Future World Economy - The fossil fuel free economy

greetings from himanshu to all the readers of the blog - so here i start -

we all must be thinking that world economic recession has ended...but wait a minute and rethink it again ! fuel prices are hovering at $72 per barrel in market and set to reach the $ 100+ per dollar mark in near future so the future looks dark again :(


The world economy should now start shifting from fossil fuel based economy to fossil fuel free economy which it is slowly starting to do.. but wait When the ongoing global recession will be completly over that is when the production in USA reaches the same level (before the recession) when all the factories start working again in full flow , when the asian countries start exporting goods to US at same rate , when the jobless claims in USA becomes nil and there are more job openings in there.. Have anybody thought what can happen then??

Well the crude oil prices would skyrocket and could well go beyond the $ 200 mark this time and a double dip recession will again haunt the global economy because presently the global economy is fossil fuel based economy and i think that the pace of shifting the global economy from crude oil based economy to crude oil free economy should increase considerably if we want that no recession should prevale any more in future, actually this is a very big task "SHIFTING OF GLOBAL ECONOMY FROM FOSSIL FUEL BASED ECONOMY TO FOSSIL FUEL FREE ECONOMY" presently in the world every thing is governed or in other words is dependent on prices of fossil fuels as everything uses fossil fuels.

and we all know that fossil fuels are limited and the middle east countries would never increase the production from present levels (for decreasing the prices) because if they do this now their own future would be very very dark. i think that was one reason that US attacked Iraq some years back to get hold of the key oil assets present in Iraq (kudos to Bush for such a shrewd thinking..) . the shift should be now gradually to the battery powered energy, nuclear energy, solar enregy(which i think would be biggest energy source in future .. in the same way as fossil fuels are today)

For protecting the double dip recession we should now shift our thinking from conventional sources of energy to renewable sources of energy like the sun, and wind i talked about few lines back. Solar energy would play a very important part in future for providing power to industrial units, cars, houses, transport, communication rather then fossil fuels, and world would become much safer place to live in. becauses there would be no threat of recession anymore once we shift from a fossil fuel based world economy to fossil fuel free economy in future.

probably in coming 20 years there would be gradual shift from the way we fulfill our energy demands today, middle east countries would be dependent on others (in contrast with today).. they would have very few sources of income in future for sure once the fossil fuels are only available in museums in future. so i can see that the world economy has to now shift to fossil fuel free economy as soon as possible .

Scope for further rate cuts - MS Ahluwalia

With the inflation rate almost halving from the peak levels in August and economic growth slackening, Planning Commission Deputy
Chairman Montek Singh Ahluwalia on Monday said that there is further scope for the RBI to cut lending rates.

"It is clear at the moment that the economy is growing below its potential and inflation is definitely on its way down. And these factors would suggest that there is a scope (for easing monetary policy)," Ahluwalia told reporters here.

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RBI Governor D Subbarao today met Prime Minister Manmohan Singh at his residence, adding to the speculation that RBI might signal further cut in interest rates to boost economic growth which is impacted by the global crisis.

The apex bank had already injected Rs 3,00,000 crore into the system slashing the policy and reserve ratio rates to inject funds into the cash strapped economy.

Responding to the steps taken by the RBI, several banks including the largest lender SBI have cut lending and borrowing rates.

State-owned banks like the Punjab National Bank, Bank of Baroda and Dena Bank today reduced their benchmark lending rates by up to 75 basis points.

The Government, in its Mid-year review of the economy presented in Parliament recently said there was considerable scope for monetary policy easing over the next 6-12 months to offset the global increase in demand for money that is being transmitted to India.

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Ahluwalia said, "We should be watching the situation carefully and we should not hesitate to take further steps. These matters are being discussed...our prospects for inflation justify taking a stronger monetary position."

Inflation which had peaked to 12.91 per cent in August came down to 6.61 per cent in December.

posted under - India Economy, economy of india, indian economy updates, Indian policy updates, economy of india, rising indian economy, 24th indian economic summit, deflation in world economy, econoy of india, growing india economy.
-source - www.economictimes.com

Threat of Deflation rises for the world

Developing countries, including China and India, are showing signs of economic cooling on account of the cascading effect of the globaldownturn.

India's industrial growth unexpectedly turning negative in October, shrinking by 0.4 percent after expanding by 12.2 per cent in the same month a year earlier, hint at the worsening conditions for the economy.

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Given the deepening global recession, the threat of deflationary spiral is mounting which may fix the global economy in similar lines of the great depression in 1930s. Even as analysts and economists feel that the governments have managed to rescue the global economy from a deflationary spiral by extending deposit guarantees and recapitalizing banks who suffered losses, attempts to artificially reducing interest rates to support prices are extremely ephemeral measures.

"They may appeal as a quick fix, defending banks from further losses. Artificially supporting prices removes the stimulatory effect that lower prices have on new investment. Instead of a V-shaped bottom followed by a speedy recovery, you may end up with an L-shaped depression," said Bred Jonathan, consulting partner at Kreg and Bordan Economic Advisory.

We often hear economists or analysts refer to the threat of deflation. Deflation is a natural function of the market to correct excesses from a boom. The boom normally ends when the central bank stops new money creation, which was used to synthetically stimulate the economy.

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Source www.economictimes.com - read full article

published under - deflation in world economy, deflation threat, economy of india, global recession updates, indian economy updates, world economy updates