Oil prices are dropping. Maybe plunging is the right word. Great for the motor vehicle owner.
But really bad for many governments around the world who put most of their eggs in the basket of oil.
Most governments, and by default, that means most economies, are going to suffer from this extreme short term thinking. As in, really suffer…when 80% of their revenue comes from oil and when it drops below a certain price they are in the negative…then….bang…big ouch….
That means we might not feel the pain so much at the petrol pump, but we may feel the pain everywhere else. Job loss, recession…etc…(I heard on the radio this morning the word recession mentioned as a possibility for the Australian economy.. All a result of short term thinking..and hitching a ride on the glory of the resource sector boom.)
Apparently the prices are dropping because of a surplus, partly due to the USA having a significant increase in oil production from fracking/shale, and also because of the drop in demand from some countries that are suffering economically. India, China for example.
My intuition says there is a deeper manipulation at play here. Powers that can push the buttons are purposefully doing so.
But that is not the point.
The point is what are governments thinking? Here in Australia there has been a dogged determination to have the majority of the GDP come from the resource sector. This is not the fault of a single government, but the ongoing blindness of several governments in succession.
Riding the coat tails of the boom without any consideration of what happens when that boom is over.
Well, it is over. It was over a few years ago, and we have been in lag. But still there is this silly talk of building more infrastructure around coal. All the while the focus on the emergence of the real growth economies go lacking.
It is incredibly simple to me…and I wonder why it seems so hard for governments.
The age of fossil fuels is over. Dead. Done…dusted. Anything we do in this arena is the final gasp of a redundant industry. That is not to say drop it completely, because it has some years of demise to go yet.
But shift the larger part of the focus to sustainable, renewable…as is Germany.
The age of manufacturing is dead. We have 3D printing. And robotics.
The age of hierarchical business is dead. And top heavy, bureaucratic business and government. Sure they will continue for some time, but the edge is elsewhere. The edge is with agility, autonomy, and real innovation.
The age of banking as we know it is dead. Bitcoin is the smoke and mirrors, the real threat is the blockchain behind bitcoin. It by nature is decentralizing large power controlling systems.
If you are in one of these industries, or if you live in a bloated corporation or government agency, then get yourself re-educated and de-institutionalised.
It is not the age of scarcity. It is the age of opportunity and abundance. But only if you get into the new game. Get off dependance of the short term blindness of government and business.
There might be many horses and buggies still on the streets, but the first motor car has changed it all. Did you see it coming?