Tuesday, May 13, 2008

What does $120 Oil Mean? Can we carry on as normal? Will it affect me?

These are very important questions, and the answers are of concern. Click on the title of this post to link to a .pdf that addresses this topic. What I can tell you is:

- With oil at $120 a barrel for a year, the world’s oil bill will be about 8% of world GDP.
That means any country growing at less than 8% (South Africa is growing at 3-5%) faces recession, and right now, that's virtually every country except China, and a small handful of others.

The implications of a worldwide recession?
Unemployment.
People unable to pay for their homes.
The middle class being wiped out.
Social unrest on a large scale.
Stock market collapses and the wiping out of money as a unit of value.
Starvation and all those things that follow from these.

Maybe it's time to start thinking about buying that bicycle.

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