Blog # 12-Asia Propels Recovery But Vulnerable to Euro Crisis

Lagarde, with the International Monetary Fund, traveled to Asia a few days ago where she met with numerous officials of the Asia. She discussed future plans with many nations such as Asia, Japan, Russia, and has future plans to visit with Canada and Latin America. Lagarde addressed the issues that the global economy will face and the issues that Europe will face alone. China being in a crisis not too long ago was bailed out by the International Monetary Fund, with this help they have been able to “propel,” and successful create jobs as well as bring a half a billion people out of poverty which is remarkable. Japan as well was faced with economic failure and had to be supported by the IMF in order to seek relief within their society. They too have seen great prosperity and have propelled out of their economic crisis. The social issue is that many Asian and European countries are still faced with economic failure and need to be supported by other countries to prevent a global economic failure. Russia is an example of a European country faced with economic failure and need to proceed with the proper procedures to try to get out of this economic crisis. Lagarde stated, “In our increasingly interconnected world, no country or region can go it alone. We are bound together by our economic success—or failure,” she warned. Many European countries have not found relief in this trying times when their economies are face with the continuing downward spiral of jobs, tastes and preferences, depreciating currencies, as well as inflation. As countries are faced with these issues it puts economic stress on surrounding countries that then spread to countries all over the globe. When If Japan and China don’t contribute to the cause of the IMF and try to help out their neighboring countries they too will be faced with the everlasting threat of economic distress. Although their economies are doing well now, this doesn’t leave out the factor that the loss of exports to these suffering European countries will not be felt in the near future.

Lagarde made a very impactful statement when she said that the world is increasingly interconnected. Just because one country is doing well doesn’t mean that they will continue with that prosperity if their neighboring countries are suffering with debt that they cannot get a hold of. Looking at the history of the economic crisis, Latin America was faced with adversity when its economy started to fail due to the financial crisis in Asia including Thailand. Decreases in jobs, income, and higher inflation in one country only mean the same effects in another if the problem is not dealt with. All of these issues are social issues within our world that are forever a nuisance. Once again, we can see how our economies have such a massive affect on our social beings. Our economies dictate how we spend and use our money which affects how everyone lives on a daily basis.

Link to Article: http://www.imf.org/external/pubs/ft/survey/so/2011/CAR111111A.htm

Blog #11-The Eurozone is Tearing Itself Apart

Italy is now facing a crisis in Europe with the Eurozone being in a crisis. Currently Italy is solvent which means that Italy’s ability to meet the countries’ debt in the future is impossible. With this being said lenders who finance money to citizens are choosing not to do so because they don’t feel very confident about the citizens being able to pay the money back because of the countries’ current situation. Along with the solvency problem, Italy also has a liquidity problem because the ability of its citizens to get large lump sums of money has come to a halt. According to the article, “ Since the mid-1990s, Italian growth has been less than 2% a year; investment and consumption have been practically flat; increases in people's real income have been among the weakest in Europe, worse even than Germany.” The only chance Italy has is to have the European Central Bank to buy some of the debt so that the liquidity of Italy’s monetary system will not completely collapse. Although the liquidity problem will be fixed that doesn’t leave out the fact that lower spending will take place and the amount of benefits and services provided will also be reduced.

The Eurozone crisis is one that affects the whole world. If Italy goes into austerity and their citizens spend less money this deficit will show up in other areas of cash deficits everywhere. People’s ability to spend money is definitely a social problem that people can’t escape. The growth rate in Italy has been increasingly stagnant in the sense that there hasn’t been any growth. Where there is no growth, there is no ability for citizens to increase their standard of living as well as well as improve how they communicate and interact with other individuals. Citizens in Africa as well as South America can feel the effects of the Italian crisis due to the fact that businesses have outsourced all around the world. If money isn’t being made in Italy and growth is not being very prevalent then businesses haven’t been able to expand and give employees raises or create new job opportunities. Employment rates in other countries are decreasing due to the Italian debt crisis and the economies of other countries will soon see how much of an effect this crisis has on their economy as well due to the world’s globalized connection. Trade to Italy has also halted and been less which only affects the countries that have made trade agreements with Italy. Due to the consumption slow down in Italy citizens aren’t able to buy all of the goods that they once could. As we can see here Italy has impacted the world’s economy as we know it. Socially people everywhere have been affected by Italy’s inability to pay their debts.

Link to the Article: http://www.cnn.com/2011/11/10/business/eurozone-tearing-apart/index.html?hpt=hp_t1

Blog # 10-Cuba: The Elusive Horn of Plenty

In Cuba, local farm growers are dealing with the increased prices in which to produce food. With the prices rising to meet the international market prices Cuba’s government has to allocate their budget to adjust more than 1.6 billion dollars for the increase in price. According to Blanca Rosa Pampín, an agricultural expert and business advisor to the National Association of Cuban Economists, “Food such as soy beans and rice have rose 47% from 2010 to 2011. Along with the rise of rice and beans, seed prices have increased by 67%, fertilizers also rose by 90 percent and pesticides rose by 50%.” All of these essential products in growing these basic foods have rose with the economic sanctions implemented and Cuba needs a break. Trade agreements with other countries to buy such supplies needed to farm are also a huge factor that has played into the exchange of these goods. One such example of an issue raised was the embargo imposed on all freight going to Cuba. This embargo has added increased prices to the cost of goods needed to produce the necessities in Cuba. Cuba’s government has gone to extreme measure trying to make sure its citizens have its basic necessities by allocating rationing books. These rationing books are what citizens need to get baskets of goods such as food and household goods. The state food monopoly is what has torn the Cuban economy down and training efforts need to be put in place so that more citizens of Cuba can learn the basics of farming and how to continue producing their own crops without the everlasting reliance on globalized products.

Globalization of trade has been a social issue that as we can see here has affected the ability of some nations such as Cuba to produce essential goods of the economy. The outsourcing of these goods has led to the inability of local citizens to know how to produce such goods at the mass numbers that are needed to meet the goals of the society. With more women and children, the training falls on their ability to produce such goods. On top of these factors with trade prices continuing to rise, Cuba has fell behind in trying to keep up with global markets and the prices in which it requires to purchase these goods. As we can see from this article the rising prices in other countries affects other countries in ways that some could not even imagine. The social ability of the citizens to buy foods has fell within the ranks of trying to keep up with global prices which has only led to the suppression of Cuba’s economic standpoint. Globalization has proven once again to have a negative effect on people’s standard of living and how they live, which affects them socially and physically as well.

Link to article: http://www.globalissues.org/news/2011/11/02/11739

Blog # 9-Roundup: European Union Leaders hold Second Summit in a Week

With the current crisis in Europe officials have met for a second time to discuss issues and possible solutions to those issues. There is no guaranteed notion that any of the steps taken will actually work to get Europe out of this sovereign debt crisis but the fact that they are taking strides to solve this financial bind is encouraging. According to the article officials talked about, “expanding the temporary European Financial Stability Facility, recapitalizing the continent's exposed banks, and the terms of a second bailout for Greece–including losses for private creditors.” Greece’s financial crisis alone is a problem within itself so getting Greece back on their feet is one main priority. With this being said at the summit officials were facing controversy in terms of reaching a consensus that didn’t cause conflict. One fact of this matter was when Europe’s banks did not agree with the restructuring plan that was meant to be a possible solution. Other officials in Europe have also yet to put reforms into place in order to hinder this economic crisis that has ventured across the world.

If officials don’t jump on board with these reforms and put some reforms into action then the financial crisis will not get better. If things don’t get better in Europe, the financial burdens of their economy will continue to lie on other economies therefore putting major stresses on the citizens as well as the society as a whole. A change in the standard of living will also be seen as a diminishing luxury as people have less money to spend on pleasurable goods and services. The effects of people losing jobs in Europe are seen as companies all across the world are globalized and have a financial hold in countries all across the world. As explained in previous posts if a company is struggling financially, the financial burdens trickle down to the employees causing unemployment and less expansion within the company globally. Socially the summit caused conflict among officials which in turn affects the entire outcome of how the financial crisis will be solved therefore affecting how people interact. If citizens are not relieved from these social issues of a decrease in pay rate as well as possible unemployment it will in turn cause an increasing financial burden on citizens all across the world.

Link to Article: http://globalpublicsquare.blogs.cnn.com/2011/10/26/roundup-european-union-leaders-hold-second-summit-in-a-week/?iref=allsearch

Blog # 8-Greece Paralysed

As I discussed in a previous blog about Greece’s possible default, Greece has now been faced with violent riots from its local citizens who feel outraged by the outrageous taxes and salary cuts. Many of Greece’s citizens have said that the cuts have reduced them to poverty and standard of living to which they cannot be satisfied with. According to the article, “Black-masked youths hurled chunks of marble and petrol bombs at riot police in front of the Parliament building in the centre of Athens.” This shows just how angry the people were as they held banners saying, “We are going back to the standard of living our grandfathers had,” they were not backing down and wanted some reformation to the current crisis. About 100,000 people marched down the Athenian streets rallying more and more people to get involved with this movement. This situation is obviously a social problem due to the fact that people gathered together with a common underlying problem of salary cuts that were totally unacceptable and would not be tolerated. One person shouted out, “I used to make €1200($2082) a month I now get €700.” I could only imagine how dramatically their standard of living has changed. The citizens of Greece feel as if they are absorbing most of the taxes. Instead of the government going after tax evaders they feel as if they are targeting hardworking citizens. Creditors and the European Union are to vote on reforms to be put into effect in order for Greece to get €8 billion that they need in order for Greece to maintain some monetary value, without this money Greece will be broke by next week. With such a rocky foundation in which to be standing upon, Greece’s citizens have huge doubts with the political parties to solve this economic crisis in which Greece is in. Many citizens feel as if Greece will be pushed further into a recession that they cannot pull them out of the recession but push them further into a recession. The working middle class are the people who feel most strongly about these drastic changes in the economy.

Salary cuts in Greece and higher taxes have really taken a toll on the citizens of Greece. There total standard of living has been changed within the matter of months. The underlying social economic issue is the inability of the citizens to maintain the standard of living that they are used to due to the fact that their government has ran their country into the ground. Citizens cannot spend money in their economy which affects how much revenue is flowing into other economies around the world. Socially people are feeling enraged by how the economy is affecting their lives and how well they are living on a day to day basis. Less money flowing into other economies affects how companies outsource different projects, how many employees are hired, how much of a raise if any is given to employees, and how many employees are fired due to the company having to cut costs in the most efficient way. People all around the world are being affected by Greece’s economic crisis. Although citizens in Greece are the main ones who see an immediate change in standard of living, other countries will slowly start to see the difference that Greece’s economic crisis has caused due to the fact that the world is globally connected. Globalization is a social problem that is yet again the underlying problem of economic issues that are affecting people all around the globe. If such an economic crisis such as the one that occurred in Greece hits other economies there will be even more violent acts that break out by the citizens of different countries to show how enraged people will be due to salaries decreasing and jobs being lost.

Link to Article: http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=10760611

Blog #7-Congress Passed Controversial Free Trade Agreement

On Wednesday the US made one of the biggest trade deals since the North America Free Trade Agreement in 1994. The trade deals involved the US, South Korea, Colombia and Panama. Although this seems like a great opportunity to get even more goods into the US for lower costs, there are also many risks involving the economic stress the economy has been in thus far. Labour unions like the AFL-CIO and the Teamsters argued that this agreement might do more damage than already has been done. Jobs in the US will become even more limited due to the outsourcing of duties to complete a job to save money. This agreement will also mean continued abuse of laborers in those countries such as South Korea, Columbia, and Panama. As stated in the article, “The new trade agreements are mere continuations of old policies that have run economies into the ground.” With the current recession that has been prolonged over the past few years the US doesn’t need to do any worse than it already has done at this point. Teamster’s General President Jim Hoffa said, “We desperately need to reverse direction and protect our economy, instead of giving it away to our diplomatic partners.” The statement that Hoffa made is genuinely true due to the fact that we are openhandedly giving away jobs that could be created in the US. Instead of putting more money in our own economy all the US is doing is giving money away to other economies all to save money on goods that will be sold to our citizens at a reduced rate. Since the North American Free Trade Act 5 billion jobs have been lost, and with this new agreement we can only hope that there will not be a similar reaction.

Trade, loss of jobs, and deflation all play a huge role in how economies around the world are dictated. With increased free trade to South Korea, Columbia, and Panama the US will only decrease the amount of jobs that are here in America. Trade sanctions with China only brought decreased jobs and lower prices of goods. Trade agreements among other countries with similar policies as China we can only hope that the economy doesn’t plummet into an even deeper hole than its already in. Socially this agreement will affect where US citizens spend their money, how much of an increased standard of living the citizens in Panama, Columbia, and South Korea will have, and how many jobs are gained and lost in each country. Other countries around the world may feel the impacts of this agreement because if the US is trading with these three countries more so than other countries ,there will be a decreased number of exports going out of these countries and a decreased amount of money going into these different economies. A decreased amount of money going into these economies will affect the citizens and where they spend their money. Money is the driving force for everything in the world so if one country feels the affects of decreased profit it will in turn affect other countries because each country is globally connected to one another. There are huge risks involved with this agreement made between the US, South Korea, Columbia, and Panama but with the US making decisions that have previously failed in the past, we can’t expect a positive outcome from this major decision that has been made.

Link to Article: http://www.globalissues.org/news/2011/10/13/11520

Greek Default Believed to be Just a Matter of Time

As stated in several news articles, Greece has been facing a financial crisis that has really hit home. Late last week Greece announced that they would not be able to meet the 7.6 deficit target. According to the article, the prime minister has talked with the European Commission, the International Monetary Fund as well as the European Central Bank to see if Greece is eligible for a bailout. “The debt level in Greece is not sustainable,” said Farid Abolfathi, the senior director of the Risk Center of IHS Global. The only reason Greece has stayed afloat this long is with the help of the International Monetary Fund and its partners. At this point Greece cannot repay all of their creditors what they are owed and there is no possible way for this to happen by any means being that Greece has been in a recession for a while now. With this being said Greece will have to default. Even after a default Greece will be dependent on other nations for many years to come. Greece will be the first European nation to default if they agree to do so but this will mean major changes in the economic economies all around the world.

With the world being so connected, countries that are thousands of miles away will be affected by Greece’s default. Greece’s economy like the U.S.’s has been in a recession and cannot repay its creditors. Having to get financial help from other nations will only mean that less money will used in other economies that could be spending that money on paying for their own debts. The default in Greece will cause jobs to be lost as well as cause many people to go into early retirement. Businesses around the world will see the financial decrease that the default in Greece has caused. Less revenue for the company means fewer opportunities for citizens to improve standards of living as well as being able to do what they please in their spare time. European countries that will be helping Greece financially will cause its citizens to possible pay more taxes or cause some of their citizens to lose jobs or even go into early retirement just as Greek citizens will be forced to do. Greece’s Default will mean major financial setbacks in the long run and cause financial burden on other nations all around the world. The default will be straining money out of other economies in an effort to bring Greece’s economy out of the dirt, while trying to sustain individual economies that are financially unstable as of now, causing social contraints on how people interact and how they live their lives.

Link to Article: http://www.chicagotribune.com/business/breaking/chi-greek-default-believed-to-be-just-a-matter-of-time-20111005,0,1827243.story

Blog # 5-Can China Rescue Europe?

The recession in the United States and the increasing debt in the European economy has made more economies panic about the continuing financial crisis happening around the world. Major exporters such as Brazil, India, Russia and China shouldn't even feel safe in an economic crisis such as this one. They will all be largely affected due to the decrease in exports which will create financial stresses in their economies that were once unimaginable. According to the article, “With closely integrated global financial markets and trading networks, financial crises and economic contractions in the developed economies, which still account for nearly 60% of the world’s GDP, will inevitably undermine emerging-market countries’ prosperity.” Europe expects to get relief by letting other countries pay for their debt using foreign reserves. With China having 3.2 trillion in foreign exchange reserves, the European countries are looking to them to come and “save” their economy. The only problem is that China is making huge demands. One of China’s demands are to be granted with “Market Economy” which will mean that companies who have been dumping large amounts of goods in overseas economies will not be accountable for their actions in that nature.

China should consider pulling Europe out of their debt crisis due to the fact that Europe makes up 383 billion dollars of China’s export market. Europe’s recession would mean a slowdown in China’s economy as well. One countries debt is another countries problem as we can see in this article. Just because one economy may be better off financially and hold foreign exchange reserves, doesn’t mean that they won’t be affected by such a financial crisis. China depends on Europe to buy from them so they can sustain a high level of exports which will continue the high amounts of cash flow in their economy. Being that the entire world is globally interlinked, this gives accurate explanations for financial slowdowns happening all around the world. The financial crisis in Europe also affects other countries around the world that trade with Europe and China. Being that Europe’s economy is facing an economic crisis this will only mean that the United States will be faced with another recession. Just as China's economy will be affected so will other big exporter countries' economies be affected due to the lack of such high volumes of orders that are normally exported. The financial crisis is a social problem that affects individuals on a day to day basis affecting people’s daily choices in what they can and cannot buy or what they can and cannot do. It’s amazing how we can take a look at the different economies all around the world and connect them back with how our economy is doing and base our expectations and standards of living on what is happening all around us. We can only hope that China uses some of its foreign exchange reserves to buy some of Europe’s debt so the financial crisis that we are currently in will seek some kind of relief.

Link to Article: http://globalpublicsquare.blogs.cnn.com/2011/09/30/can-china-rescue-europe/?iref=allsearch

Blog # 4- UK Government Sees Progress in the Tax Collection

In the UK the government has seen substantial growth in the tax gap. The tax gap refers to the amount of taxes actually collected and what should have been collected. The Value Added Tax (VAT) had been cut which meant a reduction in the amount of taxes collected. The HM Revenue and Customs (HMRC) of the UK have made a lot of strides in order to challenge tax evaders, close tax loopholes, and create a new unit to ensure that wealthier members in society pay their share of taxes as well. Once these problems were faced the government was able to add back the VAT and collect in areas of deficiency. The increase in the tax gap has created a better economic standing for the UK and their ability to make this financial crisis that the rest of the world is going through substantially less damaging. According to the article the tax gap was a contribution of tax avoidance which amounted to 14 percent of the tax gap, evasion which amounted to 12 percent of the tax gap, criminal attacks which amounted to 16 percent, and differences in legal interpretation which amounted to 14 percent. These numbers were stifling to see and based on the article the Chartered Institute of taxation concluded that tax evasion and legal activity was costing the exchequer, the bank account into which monies of the public are paid, three times as much as tax avoidance. Obviously in the UK there is a great deal of tax evasion going around which is definitely something that has to be dealt with.

As the HMRC tackles the problems of the legal differences and tax evasion they will see that their investment in closing the tax gap will be well worth it in the end. The HMRC cannot stop with their efforts in doing so because the gap will take time to close. The long run effects of closing the tax gap will resort in money being put back into their economy which in turn makes their economy better off. The money then trickles down to businesses that have branched out into the UK and in return it puts money into other hurting economies. Along with the businesses, citizens of the UK may even see a wage improvement. A wage improvement would give citizens the opportunity to spend more and be able put money into other economies. Socially, people's ability to spend money affects their standard of living. If wage improvements are made their standard of living would be improved.

As you saw before in last week’s blog about Fosun International investing in other companies and how their investments in such businesses would in turn be beneficial to the world’s economies by allowing cash flow to be increased all around the world. Globalization and its characteristics of international businesses everywhere around the world reemphasizes the fact that money will be put into other economies naturally as people spend money in their economy. The HMRC has made a very big step in improving their economy. Time will be the only factor in deciding how long it will take to shorten the gap and allow other economies to look within their tax collections to take similar measures. Globalization has proved to be a hero in this case, by helping hurting economies in this financial crisis.

Link to article: http://www.ft.com/intl/cms/s/0/98f7b9be-e467-11e0-844d-00144feabdc0.html#axzz1Yi4Eo6uK

Blog # 3-China's Fosun to Invest in Overseas Companies

Fosun International, a conglomerate privately owned company in China, has made plans to invest in various businesses in the United States, and in Europe. According to the article Fosun International is investing in clothing, pharmaceuticals, financial services, and retirement homes along with many others. Investing in these companies will bring on strong growth within the Chinese markets and create a stepping stone out of the current financial crisis. One company that has a business venture with Fosun International is Financial Prudential, a US insurer, who plans to sell life insurance products in China late next year. With China having the lowest amount of insurance based citizens this brings a new market into China that will definitely see the effects of growth in this competitive market. Fosun is creating more opportunities to bring money in the Chinese markets therefore uplifting the current situation in which many citizens are losing jobs and having to give up future plans of any kind of advancement. Guo Guangchang, the founder and Chairmen of Fosun, made the comment that the latest economic crisis provides new opportunities for his company to make more such deals with foreign brands, high technology companies, financial services firms and others with specialist expertise or technologies, that need Fosun’s help to make money in China.

As we can see today globalization has had negative effects on economies around the world. One such situation was when Chinese citizens were losing jobs due to the factories shutting after the upkeep of these factories proved to be an investment that too costly for the companies that chose to globalize. In turn this created a lot of unemployed citizens which in turn affected markets all over the world. Products weren’t being made with labor as cheap as before which caused prices to go up. This financial crisis has been seen to affect the world with its financial decline. With this being said, Fosun International is making huge efforts to bring money into the Chinese markets. Bringing money into the chinese markets will create more jobs for Chinese citizens which will in turn put more money in these businesses that have chosen to let Fosun invest in their companies and expand their business into other markets. These businesses will give Chinese citizens an opportunity to spend more money, make more money and create an economic turn within their country as well as in other parts of the world. With the economies in today’s society being so interlinked the business investments made with Fosun and the other companies can truly make a difference in the financial crisis by putting more money into the economies as they are at their lowest point financially.

Link to article: http://www.ft.com/intl/cms/s/0/23f9ccb6-df89-11e0-845a-00144feabdc0.html#axzz1Y3nkqU8O

Blog # 2-Brazilian Officials Betray their Concerns

Just last week Brazilian officials decided to cut interest rates in order to end the countries’ seven month, “tightening cycle,” in order to promote gradual growth and an immediate corrosion of global markets within their country. Although unexpected the country now faces bigger concerns like slower global growth and falling commodity prices. The interest rate cuts have been predicted to affect Brazil by only one quarter of what the 2008 crisis did but these cuts have provided crucial predictions that they will have long term affects on making the global economy weaker.

This week Brazil’s President, Dilma Rouoseff, tried to encourage Brazilian citizens to continue to consume normally in an effort to defend the economy against this international crisis. According to the article the central bank said that during this global growth slow down this would create an opportunity to cut interest rates which in turn would lower exchange rate and reduce inflation. As of now inflation in Brazil is at its peak and doesn’t seem to be declining any time soon. With these reduced interest rates the central bank is planning for a growth within the Brazilian economy and the deterioration of global markets.

These changes are definitely having an affect internationally because global markets in Brazil will start to shut down and therefore not have the same financial stability as before. Citizens in Brazil will be rejuvenating their economy while other economies struggle with finances and the ability to improve their markets. Globalization is the underlying problem here and socially this has an effect on every economy that has chosen to be interlinked in this global expansion.

As I wrote in my first blog about the Syrian oil embargos you can see how one event in one economy has a domino effect on the rest of the world. Although it may seem small and insignificant it truly does have a connection with everything around us. Brazil’s choice to decrease their interest rates has socially effected how people in other countries such as Europe, Africa, and the United States spend their money and reside. With finances being less abundant in the different economies neither institutions nor individuals can prosper or create a better standard of living for themselves. Brazil has made its citizens spend a majority of their incomes within their economy making it harder to disperse that revenue into other markets and economies. In the long run this has a negative effect on the world and their spending which in turn affects the growth and overall global economy itself.

Link to Article: http://www.ft.com/intl/cms/s/0/bbd3633c-da3c-11e0-bc99-00144feabdc0.html#axzz1XOKihAOW

Blog # 1-Syrian Oil Embargo could hit Prices

The Oil Market in the Middle East is crucial in other countries around the world and proves to have impacts on different countries as the price of gas continues to spiral up and impact economies. Syria is a country that has a significantly large impact on the oil industry today as the European Union imposes embargos on their crude oil exports. Syria produces about 370,000 barrels of oil per day and exports about 150,000 barrels of oil per day. Although Syria is not the biggest producing resource of oil due to Libya’s high quantity, the embargos have affected how other countries will make up for the loss of oil due to the civil war that has severely impacted Libya’s oil production. Libya supplied oil to countries such as France, Spain, and Italy. Due to the European Union’s embargos Syria will have to reroute their oil supply to other oil inventories to make a profit. With Libya’s shortened oil supply and Syria’s embargo on oil exports European refineries’ supply of oil will be even more scarce therefore making oil prices go up. Oil supply in the Middle East is a big issue in today’s society.

Since oil is a resource that is shared between countries this makes oil a topic of discussion in social problems. Oil consumption by oil refineries involve social interactions among people to disperse of the oil as the economic resources are supplied which in turn affects human conduct. The embargos against Syrian oil exports is an example of human conduct in action. If European oil prices are higher, European citizen are then obligated to spend more money on oil and less money in other areas of the economy which in turn affects America’s economy.

This article was an eye opener and really helped me see how one area of the world that involves something as simple as oil could affect the whole World and how their economy is conducted. The world today is globalized in a way that businesses everywhere are interlinked due to businesses expanding into various countries around the world. Getting insight on what is going on in economies around the globe is very interesting and shows just how important Sociology truly is.

Link to article: http://www.ft.com/intl/cms/s/0/00a2acf6-d485-11e0-a42b-00144feab49a.html#axzz1WoyOEQSQ