Limiting Demand

In my article “Mr. Putin’s Economic Theatre of Operation, I cited “limiting demand” to explain a Russian Iranian Oil Deal.

For most people, supply and demand is the simple concept of economics:

If more sellers (supply) show up than buyers (demand), the sellers must drop their prices to sell their goods.  They are competing with other sellers.  The more perishable the product, the faster they must sell it, the more willing they are to drop their prices.

If more buyers show up than sellers, the price goes up because buyers to not want to go home empty handing. Specially if the product is in great demand.  That is the premise.

Now on to limiting demand.

Slim’s Paradigm

“Limit supply and drive up prices. Limit demand, bypass the market, stablise the economy.”  ~ Slim Fairview

Look at what is happening from the standpoint of the two articles I wrote on the subject:

Putin’s Overture in Eurasia Minor

Mr. Putin’s Economic Theatre of Operation

In addition:

China: Not the What the Where.

What is happening? 

Russia and China: Nat Gas Deal

Russia and Iran:  Oil Deal

Russia and Germany: Nat Gas Deal

China and Germany:  Have we forgotten that China and Germany are trading partners?

If Slim’s Paradigm becomes the new normal, all the forecast numbers will have to be recast

.

A few years ago I wrote an article “Energy Independence” (Then What?)  In that article I said that the Middle East must find new customers to protect oil revenue.  China was the obvious choice.

I also wrote, “It is a universal condition. We refuse to accept that all alliances and enmities are transitory.” The Quotations of Slim Fairview © 2014.

The Global Economic Landscape is shifting. Please allow me to present a soupçon of evidence:

NAFTA

OPEC

APEC

EEU

Eurasian Economic Union

And, soon…

A Union of Emerging Nations Economic Unions. 

And, an 

E-20

The world is fragmenting into economic (not military) power zones.  Asia, Middle East, Africa, Europe, Eurasia, Latin America, North America.

One important factor of the new paradigm and the recalculating of the numbers:  it will replace the following, specially regarding China.

“When the numbers are bad, the Wall Street experts gloat.  When the numbers are good, the Wall Street Experts doubt the numbers.” ~ Slim Fairview.

The concept of limiting demand will enable long term economic planning with a reasonable degree of stability by rendering market forces irrelevant.

In addition, we seldom see ourselves as others see us.  Look at us from the perspective of emerging nations.

• ·       Chinese People have suffered poverty and hunger.

• ·       Russian People have suffered poverty and hunger.

• ·       Americans are rolling in dough.

Remember! The perspective of people starving to death in emerging nations.

I will explain what I mean by limiting demand using golf as a metaphor.  

This is a lesson about Economics.  Golf is a metaphor.  The takeaway is: Economics!

Golf Course # 1.

Public (municipal)

Fees: $50, per round in groups of four.

Anyone can play.

The demand exceeds supply.

Many are turned away.

Golf Course # 2.

For Profit.

Anyone can play.

Demand often exceeds supply.

Fees: $50, per round base rate plus extra fees with high demand.

If few people want to play, the fee is $50. As the demand rises, the fees may rise to $100 or $150 per round.  Many can’t afford the higher fees.  Many are turned away.

Golf Course # 3.

Private

Fees: $50, per round.

Demand limited to 500 members.

Not exclusive, not for the rich, not restricted.  Simply Private.

Demand is limited, the fees are always $50, and everyone gets to play.

It should be obvious to all that price increases are more sever among those who can least afford it.  As this applies to food, in many industrialised nations there is a fixed or limited demand and a stable supply, and a marketplace that can blunt the negative impact on the less fortunate.

For our purposes and to understand the metaphor, replace Golf Course with Farm and replace Golf with Food.

In the US and other industrialised nations there is certainly poverty and hunger. 

In Emerging Nations:

·       A Flood

·       A Drought

·       A Crop Failure

·       A Migration of Starving Refugees

·       Widespread Famine

·       Global Food Aid (Marginally helpful)

·       Population Displacement

·       Starvation and Death

People lying on stretchers, skin and bones, unable to stand or even sit up because their bones are too fragile to support their weight, mothers clutching to the bodies of their dead babies, do not care if we've had 5 servings of vegetables, the unfairness of golf, and never want to hear, “Childhood obesity in America is caused by poverty.”

As the world moves into Economic Power Zones, survival will come from “limiting demand”.  This is to insure that economic stability will prevail.

Regards,

Slim

slimfairview@yahoo.com

Copyright © 2014 Robert Asken Slim Fairview

All rights reserved.