2011 has started very interestingly, firstly a boy whom set himself on fire to protest the government in Tunisia has set off a storm of political unrest in the Middle East and has even began a “Not War” with Libya.
The earthquakes in New Zealand, China and Japan have devastated and changed hundreds of thousands of lives forever. Even with these crises half a world away, have you ever wondered if these events affect you?
The year began with oil prices hovering around the $90/barrel mark, which was close to an average high for the past 12 months, and then the protests in Tunisia ignited an uprising of its people to fight its government and they won.
With the help of social media, like facebook and twitter, the citizens of Egypt heard about the Tunisians toppling their dictatorial regime and began their own revolt. With a little more fight in him, Mubarak, Egypt’s leader at the time, lasted a little longer but eventually gave way to the democratic process.
Then there’s Gaddafi in Libya, he’s more colorful than a box of 1982 crayola crayons, sprinkle him with a little bit of genius like craziness and pour some oil all over him and you get what Jon Stewart from the Daily Show calls a “Not War”!
Then there are the earthquakes that have recently rocked Japan and New Zealand, they are absolutely disheartening and unimaginable to say the least. To add to it, Japan is sitting on edge with its nuclear reactor problems. Most of us have only seen the pictures on TV and are probably scared to even head over to Japan to help out as radiation is seemingly uncontrolled and our own government is warning us to stay away.
How do these events affect you?
The Middle East controls vast amounts of the world’s oil supply, and with supply being disheveled by unrest and uncertainty its value increases, meaning that it’s going to cost you more to go on the QE II for holidays.
President Barrack Obama also stated last week that in 15 years they will no longer be dependant on foreign oil, by that he means, mid east oil, as even we are foreign to most Americans, but at least our oil sands are friendly to deal with.
Based on Obama’s statement, I can imagine that there were some huge smiles at a lot of downtown Calgary headquarters last week.
Last week I was sitting in a gondola heading to the top of Kickinghorse mountain, which sits atop the town of Golden. My fellow passengers were in management at one of the local lumber mills, and I overheard them talking about them adding extra shifts to the mills and hiring a lot more people.
I was puzzled, and without hesitation, I asked why they were hiring all these new people as I wondered where the demand for all this lumber was coming from. She said one word, “Japan.” She went on to say that Japan has ordered as much lumber as they can get their hands on.
The aftermath of Katrina affected lumber prices for years, and its value went from $8 per sheet to $28 (watch for new build price increases to follow along with real estate values).
If Alberta has anything other than great people, it’s got lots of oil, and lots of trees. These major events are no question devastating and incomprehensible to understand and the least you can do is make a donation to help the victims out.
Now with the supply of oil being more and more volatile in the Middle East, the world will look for more stable governments to purchase from, along with Japanese efforts to rebuild their northeast coastline.
Albertans will surely be beneficiaries as our resource values will increase and our labour force will be putting in a lot of overtime to accommodate the demand so the least we can do is give some of it back.
Jean-Guy Turcotte is an Accredited Mortgage Professional at Dominion Lending Centres-Regional Mortgage Group and can be contacted for appointments at 403-343-1125, or emailed to jturcotte@regionalmortgage.ca.
