III Timothy

This blog is dedicated to helping youth pastors and young pastors improve their congregations and groups, and to provide analysis of world events. Brought to you by oddparts.com, the Christian Source for Bulk Inkjet Ink and Toner Refills.

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Location: The Warehouse, Ohio, United States

Our primary writer is a weatherbeaten veteran of the Rodent Wars, where he became highly decorated for the destruction of many vicious rodents. Now that he is retired, he sneaks onto his blog every night and writes about world events.

Wednesday, June 18, 2008

Oil, Credit, and the Economy

As I write this, oil is now just under $140 per barrel. The credit crunch is slowly moving through the economy, and layoffs are beginning to happen at an ever increasing rate. Another round of sanctions is expected toward Iran - if not war. Iran has just withdrawn $75 billion from Europe. The dollar continues to fall. Food prices are doubling around the globe. What is in store for us in the near future?

My view is that we are headed toward a speculative peak in oil over the next 6 months, driven largely by Iran's manipulation of oil prices through saber rattling. The Iranians make considerable profit by appearing belligerent and uncooperative; everytime the Iranian President makes a statement against Israel, oil prices go up. And that is what I believe is truly driving the upward push in oil prices: wise speculators expect that there will be a nasty Iranian war sometime in the next two years. The Russians are willing to cooperate with this psychological game, for it increases Russian power and profits also.

The effect of this oil runup is predictable. Millions of American, European, and Japanese workers will lose their jobs over the next two years. The effect upon China is less predictable. If China continues to subsidize oil prices, they will experience continued growth and gains in marketshare, but at a tremendous cost in fuel subsidies. If China allows gasoline and Diesel prices to rise, they may experience substantial social unrest as the impact leads to layoffs and squeezes farmers and city workers alike. If China merely freezes gasoline and Diesel prices without subsidizing their oil companies, then they will experience shortages, once again leading to unrest. Of course, all of China's subsidies may be in vain if the American and European slowdown leads to a substantial cut in Chinese exports. A round of layoffs in America means more people on unemployement. But a round of layoffs in China can mean starvation and major social upheaval.

What should the average person do?

1) I would begin to plan for a combination of high fuel prices and a layoff.
2) If you can afford to, purchase a new or slightly used high-mpg car when this summer's sales begin.
3) Look at saving money immediately by biking or walking to work. If you can, work from home. If you have the option, transfer to a job closer to home. This is particularly true if you work in an industry with many similar jobs such as teaching, medicine, food service, or retailing.
4) Start saving money now by looking at sales and buying in bulk. 25 pounds of rice is still a great buy and can feed a family of four for nearly a month.
5) If you haven't done it yet, start refilling your printer cartridges. $35 can buy enough ink to refill a common cartridge 15 times, whereas buying the new cartridges would cost you over $400.
6) Change from air conditioning to fans; from heating to sweaters.
7) Buy two tomato plants, plant them in pots, and move them indoors when the frost comes. Sell the extra tomatoes to your neighbors.
8) If you have space, go to Lowe's or Home Depot, buy a grape vine or two and plant them. Next year you will have grapes.
9) If you have space, plan a garden for next spring. Tilling the soil this year will make a tremendous difference for next spring. Buy some Roundup and kill the grass in your target area this fall. After a week, turn over the soil with a spade or borrow a rotatiller. A 10 x 40 foot plot of land can make a big difference to your food bills next summer. There are dozens of sources online for fruit and vegetable growing advice - for example, put into Google "growing tomatoes" or "planting grapes".
10) Join a church. A church can be a tremendous source of support in times of need.