the creation of a negative image and losses for the company. This leads to decreases in output and a restriction of growth."

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Internal Link – High Prices – Key to Innovation in Plastic Industry High oil prices increase environmental awareness and spark new solutions – plastic industry proves Australian Business 2008 (The Australian Business is Australia’s national daily newspaper. “Bio-plastic interest grows on oil fears,” http://www.theaustralian.news.com.au/story/0,,23918409-643,00.html?from=public_rss, 06/25/08, Accessed 07/14/08)

OIL prices reaching nearly $US140 a barrel are transforming the economics of the global plastics industry as producers start pouring billions of dollars into plant-based alternatives. Some of the world's largest chemical companies, including DuPont, Dow Chemical, Cargill and Braskem, are now accelerating their production of bio-plastics made from crops including sugarcane, corn, maize and wood. Dow, the world's largest producer of conventional plastics, is investing $US500 million ($526 million) in a new factory in Brazil that will produce polyethylene, one of the most commonly used forms of plastic, from ethanol made from sugarcane. It is due to open in 2011 and will employ 3000 people, producing 350,000 tonnes of the material a year. Meanwhile, Braskem, the Brazilian chemicals group, has embarked on a similar venture, aiming to produce 200,000 tonnes of polyethylene a year. Other ventures are under way in the US, where Nature Works, a subsidiary of Cargill, the American agribusiness group, has opened a factory in Blair, Nebraska, producing 140,000 tonnes of a different kind of biodegradable plastic known as PLA, which uses corn starch. In Britain, Innovia Films is building a new production line that will boost its ability to produce plastic film made from wood cellulose by 12 per cent to 28,000 tonnes a year. Diego Donoso, commercial director for plastics for Dow Chemical in Brazil, claims that the trend is being driven chiefly by economics. Using sugarcane to make polyethylene, rather than the usual naphtha-based crude oil or natural gas, is "economic with oil prices (even when they were) at $US45 per barrel", Mr Donoso said. "Sugarcane ethanol is an increasingly competitive alternative to oil ... the big challenge is to be first." Bio-plastics still account for only a small fraction of the more than 68 million tonnes of polyethylene and hundreds of millions of tonnes of other types of plastic produced around the world each year, but further investments by other big companies are expected soon. "The growth of bio-plastics is all being driven by the cost of feedstocks," said Adrian Higson, of the National Non-food Crops Centre, who estimates that the industry is enjoying growth rates of nearly 20 per cent per year. "As oil goes up, petrochemical costs (which form the conventional raw material for plastic) have risen too, whereas the cost of sugarcane, for example, has not changed substantially." Mr Higson points out that not all bio-plastics are necessarily any more environmentally friendly than those made from petrochemicals. Although some claim that the production of polyethylene made from sugarcane or corn creates fewer carbon emissions, the substance itself is chemically identical to that made from crude oil and does not break down any more quickly. Nevertheless, companies specialising in biodegradable and compostable plastics, such as Innovia (which supplies Tesco, Morrisons and Sainsbury's, as well as organic food companies such as Jordans), are welcoming the move away from oil-based plastics. Andy Sweetman, Innovia's global marketing manager, said: "We have benefited from rising

oil prices and also increased concern about the environment. It's certainly an area we see growing quite strongly."

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Impact – Landfills – Global Warming Landfills are a prime cause of global warming – emitted methane is 21 times more destructive than carbon emissions Waste Management 2003 (Waste Management is the Official Journal of IWWG (International Waste Working Group), a non-profit organisation founded by leading experts in the field of waste management and aimed to act as a think tank in the field of the environment. “The influence of atmospheric pressure on landfill methane emissions,” Volume 23, Issue 7, Pages 593-598)

Methane (CH4) is a radiatively active trace gas whose abundance in the atmosphere has more than doubled during the past several hundred years and continues to rise. ([Cicerone and Oremland, 1988, Dlugokencky et al., 1998 and Shipham et al., 1998]). This increase is correlated with increasing human population ( [Rasmussen and Khalil, 1984]). CH4 contributes to global warming as a result of its ability to trap heat, 21 times more effectively than carbon dioxide over a 100-year period ([IPCC, 2001]). Also, the oxidizing capacity of the atmosphere is diminished by increasing CH4 through reaction with hydroxyl radicals. The short lifetime of CH4 in the atmosphere, about 9 years compared with 120 years for carbon dioxide, coupled with its potency make it an ideal candidate for emissions reduction ([WMO, 1998 and IPCC, 2001]). Reducing emissions would result in relatively rapid reductions of atmospheric CH4 concentrations. A reduction in total emissions of approximately 10% would stabilize methane concentrations at current levels ([IPCC, 2001]). Reductions of this magnitude can be accomplished by mitigating anthropogenic sources. Human activity contributes about 60% of the estimated 600 teragrams (Tg) of CH4

emitted each year to the atmosphere, and landfills are among the largest of the anthropogenic sources ([Hein et al., 1997 and Houweling et al., 1999. S. Houweling, T. Kaminski, F. Dentener, J. Lelieveld and M. Heinmann, Inverse modeling of methane sources and sinks using the adjoint of a global transport model. Journal of Geophysical Research 104 (1999), pp. 26137–26160. Full Text via CrossRef | View Record in Scopus | Cited By in Scopus (79)Houweling et al., 1999]). Landfills are estimated to account

for approximately 37% of annual anthropogenic CH4 emissions in the United States and 10–19% of global anthropogenic emissions ([Stern and Kaufmann, 1996, EIA, 2000, USEPa, 2000 and IPCC, 2001]). However, there remains significant uncertainty associated with US and international estimates.

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Impact – Bio-plastics – Solve Oil Dependence High oil prices are key to the development of bio-plastics, which solve oil dependence Business Week 2008 (Business Week provides the latest international business news & stock market news. It has won the National Magazine of the Year Award 2 years running. “I Have Just One Word for You: Bioplastics,” http://www.businessweek.com/print/magazine/content/08_26/b4090044437763.htm, 06/19/08, Accessed 07/15/08)

Total global production of bioplastics is still minuscule. All the manufacturers combined will generate only about 1million tons a year by 2010, analysts say, compared with 500million tons a year of the petro-based variety. But these ordinary plastics, which account for up to 10% of total U.S. oil consumption, are quickly becoming an extravagance at $138 for a barrel of crude. A switch to bioplastics not only would help reduce oil dependence but also could save companies and consumers serious money. With Dow Chemical hiking the price of its plastic products by up to 20% on June1, some types of bioplastics from Cereplast and others already cost less. If oil stays high, bioplastics could capture 20% of the global plastics market in as little as five years, predicts Jeff Bishop, an independent analyst at Beacon Equity Research in San Francisco. "It's a no-brainer where customers are going to gravitate," he says. John Pierce, DuPont's head of biosciences, calls bioplastics "an opportunity we measure in the billions of dollars."

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Impact – Landfills Module (1/2) High oil prices spurring innovation in bio-plastics – this is key to reducing 25% of landfills Khaleej Times 2008 (The Khaleej Times the No.1 English language daily newspaper published from Dubai, United Arab Emirates. “Surging oil prices spark bioplastics’ revival,” http://www.khaleejtimes.com/darticlen.asp?xfile=data/theworld/2008/July/theworld_July694.xml§ion=theworld&col=, 07/13/08, Accessed 07/14/08)

Landfills and plastics don't mix well. It takes several hundred years for an oil-based plastic bottle to breakdown in a landfill. And plastics can consume as much as 25% of the landfill space, according to the US government's Energy Information Administration. Those two problems are helping drive innovation into new bioplastic packaging material at research institutions including Missouri University Science and Technology. There, researchers are cooking up recipes for super-biodegradable plastics that decompose in a few months. These bioplastics are welcome improvements for US cities running out of landfill capacity over the next two decades. In several states - such as Alaska, Connecticut, Delaware, North Carolina, New Hampshire and Rhode Island - capacity is expected to run out in just five years. Dr KB Lee, professor of chemical engineering at Missouri S&T, and his team are investigating super-biodegradable plastic recipes made up of fillers, such as starch and fibres. Those natural building blocks make it possible for living organisms to break down waste material. Not only do these fillers accelerate the decomposition, but they also reduce the cost in a variety of commercial applications. Lee's team is experimenting with renewable polymers such as glycerol, a byproduct of biodiesel manufacturing, and polyactic acid, a byproduct of ethanol fermentation. By combining and creating blends of polymers, the researchers believe the formulations will be suitable for applications such as agricultural films, bottles, biomedical and drug delivery devices. Researchers agree that bio-based plastics have shortcomings, including being more expensive than petroleum plastics to produce and having limited mechanical strength properties. "It would be hard to expect a plastic product with excellent resistance against wearing, tearing, and weathering during its service life to also have biodegradability after usable service life," says Lee. The challenges of higher prices are not new. Early in the 20th century, American inventors Henry Ford and George Carver tested formulations of plastics derived from foodstuffs in their labs. But they found the material wasn't cost-competitive with cheap oil-based plastics. Today, the

rising price of oil, coupled with innovative bio- plastic formulations, has improved the commercial outlook for these products. For example, bioplastics are considered good fits for different types of single-use products, such as lowgrade stuffing materials, agricultural product containers and bags and packaging for materials with short expiration dates. US-based market research body Freedonia Group estimates that demand in the $330m US market in degradable plastic will grow 13.7% each year as prices and properties become more competitive with conventional polymers. Other research efforts are focused on improving the strength of these bioplastic materials. Dr David Grewell, assistant professor of agriculture and biosystems engineering at Iowa State University and colleagues are tackling the mechanical weakness by reinforcing bioplastics with nanoclays. These tiny pieces of clay are between just 10 and 20 billionths of a metre in thickness. The Iowa State researchers are using zein - natural proteins derived from corn and soy plants - which have stronger mechanical properties. One application for bioplastic formulations, says Grewell, is for garden plant pots. The bioplastic pots can be placed in the ground with the plant, thus supplying nutrients to the plant as it breaks down. Other potential applications for bioplastics made from crop proteins include disposable wraps for hay bales and packaging for the food industry. Another application is making green, biodegradable lubrication sticks from soy grease: Grewell and the Cornell researchers are working with prototypes as part of a 20-month pilot project. Another research effort, 1,000 miles to the east of Iowa State, is based at Dr Emmanuel Giannelis' lab at Cornell University, New York. The researchers there are also using nanotechnology techniques to build composite materials with properties that permit them to decompose faster, yet have mechanical strength and durability. "What we're trying to do is make biodegradable plastics far more attractive," says Giannelis. Giannelis and his team have used a natural polymer called poly 3- hydroxybutyrate (PHB) to make a bin bag. The microbes produce the material as a way to store energy in the same way the human body produces fat to store energy. The Cornell team's composite material behaved as a clear plastic polymer but broke down almost completely in compost at room temperature within seven weeks. The rapid breakdown is enhanced by small spaces between the particles, which make the material more vulnerable to chemical attack and consumption by microbes. What's more, the material can also tolerate higher temperatures, thus making it suitable for a broader range of applications. The outlook for bioplastics research is encouraging. The two most promising areas of research are in the use of polymer-clay nanocomposites (PCNs) and using nanoparticles or nanostructured materials as modifiers, compatibilisers and fillers. With new legislation under consideration across the US for raising landfill

prices, plus the increasing cost of oil, the market opportunity for bioplastics may have its day, long after Ford and Carver tinkered with recyclable plastics.

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Impact – Landfills Module (2/2) Landfills are the prime cause of global warming – they release methane which is 25 times worse than CO2 for warming Environmental Defense Fund 2008 (The EDF is a US-based nonprofit environmental advocacy group. They partner with businesses, governments and communities to find practical environmental solutions. “Landfill Gas Capture: Cutting Emissions and Saving Money,” 04/18/08, Accessed 07/18/08) Proven technologies are available at a commercial scale to significantly and cheaply cut U.S. greenhouse gas emissions1 (See Climate Facts).

The well-respected consulting firm McKinsey & Company found in their recent analysis that the U.S. industrial sector alone can cut its annual greenhouse gas emissions by 23% or more from projected levels in 2030, using existing technologies. How? Some companies are capturing non-CO2 greenhouse gases from landfills. Methane, the main gas in landfill emissions, is 25 times more potent in terms of warming potential than CO2 and it's released from landfills across the country as a natural byproduct as waste decomposes. Although normally lost to the atmosphere, some companies have started to turn these emissions into fuel - reducing potent methane emissions and fuel costs.

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Impact – Plastic Solar Panels Module (1/2) High oil prices are renewing interest in renewable energy, specifically plastic solar panels Physorg.com 2005 (Physorg.com provides the latest news on science, technology, hard science subjects of physics, space and earth science, electronics, nanotechnology and technology in general. “UCLA engineers pioneer affordable alternative energy-solar energy cells made of everyday plastic,” http://www.physorg.com/news7098.html, 10/09/05, Accessed 07/15/08)

With oil and gas prices in the United States hovering at an all-time high, interest in renewable energy alternatives is again heating up. Researchers at the UCLA Henry Samueli School of Engineering and Applied Science hope to meet the growing demand with a new and more affordable way to harness the sun's rays: using solar cell panels made out of everyday plastics. In research published today in Nature Materials magazine, UCLA engineering professor Yang Yang, postdoctoral researcher Gang Li and graduate student Vishal Shrotriya showcase their work on an innovative new plastic (or polymer) solar cell they hope eventually can be produced at a mere 10 percent to 20 percent of the current cost of traditional cells, making the technology more widely available. "Solar energy is a clean alternative energy source. It's clear, given the current energy crisis, that we need to embrace new sources of renewable energy that are good for our planet. I believe very strongly in using technology to provide affordable options that all consumers can put into practice," Yang said. The price for quality traditional solar modules typically is around three to four times more expensive than fossil fuel. While prices have dropped since the early 1980s, the solar module itself still represents nearly half of the total installed cost of a traditional solar energy system. Currently, nearly 90 percent of solar cells in the world are made from a refined, highly purified form of silicon -- the same material used in manufacturing integrated circuits and computer chips. High demand from the computer industry has sharply reduced the availability of quality silicon, resulting in prohibitively high costs that rule out solar energy as an option for the average consumer. Made of a single layer of plastic sandwiched between two conductive electrodes, UCLA's solar cell is easy to mass-produce and costs much less to make -- roughly one-third of the cost of traditional silicon solar technology. The polymers used in its construction are commercially available in such large quantities that Yang hopes cost-conscious consumers worldwide will quickly adopt the technology. Independent tests on the UCLA solar cell already have received

high marks. The nation's only authoritative certification organization for solar technology, the National Renewable Energy Laboratory (NREL), located in Golden, Colo., has helped the UCLA team ensure the accuracy of their efficiency numbers. The efficiency of the cell is the percentage of energy the solar cell gathers from the total amount of energy, or sunshine, that actually hits it. According to Yang, the 4.4 percent efficiency achieved by UCLA is the highest number yet published for plastic solar cells. "As in any research, achieving precise efficiency benchmarks is a critical step," Yang said. "Particularly in this kind of research, where reported efficiency numbers can vary so widely, we're grateful to the NREL for assisting us in confirming the accuracy of our work." Given the strides the team already has made with the technology, Yang calculates he will be able to double the efficiency percentage in a very short period of time. The target for polymer solar cell performance is ultimately about 15 percent to 20 percent efficiency, with a 15–20 year lifespan. Large-sized silicon modules with the same lifespan typically have a 14 percent to 18 percent efficiency rating. The plastic solar cell is still a few years away from being available to

consumers, but the UCLA team is working diligently to get it to market. "We hope that ultimately solar energy can be extensively used in the commercial sector as well as the private sector. Imagine solar cells installed in cars to absorb solar energy to replace the traditional use of diesel and gas. People will vie to park their cars on the top level of parking garages so their cars can be charged under sunlight. Using the same principle, cell phones can also be charged by solar energy," Yang said. "There are such a wide variety of applications."

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Impact – Plastic Solar Panels Module (2/2) Plastic solar panels are THE solution to the energy crisis and global warming – they’re more effective than any alternative energy we have National Geographic 2005 (National Geographic provides free maps, photos, videos and daily news stories, as well as articles and features about animals, the environment, cultures, history, world music and travel. “Spray-On Solar-Power Cells Are True Breakthrough,” http://news.nationalgeographic.com/news/pf/59438741.html, 01/14/05, Accessed 07/17/08)

Scientists have invented a plastic solar cell that can turn the sun's power into electrical energy, even on a cloudy day. The plastic material uses nanotechnology and contains the first solar cells able to harness the sun's invisible, infrared rays. The breakthrough has led theorists to predict that plastic solar cells could one day become five times more efficient than current solar cell technology. Like paint, the composite can be sprayed onto other materials and used as portable electricity. A sweater coated in the material could power a cell phone or other wireless devices. A hydrogen-powered car painted with the film could potentially convert enough energy into electricity to continually recharge the car's battery. The researchers envision that one day "solar farms" consisting of the plastic material could be rolled across

deserts to generate enough clean energy to supply the entire planet's power needs. "The sun that reaches the Earth's surface delivers 10,000 times more energy than we consume," said Ted Sargent, an electrical and computer engineering professor at the University of Toronto. Sargent is one of the inventors of the new plastic material. "If we could cover 0.1 percent of the Earth's

surface with [very efficient] large-area solar cells," he said, "we could in principle replace all of our energy habits with a source of power which is clean and renewable." Infrared Power Plastic solar cells are not new. But existing materials are only able to harness the sun's visible light. While half of the sun's power lies in the visible spectrum, the other half lies in the infrared spectrum. The new material is the first plastic composite that is able to harness the infrared portion. "Everything that's warm gives off some heat. Even people and animals give off heat," Sargent said. "So there actually is some power remaining in the infrared [spectrum], even when it appears to us to be dark outside." The researchers combined specially designed nano particles called quantum dots with a polymer to make the plastic that can detect energy in the infrared. With further advances, the new plastic "could allow up to 30 percent of the sun's radiant energy to be harnessed, compared to 6 percent in today's best plastic solar cells," said Peter Peumans, a Stanford University electrical engineering professor, who studied the work. Electrical Sweaters The new material could make technology truly wireless. "We have this expectation that we don't have to plug into a phone jack anymore to talk on the phone, but we're resigned to the fact that we have to plug into an electrical outlet to recharge the batteries," Sargent said. "That's only communications wireless, not power wireless." He said the plastic coating could be woven into a shirt or sweater and used to charge an item like a cell phone. "A sweater is already absorbing all sorts of light both in the infrared and the visible," said Sargent. "Instead of just turning that into heat, as it currently does, imagine if it were to turn that into electricity." Other possibilities include energy-saving plastic sheeting that could be unfurled onto a rooftop to supply heating needs, or solar cell window coating that could let in enough infrared light to power home appliances. Cost-Effectiveness Ultimately, a large amount of the sun's energy could be harnessed through "solar farms" and used to power all our energy needs, the researchers predict. "This could potentially displace other sources of electrical production that

produce greenhouse gases, such as coal," Sargent said. In Japan, the world's largest solar-power market, the government expects that 50 percent of residential power supply will come from solar power by 2030, up from a fraction of a percent today. The biggest hurdle facing solar power is cost-effectiveness. At a current cost of 25 to 50 cents per kilowatt-hour, solar power is significantly more expensive than conventional electrical power for residences. Average U.S. residential power prices are less than ten cents per kilowatt-hour, according to experts. But that could change with the new material. "Flexible, roller-processed solar cells have the potential to turn the sun's power into a clean, green, convenient source of energy," said John Wolfe, a nanotechnology venture capital investor at Lux Capital in New York City.

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Internal Link – High Prices – Increased Consumer Costs High energy prices only mean that companies will cut production and move costs to customers – Rubbermaid proves International Herald Tribune 2008 (The IHT is the global edition of the New York Times, which has won 92 Pulitzer Prizes. “Newell Rubbermaid plans to cut products, raise prices as energy, plastic costs soar,” http://www.iht.com/bin/printfriendly.php?id=14510368, 07/15/08, Accessed 07/19/08)

Sharpie pen maker Newell Rubbermaid Inc. said Tuesday it would stop making some products while raising prices on others as much as 22 percent as it continues to grapple with rising energy costs that make plastic more expensive. The Atlanta-based company's iconic Rubbermaid line of storage and organization gear will be the CHICAGO:

brand most affected by the cuts, although few details were announced. Newell Rubbermaid said it would divest, downsize or leave categories accounting for up to $500 million in sales. "Put simply, the forecast for dramatically higher ongoing energy costs

means that the world has changed, and we must change with it in order to maintain a healthy portfolio," Chief Executive Mark Ketchum said in a statement. Particularly vexing to the company, which also lowered its full-year earnings guidance on Tuesday, are increasing oil and natural gas prices important components of resin, a key ingredient in many of the company's plastic products. "In categories where resin is a high percentage of cost of goods sold and the consumer's willingness to pay for innovation is low, the economics are no longer viable," Ketchum said. Newell Rubbermaid has seen its shares tumble nearly 40 percent this year as it

struggles to control rising expenses for fuel and raw materials along with a weak U.S. dollar.

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Internal Link – High Prices – Increased Consumer Costs High energy prices only result in increased prices for consumers – even if there are some innovations, lack of money guts progress Christian Science Monitor 2008 (CMS is an independent daily newspaper providing context and clarity on national and international news. “Fuel Prices’ Toll on US Economy,” http://www.csmonitor.com/2008/0527/p01s06-usec.html?page=2, 05/27/08, Accessed 07/15/08)

As the price of energy rises, the first thing people try to do is maintain their standard of living, Gallup has found. "They sacrifice saving," Mr. Jacobe says. "But when it comes to major impacts like $4- or $5-per-gallon gas, people start to change their lifestyle. We are starting to see it where people are parking their big vehicles and driving something more fuel efficient." Ford Motor Co. has already noticed this shift. Last Thursday, it said it would cut production of some larger vehicles by as much as 40 percent in the second half of 2008. The business sector, which generally has become a more efficient energy user, is making other changes, too. Kenneth Simonson, chief economist at the Associated General Contractors of America, is seeing more price increases and fuel surcharges. Construction companies are getting squeezed by more than energy prices. Steel prices have been rising, up 5.5 percent in both March and April over the previous months' levels. Among the reasons: strong foreign demand and the weak dollar, as well as the rise in energy prices, Mr. Simonson says. But prices are

also starting to ratchet up for plastic products, he says, because natural-gas prices have been rising as well. He cites one contractor who wrote him that he had just been told his costs for PVC (polyvinyl chloride) products were going up 20 to 30 percent. Simonson finds anecdotal evidence that some of these cost increases are getting pushed through to consumers. He points to a Holyoke, Mass., roofing contractor who is raising prices 5 to 8 percent on some plastic products. One result of the rising prices, combined with slowing demand and higher financing costs, is that an increasing number of projects are getting deferred, he says. The economy could probably cope with just the energy price increases, says Don Norman, an economist at the Manufacturers Alliance/MAPI in Arlington, Va. But he notes that energy costs are rising against a backdrop of falling home prices and the collapse of the subprime mortgage market – which have affected the ability of all sorts of businesses to get loans. "It's a triple whammy. It's amazing the economy has been as resilient as it has been, given all the hits it has taken," Mr. Norman says.

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Impact – Bio-plastic – Turn: Global Warming Turn – new bio-plastics cause more global warming than their predecessors The Guardian 2008 (The Guardian is a British newspaper that has won multiple awards. “ ‘Sustainable’ bio-plastic can damage the environment,” http://www.guardian.co.uk/environment/2008/apr/26/waste.pollution, 04/26/08, Accessed 07/15/08)

The worldwide effort by supermarkets and industry to replace conventional oil-based plastic with ecofriendly "bioplastics" made from plants is causing environmental problems and consumer confusion, according to a Guardian study. The substitutes can increase emissions of greenhouse gases on landfill sites, some need high temperatures to decompose and others cannot be recycled in Britain. Many of the bioplastics are also contributing to the global food crisis by taking over large areas of land previously used to grow crops for human consumption. The market for bioplastics, which are made from maize, sugarcane, wheat and other crops, is growing by 2030% a year. The industry, which uses words such as "sustainable", "biodegradeable", "compostable" and "recyclable" to describe its products, says bioplastics make carbon savings of 30-80% compared with conventional oil-based plastics and can extend the shelf-life of food. Concern centres on corn-based packaging made with polylactic acid (Pla). Made from GM crops, it looks identical to conventional polyethylene terephthalate (Pet) plastic and is produced by US company NatureWorks. The company is jointly owned by Cargill, the world's second largest biofuel producer, and Teijin, one of the world's largest plastic manufacturers. Pla is used by some of the biggest supermarkets and food companies, including Wal-Mart, McDonald's and Del Monte. It is used by Marks & Spencer to package organic foods, salads, snacks, desserts, and fruit and vegetables. It is also used to bottle Belu mineral water, which is endorsed by environmentalists because the brand's owners invest all profits in water projects in poor countries. Wal-Mart has said it plans to use 114m Pla containers over the course of a year. While Pla is said to offer more disposal options, the Guardian has found that it will barely break down on landfill sites, and can only be composted in the handful of anaerobic digesters which exist in Britain, but which do not take any packaging. In addition, if Pla is sent to UK recycling works in large quantities, it can contaminate the waste stream, reportedly making other recycled plastics unsaleable. Last year Innocent drinks stopped using Pla because commercial composting was "not yet a mainstream option" in the UK. Anson, one of Britain's largest suppliers of plastic food packaging, switched back to conventional plastic after testing Pla in sandwich packs. Sainsbury's has decided not to use it, saying Pla is made with GM corn. "No local authority is collecting compostable packaging at the moment. Composters do not want it," a spokesman said. Britain's supermarkets compete to claim the greatest commitment to the environment with plant-based products. The bioplastics industry expects rising oil prices to help it compete with conventional plastics, with Europe using about 50,000 tonnes of bioplastics a year. Concern is mounting because the new generation of biodegradable plastics ends up on landfill sites, where they degrade without oxygen, releasing methane, a greenhouse gas 23 times more powerful than carbon dioxide. This week the US national oceanic and atmospheric administration reported a sharp increase in global methane emissions last year. "It is just not possible to capture all the methane from landfill sites," said Michael Warhurt, resources campaigner at Friends of the Earth. "A significant percentage leaks to the atmosphere." "Just because it's biodegradable does not mean it's good. If it goes to landfill it breaks down to methane. Only a percentage is captured," said Peter Skelton of Wrap, the UK government-funded Waste and Resources Action Programme. "In theory bioplastics are good. But in practice there are lots of barriers." Recycling companies said they would have to invest in expensive new equipment to extract bioplastic from waste for recycling. "If we could identify them the only option would be to landfill them," said one recycler who asked to remain anonymous. "They are not wanted by UK recycling companies or local authorities who refuse to handle them. Councils are saying they do not want plastics near food collection. If these biodegradable [products] get into the

recycling stream they contaminate it. "It will get worse because the government is encouraging more recycling. There will be much more bioplastic around."

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Impact – Bio-plastic – Can’t Accommodate Current recycling infrastructure can’t accommodate bioplastics –they would actually harm the recycling process Popular Science 2008 (Popular Science reports on the intersection of science, technology and everyday life with an eye toward what’s new and what's next. “The Problem with (Bio) plastic,” http://www.popsci.com/environment/article/2008-05/problem-bioplastic#, 05/07/08, Accessed 07/18/08)

Packaging made from polyactic acid (something we reported on a few weeks ago) needs anaerobic conditions in order to break down. (This is part of the reason researchers are looking for hybrids of polyactic acid that can break down in all conditions.) Current commercial anaerobic digesters—used mostly for treating wastewater— don't take this kind of packaging and are very difficult and expensive to maintain. If the bags end up in current plastics recycling operations, they can contaminate the works and make the entire batch they're in unrecyclable. The other alternative, oxy-degradable bags and materials, need composters in order to break down correctly. While digesters are as complicated as power plants, a composter can be nothing more than a tremendous pile of hot dirt and waste. Unfortunately, a landfill is not a composter, and that's where the majority of these bags will end up. Landfills are in fact terrible places for degradation; they're oxygen-starved and tightly packed, both factors that work against natural chemical breakdown.

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Impact – High Prices – Turn: Russian Corruption Turn – High energy prices fuel Russian corruption – this leads to tighter markets and even higher prices Keith C. Smith, a senior associate in the CSIS Energy and National Security Program. He retired from the U.S. Department of State in 2000, where his career focused primarily on European affairs. Center for Strategic and International Studies. July 7, 2008. (“CORRUPTION, NOT DEPENDENCY IS THE RISK TO WESTERN EUROPE FROM RUSSIAN ENERGY TRADE: Investment Atmosphere in the Energy Trade: Corruption and Non-Transparency,” http://www.csis.org/media/csis/pubs/070708_eu-russia_energy_corruption.pdf)

The growing dependency in Europe on non-transparent financial transfers in the energy trade is as great a danger to Europe as is the increasing dependency on Russia as the primary energy source. Non-transparent and corrupt business practices can have a corrosive effect on European governments, and especially on the new EU member states of East Central Europe. Western energy companies trying to conduct business in Russia, Ukraine or in Central Asia confront constant pressure from local officials and energy companies to engage in shady business practices when considering investment decisions. Record high energy prices have increased opportunities for non-transparent Russian state companies to secure influence among Western governments and with political and economic elites in neighboring states. Dubious or outright corrupt business practices are distorting the energy decision-making processes in both consumer and supplier countries. According to Russian economists, the business climate within the Russian energy sector has become even less transparent and more corrupt in recent years. Increasing corruption, along with the re-nationalization in Russia of the large

energy companies has led to a decline in new investment in exploration and development. This has resulted in tighter energy markets, higher prices and greater uncertainty among potential importers and investors in the ability of Russia to fulfill its long-term energy contracts.

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Internal Link – High Prices – Key to Innovation High energy prices drive innovation to more environmentally friendly alternatives The Wall Street Journal, the world's leading business publication. October 18, 2006. (“Ten Innovations That Will Reduce The Amount of Energy We Use,” by Rebecca Smith, http://www.realestatejournal.com/homegarden/20061018-smith.html) The forces that put us here look grim. Energy

prices are high, supplies are increasingly tight, and anxiety is growing about climate change. But that dark outlook is driving consumers, utilities and public officials to finally take advantage of innovations that could radically reshape the nation's power consumption without lowering the standard of living. Some are technological fixes, from more-efficient light bulbs to variable-speed motors that use less energy when the load on them isn't as heavy. Others involve public policy. States are rewriting their building codes with an eye on conservation, and Washington is trying to lay down efficiency standards for more household appliances and electronic goods. Utilities are joining the effort as well, offering consumers rebates for buying efficient appliances and urging customers to use electricity more wisely.

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Internal Link – High Prices – Key to Innovation High energy prices drive innovation to more environmentally friendly alternatives BusinessGreen, a multimedia publication for firms intent on improving their environmental credentials. November 5, 2007. (“Volatile energy prices demand new form of management,” by Danny Bradbury. http://www.businessgreen.com/businessgreen/analysis/2202738/fluctuating-energy-prices) Cutting energy demand during the hours when prices are highest saves firms money and helps energy companies minimise supply problems, but how do businesses deliver the complex real time demand management required to make this model work? You might baulk at the idea of letting your energy provider decide when some of your electronic devices should operate - but despite the obvious cause for concern some companies are already doing this. What's more, a new approach to the energy demand management market could see you making those power decisions yourself, based on the current price of power. Energy demand management has traditionally involved abdicating some control of a customer's electrical devices to the utility, so that it is able to power them down during critical times, such as at periods of peak demand. In the US, at least, this concept has been around for a decade or more. Energy companies have operated voluntary programmes in which customers have given over control of devices such as water heaters and air conditioners. When the utility company is overstretched, and begins to worry that it may not be able to meet demand, it can power down those energy hungry devices, regulating demand and avoiding a brownout. Toronto Hydro, the monopoly energy distributor in Ontario, is one example of an energy distributor that has bought into such programmes. Its peaksaver initiative, open to both business and residential customers, allows it to install an energy control device at a customer's premises, adjusting air-conditioning operation for short periods of time to offset spikes in demand. The organisation has signed up 40,000 of an estimated 100,000 eligible customers to the programme, and spokeswoman Tanya Bruckmueller estimates that the firm can reduce demand by up to 40 megawatts during emergency

aspect of energy demand management - also known as load management or load shaping - may have been around for a while, but environmental and financial concerns are starting to drive new developments in the field, explains Dr Martin Kushler, director of the utilities programme at the American Council for an Energy Efficient Economy. "The emphasis on climate change and carbon reduction will increase, " he predicts. "To that extent, we need to reduce energy consumption, and for that you need energy efficiency and demand management." periods. This

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Internal Link – High Prices – Key to Innovation High energy prices force advances in energy supply technology – there’s no way out but to innovate Bright 2006 (Phoebe Bright is an independent consultant who focuses on sustainable business and in particular the impact on business of increasing energy prices. She was part of the team that worked on the Energy Futures project for the EPA, helping in developing a number of scenarios that explore the changes that are likely to affect us as energy price and availability change. “Review of Ireland’s Green Paper on Energy,” http://www.dcmnr.gov.ie/NR/rdonlyres/54C78A1E-4E96-4E28-A77A-3226220DF2FC/27072/VividlogicRevised.pdf, November 2006, Accessed 07/15/08)

High but stable energy prices are the best way to encourage investment and create an innovative and competitive market for energy supply. If we focus on keeping the price down, then we will only get incremental change as people try to make small changes to adjust to increasing prices. If we allow high energy prices, we will be forced to make step changes in the way we use energy, which will prepare us much better for the future and make us competitive, if not ahead, of the rest of Europe. However, even if prices are high, without the message that prices are stable, business will be reluctant to make investment if they feel price may well fall in the future. Ask a business leader if he wants higher but predictable energy prices or unpredictable prices as see what they say.

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Internal Link – Innovation – Key to Industry Survival Innovation is key to industry survival – other countries will out compete the US Evening Gazette 2007 (The Evening Gazette is a newspaper serving the Teesside area of England. It is published by the Gazette Media Company Ltd, which is a regional arm of the Trinity Mirror group. The Evening Gazette is written and published in Middlesbrough, along with many other publications. The Gazette Media Company Ltd is also well-known locally for being the publisher of the free Herald & Post newspaper. “Use innovation to grow your business,” 05/01/07, Accessed through Lexis Nexis 07/17/08)

The successful exploitation of new ideas is crucial to a business being able to improve its processes, bring new and improved products and services to market, improve its efficiency and, most importantly, improve its profitability. Marketplaces - whether local, regional, national or global - are becoming highly competitive, reflecting the ability of companies to access new technologies and further heightened by the power of trading and obtaining knowledge through the Internet. This guide explains how you can adopt innovation as a key business process and outlines the different approaches you can take. It also gives you advice on planning for innovation and creating a business environment that nurtures innovative ideas. Innovation * It is important to differentiate between invention and innovation. * Invention is a new idea. Innovation is the commercial application and successful exploitation of the idea. * Fundamentally, innovation means introducing something new into your business. This may take the form of: * Improving or replacing business processes to yield higher efficiency and productivity, or to enable the business to extend the range or quality of existing products and/or services * Developing new and improved products and services - often to meet rapidly changing customer or consumer demands or needs * Adding value to existing products, services or markets to differentiate the business from its competitors and increase the perceived value to the customers and markets Innovation can be a major breakthrough - totally new products or services. But it can also be a small, incremental change. Whatever form it takes, innovation is a creative process. The ideas may come from inside the business, from the employees and managers, from in-house. Ideas may come from research and development - or from suppliers, customers, researching the market, links with universities and other sources of new technologies. Success comes from filtering those ideas, identifying those that the business will focus on, and applying resources to exploit them. Introducing innovation can help you to: * Improve productivity * Reduce costs * Be more competitive * Build the value of your brand * Establish new partnerships and relationships * Increase turnover and improve profitability

Businesses that fail to innovate run the risk of: * Losing market share to competitors * Falling productivity and efficiency * Losing key staff * Experiencing steadily reducing margins and profit

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Impact – US Slowdown – China Module (1/2) US economic slowdown means war with China Mead 2004 (Foreign Policy, March/April) [Senior Fellow, U.S. Foreign Policy, Council on Foreign Relations; Honorary Fellow, Foreign Policy Association; Advisor, The Center for the Study of Democratic Institutions; contributing editor, LA Times; senior contributing editor, Worth magazine; former Contributing Editor, Harper's Magazine; project director, Ford Foundation-funded working group on development, trade & international finance; Project Director, CFR-sponsored Independent Task Force on U.S._Cuban Relations in the 21st Century; co-founder of the New America Foundation; Winner of the Lionel Gelber Prize for his most recent book; honors graduate of Groton and Yale] Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States-government and private bonds, direct and portfolio private investments-more and more of them have acquired an interest in maintaining the strength of the U.S.-led system. A collapse of the

U.S. economy and the ruin of the dollar would do more than dent the prosperity of the United States. Without their best customer, countries including China and Japan would fall into depressions. The financial strength of every country would be severely shaken should the United States collapse. Under those circumstances, debt becomes strength, not a weakness, and other countries fear to break with the United States because they need its market and own its securities. Of course, pressed too far, a large national debt can turn from a source of strength to a crippling liability, and the United States must continue to justify other countries' faith by maintaining its long-term record of meeting its financial obligations. But, like Samson in the temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable damage on the rest of the world. That is sticky power with a vengeance. THE SUM OF ALL POWERS? The United States' global economic might is therefore not simply, to use Nye's formulations, hard power that compels others or soft power that attracts the rest of the world. Certainly, the U.S. economic system provides the United States with the prosperity needed to underwrite its security strategy, but it also encourages other countries to accept U.S. leadership. U.S. economic might is sticky power. How will sticky power help the United States address today's challenges? One pressing need is to ensure that Iraq's economy reconstruction integrates the nation more firmly in the global economy. Countries with open economies develop powerful trade-oriented businesses; the leaders of these businesses can promote economic policies that respect property rights, democracy, and the rule of law. Such leaders also lobby governments to avoid the isolation that characterized Iraq and Libya under economic sanctions. And looking beyond Iraq, the allure of access to Western capital and global markets is one of the few forces protecting the rule of law from even further erosion in Russia and China's rise to global

prominence will offer a key test case for sticky power. As China develops economically, it should gain wealth that could support a military rivaling that of the United States; China is also gaining political influence in the world. Some analysts in both China and the United States believe that the laws of history mean that Chinese power will someday clash with the reigning U.S. power. Sticky power offers a way out. China benefits from participating in the U.S. economic system and integrating itself into the global economy. Between 1970 and 2003, China's gross domestic product grew from an estimated $106 billion to more than $1.3 trillion. By 2003, an estimated $450 billion of foreign money had flowed into the Chinese economy. Moreover, China is becoming increasingly dependent on both imports and exports to keep its economy (and its military machine) going. Hostilities between the United States and China would cripple China's industry, and cut off supplies of oil and other key commodities Sticky power works both ways, though. If China cannot afford war with the United States, the United States will have an increasingly hard time breaking off commercial relations with China. In an era of weapons of mass destruction, this

mutual dependence is probably good for both sides. Sticky power did not prevent World War I, but economic interdependence runs deeper now; as a result, the "inevitable" U.S.-Chinese conflict is less likely to occur. Sticky power, then, is important to U.S. hegemony for two reasons: It helps prevent war, and, if war comes, it helps the United States win.

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Impact – US Slowdown – China Module (2/2) US-China war escalates to extinction The Straits

Times, June 25, 2000 (Regional Fallout: No One Gains in War Over Taiwan. Straits Times. Lexis, Accessed 07/20/08)

THE high-intensity scenario postulates a cross-strait war escalating into a full-scale war between the US and China. If Washington were to conclude that splitting China would better serve its national interests, then a full-scale war becomes unavoidable. Conflict on such a scale would embroil other countries far and near and -- horror of horrors -- raise the possibility of a nuclear war. Beijing has already told the US and Japan privately that it considers any country providing bases and logistics support to any US forces attacking China as belligerent parties open to its retaliation. In the region, this means South Korea, Japan, the Philippines and, to a lesser extent, Singapore. If China were to retaliate, east Asia will be set on fire. And the conflagration may not end there as opportunistic powers elsewhere may try to overturn the existing world order. With

the US distracted, Russia may seek to redefine Europe's political landscape. The balance of power in the Middle East may be similarly upset by the likes of Iraq. In south Asia, hostilities between India and Pakistan, each armed with its own nuclear arsenal, could enter a new and dangerous phase. Will a full-scale Sino-US war lead to a nuclear war? According to General Matthew Ridgeway, commander of the US Eighth Army which fought against the Chinese in the Korean War, the US had at the time thought of using nuclear weapons against China to save the US from military defeat. In his book The Korean War, a personal account of the military and political aspects of the conflict and its implications on future US foreign policy, Gen Ridgeway said that US was confronted with two choices in Korea -truce or a broadened war, which could have led to the use of nuclear weapons. If the US had to resort to nuclear weaponry to defeat China long before the latter acquired a similar capability, there is little hope of winning a war against China 50 years later, short of using nuclear weapons. The US estimates that China possesses about 20 nuclear warheads that can destroy major American cities. Beijing also seems prepared

to go for the nuclear option. A Chinese military officer disclosed recently that Beijing was considering a review of its "non first use" principle regarding nuclear weapons. Major-General Pan Zhangqiang, president of the military-funded Institute for Strategic Studies, told a gathering at the Woodrow Wilson International Centre for Scholars in Washington that although the government still abided by that principle, there were strong pressures from the military to drop it. He said military leaders considered the use of nuclear weapons mandatory if the country risked dismemberment as a result of foreign intervention. Gen Ridgeway said that should that come to pass, we would see the

destruction of civilization.

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Internal Link – High Prices – Going Green Doesn’t Help Environmentally friendly producers are still raising their prices Wall Street Journal. July 7, 2008. (WSJ is the world's leading business publication. “Green Products Gain From New Price Equation: They Find New Buyers As High Energy Costs Hurt Regular Brands,” http://online.wsj.com/article/SB121425785415998071.html?mod=googlenews_wsj, by Arden Dale)

The eco-friendly market isn't completely immune from the effect of high energy prices, however. It costs just as much to deliver an environmentally friendly product to another city as it does to move its mainstream counterpart. And high gas prices have forced shipping companies to raise their rates.

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Internal Link – High Prices – Don’t Drive Innovation High energy prices do not drive innovation. Summary of a speech given by Charles Weiss, a Distinguished Professor at Georgetown University. Woodrow Wilson International Center for Scholars, fostering research, study, discussion, and collaboration among a full spectrum of individuals concerned with policy and scholarship in national and world affairs; November 29, 2007. (“Stimulating U.S. Technological Innovation in Energy.” http://www.wilsoncenter.org/index.cfm?event_id=320900&fuseaction=events.event_summary)

Left to the markets alone, innovation will not respond quickly to high energy prices, given the current commitment to fossil fuels in the form of existing infrastructure, public opinion, and government subsidies. Between the years of 1950 and 2003, government subsidies for oil, as an example, totaled $300 billion. Further, because there is a lack of political will at this time for demand-side policies – carbon taxes, cap and trade schemes, and strict regulatory initiatives – the best aim right now is supply-side government support – research, development, and the forging of public-private partnerships.

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Impact – High Prices – Pakistan Turn (1/2) High energy prices driving textile business away from Pakistan The Financial Daily Business Newspaper, Pakistan's largest business newspaper. July 13, 2008. (“Energy prices sentencing textile units to death,” http://thefinancialdaily.com/NewsDetail/44104.aspx)

All the Textile Processing, Printing, Dying Units and Hosiery Factories remained closed on second day of the strike against increase in electricity, gas and oil prices and discontinuation of Research and Development Facility, here on Saturday. The members of the action committee constituted by Faisalabad Chamber of Commerce and industry (FCCI) visited various parts of the city to motivate the members to close down their remaining units also. They said that cost of doing business was increasing day by day and the foreign buyers find the prices of Pakistani Textile goods too high. This situation was forcing foreign buyers to divert their purchase order to India, China and Bangladesh, thus Pakistani exporters were declining day by day. They rejected 31 per cent gas hike and demanded restoration FAISALABAD:

of R&D facility to exporters without discrimination.

That’s key to their economy – textiles spillover into other sectors Daily Times, the leading news resource of Pakistan. February 6, 2008. (“Lubricant industry suffers losses due to textile crisis,” http://www.dailytimes.com.pk/default.asp?page=2008%5C02%5C06%5Cstory_6-2-2008_pg5_7, by Nauman Tasleem)

business related to textile sector has started suffering significantly because of closure of many textile mills, lubrication industry stakeholders told Daily Times here on Tuesday. LAHORE: Lubrication

They said that the lubrication is an essential part of textile industry but since the textile sector is under depression these days, the related businesses are suffering in a great deal. The textile sector is in hot waters because of suspension of gas and electricity and around 300 units have partially closed. High interest rates, expensive labour, rising energy prices including increase in gas and electricity prices and low cotton production are some of the

factors that have left negative impact on the textile industry.

Different kinds of lubricants including engine, compressor, generator and gear oils are mostly used in textile machines. “We used to supply lubricants of worth around Rs 3 million to different textile mills,” said Zia Ur Rehman Naqvi chief executive officer of a private oil firm. He said that there has been no problem earlier and the textile mills made payments in time. However, for the last six months, the lubrication business is in depression, as the textile millers have stopped payments because of closure of mills. “The textile millers said that they are in crisis and are facing losses, therefore, our payments are delayed,” he said. Shehzad Ahmed, another industrial lubricant businessman said that his payments were delayed as the mills have closed down their business, therefore, there are less chances of getting money. “We used to deliver lubricants on credit and get the payments on the next delivery but when the mills are closed then there is no chance of getting the previous money,” he lamented. Energy crisis has significantly impacted the textile industries and load shedding of gas and electricity left drastic impact on the industry, said Adil Mahmood Chairman All Pakistan Textile Association (APTA). “How textile mills can be operated without having electricity?” he questioned. He said that the supply of gas to industry is either under load shedding or low pressure is supplied. Textile industry is a main sector of the economy, which besides others is a

prime source of providing employments to millions of peoples and earning of precious foreign exchange for the country. However, he said, due to current unbearable energy crisis the textile exports are at stake, he added this has resulted in great damage not only to the spinning mills but also to the national economy while jobs have certainly been lost on a huge scale with a resultant misery. He said that almost all textile/spinning mills have forcibly suspended operations either fully or partially. It is without any doubt that

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Impact – High Prices – Pakistan Turn (2/2) Economic instability in Pakistan leads to terrorism Dr. Robert Looney, Professor for the Center for Contemporary Conflict; launched by the Naval Postgraduate School's Department of National Security Affairs in 2001 and propelled by a seasoned staff with ready access to military and academic circles, the CCC is uniquely positioned to develop security research of high quality and relevance. February 2003. (“Failed Economic Take-Offs and Terrorism: Conceptualizing a Proper Role for U.S. Assistance to Pakistan,” Strategic Insights, Volume II, Issue 2. http://www.ccc.nps.navy.mil/si/feb03/southAsia.asp)

Pakistan is a classic example of a country fulfilling Krueger and Maleckova's description of a terrorist breeding ground. Clearly, large segments of the population have become weary and frustrated with the country's lack of economic progress, especially now that the Indian economy is pulling away with a much higher and accelerating rate of growth. The country's patterns of growth, productivity and institutional failure noted above, seem to fit in well to a more formal model of terrorist development recently devised by Bremer and Kasarda (2002). The growth and productivity patterns noted above are certainly suggestive that

Terrorism leads to extinction Alexander 03 (Yonah Alexander, professor and director of Inter-University for Terrorism Studies, Aug. 28 2003, Washington Times)

Last week's brutal suicide bombings in Baghdad and Jerusalem have once again illustrated dramatically that the international community failed, thus far at least, to understand the magnitude and implications of the terrorist threats to the very survival of civilization itself. Even the United States and Israel have for decades tended to regard terrorism as a mere tactical nuisance or irritant rather than a critical strategic challenge to their national security concerns. It is not surprising, therefore, that on September 11, 2001, Americans were stunned by the unprecedented tragedy of 19 al Qaeda terrorists striking a devastating blow at the center of the nation's commercial and military powers. Likewise, Israel and its citizens, despite the collapse of the Oslo Agreements of 1993 and numerous acts of terrorism triggered by the second intifada that began almost three years ago, are still "shocked" by each suicide attack at a time of intensive diplomatic efforts to revive the moribund peace process through the now revoked cease-fire arrangements [hudna]. Why are the United States and Israel, as well as scores of other countries affected by the universal nightmare of modern terrorism surprised by new terrorist "surprises"? There are many reasons, including misunderstanding of the manifold specific factors that contribute to terrorism's expansion, such as lack of a universal definition of terrorism, the religionization of politics, double standards of morality, weak punishment of terrorists, and the exploitation of the media by terrorist propaganda and psychological warfare. Unlike their historical

counterparts, contemporary terrorists have introduced a new scale of violence in terms of conventional and

unconventional threats and impact. The internationalization and brutalization of current and future terrorism make it clear we have entered an Age of Super Terrorism [e.g. biological, chemical, radiological, nuclear and cyber] with its serious implications concerning national, regional and global security concerns.

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1NC Global Economy Shell (1/3) A. Uniqueness – Inflation is driving safe-haven investment in gold – prices are high now The Street.Com January 14, 2008. (Simon Constable, Staff Writer, "Gold Surges Past 900", http://www.thestreet.com/s/gold-surgespast-900/newsanalysis/metals-and-mining/10398542.html?puc=_googlen?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA)

Gold prices hit yet another record high Monday as rising concern over the increasingly wobbly financial system led investors to seek safe-haven assets. Benchmark bullion contracts were rallying $12.30 at $910 an ounce in recent action on the Comex division of the New York Mercantile Exchange. Spot prices for the metal started the year at around $840 before roaring past the prior all-time high of $875 reached in 1980 amid the Iran-hostage crisis. The $900 mark was breached on Friday for the first time but only for a moment. The bullion exchange-traded funds, which hold inventories of gold bars, were racing ahead also, with streetTracks Gold Shares(GLD Cramer's Take - Stockpickr) and iShares Comex Gold Trust(IAU - Cramer's Take - Stockpickr) both up about 1.3%. "People are sensing

the instability, and the instability is causing people to want to buy hard assets," says Peter Spina, chief investment analyst at GoldSeek.com, in Denver. "The primary reason is that lack of confidence in the financial system." B. Links

1. Cross apply from the affirmative – by switching to alternative energy, the plan decreases oil prices by cutting demand.

2. That tanks gold prices – high oil prices creates inflationary scares that uniquely trigger demand for gold Tang 2007 (Brian Tang was an analyst in the corporate banking group of one of the world's largest international banks where he performed fundamental analysis on Financial Post 500 companies (the Canadian equivalent of the Fortune 500). Brian also serves as VP Finance on a consulting basis for a local privately held design build construction firm. Brian holds a Bachelor’s Degree in Business Administration (Finance with a minor in Economics) from Simon Fraser University. He also holds the Chartered Financial Analyst (CFA) designation. Brian is a member of the CFA Institute (formerly the Association for Investment Management and Research) and CFA Vancouver (formerly the Vancouver Society of Financial Analysts. “Outlook on Resources and Resource Stocks with Mr. Brian Tang and the team at Fundamental Research Corp,” http://www.miningsectorstocks.com/Articles/092107b.asp#top, 09/14/07, Accessed 07/15/08) We have been very bullish on gold prices since the beginning of 2006. Although prices have risen considerably in the past week, and are approaching their 2006 highs, we have maintained our positive outlook on gold due to the following macro economic conditions: Compact fluorescent demand to benefit from push toward green products Gold is traditionally viewed as a capital preservation

asset and regarded as a better hedge against the U.S. dollar, inflation and geopolitical risks, than any other commodity. Historically, gold prices have been negatively correlated to the U.S. dollar. The U.S. dollar is expected to depreciate with respect to other major global currencies, based on an expected slow down in the U.S. economy, and relatively lower real interest rates in the U.S., compared to other major countries in the world. The U.S. housing industry is not expected to recover before mid2008, and last week, the U.S. economy reported job losses for the first time in four years. Both these factors further signal a slowdown in the U.S. economy. The Federal Reserve is expected to cut interest rates by 25 to 50 basis points in the next two meetings, which will further reduce real interest rates in the U.S. All these factors suggest that the U.S. dollar will depreciate further going forward, which will help gold prices to stay high. We have also noticed a positive correlation between gold and oil prices, in times of high

oil prices. High oil prices create inflationary scares among investors and lead them to drift towards gold. Oil is currently at its 2007 highs, and prices are expected to stay above $60.00/bbl for the rest of the year and 2008, which we believe will also have a positive effect on the demand for gold. Therefore, based on a forecasted depreciation in the U.S. dollar, higher inflationary scares, relatively lower U.S. real interest rates, and high oil prices, we are bullish on god prices. We do not expect prices to move up from current levels for the rest of the year, however, we expect prices to gradually move up, as the U.S. economy moves closer to a recession. One of our favorite gold stocks is Grenville Gold Corp. (TSXV: GVG). It is a junior exploration company targeting gold projects in South America. The company expects to put three of their properties into production over the next four years. GVG is currently progressing the Silveria project in Peru, which is expected to be put into production in 2008. New management came on board in 2006, and we believe they have the cap ability to progress this junior exploration company into a gold producer. We believe the company is undervalued compared to its peers, and based on our DCF valuation on the company.

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1NC Global Economy Shell (2/3) Gold is the last safe haven – tensions with Iran link the oil and gold markets and drive the global risk premium in Gold AFX News, 2006. (“RPT - Gold closes higher Friday; up nearly 12 pct in April amid Iran tensions,” http://www.forbes.com/markets/feeds/afx/2006/04/30/afx2708906.html) NEW YORK (AFX) - Gold futures rose more than 18 usd an ounce Friday to close at levels not seen since late 1980, up almost 12 pct from prices seen a month ago, after the U.N. Security Council said Iran failed to meet its deadline to halt uranium enrichment and refused to cooperate with U.N.-appointed inspectors. At the same time, silver prices climbed over 8 pct as the first U.S. silver exchange-traded fund began trading. 'Iran continues to provoke conflict and the gold price is reflecting that sense of uneasiness,' said Peter Spina, an

'Iran knows they have leverage here, especially with oil above 70 usd and the US dollar becoming ever so vulnerable.' So 'all indications are that the geopolitical tensions will continue to support gold at this juncture, with the breakdown in the US dollar adding even more ammo to the run,' he analyst at GoldSeek.com.

said. The greenback dropped to an 11-month low against the euro Friday, and a three-month low against Japan's yen. The per-ounce price of 700 usd is now achievable in May, with gold likely continuing to find great support on the downside around 600 usd, Spina said. Gold for June delivery climbed as high as 658.20 usd an ounce on the New York Mercantile Exchange, a more than 25-year high. It closed up 18.20 usd, or 2.9 pct, at 654.50 usd. The contract closed down almost 6 usd on Thursday after China boosted interest rates, raising the prospect of lower metals demand from the world's most populous country. But June gold still ended the week up 3 pct and its 67.80 usd an ounce above the 586.70 usd level it closed at on March 31. Iran has failed to cooperate with U.N. inspectors, and has done little to answer questions about its nuclear intentions, news reports said. Friday marked the deadline for Tehran to halt uranium enrichment, which is a step toward creating nuclear energy or nuclear weapons. 'When you ignore the U.N., you ignore all the nations of the world at once,' said Jon Nadler, an investment products analyst at bullion dealers Kitco.com. 'This, as we have learned, is suicidal.' 'Gold is on the boil because of the immediate

ramifications of all this for oil, and also because it finds itself at the center of immediate demand by safehaven buyers,' he said. So at the moment, the biggest drivers are 'more Iran than (the silver) ETF -- more dollar than oil,' he said. 'If we see real stampede to ETF next week and oil surging back, then of course 675-700 usd gold and at least 15 usd silver are in the short-term cards,' he added. Iranian President Mahmoud Ahmadinejad has said his country 'does not give a damn' about U.N. resolutions that seek to stop it from enriching uranium because of fears the country is planning to develop nuclear weapons, according to a news report. Since resuming its research program earlier this year, Iran has insisted that it is aiming to generate power only for civilian use. US Secretary of State Condoleezza Rice said at a NATO meeting in Bulgaria that the Security Council's credibility will be tested in how it deals with the Iran issue, the BBC said. The US and other western governments are calling for trade sanctions if Iran refuses to cease its activities. Adding support to gold Friday, 'with most of Asia and Europe closed Monday for May Day holidays, traders are likely to be reluctant to go home short given the current geopolitical picture,' said James Moore, an analyst at TheBullionDesk.com. Overall, 'the precious-metals markets are experiencing significantly

higher volatility than we've seen in quite some time, and that can signal that a retracement may be in the offing,' said Dale Doelling, chief market technician at Trends In Commodities Commodity swings trigger massive global panic, leading to global economic collapse Marc Faber, Economist PhD from the University of Zurich. 2007. (“Credit Crisis Worse Than Long-Term Capital Management Collapse in '98,” http://www.dailyreckoning.com.au/credit-crisis-worse-than-ltcm/2007/09/20/)

The crises that build up in international financial structures always ricochet from country to country…. Boom, distress and panic are transmitted through a variety of connections between national economies: psychological infection, rising and falling prices of commodities and securities, short-term capital movements, interest rates, the rise and fall of world commodity inventories. These connections, moreover, can take various forms, and may be interrelated in various ways…. Boom and panic in one country seem to induce boom and panic in others, often through purely psychological channels…. Just as one huge bubble breeds others in a country, so a host of bubbles in a financial market seems to inspire the production of others in other countries. For the last several years, investors have enjoyed a massive global boom. But they should not rule out a massive global panic.

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1NC Global Economy Shell (3/3) Global economic collapse leads to extinction Bearden 2k (Tom, Retired Lieutenant-Colonel, “The Unnecessary Energy Crisis: How to Solve it Quickly,” http://www.franzlee.org/files/bearden_energy_crisis.doc, Accessed 07/20/08) History bears out that desperate nations take desperate actions. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China-whose long-range nuclear missiles (some) can reach the United States-attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stress conditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch on perception of preparations by one's adversary. The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate

full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself. The resulting great Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at least for many decades.

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Uniqueness – Gold – Investment Now Gold investment now – it’s the prime hedge against financial instability Bloomberg.com 2008 (Bloomberg.com is among the top five most-trafficked financial sites on the Web. It is regarded as a premier site for news and financial information. “Gold Climbs on Demand for Alternative to Falling Dollar, Stocks,” http://www.bloomberg.com/apps/news?pid=20670001&refer=australia&sid=a7areJEFfUIo, 07/15/08, Accessed 07/16/08)

Gold rose, extending a rally to the highest price since March, as slumping equities and the sliding dollar sparked demand for the precious metal as an alternative investment. Silver declined. The dollar fell to the lowest ever against the euro. Equities in Asia, Europe and the U.S. dropped on concern credit- market turmoil will drag financial shares down further. Gold reached $989.60 an ounce and touched $968.70 amid wide swings in crude-oil prices. The metal climbed to a record $1,033.90 on March 17. ``People are freaked out,'' said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. ``Gold is catching a flight-to-quality bid. People are looking for hard assets to put their money in.'' Gold futures for August delivery climbed $5, or 0.5 percent, to $978.70 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $989.60, the highest for a most-active contract since March 19. The metal gained for the fifth straight session. July 15 (Bloomberg) --

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Uniqueness – Gold – Investment Now Inflation now – high prices trigger safe haven buying in gold MarketWatch. February 1, 2008. (“Gold futures surge after downbeat payroll data,” by Polya Lesova, http://www.marketwatch.com/news/story/gold-futures-surge-after-downbeat/story.aspx?guid=%7B4B7070AE-0A2B-4F0A-AF21815154065DD4%7D ) NEW YORK (MarketWatch) -- Gold

futures rose sharply Friday, as much weaker than expected January non farm payrolls rekindled concerns over the US economy, boosting safe-haven demand for gold. Gold for April delivery rose $12.30 at $940.30 an ounce on the New York Mercantile Exchange. U.S. employers cut back their hiring in January for the first time in more than four years, government data released on Friday showed, perhaps providing the smoking gun showing that the economy has entered a recession. Nonfarm payrolls fell by an estimated 17,000 in January, the Labor Department said. This is the first decline since August 2003.

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Uniqueness – Gold – Investment Now High gold prices driven exclusively by investment speculation – prices will rise, but volatility is high Gulf News, January 10, 2008. (“Old-jewellery sales keep gold refiners busy,” by Shakir Husain, Staff Reporter, http://www.thedubailife.com/index.php/main/newsfull/old_jewellery_sales_keep_gold_refiners_busy/)

Gold refiners in Dubai are receiving more old jewellery to process as record high prices of the metal are tempting people to sell gold or trade in their possessions for new items, experts said. "We are getting a lot of Dubai:

old jewellery in the last three months," Haji Mohammad Rafiq, vice-chairman of Al Ghurair Giga gold refinery, told Gulf News. He said the plant, which expanded its processing capacity from 100 to 400 kg per day last month, is operating at full capacity. The supply of both scrap jewellery and mined gold from outside the UAE has increased, Rafiq added. Tushar Patni, chairman of Abu Dhabi's Gold and Jewellery Group, estimates dealers are getting 20 per cent more old jewellery than they were handling two months ago. "This is going to increase

because people want to take advantage of the record price of gold. It is coming from neighbouring countries," Patni said. Gold comes to Dubai from other countries as the city has good refining facilities. People may be disposing of their old jewellery both for cash and new gold, the industry watchers said. However, the World Gold Council (WGC) does not think the level of scrap selling is anywhere near the levels seen in 2005 and 2006, when prices shot up. The amount of jewellery being brought to gold dealers in Saudi Arabia, Egypt, Iran and India the countries where a big rise in scrap sales would be sufficient to bring down global gold prices - is not significant, WGC Middle East managing director Moaz Barakat said. He said the "perception is that gold prices will further rise." With global peak retail

seasons over after Eid, Christmas and the New Year, high bullion prices are driven by investors. Junaid Anwar Khan, precious metals trader at National Bank of Fujairah, expects a major correction in the price before the end of March. "Gold could hit $950 in the second quarter, but sharp corrections are possible. Violent corrections will happen more frequently in future," he said.

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Uniqueness – Gold – Investment Now Investments in gold now – inflation key Khadduri 2008 (Dr. Walid Khadduri is Editor-in-Chief of Middle East Economic Survey (MEES). Since its establishment in 1957, the Middle East Economic Survey (MEES) has come to be recognized as the world's foremost authority on oil and gas in the Middle East. Founded in Beirut, Lebanon, this weekly newsletter provides a comprehensive source of news and analysis of energy, economic and political developments in Middle East countries. “The relationship between the dollar depreciation and the rise in crude oil prices” http://english.daralhayat.com/business/05-2008/Article-20080504-b45c4211-c0a8-10ed-01e2-5c73b9769155/story.html, 05/04/08, Accessed 07/15/08) Last week, OPEC's current chairman, Algeria's Minister of Energy and Mining Shakib Khalil, said "the dollar is now the barometer of oil prices," and anticipated that oil prices would jump from their current level of about $120 per barrel to almost $200. In his statement to the press he explained that oil prices move in an opposite direction to the dollar and hence a direct relationship exists between the two. As an example, he added, the dollar appreciated by 1% a few days earlier while oil prices dropped four dollars per barrel, and if the dollar appreciated by 10%, oil prices would fall by $40. If the dollar stayed stable at its current level, oil prices will also stay stable between $80 and $110. He concluded his statement by saying that everything depends on the movement of the dollar which remains the barometers to future developments. The dollar is in a continuous cycle of decline as it lost a quarter of its value against the Euro over the past two years. It has also weakened further with the decisions of the Federal Reserve to cut interest rates to support the American economy. These decisions, as it is well-known, have global implications as their effects are not limited to the American economy alone. Many nations and people all over the world have been influenced by the depreciating dollar, not to mention the rise in oil prices. In its last World Economic Outlook report, the International

Monetary Fund reached conclusions similar to those stated by Khalil. The IMF confirmed that in the long term, a 1% decline in the dollar value is equivalent to an increase of over 1% of gold and oil prices. In the short term, the relation is closer to 1%, although higher for gold than for oil. According to the report, moreover, an experts meeting has reached the consensus that the recent surge in oil prices compensates for a weak dollar. The weakness of the dollar is attributed to many factors. Most of important of these is the slowing economy in the US where major economic sectors (including American and European banking sectors in addition to the American real estate sector) were influenced by developments in the US since the last fall. Stock markets have lost almost 15% of their value since last October while the prices of commodities have been up by the same rate during the same period. These opposite trends

are the result of attempts by investors and speculators to escape the effects of inflation and the declining dollar by resorting to oil and gold. By doing so and pumping billions of dollars out of the stock market, they are effectively weakening these markets while at the same time pushing the prices of oil, gold and commodities upwards at a rate that far exceeds the equilibrium between the demand and supply of these commodities. the International Energy Agency which includes twenty-six industrial member states and whose mission is to defend energy consumers warned against the dangers of inflation and a weak dollar on oil prices in its last monthly report on oil markets. The IEA encouraged energy producers and consumers to work together to improve market transparency to reach a better understanding of the causes responsible for the current record prices. It is worth mentioning that OPEC states have also recently called for a higher level of market transparency to improve the understanding of these markets. Currently, OPEC publishes significant statistics on its member states that previously were not available. What happened is that markets have been turbulent since the war on Iraq in the spring of 2003, and prices have risen to record levels at rapid rates. Additionally, the basic characteristics of the oil market have changed significantly to the extent that much of the analysis has become mere speculation and guesswork. The question that many economic and oil experts still struggle to answer is: how big and deep is the American economic crisis, what are its implications for the oil market and other commodity markets, how far will the cycle of dollar depreciation and rising oil prices continue, and what are the upper and lower limits to both?

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Uniqueness – Gold – Investment Now Investment in gold now – inflation key Financial Times 2008 (The FT is the definitive business newspaper, relied on by political and business leaders for unbiased news, comment and analysis - from Warren Buffett to Kofi Anan, Tony Blair to George Soros. “Flight to safety in gold while oil tumbles,” http://www.ft.com/cms/s/0/02ebd936-52d0-11dd-9ba7-000077b07658.html, 07/16/08, Accessed 07/16/08)

Gold pushed towards the key $1,000-a-troy-ounce level yesterday amid a widespread sell-off in stock markets and mounting concerns over the health of the global financial system. However, oil prices fell sharply as the recent pattern of highly volatile trading in thin market conditions continued. Gold rose 1.6 per cent to a four-month high of $987.75 a troy ounce as investors sought safety in the yellow metal from sharp falls in equity markets and a retreat in the dollar to record lows against the euro. Inflows into gold exchange traded funds picked up pace last week, culminating in a record one-day increase of 1.48m ounces on Friday for holdings of the seven major ETFs tracked by the investment bank UBS. Technical analysts were keeping an eye on

developments in currency markets with one suggesting that further downward pressure on the dollar and a break for the euro above major resistance at $1.6020 could help pave the way for gold to climb to $1,033 an ounce. Analysts who expect further gains for gold cite similarities between the current tensions in financial markets and the situation in mid-March when Bear Stearns collapsed. Gold hit a record $1,030.80 in midMarch but was only able to maintain a hold above the $1,000 level for one session. In late London trading yesterday, gold slid back to $973, up just 0.1 per cent on the day, as momentum faded following a sharp fall in oil prices. Nymex August West Texas Intermediate dropped $7.82 to $137.36 a barrel but traders struggled to explain an abrupt, violent downward lurch which dragged WTI down $9.26 to a session low of $135.92 during the testimony by Ben Bernanke, Federal Reserve chairman, to Congress. Harry Tchilinguirian, of BNP Paribas, said activity in August WTI options which expire tomorrow had an impact on oil prices yesterday. Mr Tchilinguirian pointed out that there had been a marked increase in the number of contracts of $140 put options - which give the holder the right to sell at that level - and a concentration of put options between $135 and $138 a barrel. He said the decline in WTI futures towards these levels yesterday forced some market participants to sell futures, exacerbating the drop in prices, to cover their option exposures. The options could "act 'like a magnet' as sellers of options will tend to over-hedge themselves near expiry," he said. ICE August Brent, expiring yesterday, fell $6.64 at $137.28 a barrel while the September Brent contract lost $5.90 at $139.43 a barrel. In Brazil, oil workers at Petrobras started a five day strike on Sunday which has cut output by 7 per cent. Base metals retreated amid rising levels of risk aversion. Zinc was the worst hit, sinking 8 per cent to $1,845 a tonne and giving back some of its recent gains as traders questioned whether recent production cutbacks agreed by 27 smaller Chinese zinc smelters would have a significant impact on the supply surplus expected in the market this year. One analyst said most of the zinc produced by these smelters was mainly consumed internally for galvanising. Weakness in zinc and lead prices has forced Teck Cominco and Xstrata Zinc to close the Lennard Shelf mine in Western Australia earlier than expected.

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Uniqueness – Gold – Investment Now Gold prices likely to be strong – but risk of all out collapse Financial Times. January 8, 2008. (“Gold is the new global currency,” http://www.ft.com/cms/s/0/b8107770-bd8b-11dc-b7e60000779fd2ac.html?nclick_check=1 ) There was a time when gold was money.

In today's uncertain world, the yellow metal is back in fashion. Bullion prices of gold's allure is its traditional status as a safe haven. It is seen as a store of value when everything else seems risky. But the bigger drivers behind the rising spot price are a depreciating dollar and the prospect of negative US real interest rates. rose to a record nominal high after the assassination of Benazir Bhutto in Pakistan added to nervousness about the world economy. Part

A better way to think of gold may be as central bankers used to before America dropped the gold standard: not as a commodity, but as another currency. As long as the dollar stays weak, gold's bull run will last. The arguments for further gains in the gold price are compelling. It looks cheap, despite climbing from a low of about $250 a troy ounce in 1999, when central banks were selling reserves. The UK's decision back then to sell 60 per cent of its official holdings looks particularly poor judgment. Prices have a long way to go before they approach the inflation-adjusted record touched in 1980 when Soviet tanks invaded Afghanistan. At yesterday's $859, gold was trading at less than half that level. It could top $1,000 and still be at the lower end of what some analysts argue is a safe haven range. Gold is also benefiting from

diversification away from equities. Commodities have emerged as a distinct asset class, with billions of dollars poured into exchange traded funds. Physical demand for jewelry may have stalled in Asia, but consumption remains strong in the Middle East. Declining output in South Africa will help support spot prices. But it is the relationship between the dollar and the reaction of the world's central banks to the credit squeeze that some bulls would say really makes gold an attractive bet. The US Federal Reserve's aggressive, rate-cutting response to the credit squeeze has created a

risk of a sharp rise in American inflation. That in turn creates the risk of a precipitous fall in the dollar and so makes gold more attractive as a hedge. The world's major economies have experienced rapid money supply growth of 10 per cent plus per annum in recent years. The Fed remains the world's biggest holder of gold, yet supplies of the metal are growing at only 1.5 per cent a year. If gold is a finite currency, its value against not just the dollar, but sterling and the euro too, should rise. Moreover, a sharp decline in US real interest rates - financial markets expect another half percentage point cut this month - means that the low yield on gold matters less. It may have been a poor hedge against inflation in the past but the combination of rising consumer prices and economic stagnation may make it a better store of value. Gold's rise shows investors are nervous. That is an important message for central banks contemplating interest rate cuts. The Fed must show it is not prepared to allow inflation to take off. Keynes called gold a barbarous relic. It has life left in it. But it is in the interests of business and consumers that its most bullish fans are proved wrong.

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Uniqueness – Gold – Investment Now Investors driving gold safe haven – speculation risks price gyrations Wall Street Journal, January 29, 2008. (“How to Survive the New Gold Rush: Investors Race Into the Hot Commodity, Even as Advisers Warn That Gains May Have Peaked; Beware the Tax Hit,” By ELEANOR LAISE, http://online.wsj.com/public/article_print/SB120156082315723535.html)

Gold has been riding its reputation as a safe haven to new highs. But it also carries substantial risks for investors. With fears of a U.S. recession prompting investors to abandon stocks, the Dow Jones Industrial Average is down 6.6% so far this year. Gold, meanwhile, has been hitting new records. The precious metal has gained 11% this year, to $927.10 an ounce, and has soared 46% since the end of 2006. As the dollar weakens and the economy and markets appear increasingly unstable, some market watchers believe the metal is now headed to $1,000 an ounce. Investors, for their part, poured a net $6.1 billion into precious-metals mutual funds and exchange-traded funds, or ETFs, last year, according to investment research firm Morningstar Inc. Many investors are getting access to gold through exchangetraded products like street Tracks Gold Shares, which is designed to track the price performance of gold bullion, minus fees. ETFs resemble traditional mutual funds but trade throughout the day like stocks. Gold can help investors diversify and reduce their overall

portfolio risk, financial advisers say, since it tends to behave differently than stocks. But at current levels, investors may be paying a high price for that diversification. Though many investors consider gold a hedge against inflation, it hasn't always lived up to that reputation. The metal's price can be extremely volatile, and many gold investments come with significant tax consequences. While the streetTracks Gold and iShares Comex Gold ETFs are popular among small investors seeking easy exposure to gold, the Internal Revenue Service treats them like collectibles, taxing long-term gains at a maximum rate of 28%. That compares unfavorably with the maximum 15% rate on long-term capital gains on securities and qualified dividends. Financial advisers also warn that since gold is considered a haven in times

of crisis -- and is less in demand for practical uses than other commodities such as copper and oil -- it tends to attract emotional, speculative investors who can amplify its price gyrations. Gold "is too narrow, it's too volatile, and historically it hasn't made that much money for people," says Randy Carver, president of Carver Financial Services in Mentor, Ohio. Some also see risks to gold investors in the current market. The dollar's long decline may be near an end, some market watchers say, and if it rebounds, that's likely to hurt gold.

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Uniqueness – Economy – On the Brink The global capital crisis puts the entire global economy at risk of depression The Telegraph. December 29, 2007. (“Crisis may make 1929 look a 'walk in the park',” http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/23/cccrisis123.xml&CMP=ILC-mostviewedbox)

As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world's central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportions. "Liquidity doesn't do anything in this situation," says Anna Schwartz, the doyenne of US monetarism and life-time student (with Milton Friedman) of the Great Depression. "It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue," she adds. Lenders are hoarding the cash, shunning peers as if all were sub-prime lepers. Spreads on three-month Euribor and Libor - the interbank rates used to price contracts and Club Med mortgages - are stuck at 80 basis points even after the latest blitz. The monetary screw has tightened by default. York professor Peter Spencer, chief economist for the ITEM Club, says the global authorities have just weeks to get this right, or trigger disaster. "The central banks are rapidly losing control. By

not cutting interest rates nearly far enough or fast enough, they are allowing the money markets to dictate policy. We are long past worrying about moral hazard," he says. "They still have another couple of months before this starts imploding. Things are very unstable and can move incredibly fast. I don't think the central banks are going to make a major policy error, but if they do, this could make 1929 look like a walk in the park," he adds. The Bank of England knows the risk. Markets director Paul Tucker says the crisis has moved beyond the collapse of mortgage securities, and is now eating into the bedrock of banking capital. "We must try to avoid the vicious circle in which tighter liquidity conditions, lower asset values, impaired capital resources, reduced credit supply, and slower aggregate demand feed back on each other," he says. Spina says the increasing uncertainty throughout the world about the quality of paper assets is also making the euro unpopular, as well as the greenback. Instead, he says, investors are buying gold as a longterm store of value.

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Uniqueness – Economy – On the Brink Economic Resilience at risk – credit crunch risks simultaneous global economic retrenchment Mortimer Zuckerman, Editor, U.S. News & World Report, December 13, 2007. (“The Credit Crisis Grows,” http://www.usnews.com/articles/opinion/mzuckerman/2007/12/13/the-credit-crisis-grows.html) Yes, there are weapons of mass destruction. They are "financial weapons of mass destruction," to quote the famous investor Warren Buffett as he surveyed the morning-after wreckage of the subprime mortgage lending crisis. The continuing destruction can now be called a

credit crisis—a significant escalation because credit has been the high-octane fuel powering the American economy for the past half dozen years. A whole galaxy of credit instruments has now been downgraded to the tune of hundreds of billions of dollars of paper losses. If those losses were incurred by individuals it would be bad enough. But leveraged lenders have a different problem. Many of them, such as commercial banks, have to maintain capital in reserve to protect against unexpected losses. If banks wish to maintain reserves equal to 10 percent of their assets, they either have

to bring in new capital or shrink their balance sheets and reduce their lending accordingly. A dollar of real losses would mean scaling back lending by $10. Translate that to the whole financial sector, where the aggregate credit losses are estimated at $200 billion as of now. Ten times those losses could result in lending cutbacks of as much as $2 trillion. Such a huge hit to the credit

supply will have a dramatic macroeconomic effect and could well produce a severe recession. Some major banks have literally shut their lending windows until they can repair their balance sheets. Vicious cycle. The repair effort is further complicated because even the most sophisticated financial institutions do not know how to price many of the securities they hold and therefore cannot predict how much they will have to cut back on their loans, as the giant bank UBS said last week. This uncertainty compounds the credit crunch. So, too, does the decline in net worth of many borrowers due to a drop in house prices. In some markets, prices are down 20 percent from their mid-2006 highs. The average 10 percent drop in home values already incurred is tantamount to a $2.1 trillion loss in home equities. This threatens a vicious cycle with falling homeownership lowering house prices and forcing more defaults, causing ownership and prices to decline even more. Research suggests that for every dollar decline in home equity, spending will go down by about 9 cents, so this could lead to a $200 billion hit to consumer spending. Another immediate effect has been a collapse in cash-out borrowing from home equity from about $700 billion in 2005 to $100 billion to date. At the same time, tighter lending and mortgage standards have contributed to a dramatic decline in residential construction from a high of over 2 million units to about 800,000 predicted for next year, with a concomitant decline in employment. A slowdown in consumer spending seems inescapable. What is now seriously in question is the capacity of our financial system to provide enough credit to support the scale of investment that has maintained our long economic expansion. Coming at a time of soaring oil prices, we may have a simultaneous decline in consumer spending, residential investment, and business investment. The economy was strong in the third quarter but clearly dropping off by the end. We may be at the finish of not just the long-term borrowing bubble but the long-term spending bubble. What should our economic policy be? The Federal Reserve must get ahead of the curve. Its priority must be to maintain the viability of the credit system and the flow of credit; our postmodern economy is dependent on an ongoing flow of credit. A start—and it is no more than that—is the proposed federal effort to help the mortgage industry deal with subprime mortgages. It will help if the banks forgo their higher "reset" rates in the coming months. Banks would have to accept the lower income stream, but that of course is better than taking a write-off from the foreclosures with all the legal costs and the downward effects to the value of abandoned homes. The problem for the Fed is that monetary policy may be no match for the deep structural contradictions that plague the financial system. We are dealing here with a whole new set of credit instruments that are little understood and therefore extremely difficult to price. The economy is clearly transitioning to much slower growth, sharply tighter lending standards, a declining housing market, and pressure on consumer spending. People and companies are trying to cope with the debt accumulated during several years of profligate lending and spending. The real danger from a credit crunch is that everyone, from banks to corporations to households, may retrench simultaneously. The collapse of values and the risks of the credit squeeze are the worst since the Great

Depression. We are going to put the economy's resilience to a severe test.

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Internal Link Booster – Gold Central reserve buying increasing Market Watch 2007 (Market Watch proves international and national news with a business and financial perspective. “Gold futures end lower, reflect retreat in oil prices,” http://www.marketwatch.com/news/story/gold-futures-end-lower-reflect/story.aspx?guid=C68BB088-D81A47D6-B4D4-7DD630B40D4A, 02/07/07, Accessed 07/20/08) In related news Wednesday, Blanchard and Company Inc., a retailer of American rare coins and precious metals, pointed out that recently updated statistics from the International Monetary Fund show that a number of central banks have begun purchasing significant

quantities of gold over the past few months. "The general trend of central bank activity regarding gold reserves has changed a great deal in the past year," said Donald Doyle, chief executive of Blanchard, in a note to clients. "For the first time in the seven years of the, banks affiliated with the Central Bank Gold Agreement failed to reach sales quotas in 2006 and now, with updated IMF reserve data just published, it is apparent that gold sales have slowed," he said. "The much anticipated and speculated upon gold buying is finally emerging in the market." Russia has added 7.45 metric tons to reserves, Kazakhstan has added 7.38 metric tons, Greece has added 3.56 metric tons, and the Philippines added 1.4 metric tons, Blanchard said, citing statistics from the IMF. "While Russia stated publicly in 2006 that it

would increase its gold reserves substantially over the coming years, the moves by other central banks were unexpected in the market, clearly a bullish signal," said Doyle. Late Wednesday afternoon, Neal Ryan, Blanchard's director of economic research said South Africa added almost 22 metric tons to its reserves in January, citing a government announcement made during the Indaba Mining Conference in South Africa. He said the figures haven't shown up yet in IMF figures because of the reporting lag. "That puts our count of Central Bank reserve additions that we can confirm, at this point, to over 41 tonnes in the last 3 months, including the Russian, Kazahkstan, Greek and Philippine Bank additions," he said. "These figures are by far and away the most aggressive

additions central banks have made to gold reserves in decades, and should serve as additional support to the coming rapid increases in price we should see in the gold market," he said

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Internal Link Booster – Gold Central banks increasing gold reserves Citywire 2007 (Citywire is a website for people with money to invest, those who advise them and those who manage investments. “US debt and Asian wealth may trigger mini gold rush,” http://www.citywire.co.uk/Personal/-/news/markets-companies-andfunds/content.aspx?ID=284596&Page=2, 06/29/07, Accessed 07/20/08)

Gold's enduring investment quality is its qualities as a hedge against inflation. But since 1998 it has lagged the increase in oil prices which suggests to Evolution that there 'may be a period of catch-up'. The figure has never been verified, but the world's central banks are estimated to hold around 31,500 tonnes of gold. They sold 330 tonnes last year, half that of 2005. Russia, South Africa

and Argentina have all said they intend to increase their gold reserves, although it has never been revealed by how much. The Chinese may also diversify their central bank reserve base which could also support demand. 'Overall prospects for investment demand remain positive and we believe this may act as a further positive influence on the gold price,” adds Evolution.

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Internal Link Booster – Gold Gold is the key functional reserve currency – everyone flocks to it in times of financial instability Telegraph 2008 (The Telegraph is Britain's No.1 quality newspaper website. It was voted best online consumer publisher. “Flight to gold as investors love faith in money,” http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/01/06/ccgold 106.xml, 01/07/08, Accessed 07/20/08) "The central banks are flooding the market with paper," Peter Hambro of Peter Hambro Mining, said. "Does anybody now take the dollar, the euro or the pound seriously? People are turning to gold because it is the only hard store of value," he said. Joachim Fels, bond guru at Morgan Stanley, said that the central banks will tolerate an upward creep in the underlying level of inflation because the pain required to kick the habit at this late stage is deemed too high. "I strongly doubt that they will tighten the screws. I expect 2008 to mark the beginning of another global liquidity cycle." Blame the return of 1970s stagflation. The China effect has turned malign, pushing up global prices. The easy trade-off between growth and inflation is over. All choices are now bad. Infecting everything is the looming end to US dollar hegemony. Mid-East and Asian states are importing America's bailout policies through their currency pegs (or dirty floats), stoking an inflationary fire. Prices are now rising 14 per cent in Qatar, 10 per cent in the UAE, 13 per cent in Vietnam and 6.9 per cent in China. The pegs are near snapping point. Bretton Woods II is dying. For a while Asia, Russia, and the petro-powers seemed happy to accept the euro as the anti-dollar. Long-term capital flows into the eurozone reached a net €200bn in the first seven months of 2007, according to BNP Paribas. Then the money dried up. Perhaps Asians were shocked to learn that German, French and Dutch banks had gorged on sub-prime debt, or perhaps they began to take a closer look at Europe's fertility rate and vanishing youth, or woke up to the deflating property bubble in Spain. Yes, the euro reached record highs in the autumn, but this was driven by hot money flows. Such fickle finance will drain away as soon as the ECB hints at rate cuts. So are the new powers turning to gold instead, mistrusting the euro as much as the dollar? Their footprints have not yet shown up in the IMF reserve data, but there can be long delays, and China does not report data. Vladimir Putin has told Russia's central bank to raise the gold share of its $469bn reserves to 10 per cent. We know that those Asian and oil states now holding most of the world's $6.6 trillion reserves possess very little gold, yet most have an historical affinity for it. Draw your own conclusion. We know too that the little guys are buying defiantly, at last able to invest in gold through exchange trade funds (ETFs) on the main bourses. The ETF holdings have reached 834 tonnes, putting them in seventh place ahead of the Bank of England, the ECB and Japan. Gold's latest surge has caught the bullion banks off-guard. Most expected the price to fall back at the end of India's Diwali marriage festival. Speculative "longs" on New York's Comex market exceed levels that have often led to a sharp sell-off in the past. Jewellery demand - still 80 per cent of the market - has stalled. With all the moons aligned for a correction, Goldman Sachs advised clients to go "short" in November. That was $60 ago. Ouch. The gold bears may yet smile. James Steel, an analyst at HSBC, said gold is shackled to oil since the commodity funds ($140bn) allocate fixed shares to each component. Energy makes up 65 per cent of the weighting, so the indexes must buy gold whenever oil shoots up - as it did last week, kissing $100 a barrel. "The oil gold correlation has risen 0.9 since the emergence of these funds, which is very high," he said. So what happens if a slump chills oil? We will then learn whether gold is a commodity, or once again a currency. "We think gold is fundamentally overvalued by about $150

but that can go on for a long time," John Reade, the precious metals chief at UBS and top forecaster this year. "A lot of our clients have been buying gold since the credit crunch because they think central banks will respond with aggressive monetary easing. If that becomes a mainstream view, gold will soon have four figures on it. The feeling is that there is a lot of money around, and not much gold," he said.

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Internal Link Booster – Gold Gold is the last safe haven – tensions with Iran and rising oil prices boost the risk premium of gold Thomson Financial News 2008 ((Thomson Financial News creates transparency, provides insight through independent news and content to enable decisions and is the trusted connection between people, transactions and ideas. “Metals – Gold jumps in line with high oil prices,” http://www.forbes.com/afxnewslimited/feeds/afx/2008/07/21/afx5233745.html, 07/21/08, Accessed 07/21/08)

Gold jumped on Monday in line with oil prices as investors hedged against inflation, while talks between Iran and world powers over Tehran's nuclear program failed, boosting the metal's safe-haven appeal. Platinum, meanwhile, was up from recent lows but fears of lower demand capped gains. However, the absence of Japanese traders with the Tokyo Commodity Exchange closed for a holiday thinned trade. 'Iran ignored calls from the US undersecretary of state to curb its uranium enrichment program. This should inflate the geopolitical risk premium in crude oil prices which could see (gold) prices rebound today. Such higher oil prices could also exert LONDON (Thomson Financial) -

further stress in equity markets, after moderate gains were realised in Europe and Asia on Friday,' said Walter De Wet, Standard Bank analyst. At 9:22 a.m. spot gold was trading higher at $963.75 from $957.20 in late New York trading hours on Friday. Silver was up at $18.31 from $18.16 per ounce late Friday. Platinum, meanwhile, was up at $1,864 from $1,854 per ounce while palladium held steady at $415 per ounce.

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A2: Increased Supply = Inevitable Price Collapse – Takes too long Production adjustments take years – gold prices will remain high Weekend Australian. February 3, 2007. (“Tsunami of cash awaits a chance - GOLD: SPECIAL REPORT,” by Keith Orchison. REVIEW, pg. 1)

Analysts agree supply is a critical factor -- gold production in 2006 was 2 per cent lower than 2005. The World Gold Council, the trade association for producers, says it sees a ''step change'' in the pricing fundamentals in 2007 both because production is slipping back after a period of several years of low exploration outlays and because pension funds, previously uninterested in the yellow metal, are now including it in their portfolios. The problems of building supply to meet demand are emphasised by Adam Hamilton of the US-based strategic adviser Zeal Intelligence LLC. ''Gold mining is an extremely tough business, plagued by geological quirks, government harassment and enormous upfront capital costs. It takes producers years to find new deposits and develop new mines.''

Current higher gold prices, Hamilton adds, will take ''at least several years'' to bring an adequate response from investors in exploration and development -- ''and then only after they are convinced the current bull run will continue.''

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A2: Weak Economy = Inevitable Price Collapse – Empirically Denied Recession won't tank gold prices Christopher Laird, Sr. Editor at Prudent Squirrel. November 15, 2007. (“Credit Crisis Meltdown Is a Prelude to Global Economic Depression,” http://www.marketoracle.co.uk/Article2775.html)

So far this year, we have had about 4 major world stock sell offs. Gold has sold off in these, but rapidly recovered later. It is not clear how gold will react if we saw a real world stock crash however, on the order of 50%. Gold showed two types of behavior this year in stock sell offs. The first was flight to cash, and as institutions had to cover margins, sold gold in stock drops. But, also, at one point in the August-Sept credit crisis, flight to safety caused gold to rise, even in the midst of the stock declines. So, we know that in this kind of environment, gold has shown resiliency.

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A2: Backstopping – OPEC won’t OPEC won't increase production to lower prices – will only contemplate production cuts to maintain Financial Times. February 1, 2008. (“Opec likely to reject calls for increase in output,” http://www.ft.com/cms/s/0/423e75ac-d06811dc-9309-0000779fd2ac.html?nclick_check=1)

Opec was last night set to rebuff oil-consuming countries' pleas for an increase in production to help to lessen inflationary pressures, blaming the recent record high prices on speculation. Ahead of its meeting today in Vienna, ministers from the oil producers' cartel said there was no need to increase supplies, warning instead that a deteriorating economic outlook could force a cut later this year. Chakib Khelil, Opec's president, said: "There is not demand for more oil and consequently I expect that production [levels] will be maintained." Mr Khelil's comments were echoed by other ministers.

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1NC Russia Shell (1/3) A. Uniqueness – Russian gold reserves sufficient to survive the credit crunch Thomson Financial News 2007 (Thomson Financial News creates transparency, provides insight through independent news and content to enable decisions and is the trusted connection between people, transactions and ideas. “Russia central bank deputy head says economy could survive credit crunch,” http://www.abcmoney.co.uk/news/232007123121.htm, 08/27/07, Accessed 07/20/08)

Russia has more than enough foreign currency and gold reserves to withstand any potential credit crunch resulting from the US mortgage crisis, central bank deputy head Gennady Melikian told Prime-Tass. 'We have a great reserve of strength,' Melikian told the agency, adding that Russia's currency and gold reserves of 415 bln usd 'are more than enough for stability.' Global markets are facing a credit crunch following a mortgage payments crisis in the US that has prompted investors to pull out of emerging markets seen as risky. This month Russia's major exchanges plunged and the value of the rouble fell against the dollar, a reverse to an established trend over several years of the rouble gaining in value against the US currency. The Russian central bank has been pumping billions of dollars in liquidity into the market and has also intervened in the currency market to support the rouble by selling dollars and buying rubles, Melikian said.

B. Links

1) Cross apply from the affirmative – by switching to alternative energy, the plan decreases oil prices by cutting demand.

2) That tanks gold prices – high oil prices creates inflationary scares that uniquely trigger demand for gold Tang 2007 (Brian Tang was an analyst in the corporate banking group of one of the world's largest international banks where he performed fundamental analysis on Financial Post 500 companies (the Canadian equivalent of the Fortune 500). Brian also serves as VP Finance on a consulting basis for a local privately held design build construction firm. Brian holds a Bachelor’s Degree in Business Administration (Finance with a minor in Economics) from Simon Fraser University. He also holds the Chartered Financial Analyst (CFA) designation. Brian is a member of the CFA Institute (formerly the Association for Investment Management and Research) and CFA Vancouver (formerly the Vancouver Society of Financial Analysts. “Outlook on Resources and Resource Stocks with Mr. Brian Tang and the team at Fundamental Research Corp,” http://www.miningsectorstocks.com/Articles/092107b.asp#top, 09/14/07, Accessed 07/15/08) We have been very bullish on gold prices since the beginning of 2006. Although prices have risen considerably in the past week, and are approaching their 2006 highs, we have maintained our positive outlook on gold due to the following macro economic conditions: Compact fluorescent demand to benefit from push toward green products Gold is traditionally viewed as a capital preservation

asset and regarded as a better hedge against the U.S. dollar, inflation and geopolitical risks, than any other commodity. Historically, gold prices have been negatively correlated to the U.S. dollar. The U.S. dollar is expected to depreciate with respect to other major global currencies, based on an expected slow down in the U.S. economy, and relatively lower real interest rates in the U.S., compared to other major countries in the world. The U.S. housing industry is not expected to recover before mid2008, and last week, the U.S. economy reported job losses for the first time in four years. Both these factors further signal a slowdown in the U.S. economy. The Federal Reserve is expected to cut interest rates by 25 to 50 basis points in the next two meetings, which will further reduce real interest rates in the U.S. All these factors suggest that the U.S. dollar will depreciate further going forward, which will help gold prices to stay high. We have also noticed a positive correlation between gold and oil prices, in times of high

oil prices. High oil prices create inflationary scares among investors and lead them to drift towards gold. Oil is currently at its 2007 highs, and prices are expected to stay above $60.00/bbl for the rest of the year and 2008, which we believe will also have a positive effect on the demand for gold. Therefore, based on a forecasted depreciation in the U.S. dollar, higher inflationary scares, relatively lower U.S. real interest rates, and high oil prices, we are bullish on god prices. We do not expect prices to move up from current levels for the rest of the year, however, we expect prices to gradually move up, as the U.S. economy moves closer to a recession. One of our favorite gold stocks is Grenville Gold Corp. (TSXV: GVG). It is a junior exploration company targeting gold projects in South America. The company expects to put three of their properties into production over the next four years. GVG is currently progressing the Silveria project in Peru, which is expected to be put into production in 2008. New management came on board in 2006, and we believe they have the cap ability to progress this junior exploration company into a gold producer. We believe the company is undervalued compared to its peers, and based on our DCF valuation on the company.

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1NC Russia Shell (2/3) Sudden drop in gold prices triggers economic collapse in Russia – crushes democracy and accelerates aggressive foreign policy Shlapentokh - Prof of Sociology @ M.S.U. – 2006 (“Intoxicated by high oil prices: Political Dutch disease afflicting the Kremlin,” Oil & Gas Journal, Nov. 6, v. 104/41, 2006, p. 18-24, Accessed 07/18/08) Intoxicated by high oil prices: Political Dutch As suggested by many economists, Dutch disease-a

country’s excessive dependence on the export of raw materials-can have serious economic consequences as a country becomes increasingly dependent on that raw materials sector. Other branches of the economy, such as manufacturing, often decline because of the concentration of such resources as oil or gold, as happened in 16th century Spain. A sudden fall in the price of the raw materials could bring an economic collapse. Seemingly, the Russian leaders, like their colleagues in Venezuela and Iran, see the world through the prism of oil revenues. It goes without saying that one of the first victims of the political Dutch disease is democracy. However, an even more dangerous consequence of the political Dutch disease is the leader’s loss of a sober assessment of reality. Under the impact of their technological achievements, both Stalin and Khrushchev, with their skewed visions of reality, moved the country closer to a major war. Putin’s euphoria over oil prices may not be as great as his predecessors’ enthusiasm, but his

aggressiveness in foreign policy in general, and toward the US and Russia’s neighbors in particular, has clearly increased since 2005. The shift occurred in late 2005 when Moscow brandished its gas weapon against Ukraine and indirectly against Europe. Russia’s foreign policy has hardened (despite some cooperative gestures toward the West) and influenced several international conflicts, including issues surrounding North Korea, Iran, and the Middle East. The conspicuous demonstrations in July of friendship with Venezuela’s Chavez, another political leader inebriated by oil revenues, and the readiness to sell him weapons despite American protests were clear signals of unfriendliness toward the US. Russian media treated Moscow’s attitudes toward Chavez as an obvious demonstration of disregard toward American concerns. Dmitry Medvedev’s proposal to make the ruble fully convertible in an attempt to renew the currency’s international status was another result of the country’s oil fever. Medvedev talked contemptuously about “the financial irresponsibility of the United States,” citing the country’s growing national deficit. He also denounced the International Monetary Fund’s attempt to promote market reforms, forgetting that only a few years ago Russia had scrounged for credits from this bank. Oil fever has not infected all Russians. The level of enthusiasm among the general public and particularly among experts does not match the levels observed after Sputnik and cosmonaut Gagarin were launched into space, to say nothing of the excitement after the 1945 war victory. Among the most persistent critics of the oil frenzy is Egor Gaidar who suggested that the leadership’s oil delirium and its disregard for the instability of oil prices were dangerous to the country. Several independent politicians and journalists have seconded Gaidar’s critique of the Kremlin’s “hydrocarbon doctrine,” demonstrating concern for the “time bomb in our political system.” Concerned about the Kremlin’s “muddled vision of the world,” some independent minds in Russia, such as Dmitry Muratov, the editor of Novaya Gazeta, insisted: “The intellect of the government changes inversely with the price of oil.”6 Leonid Radzikhovsky, a famous liberal journalist, wrote about the inverse correlation between the level of democracy and the price of oil. What is more, even Vladislav Surkov, until now the Kremlin’s leading ideologue challenging Medvedev, in a struggle for influence over Putin, suggested that, with gas as its only basis, the Russian economy would inevitably reveal its fake prosperity in the “post-hydrocarbon era.” Russia is not the only country in the world that is obsessed with oil. Every country, in one way or another, is preoccupied with oil. While the US, Europe, China, and India are concerned about fuel supply and the adverse influence of high oil prices on the economy and standard of living, several countries, including Russia, have turned their oil resources into weapons for achieving their domestic and foreign goals. As the experiences of Stalin and Khrushchev showed, Russian leaders sometimes overstretch the potential of their advantages and lose a sober perspective of reality. Mesmerized by his clout, Putin may

accept “the invitation” of the Russians to stay in power after 2008. Today, 51% of the Russians would vote for him if he decided to try for a third term, which he promised not to do. In the foreign arena, Putin has already shown less willingness to cooperate with the West and the US in particular. His foreign policy may harden even more. However, it is unlikely that Moscow will demonstrate direct hostility toward the West in the near future. The post-Soviet space is another story, however. The idea that oil will allow Russia to take control over Ukraine, Georgia, and Belorussia is deeply engrained in the minds of Kremlin politicians. We can expect an exacerbation of the political developments in the post-Soviet space, which will undoubtedly complicate relations with the West. Aside from the damage to Russia’s international relations, the oil delirium is more problematic to the country’s long-term national interests. The overconfidence in oil revenues may lead to a decline in the spirit of entrepreneurship, to a refusal to modernize industry, or even to an acceptance of deindustrialization. The obsession with high oil prices explains why the Kremlin sees few obstacles to the country’s continued move toward

an authoritative regime. It also explains the Kremlin’s conspicuous disregard for the growing problem of corruption in society. With the vision of the Russian leadership blurred, it may become increasingly insensitive to various destructive tendencies in the country. The impact of the price of oil on political decision-making in Russia is crucially important to the world and should be closely monitored.

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1NC Russia Shell (3/3) Economic collapse triggers Russian civil war and escalation Steven David, Professor of Political Science at John Hopkins, 1999 (FOREIGN AFFAIRS, January/February 1999, p. 103, “Saving America from the Coming Civil Wars,” http://www.foreignaffairs.org/19990101faessay955/steven-r-david/saving-america-from-the-coming-civilwars.html, Accessed 07/18/08)

If internal war does strike Russia, economic deterioration will be a prime cause. From 1989 to the present, the GDP has fallen by 50 percent. In a society where, ten years ago, unemployment scarcely existed, it reached 9.5 percent in 1997 with many economists declaring the true figure to be much higher. Twenty-two percent of Russians live below the official poverty line (earning less than $ 70 a month). Modern Russia can neither collect taxes (it gathers only half the revenue it is due) nor significantly cut spending. Reformers tout privatization as the country's cure-all, but in a land without well-defined property rights or contract law and where subsidies remain a way of life, the prospects for transition to an American-style capitalist economy look remote at best. As the massive devaluation of the ruble and the current political crisis show, Russia's condition is even worse than most analysts feared. If conditions get worse, even the stoic Russian people will soon run out of patience. A future conflict would quickly draw in Russia's military. In the Soviet days civilian rule kept the powerful armed forces in check. But with the Communist Party out of office, what little civilian control remains relies on an exceedingly fragile foundation -- personal friendships between government leaders and military commanders. Meanwhile, the morale of Russian soldiers has fallen to a dangerous low. Drastic cuts in spending mean inadequate pay, housing, and medical care. A new emphasis on domestic missions has created an ideological split between the old and new guard in the military leadership, increasing the risk that disgruntled generals may enter the political fray and feeding the resentment of soldiers who dislike being used as a national police force. Newly enhanced ties between military units and local authorities pose another danger. Soldiers grow ever more dependent on local governments for housing, food, and wages. Draftees serve closer to home, and new laws have increased local control over the armed forces. Were a conflict to emerge between a regional power and Moscow, it is not at all clear which side the military would support. Divining the military's allegiance is crucial, however, since the structure of the Russian Federation makes it virtually certain that regional conflicts will continue to erupt. Russia's 89 republics, krais, and oblasts grow ever more independent in a system that does little to keep them together. As the central government finds itself unable to force its will beyond Moscow (if even that far), power devolves to the periphery. With the economy collapsing, republics feel less and less incentive to pay taxes to Moscow when

they receive so little in return. Three-quarters of them already have their own constitutions, nearly all of which make some claim to sovereignty. Strong ethnic bonds promoted by shortsighted Soviet policies may motivate non-Russians to secede from the Federation. Chechnya's successful revolt against Russian control inspired similar movements for autonomy and independence throughout the country. If these

rebellions spread and Moscow responds with force, civil war is likely. Should Russia succumb to internal war, the consequences for the United States and Europe will be severe. A major power like Russia -- even though in decline -- does not suffer civil war quietly or alone. An embattled Russian Federation might provoke opportunistic attacks from enemies such as China. Massive flows of refugees would pour into central and western Europe. Armed struggles in Russia could easily spill into its neighbors. Damage from the fighting, particularly attacks on nuclear plants, would poison the environment of much of Europe and Asia. Within Russia, the consequences would be even worse. Just as the sheer brutality of the last Russian civil war laid the basis for the privations of Soviet communism, a second civil war might produce another horrific regime. Most alarming is the real possibility that the violent disintegration of Russia could lead to loss of control

over its nuclear arsenal. No nuclear state has ever fallen victim to civil war, but even without a clear precedent the grim consequences can be foreseen. Russia retains some 20,000 nuclear weapons and the raw material for tens of thousands more, in scores of sites scattered throughout the country. So far, the government has managed to prevent the loss of any weapons or much material. If war erupts, however, Moscow's already weak grip on nuclear sites will slacken, making weapons and supplies available to a wide range of anti-American groups and states. Such dispersal of nuclear weapons represents the greatest physical threat America now faces. And it is hard to think of anything that would increase this threat more than the chaos that would follow a Russian civil war.

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Uniqueness – Russia Gold Reserves Strong Now Russia’s gold reserves are holding strong now Bloomberg.com 2007 (Bloomberg.com is is among the top five most-trafficked financial sites on the Web. It is regarded as a premier site for news and financial information. “title,” http://www.bloomberg.com/apps/news?pid=20601095&sid=a70bd2vBDwrk&refer=east_europe, 09/13/08, Accessed 07/20/08)

Russia's foreign currency and gold reserves rose for a second consecutive week after registering a record weekly decline last month, the central bank said. The reserves, the world's third biggest, reached $417.1 billion in the week ended Sept. 7, rising $1.1 billion from the previous week, the Moscow-based central bank said today in an e- mailed statement. ``The reserves have stabilized and resumed gains,'' and the outflow of capital seems to have ended, said Maxim Oreshkin, a senior analyst at OAO Rosbank in Moscow, in a telephone interview today. The cost of short-term borrowing in Russia, the world's 10th biggest economy, rose last month as corporate tax payments boosted demand for rubles and foreign investors withdrew capital from emerging markets. The nation's reserves fell by $5.5 billion in the week ended Aug. 17, the biggest decline this year. ``Stable access to liquidity will be 100 percent guaranteed,'' the central bank's First Deputy Chairman Alexei Ulyukayev said on Sept. 6.

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Uniqueness – Russia Gold Reserves Strong Now Russian gold reserves holding strong now Thomson Financial News 2008 (Thomson Financial News creates transparency, provides insight through independent news and content to enable decisions and is the trusted connection between people, transactions and ideas. “Russia's Polyus upgrades gold reserves after audit,” http://www.reuters.com/articlePrint?articleId=USL3126616920080331, 03/31/08, Accessed 07/20/08)

Polyus Gold (PLZL.MM: Quote, Profile, Research, Stock Buzz), Russia's largest gold miner, said on Monday its proved and probable reserves had risen 3.5 percent to over 71 million ounces after the completion of an audit of its Chertovo Koryto deposit. Polyus, the world's fourth-largest gold company by reserves, has invested $8 million in the Chertovo Koryto deposit, which means Devil's Trough in Russian, since acquiring it in 2004. MOSCOW, March 31 (Reuters) -

Polyus said in a statement proved and probable reserves at Chertovo Koryto, in the Siberian region of Irkutsk, amounted to 2.6 million ounces of gold. Measured and indicated resources amount to 3 million ounces. Inferred resources amount to another 109,000 ounces of gold. The calculations were made to Joint Ore Reserves Committee (JORC) standards and based on a cut-off grade of 0.8 grams per tonne and a gold price of $625 an ounce. Polyus, which produces a quarter of Russia's gold, is majority owned by Russian billionaires Vladimir Potanin and Mikhail Prokhorov, who are involved in the complicated process of dividing their various assets. The

company plans to more

than triple output by 2015 after bringing several large deposits in Siberia and the Russian Far East on stream. Output in 2007 was 1.2 million ounces.

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Impact Ext – Russian Economic Collapse goes Global Russian economic collapse goes global – other countries relying on Russia now for financial stability Gilman 2008 (Martin Gilman is a former senior representative of the IMF in Russia and professor at the Higher School of Economics in Moscow. “Well-Placed to Weather an Economic Storm,” http://www.moscowtimes.ru/article/1028/42/351308.htm, 01/16/08, Accessed 07/20/08)

Faced with this gloomy global outlook, Russia is well placed to weather the storm. In fact, not only is the Russian economy likely to decouple largely from a sagging United States and even Europe, but its continuing boom -- mostly but not solely fueled by high energy revenues -- is sucking in both consumer and investment goods, and so acting as a motor of world growth. And the planned $1 trillion public investment program over the next decade should ensure that the country remains decoupled for years to come. Global economic collapse leads to extinction Bearden 2k (Tom, Retired Lieutenant-Colonel, “The Unnecessary Energy Crisis: How to Solve it Quickly,” http://www.franzlee.org/files/bearden_energy_crisis.doc, Accessed 07/20/08) History bears out that desperate nations take desperate actions. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction (WMD) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China-whose long-range nuclear missiles (some) can reach the United States-attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stress conditions, once a few nukes are launched, adversaries and potential adversaries are then compelled to launch on perception of preparations by one's adversary. The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate

full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, rapid escalation to full WMD exchange occurs. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself. The resulting great Armageddon will destroy civilization as we know it, and perhaps most of the biosphere, at least for many decades.

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Link – Oil prices key to Gold prices Oil prices key to gold prices –investors view it as a hedge against financial losses – a drop in oil would tank gold Reuters 2008 (Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. “Gold slips as oil prices tumble,” http://uk.reuters.com/articlePrint?articleId=UKL1652656020080716, 07/16/08, Accessed 07/16/08) LONDON (Reuters) - Gold

fell in volatile trade on Wednesday after oil prices dropped sharply for the second consecutive day, prompting a flurry a selling. New York crude oil prices fell by over $6 a barrel to touch a session low of $132, reducing gold's appeal as a hedge against fuel-led inflation. Gold has been boosted in recent weeks as oil has broken a series of record highs. However, gold has come off as crude prices have now fallen by more than $10 in the last two days on fears of slowing demand. "The liquidation we've seen in oil has definitely led to some profit-taking in gold," said Bulliondesk.com analyst James Moore." Spot gold sank to a session low of $960.35 and was at $971.10/962.10 an ounce at 11:14 a.m. EDT from $975.90/977.90 an ounce late in New York on Tuesday, when it hit a four-month high of $987.75. Gold has been supported in recent days by tumbling stocks and a weak

dollar, which on Tuesday hit a record low against the euro. But on Wednesday the dollar's recovery against the euro on optimism over stability in the U.S. financial system hit sentiment in gold, which earlier touched $969.30 an ounce. "A few are calling for another test of $1,000 an ounce, with heightened inflationary pressures, rising fears of financial and geopolitical risk and the weak dollar," said Calyon analyst Robin Bhar.

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Link – Oil prices key to Gold prices Oil prices key to gold prices – investors view it as a hedge against financial losses – a drop in oil would tank gold Bloomberg.com 2008 (Bloomberg.com is among the top five most-trafficked financial sites on the Web. It is regarded as a premier site for news and financial information. “Gold Climbs to Record as Investors Seek Alternative Asset,” http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=aRNcLXcNmNMo, 01/08/08, Accessed 07/16/08)

Gold advanced to a record and energy, metals and agricultural commodities rose as a weakening dollar sparked demand for alternative assets. Gold, copper and nickel are off to the best start since at least 1980. Crude oil gained, after reaching a record $100 last week, and corn climbed to an 11-year high. The dollar fell on concern a housing slump and turmoil in credit markets may force the Federal Reserve to cut interest rates. U.S. Treasuries and equities also declined. ``The whole economic landscape is fraught with risk and that's going to drive gold higher,'' said William O'Neill, a partner at commodity research firm Logic Advisors in Upper Saddle River, New Jersey. ``This market is going to continue to reflect a flight to quality. There's alternative-asset demand for commodities.'' Gold futures for February delivery rose $18.30, or 2.1 percent, to $880.30 an ounce on the Comex division of the New York Jan. 8 (Bloomberg) --

Mercantile Exchange, after earlier climbing to a record $884. Gold for immediate delivery rose as much as $23.12, or 2.7 percent, to $881.28 an ounce in London, the highest ever. Countrywide Financial Corp., the largest mortgage lender, fell on the New York Stock Exchange by the most since the October 1987 stock market crash. The Standard & Poor's 500 Index had its worst start to a year since 2000. Treasuries declined as the lowest yields on two-year notes since 2004 discouraged investors from buying short-term government debt. `Gold Is Sexy' `Gold is acting

like the currency of last resort,'' said Paul Sutherland, chief investment officer for Traverse City, Michigan-based Financial & Investment Management Group, which manages about $700 million. ``There's no place to go with that paranoid money. Gold is attracting that paranoid money. Gold is sexy to own.'' Bear Stearns Cos. Chief Executive Officer James Cayne is expected to resign and Barclays Capital Co-President Grant Kvalheim stepped down as their firms suffered losses from the collapse of the subprime mortgage market. Citigroup Inc., the biggest U.S. bank, may be forced to write down $16 billion in the fourth quarter, Merrill Lynch & Co. analyst Guy Moszkowski said. A report showed the number of Americans signing contracts to buy previously owned homes fell more than forecast in November. Interest-rate futures show a 70 percent chance the Federal Reserve will cut the overnight lending rate 0.5 percentage point to 3.75 percent by Jan. 30, compared with no chance a week ago. $1,000 Forecast ``Deepening recession jitters increase our

conviction in gold,'' John Hill, an analyst at Citigroup, said in a report on Jan. 6. ``We would expect strong safe-haven demand in the event of a U.S. recession and a test of $1,000 an ounce at some point.''

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Link – Oil prices key to Gold Prices Oil prices key to gold prices – investors view it as a safety net against financial losses – a drop in oil would tank gold Associated Press 2008 (The Associated Press is the world's oldest and largest newsgathering organization. The AP’s news is published in more than 1700 newspapers. “Gold hits 4-month high on oil record, stock drop,” http://ap.google.com/article/ALeqM5jND4r3BVBZu2Ogg2_yzjYnPIP8gD91ROVIG1, 07/11/08, Accessed 07/16/08)

Gold prices rose Friday, making their largest advance since first hitting $1,000 earlier this year, after another record crude rally and a tumbling stock market led jittery investors to the safety of hard assets. Other commodities traded mostly higher, with corn, soybeans, wheat and other agriculture futures rising. Gold's rally suggests investors are increasingly concerned about rising inflation as Americans struggle with $4 gasoline and the U.S. dollar continues to lose ground against its main rivals. After a week of volatile trading in the commodities complex, a myriad of dour economic developments pushed gold prices skyward: Oil soared above $147 for the first time, stocks dove on concerns that mortgage companies Freddie Mac and Fannie Mae might collapse and the dollar tumbled further against the euro. "All of these things are a pretty good recipe for safe-haven buying into bullion," said James Steel, analyst with HSBC in New York. "You're really spoiled for choice on a day like NEW YORK -

this." Gold for August delivery added $18.60 to settle at $960.60 an ounce on the New York Mercantile Exchange, after earlier rising as high as $969.10. That was gold's highest trading level since first cracking the $1,000 threshold on March 13 after the collapse of Bear Stearns & Co.

Nervousness about the U.S. economy, record energy prices and the falling dollar have helped propel gold 34 percent higher in the past year, but it's not clear if the current climate is gloomy enough to push gold back into record territory.

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Link – Oil prices key to Gold Prices Oil prices key to gold prices – investors turn to gold has a hedge – a drop in oil would tank gold Sunday Times, August 27, 2006. (“Gold remains resilient despite losing its shine,” by Joe Brennan) Gold has been re-emerging as the reserve of choice among big central banks, as the American dollar sizzled over the past few years. China, for example, intends to more than double its gold holdings to 1,270 tons this year as it diversifies away from the US dollar, while Russia is also increasing its bullion reserves. Last week, Axel Weber, the head of Germany's central bank, scoffed at suggestions the bank's huge gold reserves should be sold to shore up gaps in the country's budget. Germany has 3,428 tons of gold locked away, worth about $69.5 billion - making it the second largest holder of gold reserves in the world, behind America. "There is an inverse correlation between the dollar and the price of gold," said Mark O'Byrne, a director of Gold Investments, an Irish precious metals investment brokerage. America is battling its ballooning trade deficit with the rest of the world, which economists believe will have a long-term negative effect on the value of the dollar. Gold is up 21% from where it stood at the start of the year, while the dollar has lost 7% of its value against the euro.

Gold has also proved to be a safe haven in times of geopolitical uncertainty and is a great way of hedging against inflation. The value of gold is strongly linked to that of oil. When oil prices push higher they have a significant impact on inflation. Central banks usually use interest rate hikes as a crude way of fighting inflation. "Rising interest rates tend to dampen economic performance and this is never good news for the main assets of an investment portfolio: property and equities," said O'Byrne. If gold were to suddenly soar to $2,000 an ounce - which would equate to the level it reached in 1980, when adjusted for inflation - it would probably be best to invest in cans of beans and head for the bunkers, as that would indicate global financial markets were be in meltdown.

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Link – Oil prices key to Gold prices Oil prices key to gold prices – gold is the key functional reserve currency – a drop in oil would tank gold Associated Press 2008 (The Associated Press is the world's oldest and largest newsgathering organization. The AP’s news is published in more than 1700 newspapers. “Gold jumps near $1,000, then falls on oil plunge,” http://ap.google.com/article/ALeqM5jND4r3BVBZu2Ogg2_yzjYnPIP8gD91UH06G3, 07/15/08, Accessed 07/16/08)

NEW YORK (AP) — Gold made another run at the $1,000 mark Tuesday before a steep drop in oil prices put the brakes on the metal's rally, dragging down other commodities in a big sell-off. Crude prices fell more than $10 a barrel from their highest point in the day, beaten down as investors sold off stocks in response to growing worries about the health of the U.S. economy. Oil's drop weighed on most major commodities, with corn, soybeans, silver, copper and other energy futures all trading sharply lower. Gold began the day higher for a fifth session as mounting concerns over the

U.S. credit crisis and the beleagured financial sector pushed the dollar to a new low against the euro. A weak dollar encourages investors to buy hard assets like gold, considered a safe-haven investment during times of high inflation and economic uncertainty. A falling greenback also makes commodities cheaper for overseas investors. Gold for August delivery roared as high as $989.60 an ounce on the New York Mercantile Exchange, the highest trading level since the metal first topped the $1,000 threshold in March. But the contract later plunged into negative territory as worries about the U.S. economy sent oil skidding. The contract later settled $5 higher at $978.70 an ounce. "To have $9 or $10 fall in the pivot point of the commodities complex was something that gold could not ignore, and it didn't," said Jon Nadler, analyst with Kitco Bullion Dealers Montreal. "It was a roller-coaster supreme." Gold began its climb back toward $1,000 on Monday

after the Federal Reserve and U.S. Treasury Department announced plans to shore up troubled mortgage giants Freddie Mac and Fannie Mae — a move investors bet would further pressure the dollar and enhance gold's safe-haven allure. Other precious metals also fell Tuesday. Silver for September delivery dropped 23.7 cents to settle at $23.7 an ounce on the Nymex, while Copper for September delivery lost 5.2 cents to settle at $3.752 a pound. A host of bearish economic news also weighed on commodities prices. In his semiannual address to Congress, Federal Reserve Chairman Ben Bernanke said "numerous difficulties" are battering the economy and warned of heightened inflation risk from rocketing prices for food and energy. Later in the day, President Bush said Americans were facing "a difficult time" amid record gas prices and falling home prices. He urged Congress to enact legislation to shore up mortgage giants Fannie Mae and Freddie Mac and to follow his lead by lifting a ban on offshore oil drilling to boost domestic production. Crude's descent was preceded by a big move higher as the falling dollar prompted traders to buy oil as an inflation hedge. Light, sweet crude plunged $6.44, or 4.4 percent, to settle at $138.74 a barrel in an extremely volatile session. Prices at one point plummeted more than $10 from the day's high. Other energy futures also fell. August heating oil futures fell 14.59 cents to settle at $3.919 a gallon, while August gasoline futures tumbled 17.29 cents to settle at $3.3848 a gallon. Meanwhile, agriculture futures slumped on crude's decline and ideal growing weather in the Midwest. Corn for December delivery fell 15.5 cents to settle at $6.6675 a bushel on the Chicago Board of Trade, after earlier dropping to $6.615, the lowest since June 5. Soybeans for November delivery fell 41 cents to settle at $15.41 a bushel on the CBOT, while September wheat dropped 7 cents to settle at $8.11 a bushel.

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Link – Oil prices key to Gold prices Oil prices key to gold prices – investors view it as a safety net against financial losses – a drop in oil would tank gold TheStreet.com 2008 (The Street provides expert advice on stock trading, investing and personal finance. It is also a provider of stock market news & commentary, stock picks, & stock quote. “Technical Outlook: Charting Gold's Direction,” http://www.thestreet.com/print/story/10426051.html, 07/11/08, Accessed 07/16/08) The market focused Friday on the continued fallout of the financials, as Fannie Mae FNM and Freddie Mac FRE teeter on the brink of insolvency. These developments, along with speculation about the chances for a bailout of the government-sponsored entities, sent the market plunging. The recent waterfall decline in the indices has driven my sentiment indicators to historic lows, and that points to a high probability we will see some type of rebound next week to work off the oversold condition. However, the primary trend still remains down. With the recent

volatility in the market, high oil prices and geopolitical tensions, few places remain for investors to hide. In fact, if you haven't had a significant exposure to commodities or had a majority of your holdings in fixed income, you likely have experienced some significant losses in your portfolio. The market just doesn't have any long-term catalyst at this point to change the direction of the primary trend from down to up. That is why I encouraged investors to take more money off the table as the market rose up to its highs in May. If you didn't do that then, you may get another opportunity over the next week or so as we could rebound sharply from this oversold condition we're in currently. Golden Hedge I continue to receive a lot of questions from investors about the steps that they can take to hedge their portfolio against inflationary pressures, the volatile market and the possibility of a recession. So today we're going to take another look at gold, which is the

old standby investment to protect against rising inflation, economic weakness and global tensions. That scenario played out yesterday as gold surged $13.40 to an intraday high of $945.40, which likely resulted from news that Iran was testing more missiles capable of reaching Israel. Gold is viewed as a safe haven for investors when geopolitical uncertainties

like this arise, and that trend certainly was reflected in gold's rise yesterday. The other catalyst that helped gold Thursday was the declining dollar and a surge in oil prices. The drop in the dollar helps commodities like gold because it makes gold more affordable worldwide. You can see from the chart below of the dollar that the currency has been in a long-term decline for quite some time. Currently it looks like it is going to revisit and test its March lows -- a trend that, if it continues, would give added support to the gold market. If, however, the trend were to reverse and the dollar break above the $74-$75 resistance level, it would likely put downward pressure on commodities and gold. The renewed interest Thursday in gold sent shares of exchangetraded fund iShares COMEX Gold Trust IAU up almost 2% on increasing volume. If the price can break up above the $95 level, there's a good chance that we could see a renewed uptrend take place. If that were to happen, I would certainly like to see much heavier volume on the breakout, and the institutional money stream at the bottom of the chart should lead the price higher. On the other hand, if the price broke down below the $85 level, I would be inclined to liquidate or lighten up on positions. The chance of gold and gold shares moving higher over

the remainder of the year is heightened by the fact that summer months are usually strong for the precious metal. That seasonal trend, however, doesn't mean that investors should overweight their portfolios in this sector or avoid using protective sellstops in the event of breakdown in price.

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No Internal Link – No Correlation No correlation between rising oil/energy prices and gold Daniel Gross, the Moneybox columnist for Slate and the business columnist for Newsweek. April 11, 2006. (“Attack of the Gold Bugs: THE PRICE OF THE PRECIOUS METAL IS RISING

WHEN IT SHOULD BE DROPPING. WHAT GIVES?” Slate.com. http://www.slate.com/id/2139616/) Lately, gold has been golden. The price of the precious metal has soared in recent years. Last week, it pierced the $600-per-ounce barrier, marking a 25-year high. In trading Monday at the New York Mercantile Exchange, the contract for an ounce of gold to be delivered in June 2006 settled at a whopping $603. An ancient store of value, gold is a safe haven for investors worried that their other

monetary assets will lose value because of inflation, war, or confiscation by a tyrannical government. You'd expect gold to soar when the world economic state is parlous and inflation is rampant. But the global economy is in quite good shape. Despite the rising price of energy, inflation is generally under control. And investors, far from behaving skittishly, are remarkably blasé, as evidenced by low interest rates and low measures of volatility in stock and bond markets.

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Turn – Elections Weak perception of the U.S. economy gets Democrats elected. Gerald F. Seib, executive Washington editor of The Wall Street Journal, who has been involved in covering every presidential election since 1980 and writes the weekly Capital Journal column for the Journal. July 14, 2008. (“As Economy Worsens, Democrats Could Gain,” http://blogs.wsj.com/politicalperceptions/2008/07/14/as-economy-worsens-democrats-could-gain/)

On the theory that the worse things get generally, the better they are for Democrats specifically, it is hard to imagine that the newest outbreak of bleak financial news represents anything but another boost for the party. In fact, the jarring financial developments of the past few days — the collapse of a big bank and the scare over the viability of mortgage giants Fannie Mae and Freddie Mac — seem likely to reinforce the basic dynamic of the campaign year: Voters think the country is in a mess, and they are more inclined to trust Democrats to clean things up. To make matters worse for Republicans, the financial scares have reinforced the specific argument that government intervention in the economy, a natural inclination for Democrats, sometimes may be necessary. Even the Bush administration, resistant to intervene in markets, and reluctant to ride to the rescue of investors in the specific case of the housing mess, stepped up over the weekend to offer a virtual government guarantee that Fannie and Freddie would stay solvent. It grows ever harder for Republicans to campaign against government intrusion in the marketplace the more Republicans themselves appear to be losing faith in letting markets work. And if voters want intervention in the economy, why not get the real deal with Democrats? In sum, it is hard to imagine new economic scares represent anything but more bad news for Republicans, who tend to get the blame for things that go wrong simply because they have controlled the White House for the past seven years. The first question is how that affects the presidential contest. For Democratic Sen. Barack Obama, the government takeover of the failing

IndyMac Bank and the weekend plan by the Treasury Department and Federal Reserve to stretch a safety net beneath Fannie and Freddie play naturally to his argument that the government should be more proactive in stabilizing the housing market.