There seem to be mixed signals about the economy. The OPEC countries exported oil worth $1.27 Trillion last year, so that much wealth has been created for their economies and the nations who trade with them. What is baffling is the high Oil price, which in my calculation is far too high to sustain Recovery. Couple that with an observation made by Prince Al-waleed bin Talaal that in view of increasing shale gas production, especially in the U.S., the world is less reliant on oil from OPEC, meaning declining demand in years to come. Most OPEC nations' infrastructure development projects would stay on line were the price per barrel no less than $85, that was according to Sheikh Al-Naimi and Sheikh Al-Badari as well as the Algerian oil minister about a year ago. The housing numbers from the U.S. on the Case-Schiller map have not been as robust as was expected; indeed, housing starts have been the slowest for 18 years. While reduced inventory is holding up prices, there needs to be much more construction activity. In the meantime, Lakshman Achuthan of the Economic Cycles Research Institute, who looks at the leading indicators, suggests he has seen figures to indicate a slow-down, which would probably show up in the real economy in another four-five months time. Corrective measures by government and big corporations in creating jobs and a resurgence of confidence could help to avert that scenario. All humans like to eat and drink well, dress well, live in comfortable housing, have good transport, have good entertainment, read books, listen to music, watch movies, play in the park, go on holidays, and so on, and people always have aspirations that the economy - in the combined efforts of all to innovate, develop, utilize and monetize all that God has put on earth - will help them with improving standards of living. That is what everyone wants. Good news from the U.S. is that they are creating about 150,000 or more jobs each month, and today sees the announcement by Amazon of the creation of 5,000 jobs at their HQ. I suggest a lower Oil price would help Recovery regain its sure steps, for a worldwide economic Recovery. I pray for that. Kind regards, Duru-darshan. |
