Living & Damn near Dying with Socialized Medicine

“The reality is that from Canada to Cuba socialized health care’s record is appalling. It’s impossible to tally how many patients die…” Smart Money, July 16, 2007

You can ask me about universal health care. I’ve lived it. I’ve almost died it.

I’m a dual citizen and spent almost equal portions of my adult life in Canada and the United States. Canada has many things going for it and I moved back to Calgary to be where the action is in energy. But it’s a move that almost cost me my life.

I started getting flu-like symptoms on a Sunday last October. I was sluggish and pensive. I had reason to be. I have acute asthma.

As afternoon turned to evening I was having trouble catching my breath. By 7 p.m. I was struggling for air. My wife Angie ordered me to the car and raced me to one of Calgary’s emergency health clinics just down the road. We both knew I might be getting pneumonia, a potential killer for an asthmatic.

It had happened to me once before in Spokane, Wash., and Angie sped me to The Sacred Heart Medical Center. No sooner had I hit the door when two doctors threw me onto a crash cart and a team of five worked to restore my airways. I was then admitted to the hospital for five days. That was in 1992.

Seventeen years later and 500 miles to the north I knew that my chances of surviving weren’t so good.

The clinic I stumbled into last fall was brimming with three dozen patients; many waiting hours to see one doctor who had been at work since 8 that morning. Angie helped me walk to the reception desk and declared to a young woman that I was having trouble breathing.

“Take a number and I will call you when it is your turn,” she said in a cold voice.

Angie protested and said something about my condition being critical.

“Everybody here thinks their condition is critical,” said the girl.

Angie knew that I couldn’t sit and still breathe, so she propped me against a wall and strode into the examining area. Inside there were an assortment of people, some simply needing to get a refill on their prescription, others included junkies just wanting a fix. She had to physically force herself in front of someone entering one of the tiny examining rooms. The Russian doctor listened and helped her walk me to the examining table.

He laid me down and began to administer oxygen before he undertook a frantic search for Ventolin, an emergency drug for asthmatics that was apparently in short supply.

By now I was gasping for air. My bronchi were almost completely swollen shut. I felt myself losing consciousness.

Some time later my eyes opened and I managed a satisfactory breath after the over-wrought doctor slammed adrenaline into my vein. Two hours later, when he finally checked me out to go home (there were no hospital beds available in Calgary that night) he told me in broken English how he thought I was lucky to be alive.

Next month I will go back to that clinic. I will line up and wait two to four hours to get a flu shot; a vaccination that could save my life in a nation with Third World health care.

Canada offers many great things. But someday I will return to my home, the United States. I just hope it is the United States I left and not just another country that has sold out to the siren call of socialism and the mediocrity it brings.

The True Cost of Obamacare
I have no doubt from my own experiences that health care in the United States is better than in Canada. But of course the Obama administration’s single-minded approach to instituting universal health care is about money.

Last June in an ABC special Obama proclaimed, “The status quo is untenable… It is bankrupting families, bankrupting businesses and bankrupting our government at the state and federal level. So we know things are going to have to change.”

What Obama is really saying is that if the government runs things the quality of health care will be just as good as before and the cost of it will be a lot lower. But when was the last time you saw the federal government do a good job of managing anything? Consider that Washington has grown the national debt from $5 trillion in 1995 to almost $12 trillion this year while damn near reprising the Great Depression.

Health policy experts say guaranteeing coverage for all Americans may cost $1.5 trillion over the next 10 years. That is more than double the $634 billion “down payment” the Democrats are trying to sell.

Meanwhile, America will be adding another huge bureaucracy, about the last thing the world’s largest indebted nation needs. If you don’t believe me consider what has happened in Britian.

According to the Aug. 13, 2009 Examiner.Com, “England’s health care program is the third largest employer in the world and their citizens are getting anything but health care.”

To read the entire story click here.

Debt, the Dollar and Your Financial Health
The United States is increasing its national debt at a dizzying pace. Socialized medicine will only accelerate this trend. That is exactly what happened to Canada when universal health care was introduced in 1968. Over the next decade Canada’s national debt soared. In time it had Canadian dollar investors rushing for the exits.

In 1968 the Canadian dollar stood at par with its U.S. counterpart. Fifteen years later the Canadian dollar had lost nearly a third of its value. This period coincided precisely with Pierre Trudeau, Canada’s Prime Minister (1968-1984), whose Liberal government shamelessly socialized Canada.

Yet many Canadians survived and even prospered during the Trudeau years by diversifying out of the Canadian dollar and buying physical gold. From 1971 to 1980 the price of gold in Canadian dollars rose C$35 per ounce to over C$1,000 per ounce!

Action to take: Watching the Obama administration is frighteningly reminiscent of the Trudeau years. And while I can only pray that America doesn’t revert to socialized medicine I can offer sound advice when it comes to your money. Given the current political and economic conditions I urge you to put at least 10 percent of your investible assets in physical gold. I recommend 1-ounce South African Krugerrands, Canadian Maple Leafs or American Eagles. Call your local coin dealer or if you need one, we recommend Asset Strategies International in Rockville, Md., 800-831-0007 or 301-881-8600 or go to www.assetstrategies.com.

Yours for real wealth and good health,

John Myers

Myers’ Energy and Gold Report

Money, Oil and Power

"The Capitalists will sell us the rope with which we will hang them." Vladimir Ilyich Lenin.

China is building itself the world’s largest war chest. Not in tanks, planes or even secret submarines. It has accumulated the largest collection of IOUs in history.

In an age where real politik is of greater import than Otto von Bismarck could ever have imagined, China is positioned to use the once almighty buck against the very nation that gave birth to it—the United States of America.

The U.S. has unprecedented debt and its largest creditor is China. But Beijing has aims on much bigger things than accruing depreciating dollars. Number one among its objectives is access to Middle East oil.

China Zeros in on Middle East

With real gross domestic product growing at a rate of 10 percent per year, China’s need for energy will surge by 150 percent by 2020. To sustain its growth China requires increasing amounts of oil. Its oil consumption grows by almost 8 percent a year, seven times faster than America’s! At the end of the next decade China will consume more oil than the United States.

There is only one place on earth that can meet China’s and America’s demand for oil and that is the Middle East. The region holds two-thirds of the world’s conventional oil reserves, and China is thirsting to control the world’s last remaining rich oil reservoirs.

Some 60 percent of China’s oil imports come from the shifting sands of Arab lands. By 2015 the share of Middle East oil sustaining China will reach 70 percent.

With Mexico’s elephant fields rapidly declining and Canada unable to make up the difference, the United States must also focus its attention on securing Arab oil.

“Where is the oil (of tomorrow) going to come from?” asked future Vice President Dick Cheney in 1999. “The Middle East, with two-thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies."

If Cheney understood the importance of the Middle East a decade ago, we can be certain that Beijing understands it today.

There is no question that China and the U.S. are planning a future powered by Middle East oil. The real question is whether this last bastion of crude can meet the demands of both countries.

“Tensions over oil resources reflect the larger distrust between the sole superpower and the rapidly rising China.” wrote MSNBC a couple of years ago.

History Lesson about Ike and Real Power

If push comes to shove, China may hold the trump card. The reason is its unprecedented leverage over the United States.

The U.S. Treasury is auctioning off $200 billion—yes BILLION—in new debt every week.

“China has an estimated two-thirds of its more than $2 trillion in reserves in dollar assets, including more than $800 billion in Treasuries,” wrote The Wall Street Journal on July 29th.

In less than two years China will have its hands on $1 trillion in liquid U.S. IOUs.

That one country would leverage the debt it held of another for political and economic gain is not unprecedented. In the summer of 1956, England and France hatched a secret plot to re-capture the Suez Canal with force if Egyptian President Nasser nationalized the waterway.

After World War II the ruling elite in London saw the Suez Canal as the Anglo-Saxon expressway to its remaining colonies in North Africa and India. The canal was also taking on new importance.

“In 1948, the Suez Canal was gaining a new role—as the highway not of empire, but of oil…. By 1955, petroleum accounted for half of the canal’s traffic, and, in turn, two thirds of Europe’s oil passed through it,” wrote Daniel Yergin in his bestseller: The Prize: The Epic Quest for Oil, Money, and Power.

That meant the Suez Canal was a potential chokepoint and the most valuable waterway in the world. Not a property to be trusted to Arab hands thought some members in the House of Lords. Key among them: British Prime Minister Anthony Eden.

So when Egypt nationalized the Suez Canal, France and England were putting together a response. In October 1956, British and French forces attacked Egypt. Soon after, British paratroopers hoisted the Union Jack over the Suez Canal.

Eden knew that the U.S. opposed the operation. But he also knew that President Eisenhower would never send American forces into combat against its two closest NATO allies.

The Sun Sets on the British Empire

It turned out Ike didn’t have to. The Eisenhower administration forced a cease-fire on Britain and France without firing a shot. It did it with money.

At the time the U.S. was the world’s largest creditor and one of its biggest borrowers was Great Britain. The U.S. had sustained England through the war and was using the Marshal Plan to help rebuild the nation.

Ike told Secretary of the Treasury George Humphrey to prepare to liquidate U.S. government holdings of British bonds. London was made aware of Ike’s plan.

The Chancellor of the Exchequer Harold Macmillan told Eden that he believed Eisenhower would sell England down the river if British troops did not withdraw immediately. He had an even more pressing message from Macmillan—if London resisted and the Treasury sold its Sterling bonds—England would be bankrupt within a month! The island nation would face a winter without food or oil.

The next day Eden announced a cease fire and evacuated England’s troops from Egypt. He did it without even consulting the French.

For centuries England had been indomitable. Yet, with a phone call, Ike had done what the Spanish Armada, Napoleon’s army and Hitler’s Luftwaffe had all failed to do. He had brought the British Empire to its knees.

England was humiliated. Britain would never again been seen as a world power and its currency, the Pound Sterling, began a freefall which lasted for decades.

As the above chart shows, in 1956 it took almost $3 to buy a British pound. But a long decline in the value of the pound that had started in World War II began in earnest. By the 1970s London no longer had the financial wherewithal to peg the pound to the dollar. By 1985 the pound was trading at par with the buck!

Bond Market Peril

Britain’s and the pound’s decline occurred as America rose to super-power status. Today America finds itself where England was half a century ago—defending its interests, but facing an economic giant in China, a country that does not have the military to dominant but does have the money to dictate their vision.

Last spring the U.S. Treasury market was close to panic when China hinted it might want to diversify out of U.S. government debt. And as an investor you should understand that China doesn’t even have to sell its huge holdings of U.S. Treasuries for the bond market to go into a tailspin.

All it simply has to do is sit out a few Treasury auctions. If that were to happen, market forces would drive up U.S. interest rates. All of which makes today’s political and economic environments very risky for bond holders and potentially lucrative for real asset investors.

Middle East Mayhem Could Push Oil Over $150 per Barrel

The philosopher Jean-Jacques Rousseau once said, “The more things change, the more they stay the same.”

I’ve been thinking about what Rousseau said because I have passed an anniversary of sorts. Thirty-years ago this past spring I was trying desperately to keep my grades up as a junior at the University of Calgary.

One afternoon the sun was beating into our classroom. It was a petroleum-economics class taught by a Frenchman, Dr. Mitra. But that day was unusual because the professor was agitated. This was most strange. The only agitation I had ever seen in that class came from the students who regularly received Cs and Ds from the white smocked, pipe carrying Dr. Mitra.

As the bell rang, Mitra exclaimed: “This thing in Iran… this Khomeini; it changes everything!”

I don’t remember what I thought of this. I was young and selfish, so I probably wondered if it would affect the final I was already cramming for. It turned out that Dr. Mitra was talking about a lot more than a final exam for one of his classes.

It was the late 1970s, the stock market was in crisis, there was a young inexperienced Democrat sitting in the Oval Office and, oh yes, a pop star that some called “The King”, had died prematurely—of a drug overdose in his home, they said.

Sound familiar?

Back to the Future
Years later I think Dr. Mitra was saying the revolution in Iran would permanently change the markets. That nothing in international oil would be as it was before; that the removal of the Shah and a new clerical regime with its Supreme Leader would transform the Middle East.

He was right.

In 1979 the Iranian Revolution sent oil prices soaring. The country’s oil production plummeted drastically to 2.5 million barrels a day. The 1980 Iraqi invasion worsened the situation. In fact, combined production of both countries fell to just 1 million barrels per day compared to 6.5 million barrels in 1978! This lowered the global production by 10 percent, and oil prices rocketed to $36 per barrel.

Today Iran is on the brink of another revolt. America is getting ready to pull out of Iraq, a move that could throw that country into chaos. With violence escalating in both nations—countries that produce 12 million barrels of oil per day, an amount almost equal to what America imports—the ordinances are set for another price explosion.

In fact, there is a growing potential for a new terror to boil-over in the Middle East… a nuclear kind of terror.

Just how close Iran is to having operational nuclear weapons is unclear. But one thing is certain; Israel is taking the threat seriously. Last month former Israeli defence minister Shaul Mofaz told Israeli radio that Iran is a ballistic power close to becoming a nuclear power.

“Iran has undoubtedly passed beyond the point of no return, moving closer to the ultimate nuclear capacity everyday," said Mofaz.

We are talking nuclear missiles in a region that holds two-thirds of the world’s conventional petroleum reserves. It’s enough to give American strategic planners nightmares. It also sets up the biggest potential for oil and gas profits ever. A scenario that I believe will push crude oil past $150 per barrel and natural gas above $8 per 1,000 cubic feet.

Then, on July 10th, Israel issued a direct warning to Iran. It spelled out the catastrophic consequences if it attacks the Jewish state with weapons of mass destruction.

In an interview published last Friday in the Hebrew daily Ha’aretz, Israel’s national security advisor Uzi Arad said Israel must have "tremendously powerful" weapons to deter or retaliate for a nuclear strike.

In other words, touch us and we will wipe you off the map.

To read more of Israel’s sword-first diplomacy, go to: http://www.voanews.com/english/2009-07-10-voa10.cfm.

In 2009 Iran’s Crisis is an Even Bigger Threat

My office sits 20 minutes from Calgary’s core and I try to get downtown as often as I can. Last week I was at the Canadian Unconventional Oil Forum held at one of the city’s fancier hotels. It’s not so much what you hear from the speakers as what you hear at the bar—coffee, juice or otherwise.

I ran into an old university buddy during a break. He heads up a mid-sized oil and gas company that has more than 100 million barrels of proven reserves.

“If there’s trouble with Iran, it’s going to be a real mess,” he said. “Look at Bush and that Iraqi thing. That was about oil. And if this thing in Iran gets out of hand, the U.S. will be in there too. They’ve got no choice.”

I asked him if I could quote him.

“Sure,” he said as he walked back towards the lecture theatre, “just don’t use my name.”

Annual U.S. Field Production of Crude Oil

The fact is America’s fortunes are tied to Iran and the Middle East. Consider this:

  • The United States accounts for less than 4 percent of the world’s oil production but consumes more than 30 percent of world oil supplies.
  • The average oil well in the continental United States pumps less than 300 barrels per day. The average well in Iran produces 10,000 barrels per day.
  • The last elephant oil field (more than a billion barrels) discovered in the United States was in Prudhoe Bay, Alaska in 1968.

In fact, 2009 marks a milestone for the United States. For the first time since World War II, we pumped less than 5 million barrels of oil per day. We pumped almost twice as much oil 30 years ago during the first Iranian crisis.

As Thomas Wolfe said, we can’t go home again

Meanwhile, Iran remains an oil kingpin. It is the de facto leader of OPEC, has the second largest conventional oil reserves in the world and is the world’s fourth largest producer of crude.

Yet in the end maybe Rousseau was wrong, at least in this instance. Things haven’t so much stayed the same, they have gotten worse. And that is bad news for America which lately has only shown talent for one thing—pumping money.

It is however good news for petroleum investors. The first Iranian revolution doubled the price of crude oil. Today, with America so much more dependent on the Middle East and with the stakes so high, the upcoming price spike could be huge, perhaps putting oil above $150 per barrel. Any way you look at it, that’s an A+ for energy investors.

Yours for real wealth,

—John Myers