The Economic Impact of the Horrific Oil Spill
by Paul Mladjenovic |June 3, 2010Print
As I watch from a distance the great catastrophe in the Gulf of Mexico, I think with great concern what the impact will be above and beyond the monumental environmental impact for the immediate areas.
Beyond the corporate and governmental blunders, blaming and dithering, we have to recognize what must be done and also what we face as a society.
First of all, I think that all of us must heed the call to action by the governor of Louisiana. A massive mobilization of resources and manpower must take place immediately. Our Federal government should send the national guard and the navy to the Gulf of Mexico to help contain and mitigate this massive spill. We can not afford to hesitate. This oil spill is the worst in history and left unchecked, it would poison far, far more than the fishing industry in the Gulf of Mexico. It means far, far more than merely higher prices for gas or seafood.
This oil spill can easily decimate the ecology of the nearby bodies of water too. What would happen if the Mississippi river became toxic along with the Caribbean sea and the Atlantic ocean? Do you think it can’t happen? One engineer pointed out that as little as a quart of motor oil could poison 250,000 gallons of water. What would happen if millions and millions of barrels of oil seeped across the hemisphere’s many bodies of water?
The impact on ocean life (and those dependent on ocean life) is indeed horrific to think of. But the reality is unfolding right before our eyes. What will happen to agriculture? The world’s supply of clean drinkable water?
Yes…think about the logical after effects of this growing calamity.
At this point, all parties must be mobilized. All efforts must be enacted immediately. This is not just about British Petroleum and the White House. It is about all of us both in the United States and the neighboring countries getting immediately involved.
It is not just about placing blame, seeking punishment and passing laws and penalties. This is also about personal and economic survival. The Oil spill will have a significant effect on the entire economy. I don’t care if you live in Hawaii or in Oregon…you will be affected.
Among what you will see in the coming months are the obvious (such as rising prices for energy and seafood) but also…
- Rising unemployment. What will happen to businesses and jobs dependent on the Gulf of Mexico?
- Rising state deficits in the immediate region. The pool of taxpayers will shrink as the pool of dependents rise. What happens to, say, once-independent fishermen that can no longer fish?
- Rising federal deficit. The deficit can easily rise to $2 trillion from the economic fall-out from this horrific spill.
- Rising prices for corn, cotton, wheat, etc. General agriculture will be gravely impacted as water problems arise. The end result will be diminished supply coupled with ongoing demand.
- Higher taxes. The vicious cycle will keep growing as politicians use the occasion to agitate for more taxes on an already over-burdened economy.
- Indirectly, there is no positive impact on stocks and bonds but any that does materialize will certainly be negative.
- Many unintended consequences (inflation?) as yet unseen both here and internationally.
Calling your representatives to demand action (physical…not legislative) is the first step. If we are going to pay for bloated government then we might as well get some vital clean up services for the money!
In your personal strategy, some quick points…
- Buy storable food NOW. Yes…cans of tuna…you got it right. It will come in handy 6-12-18 months from now when you see what seafood (and food in general) will cost. That’s if you can get it!
- Do you have extra containers of water? You should always have a fresh supply on hand. Better safe than sorry (yes…I practice what I preach).
- If possible, have extra gasoline in a safe container tucked away in a safe spot if possible.
- Keep accumulating physical gold and silver. The US government will see to it that more dollars are printed up to deal with the added spending for the southern states.
- Commodities will keep zig-zagging up in price just as I had pointed out in my Commodities Super Boom seminar. With the oil spill, commodities prices will only strengthen more so as time goes on.
Copyright © 2010 Paul Mladjenovic
Paul Mladjenovic, CFP is a financial seminar leader, author of Stock Investing for Dummies and the editor of the Prosperity Alert newsletter. His main website is www.SuperMoneyLinks.com and you can follow Paul at www.twitter.com/PaulMlad.