Oil at 100 dollars
Is an invitation for worldwide depression?
Oil is already testing 75-80 USD per barrel rate. It can even inch towards 100 USD per barrel in the near future according to many analysts.
It appears that the impact of such high Oil prices is not being estimated realistically nor effective steps are being initiated to bring down the oil prices to levels that are affordable and sustainable. No real alternatives effectively safeguarding the economies of the world are visible. Even if the developed nations can survive a few years at the most with high oil prices, the developing and under developed economies are having no such safeguards and collapse under the burden of the unsustainable Oil prices. The research on alternative sources of energy is painfully slow only because policy makers are unable to see the impact on their economies in store. Only countries exporting oil and oil companies and oil traders get reap the benefit leaving a new world order of rich countries with oil and poor countries without Oil reserves.
If serious thought is not given by policy makers round the world to address the reasons for the abnormal rise in Oil prices and work for solutions that reduce dependence on Oil as the main source of energy, with the purchasing power of people of majority nations suffering a severe blow, another world wide depression is round the corner.
Imagine, if the imbalance in Oil price is not rectified, the demand for automobiles, new homes, and all the sectors that contribute to the growth dynamics of nations around the world suffer severely, with the consumer spending coming down drastically.
If we want to avoid worldwide depression in the making the following steps are urgently needed.
Firm resolve of nations to go into the root cause of the problem in Mid East and coming out with a solution that if acceptable to all the warring communities and ensuring peace and stability in that region. The world leaders who can influence the mindset of both the communities, must head for Lebanon and Israel and stay put there till the acceptable solutions are worked out.
Serious efforts for encouraging alternative sources of energy.
Resolving the nuclear issue with Iran, and ensuring peace and stability in Iraq.
Coming to an understanding with the Oil producing nations on the need to maintain the Oil prices without further escalations.
Curbing the trading in Oil futures, to avoid spiraling of Oil prices on speculation
Assistance from developed nations to developing and underdeveloped nations by way of subsidization of the high Oil prices till the Oil prices are reduced.
Unless these steps are initiated urgently, we may be nearing a worldwide depression that will exhaust the consumer spending and national savings to a large extent.