Thursday, February 24, 2011
TurmOIL Across the World
2011 has begun with massive unrest across the Middle East and especially North Africa. Revolts and revolutions have sprung up across different countries such as Tunisia, Egypt and now Libya as I write this. To a lesser extent Iran, Yemen, Bahrain and a few others have joined this bonfire of discontent. What is the cause of this? Where will this lead to? There are many theories both presented by mainstream media and other media sources. It is not simply a black and white issue in my opinion. There are many causes to the civil unrest. Many of these countries have ruthless dictators that have hung to power for decades. I believe these kinds of revolts against governments and authorities are going to spread to other countries and not just in North Africa and the Middle East. Last year we saw minor skirmishes in different areas of Europe. I believe this is going to go worldwide!
The internet has changed the way people communicate and unite. Social networks such as twitter and facebook have connected people together with certain causes and beliefs and made it easier to organize. The population is waking up to certain global issues. Corporate and government corruption has been exposed like never before. Websites like Wikileaks, Infowars and many others have informed people the real corruption of our world leaders and major corporations. Big Pharma and Big Agra are example of how greedy and corrupt some of these corporations have become. Big Corporations and Governments across the world are finding it more difficult to hide their dirty deeds with the increasing availability of the internet to the middle and lower class. What happened in Egypt this past month has also shown people that corrupt governments and dictators can be ousted out when people band together. I am not saying that the replacement leadership in Egypt will be great, but anyone around the world wanting to overthrow corrupt leaders were given some type of hope by what transpired in Egypt.
Food prices are going up worldwide. Prices are up because of a worldwide surge in commodity prices that has many causes. Speculation from Wall Street and big banks is one main reason. The current spike in food prices, which has now exceeded the price spike in 2008, has been blamed on various factors, including unusual weather events, higher demand, smaller crop yields, and the use of food crops for biofuels. The World Bank is warning that global food prices have hit dangerous levels, particularly in poor countries where the prices of many key staples have jumped by more than fifty per cent in the past six months. When the average person sees the big banks being bailed out by tax payers and austerity measures being imposed, while the lower to middle class are being forced to do more with less, there is much anger. More people are going hungry when they watch their leaders living a lifestyle of extreme luxury.This anger along with the ease of communication offered by the internet and social networks leads to revolts and revolutions.
Just less than three years ago in July 2008 the price of oil peaked at $145 US a barrel. It was at time the economy started to unravel in much of the Western world. The price of oil along with other factors including banking scams almost crashed the economy and we haven’t fully recovered yet. Oil is the backbone to our economy in North America. The price of food in fact is greatly related to the price of petroleum. By the end of 2008 oil was down to just over $30 a barrel. How is that for a price adjustment! Fast forward to 2011 where we entered the year with oil in the $80 US ballpark. The economy is still fragile in many parts of the world despite what the mainstream media reports. With the revolutions in Libya the price of a barrel of oil has jumped over $10 in just a few days to $100 a barrel. If the bonfire explodes further in the Middle East we can expect $145 oil again and perhaps even higher. Add to this the depreciation of the US dollar due to its massive debt, it will add to the cost of oil and food in the United States. With an already depressed economy in many areas and rising food prices, it doesn’t take a genius to predict that the riots that are happening in the Middle East and Africa will spread to Europe and even here in North America.
Three years ago when the price of oil spiked there was much talk and debate about alternative energy. Hybrid and electric cars were discussed a lot and some companies introduced hybrid models onto the marketplace. Also in 2008, after the oil spike the economy was teetering on collapse. But oil went down to under $40 US a barrel and the government bailed out the failing banks and corporations and all was well it seemed. The general population shrugged it off and went back to the way it was in many cases before 2008. Even talk of alternative energy has subsided somewhat since 2008 in my opinion. We should have looked at 2008 as a serious warning! Did we heed that warning? I am not sure that we did. We a now facing a perfect storm with rising gas prises, rising food prices, and more economic pain. Add to that riots and revolutions in much of the world.