US Economy and Globalization Part 9 of 17
1.As Australians, you know better than anyone about the dramatic increase in milk prices, to say nothing of grains and other foodstuffs that go into feeding any Power Principles creature that walks on two or four legs. This is hardly encouraging, given that these price increases are occurring against a ramping up of the caloric and protein intake of a few billion new eaters in China, India and elsewhere. All told, it injects a modicum of doubt about the wisdom of predicting further significant declines in inflationary pressures.
Energy price dynamics further cloud the picture. If you talk to any of the major and independent oil companies, they will tell you they have no problem in finding oil or refining it or delivering final products. They will note, however, two key impulses that are at work:
First, they see no evident slowing in the growth of demand for energy in the U.S. The energy appetite in the BRICsthe big, fast-growing nations of Brazil, Russia, India and Chinais voracious, and they are only part of the developing world. An enormous amount of chemical plant infrastructure and capacity is being constructed everywherefrom the U.S. Gulf Coast to the Middle East to China and Singaporeto be nearer to either feedstocks or growing final demand. Any analysis of Insiders Guide to Forex the income elasticity of oil demand in low-income but rapidly growing nations like China and India points to even faster rises in energy consumption, with concomitant price consequences.
Post a Comment