Energy Efficiency

When the Euro first hit the world economy, the US$ was valued much higher (a Euro was worth about 90 cents), yet today it takes almost US$1.60 to buy a Euro.

And while the US$’s decline this year has been lauded as good for America (as it benefits earnings, stimulates exports and helps ‘rebalance’ the U.S. economy, a runaway oil price should be the catalyst  for the next wave in America’s recession / depression.

A weaker dollar supports oil because dollar-priced commodities become cheaper for buyers using other currencies; however, the inverse relationship between the dollar and crude is tight; if there is a repeat of last year – when a weak dollar, along with low interest rates and growth in energy-intensive Asia drove oil to a record near $150 a barrel – it will contribute to a deeper global recession.

The oil price is the thing many countries particularly us here in Australia should fear the most because Corporate Government’ created situations that forced so many industries to close down / move off-shore; we have large distances to cover, we are dependant on most of our consumer goods and we are now heavy net importers of food. An upward swing in the price of oil and another retraction of sales in our resources will see any money ‘we’ (actually the corporations) make on resources quickly by rising food import prices.

If / when oil goes to $100, it will have the same effect on the global economy as when it hit $147 last year; and then the depression the politicians call a recession will again set in.