It All Comes Down to Oil

With all the tumult in the Middle East, and the latest Libya, oil has shot through the roof. Nymex has gone to $105 while Brent has reached its 2.5 year high at $120 today.Some news reported that price is heading north because the world is worried that the crisis from Egypt and Libya could spread to Saudi Arabia, who is arguably the most important figure in the oil industry. If their supply is disrupted, I won't be surprised if $148 in 2008 could be repeated or even surpassed.

But the frightening part of the story is the fact that oil is really the most influential commodity in the world. Any price swing could virtually do some damage to many countries. I mean just these past several days, many stock indexes all over the world are turning red. Dow is red, Indonesia is red, Nikkei is red, FTSE is red, and the list goes on. Companies across various industries are affected by oil in one way or the other, and sometimes the damage can be devastating. So business owners, you better take any precautionary steps as necessary to minimize the upcoming oil damage. Just remember the lesson we learned from 2008 and don't repeat the same mistake.

Your Money Eats Less Now

Food items have been outrageous these days. Rice, sugar, and chili have been the headlines of newspapers for quiet sometime now. Main reason behind this price surge is believed to be the tight supply from the extreme weather from this past year that have disrupt harvests all over the country. Some economists also say that this is caused by increased demand from emerging countries, including Indonesia, related to their rapid economic expansion. In a nutshell, as people earn more, they eat more.

But I personally think that this time is a pretty bad one. Well its not like we are having major food shortage and people are dying of starvation on the streets. But this is Indonesia who probably eats rice more than any other country in the world, and the fact that we have imported some 800k tons of rice from Thailand so far is pretty worrying. Also, I heard that some people actually stole chilis from the farms at night so that they can sell it in the market with the skyhigh price. But nevertheless, I am still very grateful that food are still widely available and that the government is doing something about it. They decided to suspend the food products import duty for a while, so that scarcity of food can be prevented. The government also expect the price rise to soften pretty soon because harvesting season starts around late February until its peak in April.

Well, lets just pray that the harvest will go smoothly and that the price will stabilize itself soon (fingers crossed!)