Saturday, 22 November 2008
Ramadan War and Oil crises
The cars are in long queue for gasoline, 1979
Great depression was confronted with “New deal”, mooted by President Franklin D. Roosevelt in 1933. That comprised many relief program for jobless and farmers. It undertook business reforms, including minimum wages and maximum weekly working hours. It’s fruits are still very much in system till today in US like social security, the Tennessee Valley Authority, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation and the Federal Housing Authorities. After World War II, American economy got stabilized and continued to swell till 1970s.
In 1973, in the month of October Syria and Egypt declared war against Israel, on the very day of Jewish atonement or Ramadan. The war lasted for 20 days and is known as Ramadan War or Yom Kippur War. The Arab forces were defeated by Israel and that angered them. They stopped exporting oil to US, Western Europe and Japan. The oil price skyrocketed, the Wall Street rocked again. It lost $97 billion in just six weeks! US and other crises stricken nations curtailed consumption of fuel by rationing. The world economy is very much dependant on the whims of these OPEC countries, as we found recently crude price touched all time high $147 per barrel. However, the oil inflicted most damaging shock to global economy after the great depression in 1973.