OIL
Unless you’ve been hiding under a rock, you have to know that the most popular topic right now is the price of petrol. It doesn’t matter what country in the world you live in, people are concerned with how much it is costing them to drive their car.
Now some people can remember when as many people used horsepower, as did those who drove cars. Some can remember the first car their family ever owned. Back then it was a huge jump from owing horse and driving buggies to owning a car and having to buy petrol to run it. At least the running of the horse was subsidised by the free grazing that was usually available.
Of course there were drawbacks, travel was a lot slower in those days. Back then we saw the ownership of the motor car restricted to the very rich, so most people had to make do with what they had used for hundreds of years.
The price of the motorcar slowly became more affordable, as did the cost of running it. Miraculously there was this wonderful liquid called oil, and a few brilliant people had found the way to use it to power the motorcar. There had been a few attempts at powering the car with steam. Though it worked wonderfully in train locomotive the engines were too big and cumbersome to be used as car engines.
We are now at a place in history where it is almost too expensive for ordinary people ^(http://www.ucontext.com/cbhop.php/4314/0/11ab70ffa0d55b6771129711e1472d74/ordinary+people) to drive a motorcar. At this point in time we are so entrenched in the use of motor transport to even contemplate using anything else, so what are we to do?
As usual Governments have lost the plot. They haven’t got an answer. They are still taxing petrol and will do so until there is none left, while the world suffers a crisis never before experienced. The cost of everything will rise beyond the means of most ordinary people until we are in much the same position as those ancient times when those with the money and power controlled everything, and the rest of mankind stood in line for what little they decided to hand out.
What has this got to do with expanding wealth you ask? The answer is in the fact that oil has reached $139 a barrel and will continue to rise until it reaches the point of resistance ^(http://www.ucontext.com/cbhop.php/4314/0/303b4f5af40c71f90568a348c94cfb70/point+of+resistance). The point of resistance is when people can’t afford anymore. Then those in control will peg the price to what can be afforded. The market will be tested to the point of tears.
Right at this moment Saudi Arabia controls the price of oil. They have on the 9th of June mad a statement saying that the want to work with the oil cartel to guarantee the supply of oil into the future. However if you think that there will be any relief in the price of oil, then think a little harder.
We don’t know and are never likely to know just how much oil is left in reserve because the Saudi’s aren’t saying, and who could blame them, benevolence does not play a part in business and so they will maxemise their return on what they have left.
They have promised to boost oil production by 0.2% as from next month. Do you think that that will make a difference in the price we pay for petrol? And don’t just blame the producers of crude; the oil refining companies are in for their share. This is a situation where a resource is quickly drying up, (sorry for the pun) and anyone who has an interest will maxemise their profits.
The day of the fossil fuel ^(http://www.ucontext.com/cbhop.php/4314/0/8fb31c63263d6c7c8c5e3508f92a4f19/fossil+fuel) driven engine is nearing its end. It may take another couple of decades, but that will go like the blink of an eye. We as investors should start looking for the alternative. You should not make the mistake of envisioning a day in the future when aeroplanes will cease to fly, ships will cease to sail and motor transport will grind to a halt, that day will not come.
You should instead be investigating the alternatives, and forget hybrid cars, they will only prolong the use of fossil fuel they will do nothing to prevent the end. I know a lot of my readers will at this moment be nodding in agreement because they have already seen what I am talking about and are right at this moment doing their own research.
I will include a very interesting video this month that you should look at, a lot would have already seen it but it is very interesting. If you have anything that you want to share with us leave a comment on the Blog and let us know. We could make this a joint effort in finding what might be the alternative to oil.
Those of you who have been readers for a while now should be well on your way into knowing how to invest, and as always I urge you to know what you are doing before you do it. There is immense satisfaction into researching and eventually capitalising on that research.
Once again good investing, and as always my best wishes.
MR (ed)
http://www.expandingwealth.com
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