Why oil prices will keep rising...

The chart shows the prices per barrel over the last year.

This New York Times article explores the reasons why oil prices keep rising. Fortunately, they have not mentioned the myth that somehow the Iraq war was responsible for the increase. A couple of dollars increase might be attributed to the Iraq war, but not the 40+ dollars that it has increased in recent months.

In one of my classes this semester, Mr. Jack Guynn, the President of the Federal Reserve Bank of Atlanta from 1996 to 2006 told us that there was a widespread belief amongst the previous federal reserve bank (the one headed by Greenspan) that oil would never rise over 60-70 dollars a barrel for a sustained period of time. 100 bucks was unimaginable. Talk about being wrong!

Over and above that, like I said, I think oil is currently underpriced. The futures are being overtly optimistic because they ignore China and India's voracious appetites, and the way their growth is going to drastically affect oil. Also, as the NY Times article explores, producing oil is getting more and more expensive. What a lot of people are missing is that all the easy places to get oil from have already been tapped. When oil production facilities were planned, the first places tapped were those which had the highest probability to contain oil. Now all you are left are the places which had low probabilities of having oil.

The extra cost due to this is partially offset by the fact that new technology makes prediction better, but the fact that most of the politically stable places have already been tapped is still absolutely true. Now you have to bargain with dictators and unstable governments to get more oil which leads to costs besides just money. As I explain in this blog post, this is one of the reasons why China has prevented any real action being taken to prevent the Darfur crisis. The costs in human life is something that will never be reflected in the dollar price of oil.

So really, for a myriad of reasons, it really is about time we start moving away from oil as fast as possible.

Leadership

Leadership is an elusive quality, but one which makes the world go round. Until a couple of days ago this post was supposed to be about personal leadership, and how not having practiced it for a while, I have done a poor job in a leadership position. I have learnt much from this experience, however, and expect nothing less than much better things from myself next time. However, like I said, this post will have to wait.

Last night I watched a documentary on the Genocide in Darfur. It exposed the ridiculous situation that has been unfolding in the Western part of Sudan, where the government has armed nomadic arabic tribes to kill and get rid of the native african people who were the original inhabitants of that place. And all for oil. However, more than the massive humanitarian crisis, what is even more galling is the absolute lack of leadership displayed by the world's leaders, if i can even call them that. The bloodshed began in 2003, and the UN was made aware of it not too much later. In 2004, the US after a fact-finding mission said that there was no word besides Genocide to describe what was taking place. Yet, until a few months ago, nothing was done about it. The reason? The UN's ridiculous veto system.

The system of veto that made the UN completely ineffective during the Cold War reared its ugly head again. Apparently, China has a major interest in Sudan, buying most of its newly found oil, and being a permanent member of the UN Security Council, vetoed any resolution for action that its buddy in Africa resented. Finally, it relented, and did not veto a resolution to allow UN troops to enter the country, however, it ensured that a clause was added that said that these troops would only go if they were 'invited' by the Sudanese government. Not surprisingly, this gold plated letter of invitation never made it to the UN's desks. I guess they lost it in the mail. However, things look far more upbeat now, with China finally allowing the UN to take actual steps towards resolving this situation, such as allowing a large contingent of African Union troops to enter the country. No small role was played by the efforts of the activists, and their campaign to brand the '08 Olympics in China as the "Genocide Olympics". If there is one thing China REALLY wants, it is to host an awesome olympics games, and they will do a lot to avoid any blemishes to these games. Unfortunately for China, telling a country it has a lot of sway on, to stop slaughtering its citizens by the thousands is indeed a lot.

My own country India is not without its own skeletons in this department. When the Myanmar government ran rough-shod over the peaceful protests by Buddhist monks, there was nary a whimper from our government. How can we claim to be a superpower, or on the way to superpowerdom, if we are not willing to take up the responsibilities that come up with this position? Even the cheesy writers of the Spiderman movies have this down better than us, saying "With great power, comes great responsibility".

However, this is not an article about these countries' failings, but rather an article of how despite the horror of 2 world wars, and a prolonged period of cold war, and thus realizing the necessity of having a powerful world body to help maintain peace, we have not done anything concrete towards attaining this goal. While the UN is easily 1st on the list of the 7 wonders of the bureaucratic world, as the situation in Darfur shows, it is completely toothless when even a small part of it disagrees with its actions. And what is the point of even having the UN if it only takes actions when EVERYONE agrees that action is to be taken? I mean, if everyone agrees, wouldn't they do it independent of the UN anyways? However, the UN has become a convenient "pass the buck" agent, with developed countries using the UN action (inaction?) as an excuse not to engage in humanitarian efforts. And then when they dont like what the UN says, they ignore it and go ahead and do what they wanted to anyways. (Iraq War aka "Daddy, I have bigger balls than you. Mommy, I pooped my diapers. Waaaahhhhhhh!", anyone?)

We have seen all this happen before in the Rwanda and Bosnian Genocides, after which, the UN apparently promised multiple times "never again", which they must have said in one of the 5 official languages besides English, because as past incidents have shown, it translates to "sure, why not". So, in the absence of an effective multinational body that can help prevent conflict, what are the chances that there will be a 3rd world war? Up until now this has been a remote possibility because there is only one indisputable power in the world, the USA. However, this is changing quickly, with China's growth (accompanied by a growing ambition whose rate is only second to its military growth), and America's boneheadedness, and rapidly diminishing international support. (Thanks once again, monsieur Bush). Without a clear top dog, many countries will be emboldened to fight for what they want. The grand democratic experiment of the last half century is breaking down rapidly (Pakistan/Iran/Venezuela and company) and we have enough religious fanaticism on every side to embarrass the Crusaders. Add to that a desire for nuclear weapons, and the impending water and environmental crises, and you have a potion for true apocalyptic mayhem.

In such a situation, will anyone step up to the mantle of world leader? And by world leader, I dont just mean the country with the largest arsenal of WMD's or the biggest collection of foot soldiers, but rather, a country which has the power, and the desire to affect change in the world, at a political/economic loss to its own self, to ensure fairness in the dealings of nations, and prevent man-made catastrophes that maim and kill humans for miniscule monetary gain, thereby reducing each and everyone of us to less than our weight in oil? Or will the 'superpowers' as defined in the mid 1940's let go of their ego's and massive persecution complexes, and actually let the UN function as a useful body by giving up their veto power? Will they accept the realities of the day, and recognize that France and the UK are nowhere near China in terms of importance in this world? Will they let smaller nations have a level playing field, or will continue bullying them through the deliberately unfair political bodies such as the UNSC and the WTO? Only time will tell, however, I am extremely doubtful that either scenario will play out effectively.

Hope I am wrong though!

Music

I recently came across this page while looking for music recommendations. I am one of those people who hate listening to individual tracks, but would rather listen to the entire album. It allows me to experience the music in the exact manner that the artist would like me to. While this may not be the best way to get the most out of the music (listening to the best tracks from each album is obviously more efficient), it helps me appreciate each album as a work of art. Often, you find that the lingering sounds from the previous track change the way you perceive the current song completely.

Anyways, I downloaded the top 10 albums on the list and decided I would listen to all of them. Having already listened to all the Beatles albums on the list, I started with the album "Pet Sounds" by the Beach Boys (#2). It took me a while to digest the music, but once I gave it enough listens, I just could not get enough of it. One day, being really bored, and with nothing to do, I dug up some background info on the album. Apparently, the Beatles released "Rubber Soul" (#5) in 1965, which inspired the Beach Boys to release "Pet Sounds" in 1966, which in turn inspired the Beatles to release "Sgt. Pepper's Lonely Hearts Club Band" (#1) in 1967.

Stop there for a second and imagine yourself as a teenager in the 60s. The hippie culture is sweeping America, which while you might not have appreciated, you cannot deny was fantastically anti-establishment. And what does a teenager like more than the smell of revolution in the morning? And then comes 1965 and you listen to rubber soul for the first time. It is amazinng, and you say that there will never be anything like it, ever again. And then the next year your predictions are proved hopelessly wrong when Pet Sounds come out. This time though, you are not going to be wrong in saying that this is as far as music will go, you think. You even place money on it. And then the Beatles come back and give a crushing blow to your pocket money savings as you lose the bet with the release of Sgt. Peppers. What a time to be a 15 year old! (Oh, and then 2 years later, HOLY SHIT, man walks on fucking moon, but that is slightly off-topic).

And then there is the maybe not so surprising fact that each of these masterpieces existed directly because of each other. There is something quite amazing, and I dare I say it, religious in the idea that one set of geniuses are pushing another bunch to continually advance the pinnacle of human achievement. I can almost feel the excitement that must have pulsing through civilization as every boundary was tested, and pressed as far as it could go. And it was something the entire world could share in. Music was not restricted to the Western world, but was available to every person on the planet, being one of the most universal mediums that has existed in history.

You would have thought that with such a fantastic platform to build upon, there was no place music could go but up. And for a while it did, as Pink Floyd in the 70's and many others then and after could testify. However, looking at the current music scene I cannot help but shed a tear or two. How many songs in the last five years can you point to and say you would actually be listening to it in 20 years? How many albums would you go and buy repeatedly every time it was released in a new format? Where is all the groundbreaking music that changes the way you live your life, and is a defining moment of the era? Why are artists not pushing each other to outdo themselves, as well as everyone else? The only competitive inspiring I see is "beefs" between different rap singers, who use their next album as an excuse to hurl f-bombs at people they hate. There is no respect for their peers, and why would there be any? Its not like anyone is creating anything worth respecting...

What has caused this decline? I think a big factor is the rise of the gangsta culture which places greater importance on the 'bling' on a person rather than the quality of their work. (Btw, isn't it ironic that these men who pretend to be so 'bad-ass' and 'manly' are such fans of gold and jewellery, historically, a feminine pursuit). At the same time, no small part is played by the record labels who have constantly looked out for artists whose music may be terrible, but can be packaged well, because in today's superficial world, it is the cover that sells. Witness the boy bands of the 90s, the teenage girl revolution of the late 90s (would Britney have a single song if she always looked like this?) and now gangsta rappers, whose CVs have nothing but a description of each time they have been shot. Additionally, music is now competing for talent with so many other pursuits, such as television and movies.

There might still be light at the end of the tunnel though. With the rise of the internet, the record labels might just be pushed out of the equation. With sites like iTunes, and myspace giving artists direct access to massive audiences, good musicians might be able to reach the public without having their lights put out prematurely by record labels who did not find them "marketable enough". Also, with regular home computers being able to perform all the functions that one earlier needed a record studio for, the barriers to entry have been considerably lowered, allowing more people to enter the music game. (Consider this, for my cousin's wedding, I was able to do all sorts of cutting, and blending of tracks using Garageband on my mac that was earlier being done in a professional studio for Rs. 100 an hour). Hopefully, if the quantity of chaff is increased, there might just be more wheat that comes along with it.

Do you agree with me on the state of music? If not, why? If so, then do you share my optimism for the future? Shoot off in the comments...