Hello Everyone and Welcome,
Today I take a closer look at the predictable global fossil fuel based economies in light of the collapse of oil prices. This was entirely predictable, although the quickness of the demise no one could have predicted. The "bottom" of the barrel crude price is yet to be reached and could fall to $10 per barrel in the next 45 days. For consumers, this is great news especially we are caught in a global depression with near zero economic growth.
Let's first examine China. China is the only country in modern history to combine a Socialist ( poverty equally divided ) government with a Capitalist economic "free enterprise" system. The flaw with this approach is Capitalism and Free Enterprise are fundamentally creative & spontaneous based on supply and demand governed by market place / consumer demand. Creativity will never be controlled or regulated and all attempts to do so are both futile inevitably ending in disaster. All countries having stock exchange and or economies based on crude, rise and fall with the price of crude. Witness what happens every time the Chinese government shuts down their stock market exchange in a futile attempt to prevent stock market and their economy from crashing. I make no criticism here , but simply an observation. China successfully manipulated their currency over the years, but this was a false foundation / premise when extended to stock market control, met the ultimate and predictable end - failure / melt down. Additionally, and contributing to China's "woes," China over supplied their reserves with oil when priced at approximately $45 per barrel. This directly resulted in China's "sell off" to Chinese domestic consumers energy pricing based on this amount explaining the "floor" placed on domestic energy. Simply stated, the consumer driven economy is directly impacted and confronted (blocked) by higher than current energy prices of $30 per barrel forcing consumers to pay much higher energy prices. This also blocks or impedes recovery of their economy & stock market as lower prices always promote economic growth not higher energy prices. This means disposable income suffers as well having direct impact on local spending for consumer goods.
I make a distinction between regulation of what I call the "greed factor" and Free Enterprise. I refer to the entire stock market approach by so called investors in reality based entirely on " buy low sell high" while hiding insider trading information from the consumer ( thus my definition of the greed factor) as the greed factor. This is neither Free Enterprise or Capitalism, instead a direct result of flawed human thought. Obviously regulation is necessary mainly to prevent people from being taken / hurting themselves financially. PPP EVS offer personal economic independence while preventing anyone from taking money from PPP EV owners.
Another consideration - China's oil demand is based on manufacturing need(s) in turn based on global demand for Chinese manufactured products. Observe the fact that the world and USA remain in a depression despite denial and false assurance from politicians. Demand for Chinese manufactured products fell off years ago directly coupled to the demise of each country's economy / jobs etc.
Manipulation and control by oil producing countries thus false & over pricing of the barrel confronted by American technology producing shale oil "bonanzas" leading to less drilling rigs required, led media to false conclusions being less oil rigs means American shale oil collapsed! In reality, shale oil technology made possible more efficient drilling methods eliminating numerous rigs. Thus American media major contribution was a false "slump" prediction all based on number of active rigs!
I am not a "doom and gloom" predictor, but prefer to look at myself as a problem solver. Now we turn our attention to PPP EVs ( Portable Power Plant Electric Vehicles ). You will have to revisit previous postings on this site to gain understanding especially if you are a first time visitor today. PPP EVs demonstrate "Capitalism in its purest form transforms Socialism (poverty equally divided) into Prosperity for all." Taking PPP EVs to the ultimate step being basing a country's currency valuation on domestic renewable green energy provided by PPP EVs and power national power grids, literally transforms any country overnight to a true Capitalist "Free Enterprise" economy. In that process, consumers purchasing PPP EVs then supplying the national grid, become financially independent while contributing to local economic growth via consumer driven economy purchasing "power."
Countries following this approach obviously are no longer tied to the price of the barrel crude thereby become immune to the current global crisis.
Renewed American Spirit ~ Catch It Then Pass It On