martes, 7 de agosto de 2012

The economic conjuncture is dominated by two facts: the possibility of war in the Middle East and the European crisis


Extract
An attack to Iran might set the oil prices over $500, while the intensification of the pressure on the economies of Greece, Portugal, Spain and Italy might provoke unsuspected political changes in the political map of Europe. The base for this hypothesis is explained in the followings paragraphs.
  1. Projection of the oil prices
Nobody can predict the future. The future is unknown. However, the historic experience is an important source of knowledge. In the past, as a consequence of the conflicts at the Middle East the oil prices reached its highest level. This happened after the War of Yom Kippur in the year 1973 and later, in 1979, in occasion of the Sha of Iran, Reza Pahlevi fall and the Iran-Iraq war in 1980.
For the year 1970 the oil price was $1.25. By effect of the Yom Kippur war in 1973, the oil prices reached $10.7. By effect of the Sha fall and the Iran-Irak war the oil prices reached $40 for the year 1980. This represented an increase of 3,200 % between 1970 and 1980.
In the book Running Out, How Global Shortages Change the Economic Paradigm, page 36, Algora Publishing, New York, year 2008, was made a projection on the future of oil prices as a consequence of its scarcity  by depletion or scarcity because of political conflicts. The estimated projection of price was $512 for the year 2012. (1) (2)
  1. Projection of the European economic crisis
The application, in the 90s years, in Latino America of the same economic program that is developed now to Europe provoked a deep political change in the region. As a consequence of that program leftist and/or nationalists parties won the elections in 14 countries of Latin America.
What might happen in Europe?
  1. Conclusions
-          The natural resources scarcity, especially water and oil is something real. The current drought in the United States is a clear proof. Something similar happen regarding the oil. Therefore, a restriction in the supply as a consequence of geological causes or political causes would rocket the prices to unsuspected levels. This fact might produce a severe world recession.
-          The European crisis has been created by Germany to guarantee its supremacy in Europe and the market for its exports.
-          Germany needs the European free market for their exports but other members of the community might consider the advantages of to stay or not in the Union.
-          A mistake in the rigid application of the norms by the European Central Bank, the International Monetary and the authorities of the Union might provoke the collapse of the euro and a global financial crisis.
-          If the energetic crisis, by a conflict in the Middle East coincide with the financial crisis in Europe, then the world situation might be no easy at medium term.
(1)    Running Out, How Global Shortages Change the Economic Paradigm, Algora Publishing, New York, 2008.

No hay comentarios:

Publicar un comentario