Here’s a very clear and simple explanation of how the supply of oil continually and dramatically affects the world economy.
The video, ‘How Oil Prices Affect the Economy: Calling for a Third Industrial Revolution’, explains how the price of oil goes up as the economy starts to get stronger coming out of a recession. When the oil price gets too high, the economy crashes again, because oil is the very lifeblood of the world economy. Oil is used for just about everything in our economy, including even in food production.
The last graphic example of this happening was in July 2008, when the price of oil hit a record $150 a barrel. The world economy began to seize up and the global financial crisis hit home very soon after that.
What is the solution?
As stated at the end of the video, the ideas are taken from Jeremy Rifkin’s latest book, The Third Industrial Revolution, in which Rifkin goes on to lay out in detail a more sustainable economic game plan to take the world beyond this finite and limiting fossil fuel era. He explains how internet technology and renewable energy are already starting to merge to create a new and powerful “Third Industrial Revolution”.
Rifkin asserts that hundreds of millions of people will begin producing their own renewable energy in homes, offices and factories, and will share it with each other on a kind of energy internet, or Enernet. This will be similar to how we create, store, and share data online today.
I’ve read the book, and I must say that it makes for a very comprehensive and compelling plan to take the world into and new energy and economic era. That great thing about it is that it has already started (see recent post: It Has Begun: 51 Percent Of German Renewable Energy Is Owned By Citizens).