As we wait to see what will happen in countries like Lybia, where gunfire is being called “Celebratory Fireworks” by the regime, the price of oil once again begins it’s inexorable climb.
Down in the US, those charged with making decisions on behalf of the people are wishing that the magic 8-ball had answers for when to open up the strategic oil reserves, some 700+ million barrels worth stored at four sites on the Gulf of Mexico, each located near a major center of petrochemical refining and processing. Each site contains a number of artificial caverns created in salt domes below the surface. (via wikipedia).
"If necessary, those reserves could be mobilized to help mitigate the effect of a severe, sustained supply disruption," Geithner told the U.S. Senate Foreign Relations Committee.
Geithner said high food and oil prices were causing hardships in many parts of the world. But he said Americans were feeling less impact.
Read more: Vancouver Sun
When the US government considers the use of Strategic oil reserves to maintain the price of oil at a level that keeps Nascar fans happy it may be an indication of a problem in perception of energy, not an energy emergency.
In Spain, the government has taken steps to reduce fuel consumption:
Spanish drivers slowed down Monday under a new speed limit designed to reduce energy use, angering some motorists but pleasing others who say every euro saved helps a nation slammed by Libya’s oil chaos and Europe’s financial crisis.
Spain’s maximum highway speed limit went from 120 kph (75 mph) to 110 kph (68 mph), and government workers spent the weekend putting up thousands of new speed limit signs.
Food prices in Canada are set to rise at least 5% immediately, with up to 10% this year, and the housing market is likely to tighten some more, with the mortgage rules changing, (maximum amortisation length of 30 years), and interest rates on the rise.
A powerful driver of economic recovery, the real estate market kicked off last year on a tear as buyers rushed into the market in advance of higher interest rates, new mortgage rules and a new harmonized tax regime in two provinces.
Some reports have warned that when interest rates rise, which many economists expect in the middle of this year, Canada’s real estate market could tank.
In the gloomiest report to date, Capital Economics analyst David Madani said earlier this month that house prices were just a few interest rate hikes away from a 25 per cent correction over the next three years.
All this to say that these days I’m thinking a lot about personal sustainability, particularly hedging against general price increases, housing and labour market corrections, and food and energy availability.
It is always easy to swing to one of two extremes, the first being that everything is going to be alright, the second that everything is going to hell in a handbasket. Either point of view has a chance of being wrong, but I’d lean toward things NOT remaining the same, and likely moving further from the “normal” as the year progresses in all these areas in particular – food, real estate, and energy.