Monday, November 19, 2007

Uncertainty, uncertainty, uncertainty

Ever wonder why articles containing good news are always emphasized more and not so good news are given less emphasis?

I believe it's just how we, homosapians are created. We tend to think about things alot and if good news are more, we think that things are good. If bad things happen, we tend to think, "oh no" bad times are here. In which case, either good or bad thoughts will create self-fulfilling prophecy of the respective event to happen.

We don't wish to have bad events happening now, do we? An example is like rumors of a stock market crash, and when investors hear about it, they will want to sell their holdings to protect their capital. A sell-down is ensured and a crash will be imminent.

I never thought it will happen, crude oil nearly reaching USD100. I thought the book "The Coming Economic Collapse: How You can Thrive When Oil Costs $200 a Barrel", was just that, a book. Instead it is a possibility in sight in the next decade if not a few years.

What is worrisome is that, the world is still stuck to oil and it's by-products of petro-chemicals. We are like a cat that needs milk. without this milk, we can't survive.

On top of rising crude oil, we are faced with a US housing bubble in the midst of collapse. And this collapse seems to be taking dragging into the grave, not only the homeowners, but the banks as well, forcing the FED to pump liquidity into the financial system.

So what are we going to face? Growing inflation, possible recession. Oh.. it's going to be a stagflation. The worst that can ever happen to a country. Hopefully it's only a country and not the entire world. Just imagine the economic and political nightmare should such a scenario happen.

What do you choose to solve, inflation or recession? Solving one will cause the other to worsen. Unless you have the political chips and patience of the people, the solution will not come with ease.