World governments have not learned their lessons from 20th Century history. It is inevitable they will generate a conflict with “global implications” somewhere soon. The price of oil demands it.
Oil continues to fall on world markets, a sure sign of the depths of the slowdown in the global economy.
What is of greater concern to the financial system is oil is directly pegged to the value of a dollar. Given the massive amounts of worthless paper the Federal Reserve has been pushing onto the scene, oil should be going up simply from devaluation of the dollar. The Fed, since it started printing for the Toxic Asset Relief Program in late 2007, has pushed about $5.2 million worth of greenbacks into the world’s system. America started with less than half that in the supply chain so oil should be about three times the price it was in 2007. That is the only upward pressure on the price of crude in the world currently.
That’s where concern about the true state of the global economy arises.
Demand for oil is weakening almost by the hour so manufacturing has to be slowing. Producers, eyeballing predictions of $7, $8 or even $10 per gallon for gasoline at the pump, have developed several large fields in the last four years so production is rising as demand started dipping.
This means the world is awash in unwanted reserves of oil on a scale not seen since the sands of Saudi Arabia were first exploited by Texaco–hence the falling price at the pump. The downward pressure is much larger than the upward pressure created by an oversupply of dollars.
All this can change in a millisecond with bullets flying at the wrong place at the wrong time but right now the world has more proven reserves than can be utilized any time soon. The global economy is thus at a crossroad moment.
Without an escalation of war, oil prices will continue to drop. Syria becomes the linchpin. If NATO or the United Nations or whomever can accelerate the pace of the conflict currently underway in Syria, there will be false upward pressure put on the world’s top commodity.
Governments around the globe will be able to proceed, with more popular support than ever, on the path to green economy. The downside for the world’s population, as Spain and Japan have both proven over the past 20 years, is green economies eliminate jobs when trying to compete with fossil fuel-based economies. Without jobs the world economic situation spirals further into recession because fewer consumers will be able to participate.
Those consumers without jobs will be more reliant than ever on government handouts. Governments will then have more power than ever because more of the population will be indebted to their social programs.
Look for a quickening of outside pressures on Syria’s internal conflict so it can erupt into a full-blown war. The initiation of the world’s military might once again will be used to boost economic output for the conflict and continue a false economic benefit for the rebuilding effort later on.
It is not the best answer for the world’s population but given the greedy nature of the world’s elite to exercise their power it will undoubtedly be the one leaders will heed. The easy way to read the nearness of the deadly tramp of war’s operations is to watch oil prices. Battle will be senseless and achieve nothing but a distraction of popular scrutiny from the horrendous shape of the global economy.
“I have sworn on the altar of God eternal hostility to every form of tryanny over the mind of man.”–Thomas Jefferson