Posts Tagged ‘advice’
On December 15, 2008, Peter Zeihan wrote “Falling Fortunes, Rising Hopes and the Price of Oil”. See it at:
Stratfor is the world’s leading online publisher of geopolitical intelligence. Thus, it is an amazing source of real news and analysis.
Mr. Zeihan’s article begins: Oil prices have now dipped — albeit only briefly — below US$40 a barrel, a precipitous plunge from their highs of more than US$147 a barrel in July. Just as high oil prices reworked the international economic order, low oil prices are now doing the same. Such a sudden onset of low prices impacts the international system just as severely as recent record highs.” Please see it at the link for the full article.
My thoughts:
I would emphasize the tremendous risk economically, politically, and globally that severe volatility (both on the upside and downside, of valuations for energy, currency, food, labor and more) can and will present to the US and all global economies and cultures.
Though economically, the US will benefit from significantly lower energy costs and many, many other commodities which have inflated over recent years due to the the rising energy costs and the great speculation/investing in “hard assets”, the risks to our way of life and our economic vitality are potentially greater.
The article describes the potential impact on governments and regimes, and the possible instability that will likely ensue, given human nature. Interestingly, I have been pounding the table with my equity investor clients on the reasons to purchase stocks in defense oriented companies, due to these very reasons. This article, plus the recently announced government spending plan, fully supports the strength of the sector and the essential need for continued development, irregardless of our incoming government’s timetable for Iraq.
Interestingly, our financial leaders are extremely concerned about the potential for spiraling deflation. They have defined deflation as the deferral of purchases in anticipation of lower prices. From my vantage point, the deflation that we are currently experiencing is more of the reversal and undoing of inflation of past years. Additionally, in the economic studies I have read recently, the decline in current consumer spending has not been due to “waiting for lower prices” but due to the lack of money to buy goods and services within neighborhoods and communities throughout our country and in many places in our interconnected world. The volatility economically and emotionally of having significant access to money (through savings or credit) to having little or no discretionary spending capability should be an area of focus for our national and global leadership.
In this holy season, as well as this season of new beginnings, we all must be optimistic about tomorrow and at the same time pray for political, economic and social stability locally, nationally, and globally .
All the best for the New Year!
I am thrilled to be up and running with this blog. The US economy is shuddering to a trickle, the markets are continuing to fall, house values are moving lower still, and foreclosures and bankruptcies are skyrocketing. There are new and major layoffs announced each day. And, our government, including the Treasury, Federal Reserve and SEC, continue to make the situation worse rather than better.
The failure for the government to intervene consistently scares the hell out of me. I am not for intervention, but we are in such a bind, intervention is the only hope.
I will be blogging regularly on the tough financial situations so many are facing, sharing ideas and suggestions, and recommendations.
Our website, http://www.moneyassistant.org, is not fully operational, but will be within the next few days. It will be a resource for those facing challenges, including small businesses and families, and also be a place to find opportunity to find solutions. We will attract investors and lenders and others seeking solid profits on their investments.
The first iteration will be a work in progress. We ask for your patience, understanding and feedback.
Given the number of friends I have in dire situations, I am hoping that my comments and work is beneficial and helpful.
Good luck to us all!
God Bless.
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