As things continue to take shape, it is looking more and more like the world will step behind US President Barack Obama on getting out of this mess. Although the plans sound good and are highly motivational as they were mostly presented in a Political speech, the foe that pushed the world over the edge is lurking to do it again.
Perhaps the word ‘countdown’ should be removed from the title at this point. It seems fairly clear we have passed zero already. Jobs are falling off like leaves on a Oak tree in Autumn. Even the word ‘Depression’ has been heard in the news on more than one occasion, and that word is the Grim Reaper of economic status.
So assuming for the moment the world will stand behind US President Obama, there is still the problem of oil prices. For the moment the price of oil is at a level that economies can assimilate. But once oil goes past $50.00 per barrel there will start to be a drag on any recovery. Once economic recovery starts the price of oil will start back up as demand increases. If oil hits $100.00 per barrel then it could collapse the economy again.
Taking note here there has been some talk that the problem was not so much the price of oil but shoddy banking practices. Well to be frank this is how Connecting the Dots sees it. The word shoddy is entirely appropriate. Once the pressure of oil got too high, they shoddy practices collapsed. As those shoddy practices were intertwined with strong banking practices, it left things looking like advanced osteoporosis once they fell.
There is only a few options for dealing with the price of oil. They are increase stockpile reserves, or override the price. However in both cases they can not go on forever. They are the short term fix that can buy months at the most. The long term option is to move away from oil dependency. When that happens even the shoddy banking practices can survive.
So to put this as simple as possible, spending money needs to get back into the wallets of people, and oil needs to be out of the picture. Unfortunately there will be several shades of grey we will need to go through before that will happen. So unavoidably the price of oil will act as a governor only allowing economic recovery to progress so far.
Relying on a government or one man unfortunately is a recipe for prolonged problems. It essentially comes down to each and every person to remove themselves from oil dependency. The approach of ants and not ox is what will provide a layer of insulation from oil. Ants can do collectively what an ox can do, and that is the mentality that people around the world must take. Essentially people allowed themselves to be lured into oil dependency, and now the price is being paid.
You do not have to live a life like the Amish of Pennsylvania, but there are some lessons they can teach us.
This is part of a periodic series.
I fully agree with your conclusion. Oil dependency should never have gone as far as it did and we have Bush to thank for it. His tight connection with the oil industry made sure no alternative energy sources were explored.
I enjoy reading your articles but if you could watch the typos and proof things before publishing it would help.