Philosophy of Economy along with the evolution of Human life

Firstly, I apologize to my readers, who are modestly expecting to read some pure economy. Even though people say the word economy, I think it never exists unless and until there are two other complimentary subjects, Technology and Management.

It has been evolving and evolving in the planet Earth, but only some parts of the planet are evolving faster than other parts. Those parts of the planet which evolved so fast with the aid of technological accomplishments, name themselves as so called “ Developed” and some are “ Developing” and still some other parts “ Underdeveloped”. Let’s start with the advent of economy. In the age old times, Barter system was ubiquitous. Then the term “Money” replaced this system and as a result, a new mint industry has developed. As a result, it is obvious there were some jobs shown up at those times related to that mint industry. Let me attempt to explain the transformation in a fictional way. There were plenty of washer men jobs few decades earlier and what happened now? Let’s imagine that they were able to afford sending their kids to good schools and as a result, imagine that those kids became some mechanical, electrical or electronics engineer. Now what happens, the washer men were slowly replaced by washing machines designed by their own kids. As a result of this transformation, the kids are leading better prosperity than their parents.

Human race is inventing new things to make their life more comfortable and simultaneously everyone is transforming themselves into prosperity and trying to make their brains work more than their physique. They are inventing machines to do agriculture, robots to make small works, computers for calculating and it goes on and on. Every small job in this world has got its own importance. A delivery boy is as equally important as a software developer in a community. Everyone needs both of them either knowingly or unknowingly. From the above examples, washer men, farmers and so many other kinds of professions has disappeared due to technological advancements. Sooner or later even delivery boy may get disappear. If there is a way to supply the water to your bathroom all the way from some river, why can’t you imagine some pipe line delivering goods to your place with the shortest possible time in the future. It may happen. Drivers for public transport may disappear as well, all they need them to kick these drivers out is, good infrastructure to support all those automated transport.

Technology never stops, man invents one after the other and slowly managing this all things lead to create a specific field management, which is definitely necessary to keep things in pace in such an evolution. These all things can be clearly understood by watching the Global GDP, which became 68 trillion dollars from 5 trillion dollars in 1950. China is making rapid progress in recent years by maneuvering the recent technological breakthroughs in the past decade. Major technological break throughs in electronics industry in late 70s and web technology in the 2001 has saved U.S to come out its recession. Now, it lacks such a huge breakthrough to save itself from dominating the rest of the world. After all these, one thing that human race would be interested in is saving their own planet. That’s how the color Green has become so famous in recent years. Environmental Technology and Management will be important in the future in the vicinity of humans saving their own prosperous life in the only possible planet in the universe.

Hemu’s tips to make some bucks:

Try to invest in all those penny green stocks by picking potential ones right now by consulting some environmentalists to see you as another Warren Buffet probably after 30 years. I will come up soon with some of those stocks in my blog. Keep watching it.

Useful Links:

http://www.networkideas.org/news/jul2008/Global_GDP_Growth.pdf

What is happening to the oil price?

Everyone who drive an automobile is probably wondering what is happening with the oil price. It is always an abstruse issue to debate. Every analyst analyses it in their own way. Let us try to understand what happened with the oil price exactly during last two years.

One fact you can keep in mind always while you are analyzing this commodity is “It is definitely a limited one”. On July 11, 2008 the crude oil price per barrel touched its all time high and stood at 147 US Dollars. The significant reason behind that spike a year ago is increased global demand. Then it came all the way down to $35 per barrel in the mid-February of 2009. Due to earlier spike and taking the global recession into account, the consumption has really decreased during this phase. US have really decreased its consumption from 20 million barrels per day to 17.5 million barrels per day, which is a record low in the past decade.

Again the prices are soaring recently ending up today (19 June 2009) at $72 per barrel which made gasoline to stand at $2.67 per gallon. The recent surge in the oil price is mainly accounted due to the increased demand in the Asian countries China and India. Despite the recession globally, Chinese spending on the automobile industry has increased by 15% last year and expected to rise to 20% this year. The oil consumption in china has almost doubled in the past year and stood at record high of 7.2 million barrels per day. Even the consumption in India is increasing day by day. At the same time OPEC (Organization of petroleum exporting Countries), has kept the production low to increase the prices. Meanwhile, due to the gloomed economy in the US, Dollar is playing weak in the global markets. Since, this commodity is always priced in Dollars, which means one has to buy oil from OPEC by paying US Dollars. The decrease in the value of Dollar against European and other major currencies makes oil cheaper in those countries and hence, the oil consumption is slowly increasing in those countries. Hence, Due to the increase in Demand, decrease in production and also due to weakness of US Dollar, the price of the oil per barrel is surging up again. The other major contributing factor for increase in consumption in some Asian countries like India is the subsidized fuel price offered by the governments, which is completely irresponsible behavior considering both economically and ecologically. Some people explain that the speculations in future commodities are the main reason behind this turmoil in the price of oil, which is not exactly depending on the supply and demand of the oil, which is not sounding really true after looking at all these best fitted reasons.

Beyond this, Oil is a form of inelastic commodity, which means there should be a huge increase in price to see the minute decrease in the demand, which we have observed from the crude price of $147 per barrel a year ago. It is expected that by 2030, most of our oil reserves will be finished, if the demand increases at the same rate as present. Goldman Sachs is confident that the price can be $95 per barrel by the end of 2010 and Deutsch Bank people are confident that the price may go to $100 per barrel by 2015. But the truth is, there may not be slow raises as expected by these banking people, immediate spikes might be inevitable to control the accelerated consumption unless and until the alternative fuels completely take the role of the petroleum. If the promising alternate energy sources didn’t show up to replace oil, it is going to be too expensive to extract oil from deeper layers of earth, which may still need lot of geological personnel approval.

Hemu’s tips to make some bucks:

Considering these issues and keeping track of the global oil consumption levels, demand levels and price of crude oil, one can safely bet on the stocks of oil companies for short term and make huge money. But, if someone is really thinking to invest on oil companies for long term, please be careful…!!

Bottom line:

It may not be a better idea to optimistically dream to get a gallon of gas again for 1.5 US Dollar. You may not see that level again in your life time. If one wants to see the price of gallon at least at this level, start consuming oil responsibly, so that you can buy the gas for the same price at least until the end of your life.

OTHER SIDE OF THE COIN- Recession/Depression

I should state that the fresh business graduates who are coming out of the Business schools in next few years or who came out in past few years are the most luckiest fellows ever. This situation may leave them with enough hassle when it comes to find an appropriate and attractive job to sell out themselves in the market. But, if someone is so ambitious about their management career and got big goals to achieve in their life, this is extremely a golden opportunity for them to experience and also keenly follow each and every corporate's success and failure stories. It is extremely substantial for them to sit back in their couch and clearly analyze the decisions taken by all those important people involved in the govt like Geithners and Bernakes. It is even breathtaking to observe all those mixed reactions from those executive Bobs and Pandits. It is time to let all those failures to teach successful lessons in someone's life to flourish them out with a successful management career. After all, it is all better to have this golden opportunity(Recession or even someone is not hesitating to state it as Depression) to occur in the early part of one's career rather than any other time.

If our Obama can't restrict this one at a stage of worst recession and if it is going to take a transformation into another Depression after 80 years(Hmm.. It is almost 80 years after our depression in 1930). Obviously, Each and every executive in this planet Earth must be facing this for the first time. Their three decades or four decades of experience have never taught them with these kind of lessons before. Atleast a good economist is aware of most of these situations. Even these are the times, when economists can make some money by publishing their awareness and Expertise. Economists weren't really cared by any of those executives as long as they are on their bandwagon. But once their wheels start experiencing lot of friction, these guys go back and open their Bibles and starts appreciating all those guys who have designed those mechanical principles. This is the time you can find all these executives having atleast one book based on economy floating around their desk rather than usual wallstreet journal. For all those guys who are highly determined to have successful management careers in the rest of your life, try to make use of this golden opportunity and build your own lessons, which should work for the rest of your life. Try to avoid yourself being another executive who would be responsible to end up this beautiful world with another great depression in the future.