Nothing Is Less Certain Than A Lead-Pipe Cinch

The headline of this story was an adage of my father’s. I remember it from a time before I knew what a lead-pipe cinch meant and I heard about it when I believed that most things my dad said were dead wrong. Now that I am in my mid-50s I have come to understand how often he was right.

I have been thinking about what my dad said because everything indicates that the GOP is certain to roll up a big victory in less than a week. Acclaimed pollster Scott Rasmussen last night predicted that Republicans will gain 55 seats in races for the U.S. House of Representatives Nov. 2; much more than the 39 needed for a Republican majority in the House for the first time since 2006.

That is not all. According to Rasmussen, the Senate Republicans should have 48 seats with the Democrats holding 47. Another five seats could slide either way, Rasmussen has said.

I am praying that Rasmussen is correct and we will be delivered a Republican victory; one that will launch a two-year countdown on President Barack Obama’s eviction from the White House. Still, you will have to excuse me if I don’t put the champagne on ice just yet.

After all, it is hard to forget the big story on Election Day, Nov. 7, 2000. At 8 p.m. the Voter News Service — a group pooling the resources of ABC, NBC, CBS, CNN, Fox and The Associated Press — called the state of Florida for Al Gore. What followed was this from Peter Jennings of ABC, “Al Gore wins the state of Florida and its 25 electoral votes.”

Two hours later the networks took another look and decided that it was too soon to tell whether Florida and with it the Presidency belonged to Gore.

At CBS, Dan Rather blamed the mistake on technology. “To err is human," Rather said, "but to really foul up requires a computer… If you’re disgusted with us, frankly, I don’t blame you."

Let’s face it, ever since odds-makers refused to set a betting line on Moses making it out of Egypt, experts have gotten plenty of things wrong. And while victory for the GOP in next week’s midterm elections is a crucial step in defeating Obama in 2012, it is far too early to plan that celebration.

First off, this election has a cast of characters unlike any witnessed. There is Ohio Republican Rich Iott who was photographed while dressed in Nazi SS garb which he was wearing to connect with his son. And let’s not forget Connecticut Democrat Richard Blumenthal who has repeatedly lied about serving in Vietnam. And it is not just the newcomers that are bizarre.

One race for Senate could be made into a novel except no one would believe it. Democratic incumbent and Senate majority leader Harry Reid (D-Nev.) was quoted as saying that he admires Barack Obama because he speaks "with no Negro dialect, unless he wanted to have one." His opponent, Republican Sharon Angle has said that if Congress can’t fix things, people may find themselves resorting to "Second Amendment remedies."

While I hate to contradict what Ronald Reagan preached — “Thou shalt not speak ill of any fellow Republican” — I feel it necessary to point out that Reaganesque leaders are few and far between. The majority of voters understand this and I think it could mean:

  1. The bums that we now have in office don’t get thrown out.
  2. We get a whole new set of incompetents in Congress who could be almost as bad as the last group.

I’m not much of a gambler so I am not betting on how this election turns out. I will, however, wager that whatever way it turns out it won’t be the salvation many American’s are looking for. Even with a Republican landside the White House is in Obama’s hands for at least another two years. A sitting President wields considerable power, even without a majority in the House or Senate, the kind of power that can co-opt a new Congress.

We also need to keep in mind that even 21st Century versions of the Founding Fathers were elected next week, the country has massive problems that will take years to solve.

Still a GOP victory is a step in the right direction. Conservative Republicans are campaigning on cutting Federal spending, extending the Bush tax cuts to all Americans and repealing Federal healthcare reform. And at least they understand that the stimulus bill has not helped grow the economy and the national debt is strangling us.

In the GOP weekly address, House Republican Conference Chairman Mike Pence (R-Ind.) said:

“Today, our national debt stands at more than $13 trillion — that’s more than $44,000 of debt for every man, woman and child in this country. The administration promised that if Congress borrowed a trillion dollars from future generations, their ‘stimulus’ bill would keep unemployment below 8 percent. Today unemployment remains at a heartbreaking 9.6 percent, making this the longest period that unemployment has been at or above 9.5 percent since the Great Depression.”

What Pence left unsaid is that these sorts of problems can’t be fixed by a midterm election and a few new members in the House and Senate.

“It’s endemic in our type of society that we always think there’s a person who holds the magic wand,” says Senator Judd Gregg (R-N.H.), a fiscal conservative who is not running for re-election. “But this society and this economy are far too complex to be susceptible to magic wands.”

Douglas Holtz-Eakin, former Director of the Congressional Budget Office concurs:

“The public has been sold this notion that somehow we can control the economy — that we can fine-tune it so we don’t get inflation on the upside, we don’t get recessions on the downside, [that] when something happens, they can step in and offset it.”

The facts speak for themselves. The U.S. economy is mired in its worst recession in 80 years. The nation has used up many of its natural resources; has unprecedented amounts of debt and is waging and losing a costly war in Afghanistan.

Excuse me for pushing the analogy, but America is like an aged, obese smoker who has drank too much and whose health has been neglected for decades. Such a patient will hardly be cured by switching around the nurses making rounds.

Instead the nation needs a lot of time, effort and leadership before we see any real improvement. A critical step in that will be when the country gets a new doctor. Hopefully that will be in two years. But even that probably won’t be a lead-pipe cinch.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

Golden Words: “The Democrats Must Go!”

Heading towards next month’s election, gold has given the Democrats a clear vote of no confidence. Despite the excitement and even euphoria that Obamamania created two years ago; the Midas metal — which abides no politics and holds no favorite — is showing two thumbs down on re-electing a Democrat majority.

The day before President Barack Obama won the election — on Nov. 3, 2008 — gold was trading at $729 per ounce. Today gold is trading around $1,350 per ounce. That is a whopping 85 percent gain in less than 24 months.

Only one other President has done so much to help gold and to hurt the nation. Jimmy Carter was elected on Nov. 2, 1976. On that day gold traded at $122.50 per ounce. Twenty-three months later bullion was at $215 per ounce. That was a 75 percent increase in the Midas metal; less than what Obama has accomplished. Who says President Obama isn’t good at anything?

The Dems Have Sent Gold Soaring

History Says Bullion Will Continue To Boil
If you think that the Obama Gold Bull is becoming a bubble consider this: The Carter Great Gold Bull just kept on going. By the time it hit its all-time high in 1980, bullion was trading for $850 per ounce. That was four times higher than what gold was after Carter’s first two years in office. Even if Obama holds on for just one term and gold follows a path similar to the Carter Presidency, bullion could top $5,000 per ounce.

But Obama’s influence can be felt well beyond the gold market. The Christmas before Obama was sworn in crude oil was selling for less than $38 per barrel. Since then oil prices have more than doubled to $82 per barrel.

While commodity prices keep rising the dollar keeps on falling. Since summer the U.S. dollar index (a measurement of the strength of the dollar against a basket of other key currencies) has fallen off a cliff — dropping from an index reading of 89 to just 77.

Regardless of what economic propaganda Washington spews, we all know that the basic cost of living is higher now than it was two years ago. Gasoline costs more, bread costs more; even a cup of coffee costs more. And oh yes, there are fewer jobs.

There are 14 million unemployed and underemployed workers, or 17.7 percent of America’s total population. Each month millions of middle class Americans see their dollars buying them less while millions more keep searching for work. It is a building catastrophe and is leading towards economic stagflation.

Stagflation is the worst of both worlds. It is a stagnant economy and currency inflation at the same time. It is going to only get worse. Consider that the economy only grew 1.7 percent in the second quarter of this year, not enough growth to improve the economy.

Economists argue that we need 2.5 percent annual growth in the gross domestic product to prevent our already high unemployment rate from rising. That means we need to add more than 100,000 jobs per month to keep our unemployment rate from rising. Yet we created only 64,000 private sector jobs in September.

Meanwhile, unemployment has been at 9.5 percent or higher for the past 14 months. That is already a month longer than our last severe recession in 1982-1983, and no turnaround is in sight.

Last week Chicago Now said that President Obama’s stimulus package is deeply flawed: “It continues to increase our government debt at record levels. The bailout of our financial institutions has helped the banks, yet they are hesitant to loan money to consumers and businesses, which has compounded the chance of a smooth economic recovery. The banks are using our tax money while hoarding cash and our federal government has not instructed them to make loans.”

Hurricane Barack
If the election doesn’t change business as usual by the President and Congress, the result will be even greater deficit spending; something that will trigger a dollar catastrophe.

According to a story in Benzinga.com last week, 2010 bank reserves are incredibly high — above $1 trillion. That is more than 23 times the $44.6 billion in bank reserves that were held at the end of August, 2008.

All this money could turn into an inflationary tsunami in quick order because the Federal Reserve could use these bank reserves to buy more Treasury securities which will allow the Obama administration to continue to create debts that are beyond the nation’s capacity to repay.

The price of gold is already flashing this sign but there hasn’t been wholesale liquidation of greenbacks… at least not yet.

What you need to know is that it could happen even if the Republican Party pries away seats from the Democrats next month. After all, the instrument of all this destruction will still be sitting in the White House for at least another two more years.

According to Benzinga.com, “With the Federal Reserve and Treasury/President/Congress doing these things, historic monetary instability is the prompt, unsurprising result. The dollar’s value is dropping to all-time lows as proved by the gold price rocketing past $1,350/oz, up 386 percent since achieving equilibrium value of $350/oz in 2003. This means the Fed has devalued the dollar about 75 percent in the past seven years, an average annual monetary inflation rate of 10.7 percent.”

The Rule of 72 tells us that if this inflation rate stays true, that dollar in your pocket will be worth 50 cents in just over six years (hopefully not, but possibly when Obama exits the White House for good).

Even if Obama is defeated in two years he has plenty of time to wreak havoc on the economy and the dollar. Again, let’s consider Carter.

After the Democrats lost seats in the 1978 midterms Carter stuck to his liberal guns. The nation was just falling into the grips of sky-high inflation, rising interest rates and surging unemployment. But over the next two years the economic crisis got much worse. It was very bad for the nation but high times for gold.

I see the same situation today. Whether or not gold will reach $5,000 per ounce I don’t know. I tend to think not because there is also a chance for a stunning deflation if America’s creditors like China get tired of the Federal government’s runaway spending. Still, gold is very strong and it has legs to move much higher in short order.

Action To Take
We only have one vote. But we can protect ourselves and our families from the stupidity that is rampant in Washington. I urge you to sell all bond instruments and use the funds to buy bullion, either in physical form or blue-chip gold mining stocks.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

Pakistan Could Be Obama’s Biggest Blunder

President Barack Obama has been so preoccupied with the November elections that he has shamefully neglected foreign policy. This is especially true with regard to Pakistan — a nuclear nation that could soon tumble into the hands of Muslim extremists who want to buy a one-way ticket to paradise by killing Infidels.

Despite deficits that have mounted into the trillions of dollars, the Obama administration has been downright miserly towards Pakistan. The result is a fractured Pakistan that may yet be swallowed up by jihad.

According to The Express Tribune, “It is an undeniable fact that a revolution is coming in Pakistan.”

The sobering truth points to one thing — Pakistan is at a tipping point. Whether it is an intended strategy or willful neglect by Obama, radical Muslims could soon seize control of this military superpower and its bristling array of nuclear weapons. If you think President Jimmy Carter executed poor foreign policies during his one term, consider this: Pakistan is Iran on steroids and may become bent on our destruction.

This month militants in Pakistan have destroyed several large and desperately needed fuel supplies headed for our embattled troops in Afghanistan.

Worse yet, these attacks come just days after the Pakistani government — our supposed ally — blocked entry into Afghanistan, bringing the American — Pakistan relationship to an all-time low.

Obama’s war against Afghan insurgents is pushing Pakistan towards the brink of civil war, warns Time Magazine’s Robert Baer: "We’re reduced to common sense in figuring out where Pakistan’s breaking point is. The war in Afghanistan has done nothing for Pakistan’s stability, and in fact it’s gotten progressively shakier over the past 10 years.”

Another Islam Misstep By Obama
Pakistan is America’s most important ally against the war on terror. President George W. Bush understood that and provided Islamabad with more than $11 billion after the 9/11 attacks. But under Obama, President Asif Ali Zardari’s government has received just a tiny fraction of that amount.

Zardari admits that he is nearly impotent against the Taliban-led insurgency that began after Obama assumed office. Today the Taliban encircles the capital, Islamabad.

According to Zardari the United States is not providing enough money to deal with the 18,000 madrassas (radical Muslim religious schools) or enough to backstop Pakistan’s security forces including its army.

There is much at stake, admitted Secretary of State Hillary Clinton: “One of our concerns is that if the worst, the unthinkable were to happen, and this advancing Taliban… were to essentially topple the government for failure to beat them back, then they would have the keys to the nuclear arsenal of Pakistan. We can’t even contemplate that.”

Recent catastrophic floods have pushed Pakistan’s economy to the edge. Islamabad’s debt has ballooned to $55 billion and any tax base to fill it has evaporated. One third of Pakistan’s population has fallen below the poverty line.

A disaster of Biblical proportions is pushing the Islamic nation of 170 million people towards economic collapse. Agriculture has been ravaged by floodwaters that have submerged nearly a quarter of the country’s farmland and swept away 70 percent of the roads and bridges. More than 10,000 schools and 500 hospitals have been destroyed or damaged. There are doubts that the land will improve before the autumn wheat planting. If that happens Pakistan faces starvation. Yet Obama pays no heed to Pakistan’s plight.

The Montreal Gazette reports that millions of Pakistanis — who were just surviving before the floodwaters hit — are now homeless and unable to feed themselves. According to Pakistan Prime Minister Yousuf Raza Gilani, losses from the flood could reach $43 billion which is an Obama-like fortune for this Third World country. Western analysts say that the end result could cause 20 percent inflation. All this for a country already mired in a terrible economic depression.

This month eight suspected German nationals were killed in a U.S. launched missile drone strike in north-western Pakistan. The group is called Jihad al Islami and their very existence has sparked a not-so-funny joke.

Question: “Which is worse: German Nazis or Pakistan Jihadists?
Answer: German Jihadists.”

Pakistan’s Nukes Are America’s Worst Nightmare
Since the collapse of the Soviet Union, NATO has been unopposed. That is until now. This month container trucks and fuel tankers that supply 80 percent of NATO’s needs in Afghanistan were blocked by Pakistan forces. This may turn into the biggest embargo America and its allies have faced since Stalin sealed off Berlin six decades ago. It demonstrates what a thin string Obama’s policies are hanging by.

When I was a kid my dad actually started digging a bomb shelter during the height of the Cuban Missile Crisis. Those were crazy times and it left me worried about nuclear war until I was almost 30. Like many of you, I thought that the collapse of Communism had arrested nuclear Armageddon, at least in my lifetime. But Pakistan is the cause of a whole new nightmare. It is a nuke toting nation whose arsenal may fall under the control of Muslim radicals.

According to Zardari, “We are not a failed state yet but we may become one in 10 years.”

Don’t bet that Zardari isn’t being overly optimistic. His wife — the charismatic Benazir Bhutto — was perhaps the country’s last legitimate national leader before she was brutally assassinated. Since her death the Taliban have launched hundreds of terrorist attacks across Pakistan. The situation has become so bad that Zardari is now a captive of a bunker that more resembles Adolf Hitler’s Wolfsschanze military headquarters than it does a presidential palace in a democratic society.

Things have gotten so bad the Obama administration is attacking the enemy within Pakistan’s borders. If you don’t think that is an alliance in crisis imagine American B-17s bombing England on D-Day.

The Guardian newspaper says the Obama administration has lost patience with Islamabad. This should be worrisome to the world. After all, Zardari’s teetering government is all that stands between us and a Jihad armed with 100 nuclear weapons. Last week in OpEdNews, Michael Payne wrote: “The probability that this scenario (involving Pakistan) could explode into a war like no other in history grows greater every day.”

While Obama’s domestic policies have been atrocious, his lasting legacy may be his failure to deal with Islam and Pakistan. And frankly, I am too old to start digging a bomb shelter.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

Allah, Oil And America’s Future

(Part two of a two-part series. Part one, Is It Time To Say, “To Hell With Islam?” ran Sept. 22)

Islam is one of the biggest threats facing America. Yet President Barack Obama and key Democrats are Islam appeasers and Muslim apologists. Does the President and his supporters act out of woeful ignorance or willful sabotage?

Consider that Obama has thrown the weight of the Presidency behind the building of the New York City Mosque next to 9/11 Ground Zero.

"As a citizen and as President,” Obama said, “I believe that Muslims have the right to practice their religion, as everyone else in this country. And that includes the right to build a place of worship and a community center on private property in Lower Manhattan, in accordance with local laws and ordinances. This is America. And our commitment to religious freedom must be unshakable."

This is not the first time that Obama has been an advocate for Muslim rights. In a speech at Cairo University last year the President made a spectacular overture to the 1.5 billion Muslims of the world when he called for, “a new beginning.”

In that speech Obama spoke of a complete withdrawal of United States forces from the Middle East and, regarding the conflict President Obama said, "We do not want to keep our troops in Afghanistan… We would gladly bring every single one of our troops home if we could be confident that there were not violent extremists in Afghanistan and now Pakistan.”

Obama apologized for the CIA’s involvement in Iran’s democratically elected government in 1953, an event that for many Muslims was the beginning of American interdiction.

“Since taking office, President Obama has reached out to the Muslim world as a whole,” said International Herald Tribune columnist Roger Cohen last month in an op-ed in The New York Times.

Former House Speaker Newt Gingrich couldn’t agree more. CNN reported that, at the Fifth Annual Value Voters Summit in Washington, D.C., on Sept. 17, Gingrich warned America faces a dire threat.

"We are at a point where our establishment is sliding into policies of such disastrous impact that they will in fact fundamentally challenge the survival of America as we know it," Gingrich said. "On the one front we have a secular socialist machine led by (President) Obama, (House Speaker Nancy) Pelosi, and (Senate Majority Leader Harry) Reid, and on the other front we have radical Islamists who would fundamentally change this country into a system none of us in this room would recognize."

Gingrich also said he will oppose any efforts to impose Sharia on the U.S. Yet the former House Speaker doesn’t have a vote. Pelosi and Reid do. Their support for Islamic rights — whether near Ground Zero or around the world — is troubling.

Backing Islam Or Locking In Oil?
To be fair, Obama is not the first U.S. President to sooth Arab sensibilities. Washington has been influenced by Arab interests for decades.

Earlier this month The Tablet wrote: “There is an Arab lobby in the United States — one as old as, if not older than the Israel lobby and it has helped to shape U.S. foreign policy and economic life since the end of World War II.”

Arab’s influence encompasses everyone from U.S. Foreign Service officers, Arab-American activists, Islamist ideologues and even Secretary of State Hillary Clinton. And no administration had closer ties to the Saudi Royals than George W. Bush’s.  Prince Bandar bin Sultan bin, Saudi Arabia’s former U.S. envoy, was even nicknamed Bandar Bush. All this Arab influence in America can be traced to a single commodity: Oil.

Oil provides 40 percent of the world’s energy and 96 percent of the world’s transportation energy. According to the Institute for the Analysis of Global Security, world oil consumption will surge by 60 percent in the next decade. That means even more money for Saudi Arabia. According to Mark Steyn in his book, America Alone, The End Of The World As We Know It, the Saudis are already spending billions to fund, “mosques and madrassas [sic] in every corner of the planet. Oil isn’t their principal export, ideology is — petroleum merely bankrolls it.”

This should put a red light over the Middle East which in 10 years will hold 83 percent of the remaining global conventional oil reserves.

The Dirty Truth About Democrats
Access to Arab oil explains some, but not all of the reasons Obama, Pelosi and Reid are pro-Islam. After all there is another huge energy producer whose resources almost equal that of Saudi Arabia. Yet this nation is given no quarter by the President or the Democrats in Congress. It seems hard to understand why when this country is America’s closest ally, a friend for 200 years and shares the same language, culture and religion as the United States. Yet Canada — with its vast oil sands — is the target for attacks by the Liberal Elite in Washington.

The Canadian oil sands will send America nearly 1 billion barrels of crude oil this year, making Canada the number one supplier of crude oil, ahead of Saudi Arabia.

Annual U.S. Imports from Canada of Crude Oil and Petroleum Products

Yet Canada’s oil sands have been attacked by Democrats as being an unethical environmental atrocity. There are reports that Left-leaning members of Congress want to ban oil sand imports into the U.S. Apparently it would be better to accept more oil from Saudi Arabia than from its northern neighbor; better to buy crude from the Arab Kingdom that spends a fortune financing al-Qaida and other extremists than to buy it from an ally whose soldiers fight and die next to their American brothers in the God-forsaken mountains of Afghanistan.

The Democrats in Congress who make cozy with Arab special interests have lost sight of the fact that in Saudi Arabia there is no democratic voice, women have no say; while torture and executions are a daily occurrence. While Canada gave every assistance to the U.S. during 9/11 — I saw waves of commercial airplanes approaching Calgary International Airport that morning — it was Saudi Arabia that was the inspiration for the attack. Saudi Arabia is where Osama bin Laden made his fortune and it was home for 15 of the 19 9/11 hijackers.

Hypocrites Favor The House Of Saud
In his new book, Ethical Oil, The Case For Canada’s Oil Sands, Ezra Levant writes: “If Saudi Arabia didn’t exist, it would take a science fiction writer in an apocalyptic mood to invent it.”

Yet Liberal Democrats in Congress are already lining up against Canada’s oil sands. Last month Pelosi visited Canada to gather ammunition to either tax or block future oil sands imports to America.

Some Democrats are campaigning against government approval for the final stage of the Keystone Pipeline project linking the oil sands to Texas refineries. And Pelosi has the power to expedite or delay clean energy legislation currently before the Senate.

According to the Montreal Gazette, “Ms. Pelosi’s mind is made up. The Alberta oil sands are a last-resort fuel for Americans best eliminated as quickly as possible.”

Alberta’s oil sands do have environmental issues. Some 1,600 ducks died after landing on a giant sludge pond which is part of the oil sand’s landscape. That is a lot of ducks to be sure, but only a tiny fraction of the number of birds that are killed every year by wind turbines. It might come as comfort to the Greens that very few ducks are killed as a result of Saudi oil production, in part because there are no ducks in the desert.

However I do have news for Liberal Democrats like Pelosi. While you support women’s rights and oppose the death penalty, you should note Saudi Arabia freely executes people, especially women. The nation has the highest per capita capital punishment rate in the world. (America’s other great Arab ally Pakistan, beheads and tortures nearly the same number of people each year.)

What is chilling is that people like Pelosi and Obama see evil in things like Canada’s oil sands but appear blind to the dangers of Islam and the ambitions that some within it have against the West. One can only hope that these leaders simply don’t know better. To entertain something more sinister is dismaying.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

Is It Time To Say, “To Hell with Islam?”

Part one of a two-part series

If you are like me, you are sick and tired of being frightened over Muslim sentiments. I say it’s high time to understand that regardless of what we do or say, we Christians have a target on our back. It’s time to face the cold truth: For countless believers of the Quran, we ARE the enemy. The sooner we understand this, the better.

It is time to say: To hell with Islam. We’re not going to take it anymore!

As I write to you, Muslims are still vowing to build a mosque near the site of the 9/11 attacks in New York and Pastor Terry Jones backed down from burning the Quran on the anniversary of the Twin Towers tragedy. While I believe that anybody that burns books is an idiot, I find it objectionable that Jones abandoned his convictions because of pressure from the President Barack Obama White House. Unlike President George W. Bush who clearly laid out the battle lines — “you’re either with us, or against us” — Obama is obsessed over what Muslims “might do” if we offend them.

President Obama — The Eager Appeaser
Call it politics, background or birthright; Obama is intent on appeasing the Muslims of the world. In fact Obama has traveled so far out of his way to avoid confronting Muslims that it’s hard to believe he is still on planet earth.

Obama is not alone in apologizing to Muslims. In 2008, England’s Archbishop of Canterbury gave an interview to the BBC. He said that the introduction of Islam in the United Kingdom — prayers from which are broadcast three times daily over loudspeakers in Oxford — is “inevitable.”

Even comedians are afraid to ruffle Muslim feathers. One of England’s top funny men, Rory Bremner, said he’s afraid to write jokes about Islam because he fears death threats.

On a David Frost television program this past summer, Bremner said, “The greatest danger now is that one of the toughest issues of our time is religion. I’m writing a line and I think, ‘If this goes down badly, I’m writing my own death warrant there.’ Because there are people who will say, ‘Not only do I not think that’s funny but I’m going to kill you’ — and that’s chilling.”

Seth MacFarlane, the creator of the TV show Family Guy — which routinely makes fun of Christ — was on Larry King Live a couple of months ago and also admitted that he, too, worries about poking fun at Islam.

The truth is we are a millennia and a half beyond offending Islam. They have been offended for more than 1,000 years and I have news: They will stay that way.

This is what Tricia Erickson had to say on the subject in a Sept. 11 News Blaze, op-ed:

“For the sake of the REALITY of who we are indeed at war with and why, let me quote some scriptures from the Koran that may be recited in the new Mosque to be built at ground zero:

  • "Martyrdom is therefore the ONLY way for a Muslim to obtain forgiveness of sins" Surat Al Tawbah 9:111.
  • "Jihad (fighting for Allah’s cause) is ordained for you" Surat Al-Baqarah 2:216.
  • "Kill the Mushrikun (non-Muslims); wherever you find them, and capture them and besiege them, and lie in wait for them in each and every ambush" Surat Al-Taubah 9:5.
  • "They (non-Muslims) shall be killed or crucified or their hands and their feet be cut off from opposite sides, or be exiled from the land" Surat Al Maidah 5:33.
  • "And if you are killed or die in the Way of Allah, forgiveness and mercy from Allah are far better than all that they amass" Surat Al Taubah 9:111.

Erickson points out that the Quran is filled with proclamations calling for the killing and maiming of “Christians, Jews and overall non-believers”.

In Allah’s Own Image
I don’t know how things are in your neck of the woods, but up here in Calgary, Canada the majority of Muslims do not immigrate and assimilate. They congregate.

In fact, Calgary is home to the largest Muslim temple in North America, the colossal 48,000-square-foot Baitun Nur mosque. The Mayor of Calgary, Dave Bronconnier, said when the complex was completed: “On laying the foundation stone of this magnificent mosque, Canadian values are flourishing in the City of Calgary."

Frankly, I just don’t see it. Maybe three decades ago it was that way with the Muslim immigrants I shared classes with at the University of Calgary. But today you can hardly travel a few blocks and not see a Muslim woman wearing the traditional burqa. In fact Canada’s Muslim population has doubled since 9/11.

Keep in mind I am not suggesting for a moment that Calgary’s Muslim population is bent on the destruction of Western Civilization, or even misfeasance. What I am saying is that the overwhelming evidence in Calgary and in Canada indicates that the vast majority of Muslims are clinging to their traditional culture and ethos. As their numbers grow, these things will lead to a nation far different from the one my parents and I were born into.

Before I get a bunch of hate comments accusing me of racism, consider this: I have close personal and decade-long relationships with two people of the Muslim faith; both of whom have been ostracized by their communities because they practice a Western lifestyle. And if you are a blue-blooded Liberal keep this in mind: Under the Sharia or the law of Allah, “Women are considered inferior to men, and have fewer rights and responsibilities.” There goes women’s liberation.

The Muslims Are Coming, The Muslims Are Coming

If you think that the growth of Islam is unique to Canada, think again. According to the book: America Alone: The End of the World as we Know It, the author Mark Steyn argues that the West’s steady decline relative to Islam has much to do with Muslim insistence on keeping their culture as well as their high fertility rates.

For example, the U.S. has a fertility rate of a little more than two births per woman. Europe falls far below this level. Germany checks in at 1.3 births per woman, with Russia and Italy at 1.2 and Spain a little more than one birth per woman.

Steyn contrasts this with the fertility rate in Muslim countries like Afghanistan, 6.69 births per woman, Mali 7.42 and Somalia 6.76 births per woman. Steyn points out that Muslims living in Europe do not assimilate and, because of their population boom, they will instead take over Europe and be the dominant cultural force in 40 years.

According to Steyn, Islam is a far greater threat than global warming, China or any other man-made or natural disaster imaginable.

Certainly this is not how Obama and likeminded Liberals in and out of the Federal government see things. They continue to try and win over hearts and minds of Muslims; to convert them to Western Democratic thinking. It is a losing strategy, and one for which we will pay a very dear price.

Yours for wealth and health,

John Myers
Myers’ Energy & Gold Report

P.S. — Look for part-two, Allah, Oil & Our Future on Oct. 6. It will examine one reason why Obama feels the need to placate Muslims, plus how America can change its future by weaning off Arab oil while exploiting our own rich reserves of coal and natural gas. The Greens won’t like it but I am way past worrying about their feelings.

Titanic Arrogance: Obama Is Sinking America

The United States of America is racing towards ruin at breakneck speed and her captain, President Barack Obama, seems blissfully ignorant of the peril he is piloting the nation towards.

As Obama traveled the country to beg Americans to vote Democrat last week, new images of the RMS Titanic’s wreck were published. Taken from three miles deep in the Atlantic, the photographs are further testament to a time when technological arrogance and Edwardian pride believed that government and industry could surmount all challenges.

When completed in 1911 the Titanic was considered the Eighth wonder of the World. Its captain, Edward J. Smith, boasted that the ship was unsinkable.

“I cannot imagine any condition which would cause a ship to founder. I cannot conceive of any vital disaster happening to this vessel. Modern shipbuilding has gone beyond that,” Smith said.

The Titanic’s aura of invincibility stemmed from the period; it was the onset of the 20th Century and men believed machinery could overcome all, even nature. This was a notion the populace, especially the traveling public, was eager to swallow.

Captain Smith epitomized the age. He was at the apex of his career and was White Star Line’s most senior captain, chosen specifically to skipper the Titanic.

So convinced were captain and crew of the ship’s indomitability that they raced across the Atlantic at record speed. On the evening of April 14, 1912 the Titanic was sailing in the dark at 22 knots. Smith seemed oblivious to icebergs which could easily cross the great ship’s path at that time of year. It was a grandiose display of arrogance which cost more than 1,500 lives.

The PBS special, “Lost Liners” puts the blame solidly on Captain Smith.

“Fault rests on the Titanic’s skipper for not exercising more caution. Having received repeated ice warnings, he did not slow his ship down. In fact, Captain Smith had a casual, almost cavalier, air that evening, when he lingered late over a second cigar following an elegant dinner with some of the ship’s more distinguished passengers.”

Obama’s Orders — Ahead Full!
A century later, the greatest marvel of the Age of Enlightenment is the United States of America and it is on a collision heading. The U.S.A. will not be sunk by icebergs, but by debt and policies which sacrifice the dollar for political expediency. At the helm is Obama who seems more worried about his crew (Democrats in Congress) keeping their jobs than he is about the ship (America) itself; more concerned about his place in history than America’s immediate future.

We are trapped in the brig with a President who continues to steam forward regardless of opposition or hazard.

“From the day I took office, I’ve been told that addressing our larger challenges is too ambitious; such an effort would be too contentious,” Obama said during his State of the Union Address, Jan. 27, 2010. “For those who make these claims, I have one simple question: How long should we wait?”

One answer might be: “Until it is safe!” 

No doubt Obama is too busy racing ahead to even hear this warning. Just this past  Labor Day the President announced he is moving forward with even more spending; some $50 billion in new road, rail and airport construction projects and a plan to both overhaul national infrastructure spending and jump-start a sea of jobs.

The President spoke in Milwaukee to union members about his ambitious agenda to construct 150,000 miles of new roads, a network of high-speed rail lines and a next-generation airport system that includes 150 miles in new runways.

Left unsaid is that this expansion will have to be done on more borrowed money. Also absent from the speech was the fact that the unemployment rate won’t budge much below 10 percent and a credit crisis which began more than two years ago continues to linger despite trillions of dollars in Federal spending.

Instead Obama reiterated that more spending won’t raise the deficit.

“This is a plan that will be fully paid for and will not add to the deficit over time — we’re going to work with Congress to see to that,” Obama said. “All of this will not only create jobs now, but will make our economy run better over the long haul.”

It is hard to follow the President’s logic. A couple of days before his $50 billion spending pledge for transportation, the non-partisan Congressional Budget Office said this year’s U.S. Federal budget deficit will top $1.3 trillion.

That would be a tiny improvement of $71 billion over last year’s record $1.4 trillion deficit and hardly the direction we need to go if the President wants to restore world confidence in America and the dollar. After all, the 2009 and 2010 shortfalls are the largest ever. Each is three times bigger than the government’s annual deficit has ever been.

U.S. Dollar: Going, Going, Gone!
To say that deficits don’t matter is to ignore history and to put the county in peril. Even some of Obama’s crew admits that much. Earlier this year Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, issued a stark warning regarding the ballooning U.S. Federal government annual deficit and cumulative national debt.

“Without pre-emptive action, the U.S. risks its next crisis,” stated Hoenig, who went on to explain that Obama’s deficits endanger the Fed’s ability to fulfill its mandate of maintaining economic growth and price stability.

Hoenig is the first senior Federal Reserve official to go on record and state that the current U.S. fiscal policies are unsustainable and, unless halted and reversed in short order, will precipitate hyperinflation.

At the risk of carrying my analogy too far, Obama has a crew member in the crow’s nest screaming, “Iceberg!” and still he steams even faster.

How To Save Yourself
We don’t need a banker from the Federal Reserve warning us. The markets themselves are flashing “Danger!”  As the chart below shows, the dollar has been sinking for a decade. It got a brief respite in 2008 because of the deflationary scare. But that recovery appears to be over and the downward trend-line remains very much intact. I expect that over the next two years the dollar will continue to fall further once Obama’s inflationary policies get traction.

The Sinking Greenback

A decade ago I wrote to my subscribers this headline: “Get into the Lifeboat!”  In that newsletter I spoke about the fact that when the Titanic first struck the iceberg, most of those on board didn’t believe it could sink. Those that were smart enough not to believe in the fallacy of that age actually got off the ship and survived.

At the time of my “Lifeboat Alert,” gold was trading under $300 per ounce. At this writing gold is fetching more than $1,260 per ounce. My expectation is that after Obama really does sink the nation and the dollar, gold will be trading above $2,000 per ounce. It is not too late to save yourself, but time is running out.

Action To Take
Buy physical gold. I like American Gold Eagles, Canadian Maple Leafs and African Krugerrands. All three are stamped in English, have their gold content stamped on them, come in convenient, well-known sizes (1-ounce, half-ounce, quarter-ounce and one-tenth-ounce).

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

The Obama Solution: “Blame It On Bush”

I have a sneaking suspicion that President Barack Obama has a sign on his Oval Office desk that reads, “The buck stops with Dubya.”

According to the Boston Herald, “Our President cannot resist a good opportunity to blame Bush.” The President has blamed Bush on everything from the credit crisis to Hurricane Katrina.

It was on the five-year anniversary of Katrina late last month that Obama showed courage in the face of criticism and calmly reiterated the message from that chart topping song a decade past, “It Wasn’t Me.”

Last month the President was campaigning for the upcoming elections in New Orleans, ground zero for Katrina. He told the audience that he would not abandon their cause. Then the President called Katrina and its aftermath not just a natural disaster but “a manmade catastrophe — a shameful breakdown in government that left countless men, women and children abandoned and alone.”

“Implicit in Obama’s remarks,” wrote The Associated Press: “is an indictment of sorts against former President George W. Bush’s administration for its handling of the crisis.”

When it comes to the Gulf Coast the President just can’t resist blaming Bush. During the height of the BP oil spill the President was at it again.

“For too long, for a decade or more, there has been a cozy relationship between the oil companies and the federal agency that permits them to drill,” said Obama from the White House Rose Garden last May. “It seems as if permits were too often issued based on little more than assurances of safety from the oil companies. That cannot and will not happen anymore."

In fact, the Obama administration has a laundry list about the previous President, two wars in the Middle East and an economy that can’t get traction. The way Obama is revving up for the fall elections you would almost think he himself was running against Bush.

While giving a speech last month, Obama said the Republican Party hasn’t differentiated itself from its predecessor.

“They don’t have a single idea that’s different from George Bush’s ideas — not one,” Obama said to applause. It seems that Obama thinks he is taking the high road as to not actually naming Bush but instead saying, “The previous administration.”

Countless times Obama has said that it is Republican policies which caused the recession.

“We got here after 10 years of an economic agenda in Washington that was pretty straight forward,” Obama said in August. “You cut taxes for millionaires, you cut rules for special interests, and you cut working folks loose to fend for themselves. That was the philosophy of the last administration and their friends in Congress.”

And it is not just Obama whose mantra is to fault Bush. Congressional Democrats like to blame the former President for just about everything. Even with the 2010 midterm elections a couple of months away, Democrats think that “blaming Bush” is still a winning strategy, even though they have had a majority for almost four years and Obama has been in control for nearly two.

I am not yet an old timer but I have been around the block. Never before have I seen a sitting President blame his predecessor the way Obama has blamed Bush.

Consider the mess Ronald Reagan inherited from Jimmy Carter.

When Reagan took office on Jan. 20, 1981, inflation was out of control, the economy was in a deep recession, and America was coming off of two oil embargoes which had lead to gasoline lines that stretched for blocks. On that day Iran still held American hostages and the nation’s standing in the world had never been lower.

Yet according to my research Reagan did not blame Carter once. Instead he got on about the business of leading the nation forward. And he did a damn fine job, coaxing legislation to stimulate the economy while curbing inflation and increasing jobs. Reagan also cut taxes, strengthened the nation’s armed forces and created renewed confidence in the United States such that the greenback surged.

The same could be said about President Lyndon B. Johnson, whose downfall was caused by Vietnam. It was President John F. Kennedy who first sent combat advisors to Vietnam and it was Kennedy’s Cabinet that urged Johnson to get tough on North Vietnam. Yet during his Presidency and the years that followed when he was on his ranch near Stonewall, Texas, Johnson did not blame JFK.

And was there ever a leader who could more easily blame his predecessor than Winston Churchill? It was Prime Minster Neville Chamberlain who placated Hitler and neglected Britain’s defense forces. It can be argued that Chamberlain laid the groundwork for World War II. Yet when Chamberlain died it was Churchill that defended him with a eulogy: “Neville Chamberlain acted with perfect sincerity according to his lights and strove to the utmost of his capacity and authority.”

Good leaders don’t make excuses and lament about their circumstances. They move forward. They lead. This is something that a whining and complaining Obama can’t seem to do, and the nation is suffering because of it.

Unemployment remains stunningly high, the housing crisis is unabated and investor confidence is shrinking rapidly. Late last month the Spectrem Millionaire Investor Confidence Index (SMICI) fell to its lowest level in more than a year as wealthy U.S. investors worried about politics and unemployment.

The SMICI fell 11 points in August to minus 18, its lowest level since June 2009, when it fell a record 18 points to minus 20 shortly after the S&P 500 index hit a 12-year low. Gluskin Sheff economist David Rosenberg calls current economic conditions “a depression, and not just some garden-variety recession,” and notes that any good news both during the initial 1929-1933 recession and the one that began in 2008 triggered “euphoric response.”

“Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times,” he said.

Rosenberg points out that encouraging gross domestic product (GDP) news happened in the period 1929-1933 where there were six quarterly bounces in GDP with an average gain of 8 percent.

“False premise,” warns Rosenberg. “We may well be reliving history here. If you’re keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3 percent.”

Rosenberg points out that the “overall economic malaise” has come despite aggressive efforts by the Federal Reserve to stimulate the economy through rate cuts.

Given the growing economic crisis Obama would be smart to listen to political opponent, Senator John McCain, (R-Ariz.).

“George Bush looks like a piker compared to what has taken place since President Obama has come into the presidency,” McCain said. “He can keep ‘B.I.O.B.’ no matter what it is, ‘Blame it on Bush’ — he can keep that up. The American people are going to hold him accountable this November, not an administration that went out of power more than a year ago."

The problem is that the ultimate judgment on Obama won’t take place for another two years and two months. That’s another 26 more months of Obama blaming Bush while doing precious little else to reshape America’s fortunes. We can only hope that in the autumn of 2012 we have a new President; a President who gets on with the business of leading rather than finger pointing.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

Obama’s War: Politically Smart Or Armageddon?

“The world must prevent Iran from obtaining a nuclear weapon. I will take no options off the table in dealing with this potential Iranian threat.Barack Obama.

What better way to prove he is not a Muslim than for President Barack Obama to strike at the heart of the Middle East? And what better way to reflate the economy, unite the nation and secure America’s future energy needs? It’s a grand slam and the White House knows it.

Then again, Iran is making it easy for Obama to get his war. Tehran’s leaders appear to have graduated from the Adolf Hitler School of Diplomacy. The day after announcing the start-up of Iran’s Russian-built Bushehr nuclear power plant President Mahmoud Ahmadinejad pulled a cover away from an aircraft called the Karrar and announced it was Iran’s first long-range drone. Not so subtly the Iranians have coined it, “The Ambassador of Death”.

Furthermore says Ahmadinejad, “Enemies know well that Iran is an invincible fortress and I do not believe the U.S. masters of the Zionists will allow the regime to take any measures against Iran.”

Not so quick President Mahmoud. The last leader that questioned an American President’s will for war was the leader of your next door neighbor. That president, named Saddam, saw not one but two wars with the United States; one initiated by the father, the other by the son.

All this has left the United States and Israel hinting war with Iran. Washington and Jerusalem are disconcerted after the Islamic Republic has shown off all its weaponry; everything from new mini-submarines to a surface-to-surface missile. Tehran has even announced plans to launch high-altitude satellites over the next three years.

The Truth Behind The Exit From Iraq
In August the U.S. Chairman of the Joint Chiefs of Staff Mike Mullen said the U.S. has a plan in place to attack Iran, if it is necessary. Executing this plan no doubt calls for the U.S. to shuffle its overseas assets, including its standing army in Iraq. It is no coincidence that within a week of Mullen’s comments, Obama touted his planned withdrawal, saying: “As a candidate for President, I pledged to bring the war in Iraq to a responsible end… Shortly after taking office; I announced our new strategy… for a transition to full Iraqi responsibility. And I made it clear that by Aug. 31, 2010, America’s combat mission in Iraq would end. And that is exactly what we are doing — as promised, on schedule.”

The Obama administration and mainstream media have celebrated the Iraq withdrawal announcement as if it were V-E Day.

The truth, says Stephen Lendman, OpEdNews: “Unmentioned was combat readiness remaining, paramilitary army additions replacing those leaving, shifting Iraq forces to Afghanistan, increasing hostilities against Pakistan, committing daily war crimes throughout the region, planning more conflicts ahead, continuing America’s permanent war agenda.”

More conflicts likely means Battlefield Iran. But Iran won’t be the pushover the way Iraq was with its low-tech static defense. Richard Clarke, counterterrorism advisor in the White House under three administrations, says that short of an all out nuclear strike the U.S. cannot win a war against Iran.

“After a long debate, the highest levels of the military could not forecast a way in which things would end favorably for the United States,” said Clarke, pointing out that the Pentagon’s planners have war-gamed an attack on Iran several times in the past 15 years, and simply can’t generate a non-nuclear scenario where the U.S. wins.

Unlike Iraq, Iran has much higher tech weaponry than Soviet Union throwaways like the 1960s designed T-72 tank. Also there are some 80 million people in Iran, the great majority of them religious zealots who would throw themselves in the face of a foreign invasion.

Iran is mountainous and vast; four times the size of Iraq. Furthermore, the Iranian army numbers 450,000 combat troops, only slightly smaller than the U.S. Army whose troops are scattered across the globe and must be on alert for other enemies.

According to Gwynne Dyer, a syndicated columnist and military historian, if the White House were to propose anything larger than minor military incursions along Iran’s south coast, senior American generals would resign in protest. “Without the option of a land war, the only lever the United States would have on Iranian policy is the threat of yet more bombs — but if they aren’t nuclear, then they aren’t very persuasive,” wrote Dyer in Straight.com.

Obama Hawks Set To Wade Into War
That’s not to say there aren’t some in America and even some in the Obama administration itself that are itching to go to strike Iran. Earlier this summer The Bipartisan Policy Center (BPC), a collection of neoconservatives, hawks and neoliberal interventionists, began calling on the President to make war preparations against Iran. Two prominent BPC members, former Senator Chuck Robb and retired General Charles Wald, concluded in a July op-ed in The Washington Post that, “current trends suggest that Iran could achieve nuclear weapons capability before the end of this year.”

To meet this threat Robb and Wald advocate that the Obama administration begin an immediate military buildup for war. They suggest a plan that will include a “targeted strike on Tehran’s nuclear and supporting military facilities.”

The BPC has supporters within the Obama administration including Dennis Ross, currently Special Assistant to the President and Senior Director for the Central Region of the National Security Council and who was one of the “original task force members” of the BPC’s bomb-Iran planning group. Ross and other neoconservatives in the Obama administration are itching to bomb Iran for military and strategic reasons. But I suspect there are others in the administration that want war for purely political reasons.

First and foremost is the President’s loss of support going into the fall Congressional elections, including musings that the President may not have been born a U.S. citizen and may in fact be a Muslim. Just as LBJ believed waging war on Vietnam would stem Republican criticisms that he was a dove, so too, Obama might think that waging war against Iran will answer any questions about his leadership and loyalties.

There are also strategic arguments to going to war with Iran. Iran is the defacto leader of the Organization of Petroleum Exporting Countries, having wrestled control from Saudi Arabia more than a decade ago. It carries the biggest stick on a patch of ground that contains two-thirds of the world’s conventional petroleum reserves. Iran’s control of the world’s oil supplies gives American strategic planners nightmares.

Countdown To War
Desperate times mean desperate measures. But make no mistake; this war could be much more devastating to the U.S. and the world than any war since World War II. There is the real potential that an isolated conflict will spread and perhaps engulf China and Russia.

Each passing week, as Obama slips in the polls and Tehran rattles its sabers, the prospects for war grow; a war that will no doubt drive up oil and gold prices. But also a war whose final outcome may be so devastating that few will enjoy the profits they reap.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

My No. 1 Cure For Depression — CNN

Have you been in a dark mood, feeling sad, listless and depressed about such things as oil spills, the war in Afghanistan or the economy? If so, I have the perfect prescription for you — watch CNN.

It turns out that the causes of depression are many and varied and include independent thought as well as accessing information from outside the mainstream. Fortunately I have found that watching network news, especially news from CNN, one to two hours a day can do wonders to clear up depression.

You see CNN is like a soothing ointment for a troubled soul. It’s the network that provides promises of a better tomorrow while proclaiming that things could be far worse. Once you see video from places like Haiti and Pakistan you understand that it is those countries that have something to be depressed about.

How CNN Helped Cure My Depression
But CNN does more than just show how bad things are elsewhere. It also tells us how much better things are becoming here.

Take the oil spill for example. Earlier this summer I was depressed over the fact that BP had leaked some 5 million barrels of crude oil into the Gulf of Mexico. There were a lot of dire predictions for the environment and for the economy in the region. But just a few weeks ago White House energy adviser Carol Browner went on CNN to say that a new assessment found that about 75 percent of the oil has been captured, burned off, evaporated or broken down in the Gulf. Voila; problem solved. Thanks CNN!

And that’s not all. This month CNN broadcast a photograph of a smiling President Barack Obama and his daughter Sasha taking a dip in the Gulf waters off Alligator Point in Panama City Beach, Fla. CNN admits it wasn’t present for the swim, but says the photo conveys the message that the White House wants to send: The Gulf Coast is repaired and open for business.

I had to force from my mind the image of the movie Jaws when Mayor Larry Vaughn orders his assistant into the water to impress upon the town folks just how safe things are. Fortunately I was able to eradicate these negative thoughts.

Mission Accomplished… Again!
Watching CNN can make you feel better about a great many things. For example the war in Iraq has caused me a lot of anxiety over the past eight years. When I was writing Outstanding Investments I got in a lot of hot water with my readers and one of my editors for opposing that war and calling it unwinnable. It turns out that I was wrong: Twice in fact.

The first time was in May 2003 when CNN and the other networks carried President George W. Bush’s victory speech from the aircraft carrier USS Abraham Lincoln. Above the President was a giant banner titled, “Mission Accomplished.”

The second time was just this month when Obama gave a television address declaring victory in Iraq and announced that troops there will begin to withdraw next year. According to CNN, “The military is continuing its drawdown ahead of Obama’s Aug. 31 deadline for ending all combat operations and keeping a residual force of 50,000 with a mission limited to stability operations and advising and assisting Iraqi security forces.” (Emphasis added)

And the “world’s leader in news” had more good news, reporting that Iraqi government spokesman Ali al-Dabbagh had said while the Iraqi Army might not be fully ready to handle security by the end of 2011, that does not mean the alternative means keeping U.S. troops longer. Neither al-Dabbagh nor CNN said what that alternative is so I can only conclude that my parents were wrong; you can have your cake and eat it too.

Blue Skies Ahead
With my fears about the Gulf Coast and Iraq having been eased I have only a few other concerns, such as the direction of the economy and global warming.

But here again CNN helped. They were on hand last week when Obama touted his administration’s clean energy initiatives, saying tax credits and loans would help create 800,000 jobs by 2012.

CNN showed the President after he toured the ZBB Energy Corporation plant in Menomonee Falls, Wis. It was CNN carrying Obama’s speech telling workers that their jobs manufacturing renewable batteries and power systems were part of a necessary transition of the U.S. economy.

“We can’t turn back. We’ve got to keep going forward,” Obama said to resounding applause caught on CNN microphones. Then we got to hear more from the President: “You’re pointing us in the right direction. And I am confident about our future because of what I have seen at this plant.”

The company is using a $1.3 million Recovery Act State Energy Program loan to help fund a $4.5 million factory renovation. Obama said the renovation is expected to result in the hiring of 80 new workers and triple the capacity of the manufacturer’s renewable power and storage systems.

CNN delivered Obama’s message that the American workers are resilient enough to emerge stronger than ever from a decade-long manufacturing decline and an economic recession. Not only that, we are going to get a cleaner, greener world to boot.

Now I know CNN may be hard medicine for some of you to swallow. Furthermore I don’t want you to just take my word that CNN will not only make you feel better. The Aug. 10 editorial page of The Boston Globe told CNN’s critics to “back off” and called the network, “the best hope for a revival of traditional news values on cable.”

The Globe also said that Fox News and MSNBC can’t be trusted because of their partisan leanings:

CNN’s rivals, Fox and MSNBC, have chosen to preach to the converted, fueling a culture of outrage and denunciation. Their effects on American political dialogue have been widely noted, and widely condemned.”

The Globe even gave the thumbs-up to Eliot Spitzer and Kathleen Parker, who are replacing Campbell Brown’s evening news program, pointing out that the two would make a very good pair: “Another Crossfire this won’t be: Spitzer and Parker will probably be unpredictable and sometimes contrarian.”

One can only hope that on this last point The Globe is wrong. For if CNN becomes unpredictable and heaven forbid, contrarian, it will no longer assuage my fears and worries. Things are so bad I would hate to start having to deal with the truth.

Before I sign off I need to leave you with a warning. If you do decide to begin a daily regimen of CNN you will have to closely monitor your level of viewing. For example, people who watch more than an hour a day of Anderson Cooper 360 can experience sudden mood changes, the most common of which is feelings of self-righteousness.

And never exceed more than three hours viewing in a 24-hour time period as this can lead to psychological disorders, such as schizophrenia, in which the logic center in your brain tells you that things are a mess but the cerebral cortex insists that things are not only fine but getting better all the time.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

Sowing The Seeds Of Starvation

“One death is a tragedy; one million is a statistic.”
—Joseph Stalin

This summer’s searing heat has put a fire beneath grain prices. But worse than another round of inflation is the potential for widespread famine, particularly in the former Soviet Union, which has been beset by the worst heat wave in 130 years.

The Ukraine is no stranger to starvation. The Terror-Famine struck the Ukraine in 1932-33 when as many as 10 million starved. It should come as little surprise that Joseph Stalin was the architect of that tragedy.

In the 1920s, Lenin proved his political savvy and made concessions to the peasantry. This led to The New Economic Policy (NEP) and a rethinking by the Kremlin.

That all ended when Stalin suspended concessions and the NEP. He even unleashed his secret police (NKVD, which became the KGB) targeting capitalists and squeezing greater food production from the suffering peasants. In the 1930s, when quotas could not be met in the face of drought, the NKVD ruthlessly robbed Ukraine of its wheat and packed the grain back to Russia.

Eight decades later the drought has returned and so have Communist ideals. Again Ukraine is facing a devastating crisis which could send grain prices much higher and upset the peace in Eastern Europe.

Reuter’s reports that the ex-Soviet Union is likely to see grain production slashed this year with Ukraine’s production falling as much as 15 percent. With a prolonged heat wave sending temperatures above 100 degrees, 27 regions have declared a state of emergency due to drought which is estimated to have destroyed 11 million hectares of crops, an area equal in size to Hungary or about one fifth of the total sown area.

Meanwhile, hundreds of forest fires rage across Russia, choking residents of Moscow. There appears no end in sight for what is being called the worst heat wave to hit Russia in its recorded history. It is wreaking havoc on one of the world’s largest breadbaskets.

A Bitter Harvest
Russia’s agricultural analysts have predicted that the nation’s grain harvest may fall as low as 65 million tonnes this year, down from 97 million tonnes in 2009. The grain agency SovEcon has also estimated that the wheat crop may decline by a whopping 44 million tonnes this year from 61.7 million in 2009. That is 4 million tonnes less than was projected a few weeks ago and the final harvest may be even lower.

The Kremlin has taken steps to bolster the security of its 9.5 million tonnes of grain stockpiles. The government is also putting as much grain aside as it can while admitting that, “the Russian grain market is becoming an acute crisis because of wildfires and drought.”

Russia has even enacted a ban on grain and flour exports for the rest of the year and perhaps longer. The Kremlin is worried domestic consumption may surpass 75 million tonnes, or 10 million tonnes more than this fall’s harvest. Fortunately, the country has 21.5 million tonnes in reserves but this stockpile will be depleted quickly if crops continue to roast in the field.

Ukraine‘s Tortured History
But even as Moscow grows more nervous each day over the upcoming harvest, its puppet state, Ukraine, is embracing the Bear in the face of servitude and perhaps even starvation. The recently elected pro-Russian, pro-Communist government in Ukraine is even rewriting history with its recent proclamation that the Terror-Famine was a tragedy the Soviet Union attempted to stop.

One of Ukraine’s top bureaucrats—Valery Soldatenko—has boasted of being a “proud Communist.” Comrade Soldatenko is not only oblivious to the oxymoron but went so far as to tell Radio Free Europe’s Ukrainian Service that he never surrendered his Communist Party membership card. “I share the Communist ideas of social and national justice, social and national equality,” he said.

Soldatenko is even a Stalin apologist. As a new director of Ukraine’s National Memory Institute (which must have no memory at all), Soldatenko believes that Joseph Stalin did everything he could to lessen the effects of the famine. Soldatenko went so far as to say that the Terror-Famine was not initiated by Stalin, but was, “The result of difficult circumstances.”

It is shocking that with starvation blowing in the wind Ukraine’s new President Viktor Yanukovych and Russia’s Prime Minster Vladimir Putin are almost nostalgic for Communist rule.

The Resurrection Of Stalin         
Last May there was a rally in opposition to Prime Minister Putin with protestors shouting slogans comparing the Prime Minister to Joseph Stalin.

"Putin is Stalin! Putin is Brezhnev! Russia without Putin," chanted the crowd. One activist held a big caricature picture of Putin kissing Soviet leader Leonid Brezhnev. Police quickly ripped it down. In another demonstration hundreds unfurled a giant Russian flag and waved signs demanding fair elections as lines of riot police watched.

Opponents such as these say Putin has censored freedom of the press and eliminated democratic rights when he was President. Now that he has permanently installed himself as Prime Minister they fear that the nation is on the road to ruin and repression.

According to renowned Russian chess grand master Garry Kasparov, “The economy is sinking, the politicians do not allow any opposition into parliament; Putin’s state control is all encompassing.”

But the opposition is the minority to Putin and his iron fist. During the last May Day celebrations Reuter’s reported that thousands of Communists, trade union activists, nationalists and black-clad anti-fascists came out in support of Putin.

Russia’s Communist Party is Russia’s second biggest political party. In the past year thousands have marched under bright red banners that hold portraits of Stalin. Late last year Stalin was voted Russia’s third most popular historical figure ever. Meanwhile, a Moscow train station has restored a phrase on a billboard praising Stalin.

Putin himself has even gone so far as to praise Stalin. “It is impossible to make a general judgment. It is evident that, from 1924 to 1953, the country that Stalin ruled changed from an agrarian to an industrial society,” said the Russian Prime Minster last December. Putin went on to praise Stalin’s leadership in winning World War II.

The question: Will Putin emulate Stalin? The test of that may come this fall as sweltering heat burns the crops in Russia, Ukraine and Kazakhstan. The Big Three are among the largest exporters of wheat in the world. They provide essential food stuffs to the Middle East and North Africa and to millions of their own citizens; people who could face mass starvation if Russia staggers back to the Dark Ages that was Stalin.

Outlook
Wheat prices hit $7.24 per bushel last week, a 70 percent increase since the June lows. That is the biggest one-month jump in three decades; bigger than the food crisis of 2008 when wheat prices reached $13 per bushel.

The result of that crisis was rioting in Bangladesh, Egypt and elsewhere. This crisis could be potentially worse. And we all know that higher grain prices mean more inflation and a weaker U.S. dollar.

Wheat Prices Soar

Potash Corporation of Saskatchewan Inc., (NYSE:POT, $109) sells fertilizers and related industrial and feed products worldwide. The company also produces nitrogen fertilizers plus nitrogen feed and industrial products, including ammonia and urea.

PotashCorp also has the mineral rights to more than 800,000 acres in Canada. Prices of this stock are up strongly as investors assume that drought will lead to greater planting and rising demand for fertilizers.

PotashCorp’s stock price has rallied strongly since the deflationary panic in the summer of 2008. I believe the continued bailout process ongoing in Washington as well as soaring demand for grains worldwide will continue to push up the stock price of PotashCorp.

Action To Take
Call your stock broker and buy Potash Corporation of Saskatchewan (NYSE:POT, $140) at market.

Yours for wealth and health,

John Myers
Myers Energy and Gold Report

Pitfalls And Profits In The Wake Of The BP Spill

“I think we should expand domestic exploration. My chances of doing that now are zero because of the oil spill.” Senator Lindsey Graham (R-S.C.)

The climate is changing. I am not talking about the record heat wave in the Northeast but rather the political climate in Washington, D.C., where the Greens are just beginning to capitalize on the Gulf Coast oil spill crisis.

The well that rests below the spot BP’s Deepwater Horizon once stood has spewed out almost 5 million barrels of oil into the Gulf of Mexico. That makes the BP oil spill the biggest ever, surpassing the Ixtoc I rig that gushed 3.3 million barrels into Mexico’s Bay of Campeche in 1979. For the environmentalists, the Gulf crisis is a once in a lifetime opportunity to re-shape Federal policies.

President Barack Obama has used the spill as a call to arms for clean energy. And he has put a freeze on new deepwater drilling; the result of which has nearly halted exploration in the Gulf of Mexico, including shallow water projects.

The Louisiana Department of Natural Resources reports that approved shallow water drilling permits in the Gulf have dropped significantly since the Federal moratorium was instituted. In fact, only four shallow-water permits have been issued since the Obama administration blocked deepwater drilling following the accident four months ago. Just four permits have been granted from May through July and those were for wells less than 500 feet deep. That compares to an average of 14 permits issued per month for the year before the moratorium.

The Obama administration is not going to let a little thing like the courts get in the way of its Green objectives. After a ruling against the six-month moratorium, the Obama administration issued a second ban on July 12 which won’t expire until December.

The oil industry is saying that Obama’s “keen to be Green” policies could eradicate hundreds of thousands of jobs in the Gulf and will start a mass exodus of rigs out of the region.

Louisiana Governor Bobby Jindal has said the drilling ban only adds insult to an area already injured.

“New requirements for shallow-water drilling are causing permitting delays that could lead to significant additional economic impacts on top of those caused by the deepwater drilling moratorium,” Jindal said.

The Governor is worried about Louisiana’s economy, but a more pressing worry for Americans could soon be the price of gasoline. That is because the Gulf of Mexico supplies nearly 30 percent of United States domestic oil and gas production. As wells in the Gulf age and are not replaced, the U.S. will experience an accelerated decline in petroleum production. This is bad news for a nation which has already seen its energy output fall steeply. The U.S. is producing less than 5 million barrels of oil per day, the lowest production levels in 60 years

You may recall the dire warnings from President Jimmy Carter’s sweater clad Oval Office chats. It is worth noting that back then the U.S. was pumping almost twice the amount of oil as is being produced today. That Democratic President fussed that the nation wasn’t producing enough oil.

Decades later and with billions of barrels in reserves spent, President Obama is preoccupied with how to limit U.S. oil and gas exploration. This despite the fact that the U.S. is importing 13 million barrels of oil per day. That is almost 60 percent of U.S. oil consumption and it costs America $300 billion per year. That is just the fixed cost which will only increase as the price of petroleum rises.

Then there are additional costs. The U.S. military spends an estimated $100 billion a year to protect the flow of oil out of the Middle East. With higher crude prices the U.S. could soon be spending half a trillion dollars per year on imported oil. And that doesn’t account for two Middle East wars this past decade which have cost a trillion dollars and counting.

Furthermore, America’s involvement in the Middle East appears to only be deepening despite Obama’s claim to the contrary. While the President has withdrawn more than 90,000 troops from Iraq, he has tripled the U.S. contingent in Afghanistan to almost 100,000 soldiers. Meanwhile more U.S. troops died in Afghanistan last month than any month since the nine-year conflict began.

The move by Obama and Democrats to reduce oil exploration in the United States—offshore or otherwise—will only deepen America’s involvement in Middle East conflicts, and could perhaps lead to a war with Iran. The results of such a foray would destabilize the nation’s energy supplies and send the price of crude oil sharply higher.

Outlook
With crisis can come opportunities and such is the case with the BP spill. Crude oil prices have moved above the $80 per barrel mark and price momentum is on the upswing. Meanwhile President Obama promises to the Green lobby to restrict drilling will not only hamper domestic petroleum production; it will also deepen America’s involvement in the Middle East. That is a mix that could send crude oil prices above $100 per barrel before the end of this year.

 

With the exception of BP, I would buy and hold shares in Big Oil. One company that is moving in the right direction and has a lot of leverage to higher oil and gas prices is Talisman Energy Inc. (NYSE: TLM, $17.00).

Talisman is a large upstream oil and gas company headquartered right in here in Calgary, Canada. In fact Talisman is one of Canada’s largest petroleum companies and it is well insulated from the Middle East. The company’s three major operating areas are Canada, the North Sea and Southeast Asia.

Talisman has a market capitalization of just under $18 billion, which makes its shares very liquid. Yet Talisman is better leveraged to rising energy prices than a giant concern like Exxon Mobil Corp (NYSE: XOM, $63.00), which has a market cap of $320 billion.

Talisman was originally part of BP, but in 1992 it became an independent company. Three years ago Talisman’s longtime President and CEO James Buckee retired and John Manzoni, a former BP executive, took over. There is one further connection between the companies. Last month as BP was liquidating assets to pay for the massive Gulf spill, Talisman stepped in and cut a deal, paying C$858 million for a 49 percent stake in BP’s Colombian operations. This purchase is in keeping with Talisman’s strategy of staying out of the Middle East and investing heavily in exploration plays.

And there is more good news: last month Talisman reported a near 10-fold increase in second-quarter profits. And the company expects oil and gas production to grow as much as 10 percent in 2011.

What impresses me most is that last year Talisman replaced 162 percent of its oil and gas production. That makes Talisman is one of the few large oil and gas companies that is growing its reserve base while slashing liabilities. At the end of March the company’s liabilities declined to $1.8 billion, just half what they were the year before.

Talisman’s emphasis on growth through exploration along with the relative safety of its vast reserves of oil and gas makes it an excellent investment. To learn more go to the Talisman’s Web site by clicking here.

Action To Take
Call your stock broker and buy Talisman Energy (NYSE: TLM) at market.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

Afghan Folly: Why We Should Have Dropped The Bomb

“It is fatal to enter any war without the will to win it.” –Douglas MacArthur.

America’s longest war is again under scrutiny in the wake of the recent flood of WikiLeaks Afghanistan documents. For me the news resurrected a question I have been asking myself for nearly nine years: why wasn’t the war in Afghanistan ended before it even began?

In the wake of 2,740 dead innocent Americans killed on 9/11, why didn’t the United States government deal with al-Qaida and Osama bin Laden with extreme prejudice? I am talking the N word. That is because I believe that Americans would be safer and the world would be a better place if the U.S. had launched a tactical nuclear strike against an organization whose goal is to kill Americans.

The argument against a nuclear strike ranges from breaking international law to harming the environment and killing innocents. But nine years of conventional war has done plenty to hurt the environment and kill combatants and civilians.

So instead the U.S. has become bogged down in its longest war ever; a war with no end; a war that has no recognizable enemy; a war that the nation can ill afford to wage.

The New Pentagon Papers
Daniel Ellsberg, a former U.S. Marine and military analyst, precipitated a rethinking of the Vietnam War in 1971 when he released the “Pentagon Papers.” The papers comprised the U.S. military’s account of what was going on in the Vietnam War.

Ellsberg understood there was a consensus within the Federal government that the U.S. had no realistic chance of victory in Vietnam; that political considerations prevented them from saying so publicly. Ellsberg argued that Secretary of Defense Robert McNamara and others continued to state in press interviews that victory was "just around the corner,” even though they knew it was not true.

President Nixon put Ellsberg at the top of his enemy’s list. Nixon’s Oval Office tape from 1971, with H.R. Haldeman talking, shows why the White House was out to get Ellsberg: “To the ordinary guy, all this is a bunch of gobbledygook. But out of the gobbledygook comes a very clear thing: You can’t trust the government; you can’t believe what they say; and you can’t rely on their judgment.”

Nearly 40 years later WikiLeaks released nearly 92,000 secret military documents about the fighting in Afghanistan. Its founder, Julian Assange, told The Guardian that, “The nearest analogue is the Pentagon Papers that exposed how the United States was prosecuting the war in Vietnam.”

According to The Washington Post, “The WikiLeaks Afghanistan War Logs will fuel political opposition in the U.S. to American troops continuing combat operations in Afghanistan.”

The commentary itself, provided below by the The New York Times, is chilling: “IN HEAVY CONTACT… We have mortars pinned down and fire coming from everywhere…. Multiple enemies running through… and fire coming from the mosque… The police station is shooting at us.”

As it turns out the Combat Outpost Keating barely hung on. Yet eight Americans were killed along with several Afghans. And several more wounded. All this from a mission that was to provide security and back-up the local government.*

Blame It On Bush
It’s not like we don’t already have plenty of reasons to be upset over the war in Afghanistan. But unlike Nixon, who wanted to repress the Pentagon Papers, the Obama administration takes the view that the WikiLeaks Afghanistan documents are old, dating back to when the war was being neglected by President Bush. The Obama White House points out the fact that the WikiLeaks documents end last year, just as President Barack Obama began his new strategy and pledged 30,000 additional troops.

If Vietnam demonstrated anything it is that more troops don’t ensure victory. Not against a battle-hardened enemy that can’t be easily recognized from the overall population.

As the chart above shows, in three years President Johnson almost tripled America’s troop levels in Vietnam. Despite ramping up the war the American military was sideswiped by the Tet Offensive in 1968 which lead CBS anchorman Walter Cronkite to say: “It is increasingly clear that the only rational way out will be to negotiate, not as victors but as an honorable people who lived up to the pledge to defend democracy.”

After Cronkite’s broadcast Johnson said, “If I’ve lost Cronkite, I’ve lost Middle America.” Not long afterward Johnson announced he would not seek re-election.

Don’t let LBJ’s decision get your hopes up. Obama is intent on staying for the long haul regardless of what happens in Afghanistan. That means the continuation of a war that kills our sons and daughters; a war that is costing our nation hundreds of billions of dollars. Just last week the Center for Defense Information, estimated the cost of the wars in Iraq and Afghanistan will reach $1.08 trillion by the end of fiscal year 2010. But the real cost is much worse. As of the end of last month more than 1,200 American service men and women have died fighting in Afghanistan. More than 4,400 American service personnel have died in Iraq.

The WikiLeaks Afghanistan documents only confirm our worst fears—that despite a recent $7.5 billion aid package Pakistan is double-dealing and back-stabbing us. And regardless of how much Secretary of State Hillary Clinton gushes over Pakistan’s alliance, it doesn’t change the fact that the Taliban and al-Qaida have key support from Pakistan’s intelligence service and key players in the Pakistan government. This, and the fact Afghanistan has seen invading forces come and go including the Greeks, Turks, British and the Soviets, makes it impossible to imagine a scenario where America can now win this war.

Perhaps the only opportunity to win in Afghanistan was squandered nine years ago when the U.S. refused to marshal all of its strength to destroy al-Qaida.

Action To Take
More than four decades ago my father C.V. began writing Myers’ Finance & Energy because he believed that the war in Vietnam was unaffordable and that the debt acquired by the Federal government to win it would be extremely inflationary. He and his subscribers bet big on gold and silver beginning in 1967, right before the Tet Offensive. He was proven correct and his subscribers profited.

From 1970 to 1980 the price of silver rose from $1.60 per ounce to more than $50 per ounce and the price of gold increased from $34 per ounce to $850 per ounce.

The war in Afghanistan is every bit as unwinnable now as the Vietnam War was then. Look for even more war spending by the Federal government; the results of which will push precious metal prices higher. That is why I urge you to buy and own physical gold and silver.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

*Footnote: If you want to learn more about the war in Afghanistan and what our troops are really up against, I urge you to read the 2010 bestseller, War, by Sebastian Junger, Harper Collins. Junger was embedded with a combat platoon in the perilous Korengal Valley in 2007 and 2008. Read a review of this book at Boston.com by clicking here.

JM

Green Lies About Oil Sands Put America’s Energy Future At Risk

Alberta’s oil sands are back on the Green’s hit list. And this time the Greens are playing dirty.

A couple of weeks ago the San Francisco based environmental group, Corporate Ethics International—which has few ethics and works closely with the Sierra Club and Greenpeace—spent $50,000 erecting billboards in Denver, Portland, Seattle and Minneapolis that deride Alberta as home to "the other oil disaster.” The campaign urges tourists not to go there.

The billboards—which may be coming to a city near you even if you live in Europe—showcase a dead duck found in a Syncrude tailings pond and an oil-soaked pelican in the Gulf of Mexico.

Now I have been to Alberta’s oil sands on a couple of occasions and I can tell you that the land is scarred. Squeezing oil out of shale is a tough and dirty business and the waste ponds there do kill ducks, although hardly enough to create a frenzy over. In fact fewer ducks die from being soaked in tailings ponds in the oil sands than are killed by flying into wind power turbines.

I need to make one more point: Canada produces 2 percent of the world’s greenhouse-gas emissions and the oil sands account for about 5 percent of that total. So while the Fort McMurray area is tarnished, it has a smaller carbon footprint on the world than a handful of Chinese coal-fired power plants. Still I can’t remember Greenpeace damning people that went to the Summer Olympics in Beijing.

I can also tell you that the last time I was up in the Fort McMurray area where Alberta’s giant oil sands are located was October, 2001. I took this trip in the wake of blown-up buildings and murdered Americans—Americans killed by Arabs, most of them Saudis, whose oil production American Greens don’t seem to have a problem with.

At that time I told my subscribers to Outstanding Investments that if I had to choose between energy security and some scarred land I would choose energy security. I also told them that if I had to choose between ducks and people; I would choose people every time.

My real outrage over this slander by the Greens against Alberta is that it is full of lies and it doesn’t even target what the environmentalists consider to be the problem—the oil sands themselves. Instead, it goes after an entire province and its tourist industry.

It was a topic of conversation here in Calgary last week at the Pacific Northwest Economic Region Summit. I was on hand and heard as people in business and government on both sides of the United States/Canada border condemned the latest smear tactics.

“I voted with my feet, I’m here (in Calgary),” said David Jacobson, the U.S. Ambassador to Canada. “To tell you the truth I think that ad campaign makes about as much sense for people not to come to Alberta to vacation because of the oil sands as it does for people not to visit Chicago because Illinois has coal.”

As an American who was born and now lives in Alberta, I can tell you it is a majestic place to visit. I have not seen greater beauty anywhere in the world than the Rocky Mountains that flank Calgary.

You might think that the Corporate Ethics group would understand that propaganda doesn’t work when the truth is allowed to get out.

Even the infamous liar, Supreme leader Kim Jong-il, has a better understanding of propaganda writes the Montreal Gazette: “The North Koreans don’t let their citizens travel. That is why Corporate Ethics International would like Alberta to be as isolated as Albania.”

There is just another tiny problem with the Alberta attack ads—they are filled without outright lies. Alberta Premier Ed Stelmach is particularly angry at the anti-Alberta ads, calling them a "propaganda campaign that is full of lies.”

Stelmach pointed out that claims about the size of the oil sands development, as well as the damage to water and air, are all grossly wrong.

Corporate Ethics International claims that Alberta’s oil sands are “twice the size of England.”

Not even close says Travis Davies, a spokesman for the Canadian Association of Petroleum. "There is a massive difference between 260,000 square kilometres and the reality of the Alberta oil sands, which is 600 sq. km. impacted and 65 sq. km. reclaimed." So much for truth in advertising.

Still, Alberta’s oil sands might seem like an easy target for the environmentalists, even in an age where radicals in the Middle East are targeting the U.S. That doesn’t mean that the Greens are being honest about the utility of Alberta’s oil sands.

“The environmental risks of the oil sands have been greatly exaggerated and overblown by activist organizations that have different agendas,” says Hal Kvisle, the former CEO of TransCanada, a North American pipeline giant. “These parties, such as Natural Resources Defense Council and Greenpeace, make statements about the oil sands that mostly aren’t true.”

America Needs Alberta’s Blue-Eyed Sheiks
I have some other news for the Greens—if they want to count on Arab oil—some of it from places where extremists continue to plot death and destruction on America—Alberta has plenty of other buyers. In fact China must be tickled pink at the Greens’ attack on Alberta because they are plowing plenty of money into Alberta’s oil sands so that they can secure their energy future in America’s backyard.

As for the U.S., it is on track to import as much as 3 million barrels of oil per day from Alberta’s oil sands by the end of this decade. Right now the U.S. consumes almost 1 million barrels per day of Canadian oil sands. Yet there are Greens in the Obama administration and in the Democrat party that want to derail oil sands imports in pursuit of more expensive green energy technologies—technologies that frankly do not yet exist and may not exist for years or even generations.

The politics of Green are blissfully ignorant that Canada has one of the largest stable oil deposits in the world just a scant distance from America’s borders.

If the Greens get their way and reduce or shut down the flow of Canadian oil, the U.S. will be more vulnerable, paying higher energy prices; in some cases for oil held by maniacal mullahs. And inevitably, China, America’s major competitor, will be enriched and empowered. If you ask me, it is a pretty stiff price to pay over some dead ducks.

Action To Take
Could Alberta’s oil sands do a better job of cleaning up the mess they are making? You bet. Meanwhile there is too much at stake for the U.S. to turn its back on this rich and secure energy source. As a result oil sands stocks will continue to prosper. I recommend you buy Suncor Energy Inc. (NYSE, SU, $30.82) and Canadian Oil Sands Trust (TSX: COS-UN.TO, C$27.52).

In fact just last week the Oil & Gas Journal wrote: “The blowout in the Gulf of Mexico and resulting ban on deepwater drilling in U.S. waters may prove a boon for Canadian oil producers,” including oil sands stocks. I couldn’t agree more.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

Confessions Of An Illegal Alien

I believe Arizona’s Immigration Law S.B. 1070 is going to be damn effective. In fact I think it should be adopted across the United States. What special insight do I have into the matter? I used to be an illegal alien.

Twenty-seven years ago this month I was sitting at my desk in the Peyton Building in downtown Spokane, Wash., and I got a letter from the Immigration and Naturalization Service (INS). I jerked it open and realized my worst fears. My work visa had not been extended.

Immigrating to the United States had been a disaster right from the start, even though it shouldn’t have been. My dad, C.V. was a U.S. citizen by right of his father being born in Oklahoma. At least that’s what the U.S. State Department said when they issued C.V. a U.S. passport.

Yet INS thought otherwise. They hadn’t forgotten that C.V. had sold gold to Americans when it was illegal for them to own it. INS wanted to deport him. It was a legal fight that would take a decade to resolve. In fact a U.S. Federal judge finally ruled in C.V.’s favor a few months after his death in 1990.

But on that day in 1983 the only thing that mattered was the letter on my desk; the letter that said I had to leave the U.S. or face deportation. It didn’t matter that I had paid my taxes, bought a house and that my wife and I had an American-born son.

Despite the fact my dad was ill I decided that I didn’t really have a choice. Better to move back under my own terms than to be roped-up like a criminal and be “escorted” by deportation bus.

Of course my dad, who was also my boss, was dead set against me going back to Canada. Besides the fact that he hated the Federal government, he had a U.S. passport that proved to him that I was entitled to a green card. He talked to his lawyer Bob Magnuson, who was the brother of Idaho mining legend Harry Magnuson, and set up a meeting with a young immigration lawyer named Dan Keane.

Before Dan became an immigration and criminal lawyer he had worked as an INS agent. In fact his father was a well known immigration judge.

I showed Dan the INS letter and he read it carefully. Then he smiled and said, “So what’s the problem?”

“What’s the problem? This letter says if I don’t leave I am going to be deported!”

“That’s not likely to happen. You’re dad’s citizenship is going to get sorted out and when that happens you will get a green card. Until then I wouldn’t worry about it.”

I told Dan I was plenty worried about it. That I was afraid to get so much as a speeding ticket; that the cop would check on my immigration status and that my wife and I would be headed for Canada.

Dan started laughing. “Hell John, the cops don’t enforce immigration law. They don’t care.”

“They don’t care!” I was astonished. Here I was, living illegally in a country and this lawyer—my lawyer—was telling me that law enforcement didn’t care.

“You could get caught robbing a bank and your immigration status probably wouldn’t be called into question,” explained Dan.

Because of Dan’s advice and my father imploring me to stay, I decided to be an illegal until there was a ruling on C.V.’s citizenship. Fortunately I was given amnesty and granted a green card by the Immigration Reform and Control Act of 1986. A decade later I became a U.S. citizen.

I have always been grateful for the opportunity to become an American. But I also know it would never have happened if I had fretted about the police enforcing the law. And while Arizona Governor Jan Brewer has been called a bigot for signing S.B. 1070, she has struck upon an idea that is long overdue: That state law enforcement should enforce U.S. laws and that in doing so the U.S. can at least slow the flood of illegals entering the country.

In fact, on July 12th azcentral.com wrote: “The upcoming enforcement of SB 1070 has caused many illegal immigrants to flee Arizona.”

It is hard for me to understand why the Obama administration is challenging assistance from local law enforcement when clearly the Federal government needs all the help it can get.

There are as many as 30 million illegal aliens in the U.S. That’s the population of Canada. And no place has been impacted harder than Arizona.

According to the Connecticut Law Tribune, “Three state counties have been lost to violent Mexican drug cartels. More than a thousand attempt to cross the border every day. Between 1996 and 2009, the illegal alien population in Arizona increased 300 percent.”

The CLT goes on to point out that, “In 18 months alone, more than 22,000 people were killed in an ongoing drug war in Mexico near the Arizona border. Thugs are now throwing rocks at the heads of our border patrol agents.”

Yet even as Arizona suffers the highest kidnapping rate in the world outside Mexico City, the Obama administration wants to obstruct Arizona from protecting its own people who are, after all, American citizens.

U.S. News & World Report says there may be method to the Federal government’s madness, with both the Obama administration and the Republican Party, “spending way too much time bowing to the interests of illegal immigrants (who come in all races and colors) and refusing to enforce existing laws or pass new ones limiting immigration to that which improves our environment and our economy.”

Through the Justice Department President Barack Obama declares that S.B. 1070, “illegally intrudes on federal prerogatives,” and further states that Federal law “trumps state statutes.”

Is the State Department serious? After all, if somebody is hijacking an airplane or kidnapping someone across state lines do we worry whether they are arrested by the Feds or the local cops? Of course we don’t. So why then should we worry who is enforcing immigration laws? We should only worry that they are being enforced.

As a person who once feared deportation I am not sure what if any of S.B. 1070 has to do with race or racism. I knew that if the INS caught me I was in fact going back to Canada. It wasn’t like they were going to say, “Oh heck you’re a white guy, we will let you stay.” As far as I could see back then and right now, Federal immigration laws are color blind. It is the Federal government which is blind to America’s needs.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

Is President Obama As Hapless As Herbert Hoover?

“Herbert Hoover is the greatest humanitarian since Jesus Christ.”
The Chicago Tribune, 1928

With all due respect to Oprah Winfrey, she was not the first person to anoint a Presidential candidate as “The Chosen One.” The Chicago political machinery was doing that with regard to the father of the Great Depression—Herbert Hoover—seven decades earlier. Could it be that Oprah was just as wrong about her President? It looks that way.

Is It Live, Or Is It Memorex?
The double dip recession that became the depression of the 1930s is playing out once again. And as my mentor Chip Wood—the geopolitical editor of Personal Liberty Digest™—sometimes points out: “History might not repeat but it certainly hums.”

A whopping 8 million jobs have simply evaporated since the Crash of ’08 despite the more than $3 trillion in stimulus money, most of it courtesy of President Barack Obama. America hasn’t got much bang for the buck when you consider that the official unemployment number is almost 10 percent. And just two days ago 2 million Americans lost their unemployment checks. That number will continue to soar in July while Congress takes its vacation.

Consumer confidence continues to decline while the housing market looks to be heading off a cliff. The national mortgage delinquency rate grew to 9.2 percent in May, up 2.3 percent from a month earlier and almost 8 percent from a year earlier.

Like many Americans Allan H. Meltzer, a professor of economics at Carnegie Mellon University and the author of A History of the Federal Reserve, wanted to believe the President’s assertion during the 2010 State of the Union address that he would grow the economy. However, in the June 30 issue of The Wall Street Journal, Meltzer says that the President has done little to improve things.

“The administration’s stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible.”

Earlier this year The New Republic declared: “Barack Obama, You Remind Me of Herbert Hoover.” “It might seem ludicrous or unfair to compare Obama to one of the most vilified presidents of the last century. But to his contemporaries, Hoover had been the American most suited to be president.”

In fact Henry Ford practically gushed over the Hoover nomination. And yes, you are forgiven if it all sounds a bit familiar.

“The reason we must have a new kind of President is that we are on the threshold of a new kind of world,” said Ford. “(We need a man) who can direct and oversee and referee between all parties and keep them all busy at the main task of creating prosperity which shall be continued and equally distributed throughout the country.”

This comes from the man who once said, “History is bunk.” Perhaps it is not so surprising then that Ford adored Hoover; the man many say was a crucial cog in causing the Great Depression.

A Very Depressing Depression
I heard a lot about the Great Depression because it hit my parents so hard. They were just getting started in life and it changed them in so many ways. But even as I continue to read more on the past I am shocked at how bad things were.

From 1929 to 1933 national income in the United States reduced by half; from $88 billion to $40 billion. Output from U.S. factories fell by half and automobile production fell by 20 percent. By 1934 American steel mills were operating at just 12 percent capacity. In fact, pig iron production fell to its lowest level since 1886.

But the banking crisis is what crushed the spirit of the nation. In 1929, 659 banks failed. In 1930, 1,352 banks failed. And in 1931, 2,294 banks closed their doors.

Deflation was in full swing. Farming, still the centerpiece of the American economy was crushed. In 1930 alone farm income fell from $12 billion to $5 billion. Factories did little better. From 1929 to 1933 factory wages fell by the same totals. U.S. M2 money supply dropped from $47 billion to $32 billion.

At the depths of the downturn 1 million people in New York City were out of work. As for Chicago, there was payback to be had for backing Hoover. Times there were so bad Al Capone’s soup kitchen provided 120,000 free meals in the space of six months.

Double Dipping Dow
Most people associate The Great Depression with 1929—the year of the infamous stock market crash. Yet the worst of the Depression was in 1933. The Dow Jones Industrial Average rebounded smartly after hitting its 1929 low of 195.35 on Nov. 13, 1929. By December 9 it had bounced to 267.56—a gain of nearly 37 percent in less than a month. By April 16, 1930, the Dow had risen to 297.25—a gain of 52 percent from the 1929 lows.

Many investors thought the worst was over and piled in looking to recover losses suffered in the ’29 Crash. They couldn’t have picked a worse time. The Dow collapsed, shattering the 1929 lows. In December of 1930 the Dow finished at 154.45 on Dec. 17, 1930. The ultimate bottom was not hit until 1933 when the Industrial Average closed at 49.68 on February 27.

The Crash of 1929 was triggered by a crisis of credit similar to what we are experiencing now. In fact, one could make the argument that today’s debt implosion is even worse, encompassing not only stocks purchased on margin, but also real estate—both residential and commercial—as well as consumer credit. Credit cards weren’t around in 1929. Neither were adjustable-rate mortgages.

The Bulls claim that stocks always seem to climb a wall of worry. And until a few months ago it just looked as if they might be correct. The Obama stimulus package seemed to erase fears of deflation.

The Dow Industrial Average, which hit 6,440 in March of last year, did make a remarkable recovery. This past March the Dow was back close to 12,000. However, the Dow never did break the 12,000 mark and it has since fallen back to about 10,000. Meanwhile we seem to be slipping into a summer of discontent.

I believe we are at the edge of another depression, an economic collapse that began with the failure of Lehman Brothers.

Of course this is not what was expected to happen. Obama was supposed to usher in a new age of prosperity. Then again the New York Herald Tribune declared that Herbert Hoover’s election: “Marks an epoch in American political history… America stands at the threshold of a new era.”*

Action To Take
Sell equities in anticipation of history repeating itself. Physical gold, blue chip gold shares and a handful of resource stocks will provide protection from the storm. Do not delay in taking action. Summer will provide only temporary reprieve at best. My long-term target for the Dow Jones Industrial Average is 6,000, almost 40 percent lower than where it currently sits.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

* If you want to know about the Great Depression, including its causes, I strongly recommend you pick up a copy of, The Year of the Great Crash, 1929, by William K. Klingaman, 1989, Harper & Row, New York. You can buy a new or used copy of it in hardcover at Amazon.com by clicking on the link above.

The G-20 Pig-out And What It Means For Gold

Listening to President Barack Obama at the Group of 20 summit in Toronto, Canada, last week reminded me a bit of myself. As a person who has gained, lost and then gained back 100 pounds over the past decade, I have given much consideration to the very best time to start a diet. Without a doubt the answer is always: tomorrow.
                     
For nearly 18 months Obama has been on a spending orgy that would make the Roman Emperor Caligula blush. Yet Obama says that the United States and other nations need to cut spending; just not yet, damn it!

"Because durable growth must also include fiscal responsibility,” said Obama after the G-20, “we agreed to balance the need for continued growth in the short term and fiscal sustainability in the medium term." Then the President added: “We can’t all rush to the exits at the same time, so countries that have surpluses should think about how we can spur growth."

In other words, “Of course I will have that piece of cheesecake.”

This is especially true if you not only think the cheesecake isn’t bad for you, but if you have in fact convinced yourself that you just might die without it.

After offering up $7 trillion in spending to re-flate the economy following the Crash of ’08 you might think that the industrialized nations had already bitten off more than they could swallow. This is apparently not so. The G-20 summit concluded with Big Governments showing their still insatiable spending appetites.

As a native born son I can tell you that nobody knows how to borrow and spend better than Canadians. Prime Minister Stephen Harper proved it by urging advanced and developing countries set aside their differences and spend until it hurts.

Harper bragged after the summit ended that the world will adopt a “carefully calibrated” plan that rightly puts growth and jobs first and then tackles market-rattling deficits in a big way.

Harper advocated what he called the, “continued role for ongoing stimulus in the short term,” adding: “The G-20 still has a lot to do to fully entrench the global recovery.”

In their final communiqué the G-20 leaders said that “strengthening the recovery is the key.” Nevertheless the G-20 leaders agreed to cut deficits in half by 2013 and to put government debt loads on a stable or downward track by 2016.

It all sounds a bit like Kirstie Alley at Thanksgiving dinner.

World’s Biggest Loser
And in case you were wondering, nobody has a bigger appetite to spend than Obama. The President says that he fears an austerity program will choke off the global recovery, inviting another crisis. But even he concedes that ballooning American and European deficits will be pared back eventually (just one last box of chocolates… I swear it).

“We are moving in the same direction,” the President said as the summit came to a close. Exactly what direction that is remains unclear, but I for one think it might require an economic liposuction also known as deflation.

Of course that is all down the road. The good news for the U.S. is that the G-20’s six-year window leaves Obama the latitude to front-load stimulus and bring in austerity later. No doubt that will come sometime after the President’s bid for re-election.

Meanwhile, Washington is currently running a $1.4 trillion deficit, or a number which almost totals 11 percent of gross domestic product (GDP). Still the President has said he is determined to keep on spending until we see a permanent economic turnaround. When that will be is anyone’s guess, but one thing is clear: it won’t be easy to stabilize the debt load, much less set it on a downward path. For the 31 members of the Organization for Economic Cooperation and Development, unemployment now stands at 46 million, up some 50 percent since 2007.

Trillions have already been spent trying to resurrect the global economy and if the G-20 meeting is any indication, world governments are about to double-down on their bet. One has to wonder if even John Maynard Keynes—the father of deficit spending—would recognize what is going on now in his name. Perhaps Keynes would fear that runaway deficits threaten an even worse financial crisis.

Eventually deficits become counterproductive. They cause concern and eventually fear in the credit markets. This will invariably lead to skyrocketing interest rates and despite government’s best intentions, an economic collapse.

Germany—a country whose people are known for their boorish appetites—is urging caution when it comes to more government spending. At the G-20 summit German Chancellor Angela Merkel warned: “It’s not about growth at any price, it’s about sustainable growth.”

German Finance Minister Wolfgang Schaeuble added: “Nobody can seriously dispute that excessive public debts, not only in Europe, are one of the main causes of the crisis.”

And German Economy Minister Rainer Bruederle threw in his two euro-cents, saying that the U.S. and Europe need to “urgently” slash spending.

Fat chance I say. A doctor at an obese clinic is more likely to stop fat kids tumbling into an abandoned Twinkie truck than the German Bundestag will be at reining in the spending of other G-20 members.

In fact President Obama has staked his reputation and more importantly, his re-election, on more stimulus spending.

The Wall Street Journal writes that the Obama administration is insisting on new stimulus measures—”convincing evidence that they too recognize that the earlier measures failed.

“The administration’s stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible.”

The latest market evidence says that the WSJ is spot on. Consumer confidence is anything but confident. The Dow Industrials are on the edge of a cliff—perched below 10,000 points, while the S&P 500 is at its lowest point since the dark days of October 2009.

And don’t look for any help from our so-called friends at the Federal Reserve. The central bank has already cut the cost of money as close to zero as it can go. In fact, the yield on 10-year Treasury notes has fallen to less than 3 percent, one of the few times in our history.

All in all it’s enough to drive a fella to run out to Wendy’s and buy up Baconators.

But there is something out there that would soothe us a whole lot better than grease. I am talking about gold.

Bullion prices have risen almost 50 percent since I first recommended it to you on this site last summer—even in the wake of last week’s big correction that took place mostly on profit taking and some fears of deflation. Still, I am convinced that Washington’s next flood of money will push the Midas metal higher—much higher—up to $1,800 per ounce within the next year. That makes bullion at $1,200 a bargain.

Most importantly, gold looks to be the only dependable investment out there. Government policies will soon unleash a tidal wave of inflation which will rock the stock and bond markets as well as the banks themselves. The only profitable place, in fact the only sensible place to be fully invested right now is in gold.

I started out by talking about diets. I want to finish up by telling you something my dad said to me about gardening: “The best time to plant a tree was 20 years ago. The second best time is right now.”

Of course it would have been better to have bought more gold sooner. But let’s do the next best thing and buy some today.

Action To Take
Sell all Big Board stocks and all bond instruments this very day and use the funds to buy physical gold. I recommend American Gold Eagles, Canadian Maple Leafs and African Krugerrands. I prefer these because they are stamped in English, have their gold content stamped on them, come in convenient, well-known sizes (1-ounce, half-ounce, quarter-ounce and one-tenth-ounce) and sell at small premiums over the value of their gold content.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

Paradise Lost: For The Gulf Coast And The United States

“So many and so various laws are giv’n;
So many laws argue so many sins.” –Paradise Lost, John Milton, 1667

In the epic poem Paradise Lost, Adam and Eve have taken the forbidden fruit and God is asking Adam why. As in Genesis, Adam is passing the buck, telling God that this woman whom He made gave him the fruit. Adam asks God how such evil could have ever been expected from one so lovely.

God tells Adam that the mistake is Adam’s not Eve’s; that Adam was to look out for Eve. God points out that just before Eve met the serpent Adam had told her that they should stick together because the Archangel Raphael had warned them of the serpent. Yet Adam let Eve stray away to meet her fate, the consequences of which changed the world.

And in the end God holds Adam accountable for the loss of paradise.

Obama’s Blame Game
Just as Adam did with Eve, President Barack Obama is shifting as much blame as he can onto BP.

According to The Daily Telegraph, BP CEO Tony Hayward’s grilling looked like a kangaroo court. He had to listen to a litany of accusations from United States lawmakers before he was able to say a single word in his own defense: “As far as the members were concerned, he was there to take the blame, whether or not there were mitigating circumstances, or companies other than BP should be sharing culpability. It was as though, in a criminal trial, the victim’s statements were being read out before the verdict had been passed, although that was a foregone conclusion—a resounding ‘guilty.’ A kangaroo court would have offered a fairer hearing.”

What The Daily Telegraph doesn’t understand is that the Congressional inquisition of BP and Big Oil was never intended to be fair. The goal was to keep the elected elites in office and increase their influence.

Just as Adam thought Eve was a perfect foil, so too, does President Obama think that of BP. And he is right. Last week White House spokesman Bill Burton mocked BP’s CEO and all-around English twit Hayward for attending a luxury yacht race on crystal waters while the Gulf of Mexico is turning into the Black Sea.

Burton opined that Hayward should take part in the cleanup operations in the Gulf of Mexico with the $400,000 yacht he co-owns.

"You know, look, if Tony Hayward wants to put a skimmer on that yacht and bring it down to the Gulf, we’d be happy to have his help," Burton said to a chorus of yuck-yucks in the White House briefing room.

It is almost beyond my comprehension that BP could have such bad PR, from Hayward saying he “wants his life back,” to BP Chairman Carl-Henric Svanberg calling the people of the Gulf Coast, “small people.” But it seems the people of the Gulf are small people, not just to BP but to Obama as well.

The same weekend that Hayward was skipping his yacht, Obama was walking the links. Even as tar balls washed up on Destin, Fort Walton and Panama City Beach, Obama was busy hitting golf balls.

Just as Adam was quick to condemn Eve, the Obama White House sees no hypocrisy in pointing out BP’s sins while denying their own.

Caught Between The Devil And The Deep Blue Sea
One estimate reported by CNN says the catastrophe of the Deepwater Horizon platform spill could cost just the Florida Gulf Coast alone 200,000 jobs before it is all over. Yet the cost on all of us is only starting to climb. Seafood is becoming more expensive and oil prices have resumed their climb towards $80 per barrel.

It is important to note that before the explosion of the Deepwater Horizon, the Gulf of Mexico was producing about 1.6 million barrels of oil per day. That is almost a third of domestic production.

If the Obama administration follows through with an overall ban on offshore drilling in the Gulf of Mexico, and further tightens the screws on exploration in Alaska, the consequences of this crisis will have a devastating affect on our oil needs.

Last week a New Orleans Federal judge lifted the six-month moratorium on deepwater drilling imposed by the President, saying: “The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium.”

However Interior Secretary Kenneth Salazar responded that he will issue a new order on deepwater offshore oil drilling.

“We see clear evidence every day, as oil spills from BP’s well, of the need for a pause on deepwater drilling,” Salazar said. “Based on this ever-growing evidence, I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities.”

Expect the White House to throw its full weight behind suspension of deep water drilling. And that is bad news for the nation which desperately needs oil from the Gulf of Mexico. Without it we will be left begging OPEC.

Does BO Have A Backdoor Deal With BP?
Meanwhile BP has kicked in $20 billion to pay for their mistake. That led Congressman Joe Barton (R-Texas) to apologize to BP saying that the $20 billion escrow fund was a “shakedown” by the White House.

I think Barton was not only ignorant of the political winds but was dead wrong. I believe that BP and the White House made a deal for the Federal government to funnel that money back to BP in the back door. One of just a handful of ways for this to work would be to give BP sweet deals on future leases.

In the end it will cost the taxpayers more than it will cost BP. Still, Obama probably considers the price tag a bargain if it can turn the nation Green.

“The motivation for allowing the well to blow and prolonging the crisis isn’t merely financial, it’s political too,” writes Prison Planet. “The motto for the people who pull the strings inside the Obama administration, people like Rahm Emanuel and Hillary Clinton is to ‘never let a good crisis go to waste’—and Obama himself has certainly taken that to heart over the course of the last two months.”

Prison Planet speculates that Obama and BP are joined at the hip: “The Obama administration has aggressively exploited the BP oil spill in the Gulf of Mexico to manufacture an artificial urgency in an effort to speed the passage of cap and trade in pursuit of a ‘green economy,’ an agenda firmly supported by the transnational oil corporations Obama is claiming to be reigning in. British Petroleum is one of the founding members of the cap and trade lobby, and has consistently lobbied for greenhouse gas restraints… and subsidies for oil pipelines, solar panels, natural gas and bio-fuels.”

Prison Planet concludes that BP stands to profit to the tune of billions.

Unfortunately what is good for BP is not good for the U.S. Some economic studies have indicated that going Green costs 2.2 jobs for every new job created.

In the Gulf, not only are shores being infected with a killer sludge, but now the Federal government is putting a moratorium on drilling. At stake are hundreds of thousands of jobs for people who have neither the time nor the money to go to yacht races or country clubs. It is their, and even our, paradise lost.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

BP: Blame Petroleum

Birds covered in oil make a great advertisement for renewable energy.”
The Financial Times, June 16, 2010.

As I watched President Barack Obama’s Oval Office speech last weekin which he offered up empty buckets of hopeI reflected on the Greens and the crisis their President is muddling through. Like a cop, there never seems to be a Green around when you need one.

Certainly the Save-The-Earth Squadron has been noticeably silent on the Gulf oil spill. In fact there hasn’t been a peep from the animal rights activists, even in the face of CNN’s continuous coverage of oil stricken pelicans.

According to Politico, “As the greatest environmental catastrophe in U.S. history has played out on Obama’s watch, the environmental movement has essentially given him a passall but refusing to unleash any vocal criticism against the president even as the public has grown more frustrated by Obama’s performance.”

In fact, environmental groups sacrificed some seals to run a full page ad in The Washington Post earlier this month. Incredibly, the ad does not fault Obama over the ecological catastrophe. In fact it thanked him for putting on hold an Alaska drilling project. “We deeply appreciate your decision…” the ad tells Obama.

It gets even more surreal.

“President Obama is the best environmental president we’ve had since Teddy Roosevelt,” Sierra Club chairman Carl Pope told the Bangor Daily News earlier this month. “He obviously did not take the crisis in the Minerals Management Service adequately seriously, that’s clear. But his agencies have done a phenomenally good job.”

Good job? Can you imagine if this disaster belonged to John McCain and Sarah Palin? The Greens would be marching on Washington with ropes in hand. So what is going on?

I think the answer is pretty easy: Greens are not outraged by what is happening in the Gulf of Mexico because it is a means to and end. The end being a President that wants to reshape the U.S. economy right down to the last solar panel.

“These guys have bet the farm on this administration,” said Ted Nordhaus, chairman of an environmental think-tank, the Breakthrough Institute. “There has been a real hesitancy to criticize this administration out of a sense that they’re kind of the only game in town. These guys are so beholden to this administration to move their agenda that I think they’re unwilling to criticize them.”

Even as Obama compares the oil spill to 9/11, the silence of the environmentalists is deafening. It is all part of the Green’s strategy to paint petroleum as the enemy. And Obama is marching lockstep with them.

“In the same way that our view of our vulnerabilities and our foreign policy was shaped profoundly by 9/11,” said the President, “I think this disaster is going to shape how we think about the environment and energy for many years to come.”

Obama is using the catastrophe to push forward climate and energy reform. These are not my conclusions. This is what the President has vowed: “(We will) move forward in a bold way in a direction that finally gives us the kind of future-oriented… visionary energy policy that we so vitally need and has been absent for so long.

“One of the biggest leadership challenges for me going forward is going to be to make sure that we draw the right lessons from this disaster,” the President said.

Obama said he did not know if America would shift from an oil-based economy in his lifetime, however he added that now was the time to “start making that transition.”

Obama’s comments and the Federal government’s need to look like it is doing something about the oil spill led the CEOs from Big Oil to Capitol Hill last week with promises to reform while pleading their case for petroleum.

The executives of the five biggest oil companies operating in the U.S. faced accusations that the Deep Horizon oil spill is somehow the fault of all of them. The bosses of BP, Shell, ExxonMobil, Chevron and ConocoPhillips delved into the safety of offshore oil exploration and drilling and even had to muster arguments as to why oil is a necessity to the American economy.

Woulda, Coulda, Shoulda
I can see why BP was grilled by Congress; but I am baffled why the other Big Four were called before the House Energy and Commerce subcommittee.

"This blowout happened at a BP well,” declared Congressman Henry Waxman (D-Calif.), “but, if it occurred at an ExxonMobil or Chevron well, they wouldn’t have been any more prepared to respond.”

Excuse me Mr. Waxman, but it didn’t occur at an ExxonMobil or a Chevron well. It happened at a BP well, and while we are on the subject let’s talk about why it happened. It happened because the available terra firma of the U.S. has been over drilled, over pumped and sucked dry.

Still Chairman Waxman and the rest of the committee have Big Oil back-peddling. ConocoPhillips CEO James Mulva looked like a kindergarten kid ready to cry as he explained that the Federal government’s energy policy must "recognize that we have a robust oil and gas industry that generates vital U.S. jobs, as well as substantial state and Federal revenue from tax and royalty payments."

Obama’s Testing The Waters
Common sense suggests that Mulva and the rest of the non-BP executives should have told Congress to shove-off, that they are in fact keeping America’s economy afloat and, oh by the way, providing you with transportation home. Big Oil isn’t doing this. Instead they are allowing themselves to become whipping boys for Must See Congressional TV. That tells me that something bigger is afoot. Exactly what that is is being revealed by Obama.

From the Oval Office Obama said: “The time to embrace a clean energy future is now.”

It just so happens, writes The Financial Times, that wind turbine makers and solar panel companies are ramping up their pressure on Congress and getting a sympathetic ear.

A member of the Clinton White House (Bill’s not Hillary’s) told The Times that renewable companies had to seize the moment quickly. "Most events do not engage people’s heartstrings and neurons together. This one does," he said, adding: "It cries out for the President to push the Senate to act this year."

First come the heartstrings then come the purse strings. By the time this thing finishes up the environmentalists will be tickled silly. For them the catastrophe in the Gulf of Mexico is a perfect storma stupendous way for the Greens to collect a lot of green from ordinary people like you and me.

Action To Take: The rant against Big Oil is mostly for show. However, BP (NYSE: BP, $29.58) is a mess and it is only going to get worse.

Chart

Fortunately we sold BP on May 5 and recommended you do the same in A Crude Coincidence—The Gulf Oil Spill Works Out Well For The Greens. BP traded that day at $52 per share. At this writing it is trading under $30 per share. If for some reason you still haven’t sold your shares, do so now. Obama and the Big Green Machine may bankrupt BP.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold

Between A Rock And A Slippery Place

It’s taken the biggest environmental crisis in American history to drive home a simple point—Washington’s energy policy has been reckless and could yet be the ruination of this once great United States.

The latest polls show that 38 percent of Americans approve of President Obama’s handling of the Gulf oil crisis. Which makes one wonder, what would it take for these people not to support the President?

Of course there is the latest success that appears to be working almost seamlessly above the Deep Horizon oil well 5,000 feet below the Gulf of Mexico. The containment dome is now trapping more than 15,000 barrels per day of spewing oil, up from just 6,000 barrels per day when it was first placed over the ruptured hole. That’s amazing; the Obama administration said that the ruptured well was only leaking 5,000 barrels per day to begin with!

The President has promised that the U.S. will bounce back from this cataclysm. “We will get through this crisis,” said the President, echoing the words of President Carter who declared that he would bring the American hostages home from Iran, even as the daily calendar on that catastrophe clicked forward endlessly. Will this one reach day 100, day 150, perhaps even day 200?

Better Than Ever
Last week Obama said that the people of the Gulf coast "are going to need help from the entire country," but that he is determined to see that the region will be restored to a condition better than it was before the BP well blew up.

Better? That is like saying Vietnam is better after being raked with Agent Orange?

It is estimated that BP is on the hook for $14 billion but that will never make things better. Not for them (The BP brand has been tarnished for decades); not for the wildlife and certainly not for the people along the coast that make their living from those waters. And that is if we don’t get another “incident.”

But wait! The Deepwater Horizon is not the only well spewing oil into the Gulf of Mexico. According to a Federal document a nearby drilling rig, the Ocean Saratoga, has been leaking since at least April 30. While much smaller than the BP spill it has nevertheless produced a 10-mile-long slick that can be seen on satellite images. Diamond Offshore, which owns the drilling rig, said that they could not comment on the ongoing spill but it appears as if a boat is putting dispersants on the slick.

It all adds up to one thing—even after BP antes up billions you can bet the Federal government is going to be on the hook for a substantial part of the tab. The President promises that he is going to squeeze every penny for the cost of this problem out of BP but Obama has a pretty poor record when it comes to holding companies accountable for their mistakes. Just ask bank executives who threw the economy into a tailspin then collected billions in bailouts and then gave themselves millions in bonuses.

Regardless of the cost, the Gulf of Mexico is not the real problem. The 2 million barrels of crude oil that will have spilled into the Gulf of Mexico is a symptom of a much bigger problem; one that is getting progressively worse. I am talking about America’s unrequited addiction to oil which has been drilled dry within our borders.

The U.S. is now pumping less than 5 million barrels of oil per day. We pumped almost twice that much oil 30 years ago during the first Iranian crisis.

That leaves the U.S. dependent on harvesting petroleum wherever it can, including 5,000 feet deep in the Gulf of Mexico. It also leaves the U.S. importing more than two out of every three barrels we burn, much of that from countries that hate us.

Oil discoveries have been declining since 1964

As the graph above shows, the discovery rate for oil in the United States has fallen off a cliff. The U.S. is tapped out and drilled out. You have to go back to the 1920s to find a decade where less oil was discovered in the U.S. than will be discovered this decade. In case you are wondering, in 1920 there were 7.5 million automobiles in the U.S. Today there are about 250 million registered vehicles on the road.

Driven To Disaster
“Over the last 25 years, opportunities to head off the current crisis were ignored, missed or deliberately blocked, according to analysts, politicians and veterans of the oil and automobile industries,” wrote The New York Times.

The Times pointed out that as politicians heatedly debate opening new regions to drilling, corralling energy speculators, or starting an Apollo-like effort to find renewable energy supplies, analysts say the real source of the problem is closer to home. In fact, it’s parked in our driveways.

A whopping 70 percent of the 21 million barrels of oil the U.S. consumes every day goes for transportation, with the bulk of that burned by individual drivers. Americans’ daily use of oil is nearly twice the combined consumption of the Chinese and Indians.

Our nation’s dependence on imported oil has only kept growing in recent years, undermining the trade balance and creating a perfect storm for environmental disasters like the one happening in the Gulf of Mexico.

From Gaza To The Gulf Of Mexico
There has been no summer lull for the Obama administration. Consider:

  • June is turning out to be one of the bloodiest months in the Afghan war.
  • More than seven years after the U.S.-led invasion of the country in March 2003, bombings and shootings still remain common across Iraq.
  • Much of the world is outraged about events in Gaza, which may or may not have been provoked by America’s largest aircraft carrier also known as Israel.

The common denominator between these events and the Gulf spill is oil. If not for oil and America’s strategic need to secure the world’s last rich pools—most of which lay under Arab lands—Washington could pull its armies out of the Middle East, be an honest broker of peace between Israel and her Arab neighbors. That would not only save American lives but also hundreds of billions of dollars that are being spent on a foreign occupation. It would also restore the reputation of the U.S. which would help usher in a new age of prosperity.

But don’t expect peace to break out anytime soon. The President has a lot to say about the need to go Green, but there are two realities:

  • The technologies needed to replace oil are not here nor are they on the horizon.
  • The only Green that this President seems to understand is the kind of green that BP gave him when he was running for office. After all Obama was the largest recipient of BP campaign contributions.

It seems that if you give the President enough mulla, he is willing to let all of us deal with the Mullahs.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

It’s The Greens That Sowed The Seeds Of The Gulf Oil Disaster

To the Greens I have six words regarding the catastrophe in the Gulf of Mexico: Your President, your policies, your fault.

After all Barack Obama was the progressive Green candidate, a thinker who could steer the course in the 21st Century. Oprah anointed then-Senator Obama as "The Chosen One". To Oprah and a great majority of Liberals, Obama was the anti-Dubya; a larger than life leader with savior qualities that would lead us to peace and overcome all obstacles.

So far, so bad. America’s endgame for Iraq is in question because of increasing levels of Shiite-Sunni violence. Afghanistan looks more untenable all the time. The recovery is sluggish and healthcare has been rammed down the throats of the American people. Now we face an enormous crisis in the Gulf of Mexico. It’s been almost two months since an explosion sent crude pumping into the Gulf and the Obama administration has shown an astonishing lack of leadership.

David Gergen, a centrist political commentator and advisor to four Presidents, has pointed out a basic lack of leadership from the Obama administration: “Ultimately it is not the responsibility of BP or any other company to protect American interests but the responsibility of the Federal government.”

While on Anderson Cooper 360° on CNN, Gergen added: “If our government had fought World War II like the way we’re fighting the oil spill, there’s a good chance many of us would be speaking German today.”

Gergen is hardly alone in the criticism. Former Secretary of State Colin Powell, the general who endorsed Obama in 2008, says the President has been far too slow in asserting leadership over the Gulf spill and the time has come for a "comprehensive and total attack" on the problem.

So here it is, a news flash to Oprah and the Liberals: When it comes to leadership, Barack Obama is a lot more Herbert Hoover than he is Harry Truman, regardless of how many “the buck stops here” speeches Obama chooses to give. Little wonder that a recent USA Today/Gallup survey showed that six out of 10 Americans believe the Federal government is doing a “poor” or “very poor” job handling the spill.

The President bristles at criticism that the Gulf crisis is his Katrina. Even in the face of the failure of BP to stem the spill with its top-kill option, Obama was defending the Federal government’s record and promised aggressive action to ensure future drilling is done safely. He has extended a moratorium on new exploration drilling in the Gulf and announced that 33 current projects in the deep water will be suspended along with two permits for exploration wells in the Beaufort Sea off Alaska.

“As we continue our response effort, we’re also moving quickly on steps to ensure that a catastrophe like this never happens again,” he said. “I’ve said before that producing oil here in America is an essential part of our overall energy strategy. But all drilling must be safe.”

Respectfully Mr. President, can we not worry about future leaks until we fix this one? After all, the BP gusher has well surpassed the 1989 Exxon spill in Alaska as the largest ever in the United States. Crude has continued to spew for 52 days after it began with a rig explosion that killed 11 people. Every effort to stop the spill has so far proved unsuccessful.

When I was a boy on the farm we didn’t worry about the horses that might get out; we scurried about to catch the horse that had gotten out. And right now there is a big and nasty animal rolling about the Gulf presenting a clear and present danger to the United States. Meanwhile we are getting the Green lecture—how to stop future oil spills. Which brings me to my second news flash—it is Green policies that got us into this mess in the first place.

The Greens Made Us Drill So Deep
Last January I wrote about the problems and costs of drilling for oil at such extraordinary depths as those being worked off the coast of Louisiana. It was called The Deep Truth About Oil and the Gulf of Mexico.

In that column I said: “Chevron has spent 10 years and a whopping $2.7 billion for this project. This is the cost of running a drill and casing more than 30,000 feet through earth and ocean, the same distance that an airliner flies above the earth. Chevron will spend billions more and in the end, even with all the high-tech in the world, there are no guarantees that its deep-water experiment will hit pay-dirt. In fact there is less than a 50/50 chance that Chevron’s latest deep-sea adventure will yield anything. Still Chevron and their brethren don’t have a choice.

“The Wall Street Journal sums up the situation: ‘Big easily tapped oil fields close to shore have become off-limits.’”

Fast forward a few months and we saw the real danger in not drilling in shallow waters and places like the Arctic National Wildlife Refuge (ANWR). We see what happens when Big Oil is forced to drill in 5,000 feet or more of seawater; depths at which accidents can’t be easily repaired.

I’ve been talking to my friends in the Alberta oil patch about this for weeks. But the problem didn’t see the light of day until the May 29 episode of Meet the Press. There Host David Gregory asked White House Energy Adviser Carol Browner if in response to the Gulf Coast oil spill, America should start drilling in ANWR.

Gregory asked: "Is the problem that we’re drilling in water that’s just too deep?" 

Gregory continued: "Should you (the White House) even rethink your own approach to the environment to say… maybe in the Arctic Wildlife Reserve; we ought to be drilling there… we ought to be going into shallower waters so that this can be done more safely?"

Incredibly Gregory wasn’t given an answer. But even I know this simple truth—that we need to be drilling in shallow water and places like ANWR. Places where accidents can be corrected.

Don’t expect any leadership on this from the President even though his decision to suspend deepwater drilling off the U.S. coast will have consequences.

“An extended moratorium on safely producing our oil and natural gas resources from the Gulf of Mexico would create a moratorium on economic growth and job creation,” said Jack Gerard, chief executive of the American petroleum Institute.

It’s worth noting that the Gulf of Mexico currently produces about 1.6 million barrels of oil per day—an amount larger than the output of Canada’s oil sands. It was expected to grow to 1.9 million barrels by 2025. But the jury is out on this until Obama—"The Chosen One"—chooses leadership over politics and stops this catastrophe.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

North Korea—Brace For Another Phony War

“What difference does it make if it’s true? If it’s a story and it breaks, they’re gonna run with it.”Wag the Dog

Upset by the Energizer Oil Spill, the healthcare bill or our economic ills? Don’t worry; you might not have to fret much longer. Not because anybody is going to fix these problems. Rather because President Barack Obama might be seeding a much bigger problem.

Last week Obama announced United States troops stationed in the Korean Peninsula were going to a war footing. The move came as South Korea announced it was cutting off all trade with the North in retaliation for what it claims is the deliberate sinking of its warship the Cheonan in March. The government in Seoul vowed “immediate” retaliation if North Korea attempted further provocations.

According to White House spokesman Robert Gibbs, “U.S. support for South Korea’s defense is unequivocal, and the President has directed his military commanders to coordinate closely with their [South Korean] counterparts to ensure readiness and to deter future aggression.”

It has even been “leaked” that because of the urgency of the “crisis”, the U.S. has deployed its most advanced air-superiority fighter, the Raptor F-22, to the Korean Peninsula.

Excuse this writer for thinking it all sounds a bit too much like the movie Wag the Dog. In that film a spin doctor sees his President’s polls falling so he employs a Hollywood director to construct a fake war with Albania. It is all an attempt to distract the media and the people.

Of course what is happening in Korea may have nothing to do with growing dissatisfaction over Obama’s handling of the oil spill, the recent 10 percent decline in the Dow Jones Industrial Average or the European debt crisis. North Korea may in fact be a clear and present danger to our national security. But we should consider that the “crisis” with North Korea is a diversion from growing success for the Tea Party and growing criticism of the President. In fact there is precedent.

Gulf Of Tonkin
Pyongyang has denied it torpedoed the Cheonan near the Korean maritime border killing 46 sailors. And it has accused South Korea of trespassing in its waters, saying that the South has sent “dozens of warships” into its waters these past few weeks in "a deliberate provocation aimed to spark off another military conflict."

I am not stupid enough to believe what comes from this reckless government and its midget dictator Kim Jong-il. Then again I am not stupid enough to believe everything the Federal government tells me either. If you are my age or older you might remember President Johnson and the Gulf of Tonkin.

That military crisis was ushered to an unsuspecting public on Aug. 5, 1964, with a headline in The Washington Post that read: “American Planes Hit North Vietnam After Second Attack on Our Destroyers; Move Taken to Halt New Aggression.” That same day The New York Times reported: “President Johnson has ordered retaliatory action against gunboats and ‘certain supporting facilities in North Vietnam’ after renewed attacks against American destroyers in the Gulf of Tonkin.”

According to Fairness and Accuracy in Reporting, There never was a “second attack” by North Vietnam. No “renewed attacks against American destroyers.” Instead these official lies told from the President on down took hold and opened the floodgates for the bloody and useless Vietnam war; a conflict that originally had a huge backing by the American public and swept LBJ into office with the greatest percentage of the total popular vote (61 percent) ever attained by a Presidential candidate.

The same LBJ who just three months before the election had ordered U.S. bombers to "retaliate" for a North Vietnamese torpedo attack; and attack that never happened. In fact a year later LBJ joked: “For all I know, our Navy was shooting at whales out there.” All very funny except for the terrible cost in blood and money that the Vietnam conflict inflicted. You notice I don’t use the word “war” because the U.S.  didn’t declare war, not then and not in the nearly half century since.

Instead Congress passed the Southeast Asia Resolution (the Gulf of Tonkin Resolution) backing the President in taking “all necessary measures to repel any armed attack against the forces of the United States and to prevent further aggression.” On Aug. 10—less than a week after the fabricated fight—Johnson signed the resolution. There were only two dissenting votes in the Senate and not one in the House.

The Uncensored War, a book by Daniel Hallin, indicts the press over Vietnam.* Hallin points out that the media had “a great deal of information available which contradicted the official account of Tonkin Gulf events; it simply wasn’t used.” Just the day before the first incident Hanoi had protested the attacks on its territory by Laotian aircraft and South Vietnamese gunboats.

What’s more, wrote Hallin, “It was generally known that ‘covert’ operations against North Vietnam, carried out by South Vietnamese forces with U.S. support and direction, had been going on for some time.”

Ancient history you say? Not if you count Saddam Hussein and those weapons of mass destruction that never did turn up. That fairy tale gave us $1 trillion conflict with Iraq and a resounding re-election of another incumbent President.

The bottom line is I won’t be surprised if this fearless President stirs the nation into action and gets many of us ready at the ramparts in the face of a foreign horde. It is what General Douglas MacArthur warned us of.

“Talk of imminent threat to our national security through the application of external force is pure nonsense,” said the General in 1951 adding: “Our threat is from the insidious forces working from within which have already so drastically altered the character of our free institutions—those institutions we proudly called the American way of life.”

MacArthur knew what it took to wage and win a real war. He also learned the hard way the politics and economics involved in a modern “conflict”… the kind of conflicts the U.S. invariably falls into when the nation’s economic or political woes grow out of control.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

*Footnote: The Uncensored War: The Media and Vietnam, Daniel C. Hallin, New York, Oxford University Press, 1986.

Obama’s Big Fat Greek Bailout

“It was built against the will of the immortal gods, and so it did not last for long.” Homer, The Iliad

The youngsters that run Wall Street know a lot more about Homer Simpson than they do the Greek poet. But in the wake of riots in Greece and stock market gyrations at home, we may all soon be in for a full fledged tragedy of epic proportions.

The $1 trillion bailout by the International Monetary Fund (IMF) and Europe to stave off a Greek debt default is just the latest attempt by Big Government to defeat deflation. But the soaring price of gold shows that this latest rescue is mired with problems.

Consider the fact that even the strongest of the rescuers are bleeding debt. Germany, once the hero of fiscal policy in Europe, has seen government debt rise to a whopping 80 percent of its gross domestic product (GDP). Germany is far stronger than the other weak sisters that make up the euro—Spain, Portugal and Italy.

It looks as if the $1 trillion bailout to Greece may not have stabilized global stock markets and it certainly has not arrested the decline of the euro. Last week The New York Times reported that, “Fear in the financial markets is building again, this time over worries that the Continent’s biggest banks face strains that will hobble European economies.”

Greece is the latest domino in a continuing debt crisis that began with the implosion of Lehman Brothers in 2008. Greece is just another link in a very weak chain. In fact, the IMF warns that “high levels of public indebtedness could weigh on economic growth for years.”

Borrowing Against All Of Our Tomorrows
The world’s budget deficit as a percentage of GDP now stands at 6 percent, up from less than 1 percent before the financial crisis. If public debt is not lowered back to pre-crisis levels, says the IMF, economic growth could decline by half a percentage point annually. That is bad for the world and bad for the United States which is just barely clinging to an economic recovery; a recovery built on cheap money. But how long money will stay cheap is anyone’s guess.

In the not too distant future the U.S. dollar, once the Zeus of all currencies, may topple from the mountain top. Greece has a budget deficit of 13.6 percent of its GDP. Meanwhile the U.S. has a budget deficit of 9.3 percent, and that’s only for this year. In the coming years America’s deficit could easily exceed Greece’s number.

Furthermore, Greece’s national debt now totals 115 percent of its GDP. U.S. national debt totals “only” 85 percent of GDP, but it is expected to reach 140 percent of GDP in the next two decades.

But what the Mexican debt crisis taught us in the 1980s and what Greece is teaching us now is that the bond markets will never allow the U.S. to reach its debt targets.

According to Dr. Edward Yardeni, president of Yardeni Research, "There’s a tremendous clash between the bond vigilantes on one side and reckless governments on the other. The bond vigilantes are trying to establish some fiscal and monetary law and order."

You might recall Yardeni from the 1980s when he correctly predicted the Latin debt bomb, the explosion which helped trigger the 1987 stock market crash. Three decades ago Yardeni pointed out that, "If the fiscal and monetary authorities won’t regulate the economy, the bond investor will." Like Homer’s Cassandra, Yardeni has a talent for correctly predicting tragedies but is cursed because no one will believe him.

Just how bad is this crisis which was spawned in Greece, the cradle of learning and democracy? According to Citigroup’s top economist, Willem Buiter, with the exception of wartime, “the public finances in the majority of advanced industrial countries are in a worse state today than at any time since the industrial revolution. Restoring fiscal balance will be a drag on growth for years to come.”

Still, the Obama administration and the Federal Reserve continue to believe they can engineer yet another bailout. In fact, the Fed has opened up new lines of credit to the European Central Bank as part of the European rescue package.

“We didn’t do so out of any special love for Europe,” said Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis. “We’re American policy makers, and we make decisions to keep the American economy strong.” Yet the Fed president admits that the liquidity problems abroad could soon haunt U.S. financial markets and the recovery itself.

The Federal Reserve and Federal government have already borrowed trillions of dollars to derail the wave of deflation that began in early 2008. To do that and to spark a recovery the Fed pushed short-term interest rates towards zero, the lowest levels America has seen since the 1930s. In other words the U.S. government has shot its bolt. The U.S. simply can’t hit the “re-flate” button again without a major outcry from the bond market.

Gold On Record Run
The knee-jerk reaction from the euro crisis has been for money to go into U.S. Treasuries. But the chart below shows the monumental increase in 10-year Treasury bond yields since the beginning of 2009. Investors have demanded a higher return from Uncle Sam as the Obama administration and the Federal Reserve have been hell-bent on bailing out the U.S. economy with trillions of new dollars.

10-Year Treasury Yield

U.S. loans to buoy European central banks will only accelerate the bond markets woes, and with rising interest rates on the horizon, we can anticipate a bear market. The computer-glitch stock market meltdown that happened earlier this month portends to an American tragedy.

With the euro at four-year lows one might be expecting the greenback to soar. Instead there has been only modest strength in the dollar and record highs for gold. At this writing London gold is trading just under $1,200 per ounce. In November 2008, London gold was $713.50, so the Midas metal has had quite a run since then. In fact gold was $810 when I first recommended it to you last August. Still I believe gold is headed much higher.

Action To Take
Expect short-term strength in the U.S. Treasury market as we go into summer. If you own bonds, use this rally to liquidate them. Higher interest rates are looming and so is a bond market meltdown. Meanwhile, continue to accumulate physical gold. I think $1,500 gold is a realistic target by the end of this year.

Yours for real wealth and good health,

John Myers
Myers’ Energy and Gold Report

P.S.—I thought the quote at the top by Homer is applicable to the U.S. dollar. I am interested to see if you agree.
—JM

Supreme Injustice

“Presidents come and go, but the Supreme Court goes on forever.” President William Howard Taft

President Barack Obama is covering all the bases when it comes to forming his Supreme Court, an institution which will leave his stamp on America long after he has left office.

Gay rights activists are quick to laud the President’s latest pick for the high court, Solicitor General Elena Kagan. The nomination of Kagan comes one year after Obama’s first selection for the court, Sonia Maria Sotomayor. Latinos loudly applauded that nomination. Gays are downright giddy over Obama’s decision to replace John Paul Stevens with Kagan.

Kevin Cathcart, Lambda Legal Defense and Education Fund’s executive director, believes Kagan holds “a strong position” in opposing the military’s ban on gays.

During her confirmation as solicitor general last year it was revealed that Kagen had tried to bar military recruiters from the campus of Harvard Law School while she was dean. Even though Kagan was part of the Clinton administration she was never a fan of Clinton’s policy of “Don’t ask, don’t tell.” It seems that this academic nominee (she has never been a judge and she has only practiced law for two years) believes that being openly gay is good, even if it impedes national security as many in the armed forces believe.

Kagan told the Judiciary Committee last year that in her view, “the exclusion of individuals from basic economic, civic, and political opportunities of our society on the basis of race, nationality, sex, religion, and sexual orientation (is injust).”

With control of 59 votes in the Senate, Democrats should be able to win confirmation. However, if all 41 Republicans vote together, they could block a vote with a filibuster.

Joe Solmonese, Human Rights Campaign president, said Kagan’s selection fulfills Obama’s promise to promote “diversity” on the court. There can be little doubt of that. Last week The Washington Post asked in a headline: “Can men still be appointed to the Supreme Court?”

If we assume that the pool of possible nominations includes equal numbers of equally qualified men and women, then the nomination of two women consecutively has a one in four chance of occurring. But the kicker for Kagan getting nominated is her close personal relationship with the President. In fact Obama introduced the former Harvard Law School dean as "my friend."

"Elena is widely regarded as one of the nation’s foremost legal minds,” Obama said. “She’s an acclaimed legal scholar with a rich understanding of Constitutional law. She is a former White House aide, with a life-long commitment to public service and a firm grasp of the nexus and boundaries between our three branches of government."

I don’t know what having a firm grasp on the nexus and boundaries means, but it sounds like something that would be bandied about at a Mensa meeting. And while I will never be invited to that group of geniuses, I am smart enough to understand that when it comes to consolidating power, Obama resembles leaders from Caesar Chavez to Fidel Castro; friends come first.

The never-married 50-year-old Kagan is not only a close friend to the President but also shares many of his ideals. Kagan clerked for one of the Supreme Court’s staunchest liberals, Thurgood Marshall, and was a research assistant for one of the greatest legal defenders of gay civil rights, Laurence Tribe. She was also a staff member on the Dukakis for President Campaign in 1988. The defeat of Dukakis set back gay rights for 20 years, but with Obama and now Kagan, another minority is set to take swift strides.

As MSNBC pointed out, “Kagan has the chance to extend Obama’s legacy for a generation.” And every bit as alarming as that is the likelihood that Kagan is a supporter of even greater executive powers.

The Court’s Lurch To The Left
In 1952 Supreme Court clerk and later Supreme Court Chief Justice William Rehnquist wrote that the Court should not strike down Jim Crow laws. Rehnquist also said that Brown v. Board of Education should not find that minorities do not have a constitutional right to the same treatment as the majority.

Rehnquist wrote: "To the argument made by Thurgood Marshall [in Brown v. Board of Education] that a majority may not deprive a minority of its Constitutional right, the answer must be made that while this is sound in theory, in the long run it is the majority who will determine what the Constitutional rights of the minority are."

I wonder if it was not Rehnquist’s ideas that were sound only in theory. It seems less and less that it is the majority deciding its future. Consider the immigration law passed in Arizona, SB 1070. A CBS poll showed that 60 percent of American’s don’t think the new law—which is bound to include profiling—is too extreme.

Yet our President has announced opposition. Obama held a reception at the White House on May 5—Cinco de Mayo Day—where he denounced Arizona’s new immigration law. Obama announced that he has instructed his administration, "To closely monitor the new law in Arizona, [and] to examine the civil rights and other implications that it may have."

Furthermore, U.S. Attorney General Eric Holder confirmed that the Justice Department is deliberating whether to file suit against the Arizona law, either on the grounds that it violates the Supremacy Clause or Federal civil rights laws. But during a Congressional hearing May 13, Holder admitted he had not even read the law.

It doesn’t look like Arizona will back down and, in the wake of the past 17 months in office, it appears doubtful that Obama will either.

Congressman Ted Poe (R-Texas) accuses the Obama administration of doing more to secure the borders of foreign countries than its own and called for immediate action to reverse that.

“We want the National Guard to be armed and defend themselves if necessary and to assist the border patrol and local law enforcement," said Poe.

Republican Gov. Jan Brewer—who signed the bill—has said Arizona must act because Washington had failed to stop the flow of illegal immigrants and drugs from Mexico. Arizona is home to nearly half a million illegal immigrants and is the nation’s busiest gateway for illegals and drugs.

Yet Congressman Raul Grijalva (D-Ariz.) said that Republicans are using the issue to divide the country. "We’re here to say it’s time to deal with comprehensive reform realistically and begin the process of healing this country.”

For things to work out for Grijalva, the city of Phoenix may have to live up to its name and raise the dead. According to Brian Ross of ABC News, “Phoenix, Arizona has become the kidnapping capital of America, with more incidents than any other city in the world outside Mexico City, and over 370 cases last year alone.”

In the end expect this dispute to land on the steps of the Supreme Court; a once non-partisan institution that Obama is trying to stack with minority rights activists such as Sotomayor and Kagan. While Latinos and gays may rest easy because of Obama’s choices for the Supreme Court, Americans living in Phoenix will not. That is bad news for the majority of Americans whose families built this great country.

Yours in good times and bad,

John Myers
Myers’ Energy and Gold Report