No Comments
/
Nov 13.09
/
Energy
/ by Ro Econ
This article is a continuation part two of three. Read part 1 here:
With a viable world market within striking distance, I will argue that the only method for inducing a change in OPEC behaviour is to 'steal' import supply from the United States. It is unlikely that strong>oilsands products will make it to any other world market due to logistic costs. Shipping oil to the nearest transport hub, likely in British Columbia, would be the only alternative for sending crude to the market abroad. It is more efficient to create and build upon the existing transportation system directly to the United States. As a result, there is potential for oilsands exports to replace OPEC exports to the US. However, the only method of achieving this is by increasing current output and reducing lifting costs. The question of whether US importers will increase their Alberta consumption for oil is dependent on the cost. Is it cheaper to construct a pipeline directly from oilsands projects in Alberta, or is it cheaper to import from the Middle East? Regardless of location, the consumer, or in this case the nation, will import the lowest cost product. This suggests Saudi Arabia will continue to export crude to the United States so long as they can maintain lower costs. The higher transportation costs are compensated by the lower marginal lifting costs. Thus, one of the major factors in determining the success of the oilsands export market will hinge upon the producer's ability to maintain an affordable product under market conditions. Presently this is the case, high market prices support the market for expensive bitumen exports.
Potential Size of United States Export Oil Market
Continue reading this article »
No Comments
/
Nov 09.09
/
Energy
/ by Ro Econ
Here a paper written by one of our members exploring the viability of Alberta oilsands impacting the overall world market price for crude from 2005.
Abstract: This paper will investigate the impact production of the Alberta oilsands reserves may have on the world oil market and how the OPEC cartel could respond to this new supply. The primary market used in examples is the relationship between the United States, Alberta, and OPEC. The effect lost world oil market share and subsequent OPEC responses will also be investigated. Crude oil is the only resource under consideration within this paper despite other resources available within the oilsands resource.
Analysing the potential impact the Alberta's oilsands reserves could have on the world oil market requires one to clarify what volumes regarding available reserves and output will be used in discussion. Determining the size or clarifying which data sets are used is largely dependant on a variety of variables and measures a particular firm or institution incorporates.
According to The Alberta Energy and Utilities Board (EUB), current oilsands reserves are estimated to contain approximately 174 billion barrels oil (as of 2003). 174 billion barrels of available reserves producible at current technology. Many advocates of the oilsands production and expansion, that is producers and Alberta politicians alike, are eager to divulge a resource value closer to 315 billion barrels.
This ultimate recoverable volume is attractive to proponents of oilsands production because of its size. The ultimate recoverable estimate is greater than the current conventional proved oil reserve estimate for Saudi Arabia, OPEC's biggest member and producer. However, using the ultimate resource figure when describing the current potential for Alberta oilsands output is presumptuous. The value cannot be supported with current technology and thus should not be considered when determining the size of the resource. The more accurate estimate suggests Alberta holds the world's second largest reserve of oil deposits at 174 billion barrels. Although the ultimate potential of the oilsands is comforting to Albertans, due to their dependency on the energy sector, the value of current recoverable reserves is nonetheless staggering when compared to the remaining conventional reserves within Alberta and abroad as well. Continue reading this article »
1 Comment
/
Oct 29.09
/
Macroeconomics
/ by Ro Econ
This was originally posted in our forum and reposted here when the forum closed.
Q. I was wondering if I could have some help understanding some basics.
When a government increases the money supply, where does this money go immediately? I mean, when it increases money supply, who exactly gets this extra money, and how?
Also, I think that when there is more money, inflation rises. But how are interest rates affected? And why?
Finally, I know what deflation is, but I don't understand what can cause it and the negative implications it has. Can someone explain it, in simple language please? I would be most grateful.
A. Usually the central bank hangs on to that money and slowly send it out as demand warrants. (That means the bigger banks borrow the money from the central bank.) Continue reading this article »
No Comments
/
Oct 26.09
/
Insurance
/ by Ro Econ
In recent months, the topic of health care reform has dominated the airwaves. There have been heated debates taking place on both sides of the issue. The arguments presented by each side can often be confusing. In order to better understand the various health insurance reform arguments, the following is a summary of the pros and cons of health insurance reform.
Health Insurance Reform Pros
Continue reading this article »
1 Comment
/
Oct 23.09
/
Global Economics
/ by Ro Econ
This question was posed in our forum and is now placed here:
I have a research about economic growth. So there are 4 question.
I am very grateful to you if you answer :
1- why do have developed nations a little GDP rate than developing nations?
( for example USA has 1% and Iran has 12% )
2- is the economic development cause of the economic growth or the economic growth cause of the economic development ?
3- is it good a high GDP rate for a long time ?plz explain
4-does a high GDP rate develope the economy of nations? plz explain
5-why China wanna reduce the GDP rate ? is it good ? plz explain
Continue reading this article »
5 Comments
/
Oct 19.09
/
Debt Management
/ by financewriter
Credit has become so much a part of our lives that we don't even give it a second thought
In the 1850s Isaac Singer wanted to increase sales of his sewing machines. Very few people could afford to buy them outright. His plan allowed buyers to put $5 down and $5 monthly. Today peoples' credit histories are a critical reflection of their ability to be trusted.Granting credit has grown into an extremely competitive multibillion dollar industry. The target? Our wallets, usually starting with our young people! Get them and dupe them early they say....
So let's dissect Lila's (the comic) situation for educational purposes.
Continue reading this article »
3 Comments
/
Oct 17.09
/
Macroeconomics
/ by Ro Econ
This question was originally posted in our forum and moved here.
how inflation rate of any country is determined?
i mean which yardstick is used to measure inflation?
looking forward to quick response
thanks in advance Continue reading this article »
2 Comments
/
Oct 15.09
/
Macroeconomics
/ by Ro Econ
A user, Mr. English posted this in our forum and we're reposting it here.
Hello People,
I have been investigating something for a while know but as yet have not been able to establish conclusive answers to what would seem fairly straight forward questions.
* The question being in any countries economy does anyone here understand exactly how the total monies are monitored to establish money available in the economy and how this is policed and measured?
I have heard about MO M1,M2, & M3 being the totals measured; the question that has been on my mind is that on bank notes there are serial numbers, which my understanding was that presumably these are printed under an organised global finance system overseen by laws which state that these notes are printed at an authorised legal amount in line with legally merited ways that these monies have been acquired e.g. serial number 0123,435,234,234 would equate to an indication of their being $123 Bn in the economy.
Continue reading this article »
6 Comments
/
Oct 12.09
/
Foreign Exchange
/ by Ro Econ
We're migrating some posts from the old economics forum to our blog. This is one from 2007.
I have been discussing with my friends on how some currencies compare against USD. For example, the Kuwaiti Dinar is the most expensive currency in the world (1 KWD = 3.55 USD = 1.77GBP).
Also, 1 US Dollar = 1.87208 Brazilian Real. However, before Brazil introduced new Real in 1994, you could get a lot more of the old currency for 1 USD. The new Real just divided the old currency by some factor.
So, just because a currency will buy you more dollars than another one doesn't mean that economy of that country is better. It might be true in some cases but doesn't have to be true all the time.
So, my questions is ... since a British Pound is worth more than US Dollar ... what does that say about the British economy compared to the US? Since pound is worth more than dollar there is just less pound to go around to balance it out? Continue reading this article »
No Comments
/
Oct 10.09
/
Foreign Exchange
/ by Ro Econ
Q. If a currency falls in value, does the central bank raise or decrease the interest rate to make it gain in value again?
A. Typically the FED won't move interest rates just for the dollar. Here is a brief run down of how movements in the interest rate affects the dollar.
Change in the short term interest rate: Increase
That means to foreign investors short term assets look more appealing cause you get a better return. That means an increase in demand for US dollars. Conversely, that also means corporate money decreases as people get ancy with the increased interest rate (sign of a slowing economy?) and pull money out. That may slow down the economy and in the medium run (between short and long term) there may be a depreciation of the currency despite the initial appreciation from the initial increase in interest rate (because now the economy may be weakening). Higher interest rates are not always negative things though. It's a good way to curb inflation.
Originally posted in the forum.
