Prices are going Up UP and AWAY. Why are prices going up? Is there any rhyme or reason? Oil prices just shoot up last year. There was no major event so to speak like the Iraq Invasion or major oil fields suddenly depleted.
There are 3 types of people:
1. Those who make things happen
2. Those who watch what happened
3. Those who wonder what happened
When it come to this price increase, I belong to category 3. We all know increased incomes in China have generated huge demand. Drought in Australia diminished production. Have demand for oil or energy been so dramatic? Is there a decrease in production capacity? US dollars weakening is due to mismanagement of the Bush Administration - Iraq war is an example. What else is happening. It is hard to fathom all the changes that is causing huge hardships around the world.
Is there an invisible hand? Is God punishing us? How can God effect prices? Is Man the root cause by destroying the Earth and causing Global Warming? I remember the oil crisis in the 1980s. There were huge interest in alternative energy such as wind, solar, waves and geothermal. Then oil fields were discover in North Sea and Russia. OPEC is no longer controlling all the production. Oil prices dropped over time to a low of US$20 per barrel. Now it is at US$139 per barrel. US dollar was stronger in the 80s. Still it is a 7 fold increase from the historic low and more than 100% increase from last year.
Buckle up, it will be a wild ride in our immediate future ahead.
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