A Well Oiled Machine

Look at that header again. Pun intended.

Here’s an activity. Take out the commodities listing for the last month. Note the price of a barrel of petrol .  And now, plot a graph.

What you will get, is a wildly oscillating Sine Wave.  The same kind of graph you get, when you plot the average blogger’s interest in blogging.

It was at 148 $ a barrel two days ago, fell to 136 a pop yesterday.

Why was the difference of 12 dollars created? Simply because a bunch of Brazilian oil workers had threatened to call a strike. Threatened to call a strike, mind you,  not an actual declaration of a strike.

What is going on with oil? Sudden spike of demand? I find that hard to believe. It’s not like consumers have found an alternative to oil. So our dependency on oil Is still intact.

Are there problems on the supply side? Saudi Arabia, the largest exporter of petrol, has increased production levels to way beyond theoretical levels.

So, what gives?

The OPEC says that it hasn’t raised its prices at production level. The refiners say that they haven’t raised their costs of refinement. The governments say that they are doing all they can, to reduce prices.

As a responsible global citizen, all I want to say is, enough with the officialese. Let me have an honest answer.

Why is it that when a Russian oil minister sneezes, prices go up( “ Fears about a slowdown in oil production”)why is it, that ( for the Indian context) in the same country, a person in Bombay pays a different rate for petrol, than a person in Bangalore? (I know, petrol duties and all that rot)

Of course, as long as we have eminently sensible people like George W Bush, who have been renowned for taking wise steps to secure oil supplies.

Here is Dubya’s solution to decrease oil prices. Cut down forests and nature reserves, so that American oil companies can drill for oil.

Never mind that it takes around 8-10 years before an oil field can begin mass production. Never mind that all that drilling will not have any benefit for the next 5 years. Never mind that all bush’s plan will achieve, is more deforestation of the American Greens.

Like I said before, Dubya is a sensible guy.

The Great(?) Depression of the 21st Century

Reading the newspapers of the last six months, one would get the impression that all the action lay in the business section.

Day after day, we’ve been fed data that suggests that we are in the midst of a recession that will rival the Great Depression of the 1930s. Some experts(who seem to appear on all channels, speaking the same words again) have claimed that this is the BIG ONE!!! That doomsday is at hand.

Rchi has a rule of the thumb. Which says that if there is an earth shattering announcement on page one, the real news will lie on page 4 of the following day.

Of course we all know there is massive inflation in the economy. Of course the prices of commodities have risen to ridiculous levels. But my point is, prices always rise over a working cycle of a generation.

To wit, let me quote my dad, who never ceases to point out – “ You youngsters have a starting monthly salary, that equals my annual salary, in my mid career stage.”

To which I point out – “ Uh Yeah dad. But your starting monthly salary, was probably greater than grandpa’s annual salary”

Prices rise, with rising income levels, which ensure that no matter how much the middle class earns, things which are considered ‘a luxury’ (middle class speak, dear Armani toting reader), remain in the realm of luxury, no matter what your income is.

The golden rules still apply from the dinosaurs age –

• ·         SAVE as much as you can.
  
• ·         If any item has more than 3 zeros, ignore it
  
• ·         If you don’t have the cash for it, ignore it
  
• ·         Credit cards are a taboo
  
• ·         Always Ask – Do I ABSOLUTELY need this
  

The last one is the most painful, but the most important nevertheless.

Of course, the haves will always be sheltered from the ‘The Devastating Effects of a Slowing Economy’™

Me? I will continue to burn in envy, every time I see that Ferrari whiz past, with a Rolex hanging out of the window