Wow... When I predicted that oil could be on its way to reach USD150 or USD200, actually, I really do not want it to happen... But looking at the way the market is shaping up, there seems to be no way that there will be any drastic reversal in the near future... There is very unlikely that we will get any huge oil discovery since most of the major oilfield has been discovered.
The continuing up trend of the oil prices is not at all good, since at the moment the world depend so much on oil. Alternative energy is not readily commercially available and it may take time for new technology to emerge to replace our dependency on oil. The world has been very much driven by oil and thus the steady increase of oil prices is not good at all.
To make matter worse, it is not only the oil price that has gone up, other goods including rice also following the same trend. But what actually the driving force of these price uptrend? Is it the weakening USD value or it is driven by fundamentals? I have read some of the analyst made by people around the world and there may be some information that is not being disseminated accordingly and thus this could well be the driving force of this price uptrend.
Base on some of the analysts, the most affected countries at the moment are those in the Asia and America., and maybe the Africa.. It is also reported that the Europe and the south America is not so much affected... The high price of rice maybe as a result of prediction that there will be a low supply of rice due to the natural disaster such as storm or drought which may affected some of the rice producing countries.
Some analysts are also still waiting the effect of the price increase to hit Europe, since the European countries have not being badly affected by the increasing oil price. According to some analysts, the oil price in Europe are relatively more or less the same since the European currencies appreciated against the USD. Hence the increase in price and other goods are not really affecting these countries. Maybe Europe through its strategic economic collaboration are more sustainable in dealing with the effect of global economic situation and have a better economic structure to absorb or to cushion any global economical impact.
The world economy are still more or less traded in barter system, only it has becoming more complex, sophisticated and less fundamental due to the introduction of modern banking system and paper money which generated a credit base economy. The complex structure of the world economy has provided the opportunity for the people to create wealth by using qualitative values and thus there is loop holes that could be exploited to increase a value beyond its fundamental and this has lead to the system to naturally balance itself to recreate the economic equilibrium and which along the way will have a negative impact on the system. Any system which is not based on a strong fundamental platform can collapse easily, and thus, a credit base economy with a weak fundamental support can be easily rock down by any natural initiative from the system to balance itself. There are so much issue that need to be address in the world economy, and the most fundamental is to determine the exact fundamental of supply and demand status for key goods such as the oil, foods, raw materials and energy that is needed.
In this emerging democratic world, sometimes due to the competition and competitiveness of survival, the world is being influence by a different sets of values and cultural differences that may altered the priorities and the perspectives of humanity. People sometimes are being blinded and being tied up with the perceive values and tend to forget the fundamental values of humanity and thus, we can no longer be able to set the priorities. For a successful businessman, driving a Mercedes is a very important item and high on his priority, but for a low class worker, what he is constantly think is about getting a loaf of bread for his family to eat. Some people may set their priority to have a nice holiday on a overseas trip, but other people need to skip lunch because they cannot afford to have it. Well, some people may argue, if we keep thinking about the lesser people, then we cannot move forward and will always be tied up with the charity works. Well, that I think is a different issue, but for now, I just want to have a check and balance on the situation.
Then how can we solve these economic issues? Well at least Annika Sorenstam just realize that there is more than the competitive golfing as she announce her is retiring at the end of the LPGA season to focus more on her family and her business. Maybe the government can play a more positive role in addressing the economic problem. Well at least the Malaysian government have been very aggressive in increasing the wages for the government servant in the recent years, and this may have a mixed effect on the overall wage structure of the private vs government.
I think the economic need to be operated on a strong fundamental basis. With the strong fundamental, productivity can be enhanced and people can have a strong guidelines and way forward towards the economy. With the strong fundamentals, hopefully the economic structure will be more resilient to economic crisis and the economic balance can provide a better initiative for a better lifestyle for more people.
The continuing up trend of the oil prices is not at all good, since at the moment the world depend so much on oil. Alternative energy is not readily commercially available and it may take time for new technology to emerge to replace our dependency on oil. The world has been very much driven by oil and thus the steady increase of oil prices is not good at all.
To make matter worse, it is not only the oil price that has gone up, other goods including rice also following the same trend. But what actually the driving force of these price uptrend? Is it the weakening USD value or it is driven by fundamentals? I have read some of the analyst made by people around the world and there may be some information that is not being disseminated accordingly and thus this could well be the driving force of this price uptrend.
Base on some of the analysts, the most affected countries at the moment are those in the Asia and America., and maybe the Africa.. It is also reported that the Europe and the south America is not so much affected... The high price of rice maybe as a result of prediction that there will be a low supply of rice due to the natural disaster such as storm or drought which may affected some of the rice producing countries.
Some analysts are also still waiting the effect of the price increase to hit Europe, since the European countries have not being badly affected by the increasing oil price. According to some analysts, the oil price in Europe are relatively more or less the same since the European currencies appreciated against the USD. Hence the increase in price and other goods are not really affecting these countries. Maybe Europe through its strategic economic collaboration are more sustainable in dealing with the effect of global economic situation and have a better economic structure to absorb or to cushion any global economical impact.
The world economy are still more or less traded in barter system, only it has becoming more complex, sophisticated and less fundamental due to the introduction of modern banking system and paper money which generated a credit base economy. The complex structure of the world economy has provided the opportunity for the people to create wealth by using qualitative values and thus there is loop holes that could be exploited to increase a value beyond its fundamental and this has lead to the system to naturally balance itself to recreate the economic equilibrium and which along the way will have a negative impact on the system. Any system which is not based on a strong fundamental platform can collapse easily, and thus, a credit base economy with a weak fundamental support can be easily rock down by any natural initiative from the system to balance itself. There are so much issue that need to be address in the world economy, and the most fundamental is to determine the exact fundamental of supply and demand status for key goods such as the oil, foods, raw materials and energy that is needed.
In this emerging democratic world, sometimes due to the competition and competitiveness of survival, the world is being influence by a different sets of values and cultural differences that may altered the priorities and the perspectives of humanity. People sometimes are being blinded and being tied up with the perceive values and tend to forget the fundamental values of humanity and thus, we can no longer be able to set the priorities. For a successful businessman, driving a Mercedes is a very important item and high on his priority, but for a low class worker, what he is constantly think is about getting a loaf of bread for his family to eat. Some people may set their priority to have a nice holiday on a overseas trip, but other people need to skip lunch because they cannot afford to have it. Well, some people may argue, if we keep thinking about the lesser people, then we cannot move forward and will always be tied up with the charity works. Well, that I think is a different issue, but for now, I just want to have a check and balance on the situation.
Then how can we solve these economic issues? Well at least Annika Sorenstam just realize that there is more than the competitive golfing as she announce her is retiring at the end of the LPGA season to focus more on her family and her business. Maybe the government can play a more positive role in addressing the economic problem. Well at least the Malaysian government have been very aggressive in increasing the wages for the government servant in the recent years, and this may have a mixed effect on the overall wage structure of the private vs government.
I think the economic need to be operated on a strong fundamental basis. With the strong fundamental, productivity can be enhanced and people can have a strong guidelines and way forward towards the economy. With the strong fundamentals, hopefully the economic structure will be more resilient to economic crisis and the economic balance can provide a better initiative for a better lifestyle for more people.
3 comments:
Hmm... Maybe it is true that the European countries and not badly affected. The oil prices may have gone up in USD but it seems the negative effect is not as bad as anticipated. Maybe fundamental of the world economy is stronger than what is thought to be and this have cushion in the impact of rising oil prices.
Or maybe, the negative impacts have not started yet for some countries, since the countries are able to absorb the impact and balance the economy.
Anyway, the oil crisis and the food crisis should serve as a strong inidcator and alarm signal for the economy. Maybe the partial increasing food price can have a positive effect in balancing the economy and swing the economic pendulum to be operated fundamentally.
The attached youtube is pretty cool music video... Some good message also in the video...
Good words.
Post a Comment