1973 Energy Crisis And Its Effect On World Economy.

1196 words - 5 pages

Origins of the 1973 world oil shockWorld competition over resourcesThe Arab-Israeli conflict triggered an energy crisis in the making. Before the embargo, the industrialized West, especially the United States, had taken cheap and plentiful petroleum for granted. (Indeed, the form American cities took after World War II - with expansive suburbs full of detached, single-family homes - depended on the automobile as the principal means of transportation - a form that consumes oil en masse as fuel.) Between 1945 and the late 1970s, the West and Japan consumed more oil and minerals than had been used in all previous recorded history. Oil consumption in the United States had more than doubled between 1950 and 1974. With only 6 percent of the world's population, the U.S. was consuming 33 percent of the world's energy. At the same time, America's economy accounted for a quarter of total global production, meaning US workers were over 5 times more productive than the global average (because of their advanced industrial sector, which accounts for the bulk of energy usage).The fall of the dollarU.S. economic policies had an important effect on the crisis. While the OPEC boycott was an immediate trigger, historians increasingly see the crisis as being rooted in American economic policies.Oil, especially from the Middle East, was paid for in United States dollars, at prices fixed in dollars. U.S. President Richard Nixon had inherited an economy in which growth was already sluggish, in which inflation was already troubling. By the summer of 1971, the president was under strong public pressure to act decisively to end the dilemma of rising prices and general economic stagnation (see "stagflation"). Nixon thus released the dollar from the fluctuating gold standard that had controlled its worth since the signing of the Bretton Woods pact at the end of World War II, allowing its value to fall in world markets. The United States suspended convertibility of the dollar on August 15, 1971; the dollar was devalued by 8 percent in relation to gold in December 1971, and devalued again in 1973.The devaluation resulted in increased world economic and political uncertainty. Concurrently, in the early 1970s, the fall in the dollar went along with a fall in the price in dollars for oil. This improved the situation of U.S. industrialists in relation to European and Japanese competition. But the de-valorization, and then devaluation, of the dollar crystallized the unease of raw materials producers in the Third World who saw the wealth under their lands being reduced and their assets growing in a currency that was worth significantly less than it had been worth just quite recently. This set the stage for the struggle for control of the world's natural resources and for a more favorable sharing of the value of these resources between the rich countries and the oil-exporting nations of OPEC.OPEC devised a strategy of counter-penetration, whereby it hoped to make industrial...

Find Another Essay On 1973 energy crisis and its effect on world economy.

The World's Least Liveable Countries: Yemen - A report on how its infrastructure, geography, culture effect it's economy and solutions to the limitations

1562 words - 6 pages were officially united. In 1994 another civil war broke loose with fighting between secessionists from the south and Yemen's northern-based government - the war was won by the north. In 2001 Yemen lent its name to the U.S 'war on terror' and subsequently received aid and possible economic ties with the U.S.Yemen's geography greatly limits the agricultural sector of its economy because rainfall is unpredictable. There is usually little to no rain

The Effect in Hong Kong's Economy After the Asian Financial Crisis

2663 words - 11 pages firms in non-export related sector.•rates rebate for the first quarter (worth HK$3.85 billion)This expansionary fiscal policy has helped shorten the recession of Hong Kong. As the Asian economy slowly recovered from the Asian Financial Crisis, Hong Kong has also managed to climb back from its recession.ReferenceCorsetti, G., Pesenti, P. and Roubini, N. (1998). What Caused the Asian Currency and Financial Crisis?. New York University.Edwards

Slavery And Its Effect On The Uprising Of A New World

1851 words - 7 pages “Slavery and Its Effect On The Uprising Of A New World” In the 17th century, Africans were taken from their homeland and forced into slavery in the New World. Once there, they were exploited for profit by European settlers. Despite mainstream historical accounts, it was African-Americans who built the foundation of the American economy, which eventually made it a super power. This essay will illustrate how Blacks survived in a hostile

Bailouts Effect on Economy

934 words - 4 pages Almost 1.2 trillion dollars were spent on bailing out the various banks in the 2008 financial crisis. First, what bailouts are is explained. Then, the history of bailouts in the US is told. Finally, the effects of the recent bailouts are analyzed. Because billions of dollars are spent on bailouts, they need to be understood by the public by knowing their history and their effects on the economy to ensure informed decisions in the future on

Fracking and its Effect on the Environment

1500 words - 6 pages rising prices of fossil fuels, and there is much potential for recovering natural gas through fracking. However, fracking has many waste products and unusual side effects caused by the unnatural forces and materials used. Fracking has a detrimental effect on the surrounding environment through pollution and earthquakes. Fracking is the process of extracting natural gas from layers of shale rock deep within the earth. One of the world’s largest

Advertising and its Effect on Childhood Obesity

1521 words - 6 pages effect of media exposure on obesity may also operate through the extensive advertising messages for unhealthy foods targeted at children.” (Agarwal, Dhanasekaran) The food advertising geared towards children makes them develop unhealthy eating habits, and choices. The advertisements are usually advertising unhealthy foods, never healthy ones. “When children watch television, they cannot escape food advertising. “Sugared snacks and drinks, cereal

War and its Effect on Society

643 words - 3 pages effect on everyone, regardless of race, gender, or age.When hearing the statistics of a war, you learn how many are dead, injured, captured, and starving. The physical ramifications as a result of being in combat can range from a nick and a few scratches, losing a limb, or even losing a life. Time tends to heal these injuries. The psychological effects of war on the other hand are trickier to deal with. Most veterans that return home after

Outsourcings and its effect on business

1140 words - 5 pages become. Outsourcing is an increasing important portion of business today and business managers need to examine their corporations to determine what, if any, outsourcing is right for them. When trying to decide what operations are ripe for outsourcing, business managers should focus on items inside a corporation that can be digitized and easily and inexpensively sent to the other side of the world. Granted it is still possible to outsource the

TV Advertising and its Effect on Children

2904 words - 12 pages TV Advertising and its Effect on Children Today’s children are unique in many ways from previous generations, but perhaps the most influencing on our young children today is Television advertisements. "In 1997, the nation’s estimated 34 million children age 12 and under will have spent or influenced spending of a record $500 billion" (Horovitz 1997). There is obviously a great deal of interest in this subject, many books have been

PTSD and Its Effect on Military Families

2199 words - 9 pages PTSD and Its Effects on Military Families In 2004 Operation Iraqi Freedom became the deadliest American military conflict since the Vietnam War. Military operations in Iraq and Afghanistan and Vietnam have brought heightened awareness of military related PTSD, as well as the relationship and family problems that accompany the disorder. Studies have shown that 11% - 20% of Veterans that served in Iraq and 6% - 11% of veterans that were deployed

Tv Violence and its effect on children

871 words - 3 pages on a child's perspective it will educate a child wrongfully by giving him the idea that violence is cool which can lead to several other issues that may arise in ones household, school and may even effect ones future relationship. Violence can branch off into many categories such as control issues, shortage of temper, abuse and even several more. Preventing your child from going astray by limiting what is suitable and not suitable for watching can

Similar Essays

Immigration And Its Effect On The United States' Economy

1524 words - 6 pages Immigration and Its Effect on the United States' Economy The 1990s have brought the largest influx of immigrants into labor force of the United States of any decade in this nation's history. A panel of social science scholars concluded their assessment of U.S. society with the observation that "America's biggest import is people" and determined that "at a time when attention is directed to the general decline in American exceptionalism

Strong Economy And Its Effect On Financial Market

1025 words - 4 pages Following the trend of economy, it is important to investors to understand that strong economy creates strong stock market. To elaborate further, as stock prices are increased by current and future expectations of earnings, thus without a strong economy it would be difficult for the companies to increase and sustain their earnings (Kong 2013). The economy development is usually calculated using the gross domestic product of a countries. On the

The Price Of Oil And Its Effect On A Country´S Economy

2381 words - 10 pages Introduction Oil is one of the primary source of energy and strategic to the development of modern economy. Oil is an important resource which attracts interest by stakeholders in the management of the country’s economy. There is always hot issues whenever there is an oil price fluctuation and is discussed in the economic cycle and in the political landscape. Oil is a global commodity where its price fluctuation and uncertainty affects global

The Effect Of The New Deal On United States' Economy In Crisis

2826 words - 11 pages The Effect of The New Deal on United States' Economy in Crisis Ever since the details of the Great Depression began to emerge from the post-World War I rubble; historians have wondered how such a horrific catastrophe could have taken place. The following investigation will examine the role of the New Deal in improving the U.S. economic crisis from two differing perspectives: the New Deal, when viewed as a whole, was