Economic storms can be of many origins. Despite the variety, they all have some common characteristics. The storm at the beginning of 2015 can be labelled as the falling price of gasoline storm. It was brought about by a corresponding drop in the price of oil.
To the consumer this is anything but a dangerous storm. It is a gentle shower on a hot summer day that cools and refreshes. To those in the energy sector it is a possible deadly hurricane or tornado.
Professionals like landmen, petroleum engineers, production engineers, and information technology specialists are the first to experience the impact. Vacancies are not filled or, worse yet, job terminations are enacted.
The field workers are the next to go as exploration budgets and production volumes are curtailed. The manufacturing industry of equipment is then challenged by cancelations and the need to suddenly cut inventories and activities. Plant expansions are put on hold. Disposable income throughout the economy is impacted. Consumer confidence falls adding to the sudden downturn.
The common results become evident. Individuals and companies who have neglected to build cash reserves are faced with the need to enact serious cutbacks. Their presumption on the future has placed them in a dangerous position once again.
Those who leveraged their activities during the growth time are now faced with the added burden of debt and interest. Had they waited for the cash to execute these purchases, the impact of the downturn would not have been so severe.
God’s word tells us there is a way that seems right to man, but the end is death. (Proverbs 14:12)When will we ever learn that God knows best.