Tuesday, September 16, 2008

Sep 16 - The World Changed, and We Were Unaware

For 42 days (July 24 - Sep 3), our only contact with world news, other than the few days where we had access to CNN, BBC, or EuroNews, was by watching Chinese, Russian, Uzbek, and Kyrgyz TV. Since we don't understand a whole lot of Chinese, Russian, Uzbek, or Kyrgyz, (and since those channels don't cover a whole lot of world news), it is now time to note what happened while we were out of touch.

Oil: On July 11, 2008, the price of oil hit $147 USD per barrel. By July 24, it had dropped slightly, to apx $128 USD per barrel. Today it is $91 USD per barrel. In July gas at the pump was right around $4 per gallon when we left, and $3.55 per gallon when we got back, although it has now temporarily spiked in Georgia as Gulf refineries closed because of Hurricanee Ike.(Prices of gas where we traveled were consistently in the $.90 to $1 per liter range, which corresponds to $3.50 - 3.80 per gallon, although they are likely to be falling there.)

The dollar, euro, pound, and Chinese yuan: on July 25, the Chinese yuan was at 6.8213 to the dollar (1 yuan = $.1466). It is now 6.86824 (1 yuan = $.1456). Pretty stable. But on July 25, $1 = .6371 Euro ($1.5696 = 1 Euro), and today it is $1 = .7043 Euro ($1.4198 = 1 Euro). The British pound was $1.9893 = 1 pound. Today it is $1.7803 = 1 pound. The Uzbek sum and the Kyrgyz som have weakened very slightly against the US dollar.

In July, the following were still independent entities, unencumbered by sale, bankruptcy, receivership, or conservatorship: Fannie Mae, Freddie Mac, Lehman Brothers, IndyMac, Merrill Lynch, and AIG.

How can so much change in 7 weeks or so? We had very little knowledge of it, and were seemingly unaffected by any of it.

This region of the world will certainly be affected by the price of oil/diesel fuel. But the things that really affect it are the price of rice (currently over $1 per pound in the markets), the price of flour (bread and noodles), and the price of locally produced meat, vegetables and fruit, and the price of imported goods, like refrigerators, computers, automobiles, trucks. Will the strengthening of the dollar and the slow collapse of the US and world financial institutions affect the price of these things in Uzbekistan? The stability of the nations of Central Asia may depend on the answer to that and similar questions.


Eileen Tan said...

Hi Mike & Carol! This is Eileen, one of the Singaporeans you met at Kochkor during the home stay. We have pictures of you that we'd like to send. Can we have your email? Mine is zephryn@gmail.com

Kaya said...

Ephemeralization a potential the answer. Look up Buckminster Fuller's books and thought.



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