As we are on the back end of what has been termed the worst economic situation since the Great Depression, do we need to re-establish the Big Picture of what is happening in the world? Sure it’s fun lamenting about how crappy the last year and a half has been, talking about the layoffs, the drop in oil prices, perhaps we can bring up how the government royalty program is directly responsible for the global meltdown (oh did that come off to sarcastic?), how it’s just not great like it used to be?
You remember, when we continuously complained about how expensive property was getting, when we complained about how busy it was, when we were frustrated at the incredibly poor customer service virtually everywhere due to lax hiring standards, you know the good old days. It just seems if we aren’t finding something to be annoyed with (did you go outside anywhere Sunday in Alberta!), we just aren’t happy.
Far too many people are caught up in the moment, it is definitely time for many of us to revisit the Big Picture, and I am not talking about global warming right now either. That is a separate rant. We will still feel repercussions of the recession for quite a while, there will be plenty of debt for people to pay back, there will be more pressure on homeowners as values keep increasing, we have to accept it.
Look forwards a year, two or perhaps even further down the time line, what may be happening then? As I like to mention, what happens when the global economy continues to ramp up? First and foremost demand for energy (think oil and gas) will eventually increase, this is a good thing! If you haven’t paid attention, neither China nor India are going away, in fact they are expected to continue to have more incredible growth in their economies for the next several years.
Too many Canadian companies have focused on dealing with the US, after all, it’s easy, and they are just across the border. As Canadian companies start to look globally to economies that are more active, (I think the US will be stagnating under all its debt for quite a while yet) more business will be directed globally. Global business requires more energy! Canada and specifically Alberta provide energy; can you see where this is going?
The Big Picture is things will continue to improve and while we won’t repeat the same unbelievable levels we were mid this decade, we will be rolling along. We will still have people complaining about something then, but for the majority of us it will be a much better place.
Since I brought up a potential rant about global warming, here are a couple thoughts for you. As global warming and its new nom de plume, climate change continues to take center stage; wouldn’t it be great if we see more electric vehicles in use. After all, they use less gasoline and are more efficient, we just have to plug them in? Our already over taxed electrical grids would welcome even more burden on them, then we can fire up more natural gas or “clean coal” electrical plants overnight to help increase power in the grid. Except it won’t be overnight, it takes a couple of years of longer to build a power plant, and they already account for 26% of the CO2 emissions in the world, making them the largest single source of CO2 emissions globally.
Perhaps there will be even more pressure due to the climate conference on Canada and Alberta to reduce CO2 emissions most specifically relating to the oil sands. This as the US has already announced they are planning on weaning off Middle Eastern oil within ten years. This leaves Venezuela (gosh that Hugo Chavez seems like a nice fellow, very rational and looking out for everyone, seems to love the US too), Mexico (thought to be a net importer of oil due to its growth within the next five years, oops one more tap turned off) and perhaps Canada?
Who do you think will win that one? The energy starved demands of the US perhaps? If they do put reductions in place, the oil just becomes more expensive, which eventually leads to price increases that get passed on to the consumer. Presently one in every five barrels of oil the US uses comes out of Canada; one barrel out of every 20 comes from the oil sands. This number will only increase as Obama moves away from Middle Eastern oil and it has to come from somewhere stable, and nearby. What affect will this have on our economy?
Of course as our economy goes, so does our Real Estate. This really puts a big smile on my face as I look at the Big Picture, now if I can only get through 2009.
