Living in Peace and Wisdom on our Planet

  My Profile  Log In   Register Free Now   
Living in Peace and Wisdom on our Planet Planet Thoughts Advanced       Click to see one of our videos, chosen at random from the database, along with its PlanetThought
 Try a video
Home   About   Books&Media   Resources   Contact  
   News   Quote   Review   Story   Tip   All   Blogs   News   Quotes   Reviews   Stories   Tips
Get Email or Web Quotes
or use our RSS feeds:
New Feed:  Fossil Fuel
 Full  Blog  News
Read & Comment:
A Solar Community In Isr...
'Let's You And Him Fight...
Paul Krugman's Errors An...
Why Climate Change Is An...




Most recent comments:
From Farm To Fork
A Simple List: Things We...
Can the affluent rest at...

Actions:
Bookmark the site
Contribute $
Easy link from your site
Visit Second Life
Visit SU Blog





Blog item: World Braces as Markets Give Economy a Scare

    Email a Friend     See Related

0 comments   Add a comment   Author: GuestWriter (Jul-6-2008)    Play a Video
Categories: Economic/Financial, Peak Oil/Gas & Energy Demand

Traders work the crude oil options pit at the New York Mercantile Exchange - APby James Langton and Asa Fitch

July 3 – Fears of the global economy tumbling into a major recession deepened yesterday after a bleak 24 hours in which stock markets fell and the price of oil continued to rise.

In New York and London, share prices officially slid into bear-market territory. The Dow Jones Industrial Average, a key measure of US economic health, declined to 20 per cent below its previous peak, while Japanese stocks hit a low not seen for more than 50 years.

Among the victims was the once-mighty General Motors, left staring at bankruptcy after shares hit their lowest point since 1954. At the same time oil surged to a new high yesterday, reaching more than $146 barrel and adding to the inflationary pressures on goods and services.

In Frankfurt, the European Central Bank became the first bank from the G7 leading industrialised nations to raise interest rates since the credit crunch exploded last August. The quarter per cent rise in its benchmark interest rate is intended to curb inflation, but risks putting more pressure on the weakening dollar and in turn making oil even more attractive to speculators.

Lurking in the background is the spectre of "stagflation", a lethal combination of stagnating economic growth and inflation that can lead to mass unemployment and years of recession.

The monthly job figures published in the US yesterday showed 62,000 Americans were thrown out of work in June. Although the figures were only marginally worse than feared, the six-month period of rising unemployment is the worst for six years.

Leading analysts increasingly fear that the point of no return for a worldwide depression already may have been passed.

"This has been a summer of thunder storms that have been building up for some time," said Justin Urquhart Stewart, investment director at Seven Investment Management in London. Only now are people beginning to realise how dark this particular storm is looking, but it's been a long time coming."

While oil-exporting countries such as the UAE and Saudi Arabia are in part insulated from the global turmoil by the extra income from rising oil prices, their economies must also grapple with the inflationary effects of the cost of a barrel of oil closing on $150.

With family budgets hit by rising food prices, the pressure for higher wages also threatens to increase the cost of construction and economic development.

Inflation in all Gulf nations except Bahrain is now in double digits and is estimated to have risen to 11.1 per cent in the UAE last year.

Simon Williams, HSBC's chief economist for Gulf markets, warned: "The value of our currency is being drawn down because of weakness of the dollar and we are suffering from inflation because of rising global commodity prices and monetary policy ties to the US."

All GCC currencies except Kuwait's are pegged to the US dollar, which has stoked inflation as the US Federal Reserve lowered interest rates in recent months.

But the greatest long-term danger for GCC economies, said Mr Williams, is if the current crisis in the US and western Europe feeds through into Asian markets and translates into a slowdown in demand for oil. Even then, though, oil revenues would remain high.

"We're not isolated but we are certainly well insulated from the troubles affecting the outside world", he said.

jlangton@thenational.ae

afitch@thenational.ae

Source: The National  
Related PlanetThoughts.org reading:
  Green Is The Only Way To Go (Dec-4-2011)
  "We know that market prices need to reflect the f..." (Jan-22-2010)
  The World Could Take An Economic Hiatus, Focus O... (Dec-13-2009)
  The Death of General Motors (Jul-10-2009)
  Sane Environmentalism to Save Earth (Apr-30-2009)
  Is this the end of the age of the automobile? (Mar-11-2009)
  What is the American Dream? Is It What You Read... (Mar-9-2009)
  Homo Economicus, Homo Ecologicus: Two World Views (Dec-18-2008)
  Conspiracy Theory: The Wages of Greed is Debt (Nov-23-2008)
  "The species with the large brain must make the c..." (Nov-5-2008)

Click one tag to see readings related specifically to that tag; click "Tags" to see all related readings
  
^ top
Add a comment    
  Follow the comments made here? 
  (Please log in or register free to follow comments)

  
^ top 
About author/contributor GuestWriter

PlanetThoughts.org welcomes occasional articles and opinion pieces from writers who are not regular contributors. Their contributions will be listed under the "GuestWriter" name, and additional attribution will be shown in accordance with the agreement with the original writer and source of the PlanetThought.

Visit Green Wave Email Marketing
Email Marketing for You and Your Planet


We won a Gotham Green Award for 2010, on Earth Day! Thank you Gotham Networking for this award.

See the attractive event brochure.

Recommended Sites

  Member of:
GOtham Green networking
Green Collar Economy
New York Academy of Sciences
Shades of Green Network

  PlanetThoughts
     Members/Affiliates *

Approaching the Limits
    to Growth
EcoEarth.Info
Environmental News Network
EESI.org
GreenBiz.com
GreenHomeBuilding.com
Heroin and Cornflakes
NewScientist
ScienceDaily


* Members of PlanetThoughts      
  communities on SU or MBL,      
  and blog article affiliates      

  Other Favorite Blogs
21st Century Citizen
Center for Bio. Diversity
Easy Ways to Go Green
EcoGeek
Good Bags
Opposing Views


Valid my RSS feeds


We Do Follow

ClickBlog.org



  Volunteer      Terms of Use      Privacy Policy  

Copyright © 2020 PlanetThoughts.org. All Rights Reserved.
Except for blog items by David Alexander: Some Rights Reserved.