Oil Insufficiency

"Production rises quickly at first and then gradually slows until approximately half the original supply has been exhausted. At that point, a peak in sustainable output is attained and production begins an irreversible decline until it becomes too expensive to lift what little remains."

That time which is ahead will come when it will come.

When it does arrive, the price of this scarce product will go even higher.

Here we are reminded that Bahamian folk wisdom holds that you get nothing for nothing and after that you should not pretend surprise when you get very little for your penny.

We take note of this wisdom-nugget as we reflect on some of the news coming forward concerning this nation’s housing stock.

Here the specific reference is to those cases where consumers are finding out the hard way that there is a price for everything. In instance after sad instance, we are hearing stories as to how this or that potential home-owner is discovering that there is no short cut to ownership.

More to the point, some consumers today understand some of the danger that is inherent in ‘purchasing’ consumer goods on credit.

Put simply, too easy credit might well be one of those royal roads that lead to ruin. This potentiality is accentuated whenever things – as they say – are tight.

That is why we take time out to counsel and caution Bahamians that the cost of living is rising and that there are things that can be done in order to mitigate expected impacts.

Some Bahamian pundits and some others who could be deemed ‘quite ordinary folks’ are somehow agreed that we are in for hard economic times.

They warn all who would hear them about the impacts that high and rising oil prices are currently having on the cost of living in The Bahamas.

Some of these expert brothers and sisters are advising all who would hear that the housing market in this country is in the midst of what some have called a meltdown.

They cite as evidence the fact that building supplies are high in price and rising. So too is the cost of labour. Put together, these now push more and more people out of that market.

In other instances, the same pundits tell us that some would-be home-owners are finding it more and more difficult to sustain properties they mortgaged in a more buoyant time.

Interestingly, these expert witnesses have as counterparts any number of people whose business it is to operate household budgets. Increasingly, these people – invariably Bahamian mothers – are finding it nigh-impossible to make ends meet.

As if designed to make matters even worse, the cost of gasoline – and therefore the price of the commute to work and to church – is getting more expensive by the day.

This phenomenon has no where to go but up so long as the United States of America remains dependent on others for its oil supplies.

This is so because The Bahamas just happens to be that kind of place where the national economy is tethered to another that just happens to be enormously gigantic.

That huge economy is that of the United States of America.

Interestingly enough, while this economy is stupendously large, it can not insulate itself from that myriad of consequences that flow from its dependency on imported oil.

In turn, the price of oil is dictated by market-forces, pure and simple.

Michael T. Klare notes, "The economic bubble that lifted the stock market to dizzying heights was sustained as much by cheap oil as by cheap (often fraudulent) mortgages. Likewise, the collapse of the bubble was caused as much by costly (often imported) oil as by record defaults on those improvident mortgages. Oil, in fact, has played a critical, if little commented upon, role in America's current economic enfeeblement -- and it will continue to drain the economy of wealth and vigor for years to come."

As this process unfolds, Bahamians will be obliged to respond.

How they respond will determine whether they sink or swim. There is no other option.