There are many worrying things going on. Some won’t have escaped your attention because they have been plastered all over our TV screens.
Others tend not to be picked up other than by geeks like me whose job, in part, is to think about these things.
The most immediate concerns have to do with what’s happening in the Middle East and North Africa.
The uncertainty caused by the ongoing political upheaval in Tunisia, Egypt, Bahrain, Libya and other MENA countries is making oil markets very nervous, hence $110-plus Brent.
However, before the “troubles” began, the oil price was already on its way up, having risen roughly $15 a barrel this past year as the global economy picked up, driven largely by rising Asian and, especially, Chinese demand.
This is inevitable while China’s economy continues to grow on the back of an artificial exchange rate which discourages western imports but underpins Chinese exports.
Economists in the US and elsewhere believe China’s currency may be 40% undervalued and argue that this gives the Chinese an unfair trade advantage.
It’s an old story and a persistent one that we seem unable to persuade the Chinese to deal with.
I see this not as a problem but a greater threat to our own position and that of all other western democracies than what’s happening in the MENA countries.
It’s a classic double, if not triple, whammy.
Put simply, the more we buy from the Chinese, the more oil (and other resources) they will gobble to satisfy internal and external demand.
This will, in turn, push the oil price even higher and, of course, that will cause other problems.
According to the IEA, in late 2010 China’s oil consumption was over 10million barrels of oil per day (bpd).
Over the year as a whole, Chinese oil imports rose 17.5%. A huge figure.
BP thinks that between now and 2030, China and other Asian countries will require an additional 13million bpd, accounting for 75% of oil demand growth.
The IEA’s projections for the rate of increase in Chinese demand over the next decade are no less scary.
As we know, China has been investing in new oil production and buying up existing production in Africa and other parts of the world.
Very close, in fact, too close to home, it is now also effectively a co-owner of the Grangemouth refinery, as well as one in France, via a deal with the Swiss-based company Ineos.
The problem I have with this is that, when it comes to democracy, China is really no different to some of the dictatorships and “autocracies” in the Middle East and North Africa.
According to the Hong Kong-based group Information Centre for Human Rights and Democracy, at the same time as the situation in North Africa and Egypt was developing, the Chinese were busy arresting hundreds of democracy protestors.
And we are all aware that the current Nobel peace laureate, Liu Xiaobo, is a Chinese dissident serving an 11-year jail sentence for calling for democracy and reform in China.
Despite this, the Google affair, and other anti-democratic activities, the UK Government seem to have been quite happy about the Chinese “investment” in Grangemouth and to see companies like BP invest in new chemical plants in China.
Given what the government is saying about certain MENA regimes, this is not just hypocritical, it’s also very naive.
From around the mid-1980s, City of London financial institutions set out to convince government and industry that it really was a wonderful idea to “offshore” manufacturing to China. Similar arguments were put forward in other countries, notably the US.
The argument was, of course, that it would make manufacturing much cheaper, improve UK company profits and, therefore, work wonders for our pension funds.
Certainly the latter did not happen.
The government also convinced itself that this would be good for the consumer, as it would dramatically reduce the price of many products.
The political argument was simply ridiculous.
Governments became convinced that trading with Chinese communists would lead to more open relationships, ultimately resulting in them adopting normal western multiparty democratic standards.
They were wrong. Nothing has changed and nothing will.
Some will argue that, in the case of Egypt and other unsavoury regimes, it was necessary to support them because they helped keep the peace in the Middle East.
That may well be true, but what then is the advantage of trading with the Chinese when we’re the ones that are losing out overall, and when it so obviously makes no difference at all to their behaviour and how they treat their people.
So, what do we do next?
According to UK Oil & Gas there’s an investment and jobs boom returning to the North Sea. It’s possible then that the problems of the Middle East and North Africa, on top of increased Chinese and Asian demand, will provide an opportunity for the North Sea to shine again, at least for a while.
But that will make our reserves more attractive to others, including the Chinese.
Currently, they can buy most western oil companies, though the US might move to block any deals.
However, I doubt that a western company could currently buy any Chinese oil-related firm.
We need to change the UK takeover rules so that they automatically exempt any Chinese company, or their proxy, from being able to buy any UK energy assets or company.
We need to limit Chinese access to oil & gas resources around the world so that we limit their economic growth.
This, in turn, will reduce their demand for oil & gas, and we can then use this as leverage to make them deal with their exchange-rate problem and their record on human rights.
But be under no illusion, they are currently waging economic war and will conquer through trade.
It’s just that we are too stupid to realise this.