« Le malheur des uns fait le bonheur des autres. »
The misfortunes of some delight others.
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Last week in my neighborhood (be still my heart) the price of gas dipped below $3.00 per gallon.
This is the first time since December 2010 that gasoline has been so cheap.
It seems (eh eh eh) that there is a worldwide oil glut. Thanks to the increased American oil production there is too much black gold on the market. Glory be!
The big oil producers (Russia, Saudi Arabia, China, Iran) are not amused.
They critically depend on oil revenues, and when the price of oil falls below $80.00 per barrel they start to squirm.
Governments’ diminished revenues usually translate into cost of living increases, and this usually means trouble at home.
All these countries must keep their often-restive populations relatively quiet, and they do this with the carrot and stick method.
But when their buying power starts to erode significantly people don’t see the carrot anymore. They become fixated with the stick and no government likes that.
Comrade Putin is particularly unhappy. This is an unexpected blow to his ambitions.
Russia is highly dependent on the price of oil and if Vladimir cannot keep his compatriots well disposed toward him, the walls of the Kremlin might not be high enough to keep him on Mother Russia’s throne.
He might (like Marie-Antoinette) tell his people to eat cake, but I don’t think that it is a good idea.
Many western countries are turning a blind eye to human right abuses in other countries in order to continue getting a steady supply of oil.
This could change if oil becomes less relevant.
In politics, friendship is based on self-interest. If you don’t need your friends’ goods anymore, the “friendship” can go sour pretty quickly.
The mutual dependency of Saudi Arabia and America in particular will decrease and change the politics of that region.
Let’s not forget that Wahhabism does not sit well with Americans (or the rest of the civilized world).
If the importance of black gold starts ebbing, so will the strategic alliance between those odd bedfellows.
And feminists will cheer.
The downside of this damn business is that the stock market is taking a big hit.
People holding shares in oil companies are dumping them as quickly as possible.
And as usual, it is the little guy that foots the bill.
But for the time being, let’s rejoice and take advantage of the oil bonanza.
We might never see it again.
Oil is now so cheap that instead of bathing in camel milk as I usually do, I might start soaking in crude.
Alain
http://youtu.be/WXozuaz5NFw
