What You Don't Know About Silver, Oil and Even Your Morning Cup of Coffee

Did your day start with a cup of coffee? Or do your prefer water?

Of course, there's water in your coffee, brewed with coffee to make your morning cup of joe. But it takes a lot more water than that just to get the beans to your house or favorite coffee shop.

A Dutch study recently found that making a cup of coffee takes 140 liters of water, most of it to grow the coffee beans. Another study states it in different terms: 20 tons of water to make one pound of coffee.

This demand for water, hidden from most of us, but used for our most basic commodities, is sure to be a hot political and economic topic as the world's population continues to grow and to modernize. Just something to ponder over your next cup of coffee.

Stuck in the cement

Ever feel like you are mired in wet cement? If you are a fan of wet cement, you may want to schedule a visit to China soon. For the past 18 years, China has been the world's leading consumer of cement, according to the China Building Materials Industry Association. In any given year, construction crews in China pour 38 percent to a whopping 44 percent of the world's concrete, as the country evolves into a first-world economy. China is now the world's second largest automotive market; the Chinese buy more cars than any country other than the U.S. So there is a high demand for highways, driveways and parking structures in China.

All those cement mixers working in China need access to fresh water - you need about 6 gallons of water for every 100 pounds of cement. Supplying all that fresh water is a growing challenge.

As the world's population continues to grow and large countries like India and China continue to modernize, the pressure on the world's fresh water supply will continue to grow. How the world responds to that pressure may be the great economic challenge of this century.

A jolting statistic

Demand for electricity has grown dramatically over the last two decades, and as our society becomes even more technologically driven, the need for electricity will continue to grow. According to the U.S. Energy Information Administration, total demand for electricity in the U.S. is expected to increase by 41 percent from 2005 to 2030.

The demand for more electricity is driven in part by all the computers and other electrical devices which are now part of our daily lives, but it is also driven in part by what happens when we turn all those machines off. Think of the clock on your microwave, DVD player and stove. Think of the computer printer which "goes to sleep" but is not really off. All of these items take a small amount of electricity. Multiplied by millions of American household, our electricity demand is high.

At the wholesale level, electricity is a commodity, and with this growing demand, it is no wonder that at $217 billion a year it is one of the largest commodities in the U.S. economy.

What's in that barrel of oil?

While the price of oil has a lot to do with what a gallon of gasoline costs at the pump, that barrel of oil makes a lot more than just gasoline. In fact, in a 42 gallon barrel of crude oil nets about 48.4 gallons of finished products, as various additives are introduced during the refining process.

A typical barrel of oil will be used to produce about 24 gallons of motor gasoline. That's just a rough average because many factors, including the type and grade of the oil, as well as the economic factors for the refineries, impact the final outcome. Other products coming out of that barrel will be jet fuel, fuel oil, asphalt, lubricants and several other odds and ends.

The price of oil only amounts to about, on average, 60 percent of the cost of a gallon of gasoline. Taxes add on another 16 percent, refining costs and oil companies profits are about 17 percent and distribution costs are about 7 percent. These percentages vary with the price of oil and the tax rates of various states.

There's silver in them there gadgets!

It is a good thing someone invented the digital camera. We needed that extra silver.

The amount of silver used for photography - you can't develop a traditional photo print without silver halide in your chemical mix - has dropped by about half since 1998 and is continuing to fall. It's a good thing, too. Even with the falling demand for photographic uses, the worldwide demand for silver is increasing.

What's causing this increased demand? Well, your digital camera, among other things. Digital camera and all sorts of electronic devices use silver membrane switches, which are found behind the buttons of control panels for cable television, telephones, microwave ovens, learning toys like touch and tell or speak and spell, and computer keyboards. Add in other electrical uses, silverware, coins and jewelry, and the demand for silver remains strong. In fact, 2006 was a record year in the U.S. for the overall use of silver.

So the next time someone wants to take your picture, don't say "cheese," say "silver."