Obama’s Keystone Kops

“The only way to break this cycle of spiking gas prices — the only way to break that cycle for good — is to shift our cars entirely, our cars and trucks, off oil.” — President Barack Obama, speaking at the Argonne National Laboratory on March 15

President Barack Obama has finally brought Congress together with one common goal: to oppose his ruinous energy policies. Perhaps he can unite grass-roots Americans the way no one has since King George III.

On Thursday, a bipartisan bill was introduced in the U.S. Senate that would give Congress the sole power to approve TransCanada Corp.’s Keystone XL pipeline project. It is essential to America’s national security in that it channels Canada’s vast oil sands to refineries and ports in Texas.

Senators John Hoeven (R-N.D.) and Max Baucus (D-Mont.) introduced the measure, which proposes to ensure the construction of the 800,000-barrels-per-day pipeline.

It is no surprise that the President is fighting back. White House spokesman Jay Carney told reporters last week that since the pipeline will cross international borders, the decision for its approval belongs with the State Department. This is the latest example of how the President usurps the democratic process and seizes extraordinary powers, all for the good of the environmental movement.

The $5.3 billion Keystone pipeline has become the battleground for Canada’s oil sands. The combatants are the Greens and the realists. The latter understand that for the foreseeable future America needs secure supplies of petroleum and not the fantasy of windmills and electric cars.

The Greens continue to resist and insist the pipeline will expand the oil sands projects in Western Canada, leaving a dangerous carbon footprint upon the world.

The Problem with Pelosi

Not only would the Keystone pipeline greatly decrease America’s dependency on Mideast oil, but it would also create tens of thousands of new jobs at a time when unemployment lingers close to 8 percent.

Not so, said House Minority Leader Nancy Pelosi, a Democrat and environmental activist who continues to argue that the Keystone pipeline will not deliver many jobs.

“It just is amazing to me that they can say [Keystone would create] ‘tens of thousands of jobs and reduce our dependence on foreign oil,’” said Pelosi at a press briefing on Capitol Hill last week to oppose the bipartisanship in the Senate. “The oil is for export and the jobs are nowhere near that.”

The Keystone pipeline may not employ as many people as Pelosi does for her hairdos, clothes and facelifts; but at least it is a start. Contradictions from Pelosi abound. If she visited Saudi Arabia as opposed to any Western democracy like Canada (America’s most reliable ally and energy source), the women’s rights advocate would have to cover her face with a scarf and she couldn’t drive around in her gas-guzzling Chevy Suburban.*

Pelosi, Obama and green advocates continue to recklessly tie the Nation’s future to Islamic oil producers like Saudi Arabia, home to most of the 9/11 hijackers.

The chart below gives you an indication of Canada’s oil wealth. It doesn’t even include Canada’s oil sands reserves. If those figures are included, Canada has oil reserves five times larger than Saudi Arabia.

 
Incompetency Or Conspiracy?

In November, columnist Ezra Levant summed up Obama’s energy strategy in the Toronto Sun:

Barack Hussein Obama announced America’s new energy policy: He prefers Saudi conflict oil shipped in on tankers over Canadian ethical oil in a pipeline.

It’s a bizarre decision for the president of a country with 9% unemployment, that could use the thousands of well-paying jobs that will be created building the state-of-the-art pipeline.

It’s not just jobs and the property taxes that the pipeline will pay in perpetuity. It’s the energy security. There’s no risk of a Gadhafi-style revolution in Canada.

There’s no need to spend $1 billion on a Pentagon mission to secure Libyan conflict oil, with friendly Canada to the north.

But in some ways, Obama’s decision isn’t surprising. He has adamantly opposed drilling in northeast Alaska, though his own administration estimates that would provide an additional 800,000 barrels a day, almost as much as America imports from Saudi Arabia or Venezuela.

Obama doesn’t much like drilling in the Gulf of Mexico either ­­— his moratorium there caused many deep-water rigs to move to other countries, costing more than 100,000 lost jobs in states like Louisiana, jobs that won’t come back for years.

I cannot fathom how the President is so ignorant of America’s energy and job needs. He continues to ignore the best interests of the Nation he swore to protect. Could it be there is something nefarious afoot in the Obama White House?

The party line was repeated Friday by Obama spokesman Josh Earnest, who declared that supporting projects such as the Argonne National Laboratory, where Obama was touring, is more important to America than petroleum.

The Argonne lab is just outside Obama’s home base of Chicago. Researchers there are working on advancing batteries for electric vehicles. It is part of Obama’s pledge to wean cars and trucks from oil.

The President has as much engineering expertise as I do, and I would wager that he has a lot less understanding of energy. Despite this, he has brazenly urged the establishment of a $2 billion clean energy fund over the next 10 years. How? Obama will redirect royalties the Federal government receives from offshore drilling along the Outer Continental Shelf toward research for electric vehicles, the very cars that I have derided.

Against all reason, the President continues to embrace Green energy while marginalizing Texas tea. He is robbing Peter to pay Judas.

So around and around we go with Obama, our vaulted leader who is in Jerusalem today kicking off his Mideast tour. He proposes to jump-start Israeli-Palestinian peace negotiations and ease tensions in a region that sits atop two-thirds of the world’s conventional oil reserves and is on the brink of anarchy.

What Obama either doesn’t understand or understands all too well is that America’s national security needs are tied to petroleum. Without a lifeline from the Canadian oil sands, the inevitable will happen: the Mideast will explode while the U.S. economy, under the yoke of $10 per gallon gasoline, will implode.

In the end, the greatest threat to America may reside inside our borders at the very head of our government.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

*Editor’s Note: Carma Globale reported in 2009 that then-Speaker Nancy Pelosi was driven around Washington in a Chevy Suburban. The website was unable to find out what vehicle she drove.

Obama Is Spoiled Rotten

“Spare the rod, spoil the child.” – Samuel Butler

Last week, Vanity Fair published an adaptation of Zev Chafets’ biography of FOX News President Roger Ailes, in which Ailes described President Barack Obama as “lazy.”

Ailes may be correct in saying that Obama “never worked a day in his life.” Yet I do not believe that the President is lazy. I think Obama was spoiled rotten by his mother and her parents and that he has continued to be spoiled rotten by overly adoring liberals.

The real Obama clearly expressed himself in 2008 when he became exasperated by reporters after a news conference: “Come on! I just answered, like, eight questions.”

Sorry, Obama, for thinking it was anyone’s job to ask you questions.

Obama is the last person in the room to be sorry about anything. (There is plenty to be learned about Obama in Richard Minter’s recent book Leading From Behind: The Reluctant President and the Advisors Who Decide for Him.)

According to White House records, the President was born in Honolulu, Hawaii, on Aug. 4, 1961. That makes him a member of Generation X, those born between 1960 and 1984.

What makes many of that generation so special is that they are born to baby boomers, who rejected raising their children the way generations of Americans had raised theirs. The baby boom went bust when they overindulged and spoiled their kids.

Raised by a single mother who was taking college classes, our 44th President had zero contact with his father. Instead, he found himself with his mother, Stanley Ann Dunham, who was “finding herself” while traveling the world and continually going to college. When he was 10, Obama’s mother left him with his doting maternal grandparents.

Obama was not spoiled by money but by attention and adulation. One of only a handful of black kids at his high school in Hawaii, he was given extra merit for his intelligence. It seems clear that his grandparents, teachers and fellow students fawned over him, giving him an exaggerated sense of self.

Social scientists say that our basic personality is shaped at an early age. I have found that to be true. If we turn out to be kindhearted, industrious or insolent at 50, our behavior is cemented at a young age. In this regard Obama exhibits the personality of the peevish boy that he was while growing up.

On Jan. 27, New Republic published an interview with Obama.

One question asked was:

It seems as if you’re relying more on executive orders to get around these problems. You’ve done it for gun control, for immigration. Has your view on executive authority changed now that you’ve been president for four years?

Obama responded:

[T]here are certain issues where a judicious use of executive power can move the argument forward or solve problems that are of immediate-enough import that we can’t afford not to do it. And today, just to take an example, the notion that we wouldn’t be collecting information on gun violence just to understand how it happens, why it happens, what might reduce it–that makes no sense. …

Clearly, Obama sees things his way: the way a 5-year-old sees a Tonka truck.

The Telegraph summed up Obama’s leadership qualities:

President Obama sees his re-election as a mandate to continue the very policies that will eventually bankrupt the country unless they are reversed, regardless of huge opposition on Capitol Hill. It chimes closely with the president’s second inaugural address…, which offered absolutely no olive branches to the nearly 61 million Americans who voted for his opponent in November.

It wouldn’t be hard to fill a book on Obama’s self-centeredness. When Neil Armstrong died in August, the President posted a picture of himself looking up at the moon. What should have been a President talking about the greatness of an American hero became another self-aggrandizing moment by Obama.

How Dr. Spock Ruined America

I will wager that Obama never got a spanking. His upbringing is the kind that is on constant display; the baby boomers of my age were bound and determined to never use discipline on their children. Instead, they praised their children as being “special.” When those kids acted up, they begged and pleaded with them to be good.

I was hardly “Father Knows Best.” Most of the credit for the way our children turned out goes to their mother. But I won’t shy away from the fact that I did administer spankings to our kids on rare occasions, just as my parents did with me and my siblings.

Today, our children are 25, 28 and 30 years old. They all have good jobs, live independently and, in their adult years, have thanked me for the discipline they got.

What earned a spanking? A clear example was our eldest. When he was 4 we took him to the Seattle Zoo. As we got to our car, he got this strange look on his face and immediately bolted into traffic. I yelled, “Stop!” He kept going and reached a lane where there was an oncoming car approaching at 30 mph. The fact that I was then young saved his life.

When pregnant with that child my wife read what millions of baby boomers read: Baby and Child Care by Benjamin Spock, M.D.

If you ever thought Spock was a plethora of knowledge, think again. In 1989, while revising that book, he wrote: “I visited a small private school… with the idea of asking children… what advice to parents they’d like me to incorporate in the forthcoming revision of Baby and Child Care. … In a thoughtful mood, the class was unanimous that parents should not hit their children.”

I am shocked! What is next: recruits in the Marine Corp will say they don’t like PT?

Look around and you can see bratty behavior on display. (Shopping malls come to mind.) And kids don’t grow out of it. I have a friend that consults for a college football team. He tells me that sometimes parents call up the head coach at the university and question him as to why their son isn’t playing more.

There was a CBC TV documentary two years ago about post-baby boomers. It included a segment where parents phoned bosses of their 20-something children to complain that Johnny and Sally were not being treated fairly at work. The program concluded that spoiling children took off with Generation X.

Obama is not the only one in government who was spoiled. The ranks of Congress are also becoming filled with the overindulged and pampered prodigy of the baby boomer generation.

In today’s Congress, there are 115 members who belong to Generation X. While the average age of Congress is high by historical standards, its ranks are being filled by people who did not suffer events like the Great Depression and World War II. I don’t doubt that most of these members are intelligent and capable. I doubt many of them faced much hardship or discipline. They continue to demonstrate that they simply can’t “play nice” with others.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Titanic Trips

It’s just money; it’s made up. Pieces of paper with pictures on it… And it’s certainly no different today than it’s ever been. 1637, 1797, 1819, ’37, ’57, ’84, 1901, ’07, ’29, 1937, 1974, 1987 — and whatever we want to call this. It’s all just the same thing over and over; we can’t help ourselves.” — Wall Street CEO John Tuld (played by Jeremy Irons) in the 2011 movie “Margin Call”

A man grabs milk from his fridge. He takes a slug. He says, “Still sour.” He puts the milk back in the fridge.

That sums up my philosophy on investing and pretty much every other human endeavor. People tend to be suckers. How else can you explain why so many of us repeatedly make mistakes that would make a 5-year-old scream, “Stop, stove hot!”?

Not making the same mistakes over and over is something we lose in our teenage years.

As Voltaire observed, “Common sense is not so common.”

A titanic example is the Titanic itself. A year ago, it was announced that a new HMS Titanic — the old one is apparently rusted — is going to set sail in 2016. More than 40,000 people, some willing to pay $1 million, have already signed up for its maiden — whoops, second from maiden — voyage. It sounds like a joke, but Australian billionaire Clive Palmer unveiled his plan to build the Titanic II and add to his “for suckers” assets, which he calls his tourism business.

Palmer said his company Blue Star Line has commissioned the state-owned Chinese company CSC Jinling Shipyard to build a near replica of the ill-fated Titanic. I say near because I suspect this one will have more lifeboats.

At my age, I, too, am nostalgic. But really, the Titanic? I understand why people might pay a million dollars to fly on a replica of the Spirit of St. Louis. It never crashed. But the Titanic sunk, taking with it the lives of more than 1,500 people. For a century, it has been recognized as one of the pinnacles of human stupidity.

What’s next, a trip on the Hindenburg? I believe thousands of people would sign on for that, too.

Billionaires like Palmer don’t make many mistakes. (It is interesting that most of his wealth is tied to hard assets through his mining empire.) But most of the rest of us do make mistakes.

There is another kind of Titanic that is currently sailing at breakneck speed through iceberg fields. It is called the stock market.

A Constant Rebirth Of Old Pains

My family is no stranger to stock market crashes. In 1929, my father was 17 and was working on the homestead with my grandparents, who had managed to tuck away money with a Calgary feedlot. My grandmother was a tough and skeptical woman, but even she was caught up in the irrational market exuberance that marked the last three years of the 1920s.

According to my uncle, bad news came to their farm in 1930. The feedlot was under foreclosure. When my grandparents arrived in the city, they discovered that one of the largest feedlots in Southern Alberta had been shuttered and permanently closed. They hired a lawyer but to no avail. Creditors during the earliest stages of the Great Depression had foreclosed on the feedlot and taken her and my granddad’s $10,000. That equates to $80,000 in today’s money: a lifetime of savings for my grandparents.

My grandparents owned the land they farmed, so they barely squeezed by during those depression years. But never again would she trust her life to the fortunes of others. She hid cash and was suspicious of banks, a tradition that was passed on to my dad and his children. I know my children don’t share that sentiment because they are willing to buy Big Board stocks even though I have tried to discourage them. I can understand their willingness for risk. I’ve witnessed six bear markets in my time, and they have not experienced any (as of this writing).

My father told me how he remembered the stock market crashing in 1929 and that there was a final washout in 1937. It took four decades for the next bear market to beset U.S. stocks. It is understandable that investors in the early 1970s thought risk had been eliminated from the stock market. What is amazing is that right now investors can’t even remember the crash that happened five years ago.

March Madness

The Dow Jones industrial average’s rise above 14,000 points is incredible when you consider that since President Barack Obama was elected to his first term the Dow was 9,000. In fact, the Dow has climbed 15 percent since Thanksgiving. And the charts also show that the Dow is likely hitting a triple top. The first two were in 2000 and 2007.

American stock prices have not soared on bedrock fundamentals. Consider the following:

  • On Friday, the Federal government was forced to implement its $85 billion “sequester” spending cuts, which are already impacting jobs and confidence in the economy.
  • The unprecedented easing by the Federal Reserve (Fed Chairman Ben Bernanke’s idea of priming the pump at your house would be to run Niagara Falls over your property).
  • An intractable unemployment rate hovering just below 8 percent or not far from where it was when the Dow started to take off. (Consider the chart below, which shows the price of the Dow measured on the left and the U.S. unemployment rate on the right.)
Dow Jones Industrial Average vs. U.S. Unemployment Rate

How is it even possible that these fundamentals don’t add up? The truth is, it wouldn’t be possible with even a modicum of common sense. This bubble exists because investors have become speculators and are rabid to profit off the last dollar — a dollar whose value, by the way, is eroding considerably each and every year for the past 12 years.

Tripping Point

When I was in my early 20s, I was at a party with all my old friends from high school. One of our buddies thought he could drink with impunity. That was until he stepped around the bar and tripped over an ice chest, falling flat on his face. In the 35 years since, I have never seen him drink in excess again. So there is hope.

On the other hand, Wall Street is nothing right now but excess. My fear is that when Wall Street trips, it is going to take the rest of us down with it.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Driving With The Stars

“If I am your president, the first thing I would put into motion is that 10 years from the day I take office, no new car made in America is run on the internal combustion engine.” — George Clooney as Democratic Presidential candidate Mike Morris, in the 2011 movie “The Ides of March”

Many of the biggest names in Hollywood were out in full force Sunday at the Academy Awards. Many adopt highfalutin causes the way Madonna and Angelina Jolie adopt children. An important cause among the rich and famous is saving the Earth. Movie moguls’ and stars’ favorite tools for saving the Earth are electric cars, such as those that were on display at Global Green USA’s annual pre-Oscar party.

Lots of B-list stars were on hand at this year’s event, including Ed Begley Jr. from the early 1980s TV show “St. Elsewhere.” Begley arrived in his black Chevy Volt.

Greencarreports.com reported: “Stars and green cars are nothing new–several have admitted to owning Toyota Prius in the past, while others have been spotted in Tesla Roadsters or Fisker Karmas.”

Excuse me, but I don’t like to be lectured how I should live my life from multimillionaires whose abuse of sex and drugs would prohibit their entrance into the gates of Sodom or Gomorrah. Besides, it is much more interesting to learn the opinion of one of the largest car manufacturers, Toyota, than it is to hear drivel from people whose basic job is to look good while pretending to be someone they are not.

Last fall, Toyota cancelled mass production plans of a soon-to-be launched eQ, which was to be a pure-electric variant of the Scion iQ.

“There are many difficulties,” Takeshi Uchiyamada, Toyota’s vice chairman, told Reuters in September, breaking ranks with other car companies that, for mostly public relations reasons, feel compelled to build and sell electric vehicles, also known as lemons.

Uchiyamada said, “The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge.”

Want a second opinion? Read this story published on Feb. 22 in the National Post under the headline “Electric Vehicles ‘20 To 30 Years’ From Mainstream Use.”

The Post interviewed Dennis DesRosiers, president of DesRosiers Automotive Consultants, which outlines future trends for automobile manufacturers.

Rather than just focusing on the fact that batteries still have not come up with a reliable way to move people over any reasonable distance, DesRosiers criticized the lack of infrastructure to recharge electric vehicles while they are on the road.

“It isn’t getting the charging station out there, and it doesn’t matter how sophisticated the charging station infrastructure is,” he told the National Post. “You don’t have the battery technology developed enough to be able to quick-charge in a matter of five or 10 minutes. We could be decades away from that.”

DesRosiers concluded: “You can build a case for electric vehicles, but they’re 20 or 30 years out before they have any sort of volume.”

While DesRosiers is critical of the lack of EV service stations, The New York Times took dead aim at the electric car itself this month in a scathing test drive report. Published on Feb. 8, the headline in the Times read “Stalled Out on Tesla’s Electric Highway.”

It took John Broder five times longer to drive the Tesla Model S from Washington, D.C., to Boston than it would have taken him to travel in a conventional car. In addition, the trip was riddled with angst, including technical problems and emergency stops to charge the battery. It ended with the total failure of the car, which had to be put on a flatbed truck (a process made more difficult because the car’s parking brake would not release). Per “Tesla’s range-maximization guidelines,” Broder set the cruise control at 54 mph. The speed limit was 65. The $101,000 car had to go slow because its batteries were seriously running out of juice. Recharge times took up to an hour when Broder was able to find places on his carefully planned trip, which included troubleshooting calls with Tesla technicians in California.

Predictably, there has been a backlash by the Greens, and Tesla went so far as to criticize the driver while vindicating the car. It’s not the car’s fault; it’s the driver’s.

Personally, I do not want to spend a fortune on a car that cannot go as fast as my first car, a 1972 Ford Pinto. Whose genius did this start with? A famous celebrity who has gainfully played the role of President of the United States for the past four years.

Broder reported:

The federal government has invested in the effort to find a solution. Three years ago, Steven Chu, the Nobel Prize-winning physicist and secretary of energy, proudly announced a $465 million loan to Tesla as part of an advanced vehicles program intended to cut fossil fuel use and address global warming.

The loan to Tesla would “begin laying the foundation for American leadership in the growing electric vehicles industry,” Dr. Chu said.

On Feb. 1, Chu announced that he will not serve a second term as head of the U.S. Department of Energy. Apparently, Chu sees the end of the road is coming for his polices, and he wants a quick getaway. My guess is that he will not be taking it in a Tesla.

And don’t expect President Barack Obama or the first lady and their entourage to be traveling in electric limos. For one thing, such vehicles are too heavy to be moved by a puny electric engine. Even if the horsepower existed, it would not be reliable or safe transportation. They are what the rest of us should drive, however.

Yours in good times and bad,

–John Myers
Myers’ Energy and Gold Report

Obama: Free At Last

“Free at last! Free at last! Thank God Almighty, we are free at last!” — Martin Luther King Jr., at the conclusion of his march on Washington, D.C., Aug. 28, 1963

President Barack Obama has a dream, and he made it clear to the Nation a week ago during his State of the Union address. In it, he laid out how it will be manifested in his last term. Obama has four more years to be free at last, four years to dictate his economic and energy visions to the United States.

We are at the cusp of a revolutionary period — a time for Obama to right a ship that he, with his Ivy League idealism, never believed was properly upright. The President will use these years to cement what he believes is his rightful place in history.

But these next four years will reap an economic crisis, planted by the President and from which the only harvest can be the destruction of the U.S. dollar.

Obama’s audacious plans for America’s future were laid out plainly during his State of the Union speech last week.

“Deficit reduction alone is not an economic plan,” he said.

I know the President said this because I was watching Obama’s address with my wife. I asked, “Did he just say what I think he said?” She looked as surprised as me and gave me an affirmative nod.

With the power of the Internet, I understood that evening that indeed neither of us had been dreaming. Instead, the President had been on television sharing his dream for America’s future.

Then, this past weekend, the President gave his weekly radio and Internet address to reaffirm his position that deficits do not matter.

According to Obama, no American who works full-time should live in poverty. He was asking Americans to support his proposals to raise the minimum wage, pass comprehensive immigration reform and incentivize companies to create jobs in the United States. The President clearly believes that the long-term solution to America’s economic problems is more short-term debt. What Obama doesn’t realize is that we are already late in the game.

When I started out writing about the Federal government more than 30 years ago, the Federal debt was just more than $900 billion. I remember my father, who was my publisher at the time, fretting about what $1 trillion in Federal debt would mean for the economy. As it turned out, it meant very little. We blew past that total, then many other milestone numbers. The biggest debt accumulator of all time is Obama.

Continued deficit spending is part of Obama’s dream; but it is a dream I very much doubt that King would endorse, given the increase in poverty to American minorities.

Earlier this month, The Washington Informer stated:

There is nothing wrong with Blacks “having Obama’s back” if we were all enjoying high levels of economic success, but continuing to applaud ineptness is dishonest. Suppose you spend more money this month than your income. To keep going you borrow. The amount you now owe is “debt.” You have to pay interest on your debt. If next month you spend more than your income, you must borrow more and still have to pay the interest on your now larger debt. If you keep borrowing eventually you will reach a point where all you can do is pay the interest and not have money left for anything else. This is known as “bankruptcy.”

… It’s time Black Americans ask themselves: “Can these practices go on forever and can we pretend that what has been occurring is “good governance?” Talk about a “racial divide”: Polls show that Blacks and mainstream America view this economic imperative differently. While 96 percent of Black Americans support Obama and his policies, 85 percent of Americans worry that growing deficit spending will hurt their children and grandchildren, and 56 percent think that within the next decade the red ink will spark a major economic crisis.

Since Obama took office, the Federal debt has increased to $16.5 trillion, up from $10.6 trillion when George W. Bush left office.

Yet, according to the President, education, job training and benefits to the elderly should not be sacrificed to reduce the deficit.

So where then is the sacrifice? It seems Obama wants to have his cake and eat it, too: He wants to bankrupt America.

One thing college did not teach Obama is that deficits will matter in the long run. (In fact, we are rapidly approaching the time when they will matter.) Deficits matter because the Federal government is borrowing $5 billion per day to pay its operating expenses, and many of the Treasury auctions are being attended by foreign investors. The last data on a full month was for December; foreigners bought almost $30 billion in Treasury debt. Currently, China and Japan are sitting on $2.3 trillion in U.S. Treasury debt. And for Obama and the United States to continue to meet its spending plans, it needs these two countries and many others to keep bidding at Treasury auctions.

What happens if investors in Beijing and Tokyo lose confidence in the ability of the U.S. government to deliver back dollars that have “not” lost their worth because of inflation?

The first thing that would happen is that the U.S. bond market would begin to snap, since the United States would be forced to pay higher interest rates to sell its lifeline of debt. Higher interest rates would impact not only the bond market, but the stock market, real estate market and every component of the U.S. economy. In a matter of days or even hours, we could have an economic bust that would make the Crash of 2008 a footnote in history books.

Yet I believe that Obama remains unfazed by the size of the exploding Federal deficit and the resulting whirlwind that will drive interest rates higher and implode the U.S. economy. Either Obama is willfully unaware of the risks facing the Nation or he simply does not care about them. His ultimate economic and political endgame may be known only to him and a few insiders, but I believe he is the most dangerous President America has elected in the past 100 years.

While King revealed his dream for America half a century ago, Obama is just beginning to fully disclose his vision. It is the antithesis of King’s dream. It will not strengthen nor unite a Nation; it will weaken and rip us apart, both blacks and whites. The President’s dream will become the Nation’s nightmare.

Yours in good times and bad,

John Myers
Editor, Myers’ Energy & Gold Report

The State Of The Disunion

The State of the Union address last night revealed in Barack Obama a President who has tried and failed to be a healing leader. When first elected, he swore to oversee America’s social reconstruction. He failed. Instead, he has brought about a deterioration of race relations and greater social strain than we have ever witnessed in two generations.

Throw away the accolades, the awards or the vast number of schools and bridges that will doubtlessly be named after him; Obama’s term in office is stirring racial resentments.

Good Leaders Unite People

I disagree with the politics of the Kennedy brothers and the myth of Camelot that is embedded in President John F. Kennedy’s Administration. Yet I believe that Robert F. Kennedy did his utmost to heal a nation during one of the most troubled times in our history.

The best evidence of this is the speech RFK delivered to a mostly black crowd gathered to hear him in Indianapolis on April 4, 1968. RFK had just learned of the assassination of Martin Luther King Jr.:

I have some very sad news for all of you, and I think sad news for all of our fellow citizens, and people who love peace all over the world, and that is that Martin Luther King was shot and was killed tonight in Memphis, Tennessee.

… For those of you who are black — considering the evidence evidently is that there were white people who were responsible — you can be filled with bitterness, and with hatred, and a desire for revenge…

For those of you who are black and are tempted to be filled with hatred and mistrust of the injustice of such an act, against all white people, I would only say that I can also feel in my own heart the same kind of feeling. I had a member of my family killed, but he was killed by a white man.

… What we need in the United States is not division; what we need in the United States is not hatred; what we need in the United States is not violence and lawlessness, but is love and wisdom, and compassion toward one another…

Robert Kennedy was beloved by millions, perhaps because he did not live long enough to meet or to disappoint grand expectations.

You would think Obama would emulate RFK. Both were young Senators in the Democratic Party who campaigned hard for the Presidency. Yet unlike Robert Kennedy, Obama has refused to ease racial tensions and has at times inflamed them.

Obama’s Handy Race Card

In contrast to RFK’s message are two occasions when Obama poured gasoline on already simmering racial fires.

The first was in July 2009 when Harvard professor Henry Louis Gates Jr. was arrested at his home in Cambridge, Mass., by police investigating a possible break-in.

Gates found that the door to his residence was jammed and forced his way through the door, according to The Associated Press. A woman called police, saying she saw “two black males with backpacks on the porch” and that one of them was “wedging his shoulder into the door as if he was trying to force entry.”

When the police arrived, Gates would not come out of the house to talk to them and he refused to explain the circumstances of the apparent break-in. Instead, he became confrontational with police and even initially refused to produce identification.

The Boston Globe reported:

He was booked for disorderly conduct after “exhibiting loud and tumultuous behavior,” according to a police report. Gates accused the investigating officer of being a racist and told him he had “no idea who he was messing with,” the report said.

Rather than simply ignore a regional news story, Obama was quick to comment: “Now, I don’t know, not having been there and not seeing all the facts, what role race played in that. But I think it’s fair to say, number one, any of us would be pretty angry; number two, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home; and, number three, what I think we know separate and apart from this incident is that there’s a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately. That’s just a fact.”

Please, Mr. Obama, let’s not forget the facts you openly admit: that you were not there and that you do not know what role, if any, “race” played in that arrest.

After the truth came out (that Gates was abusive and police were doing their job in protecting his property), you might believe that Obama may not be so eager to personalize another news event whose focus was race. If you thought that, you would have been wrong.

More egregious than Obama’s inserting himself into the Gates’ case were his opinions on the tragic death of black teenager Trayvon Martin one year ago.

Not in dispute is the fatal shooting death of Martin by George Zimmerman on the night of Feb. 26 in Sanford, Fla. The events of that night grabbed the national spotlight. If we learn the truth of what happened that night, it will be in a Florida courtroom — not from the personal opinions of our President.

But that didn’t stop Obama from weighing in on it. “If I had a son, he’d look like Trayvon,” Obama said nearly a month after Martin’s death. “I think [Trayvon’s parents] are right to expect that all of us, as Americans, are going to take this with the seriousness it deserves and that we’re going to get to the bottom of exactly what happened.”

Seriously, Mr. President, if you had a son, he would look like Trayvon? If a non-black said there is a resemblance between Martin and the President, I expect he would be accused of being racist.

Moreover, does the Florida judicial system really need to be lectured by the President to take the young man’s death seriously?

Four More Years Of Racial Unrest

Throughout his first term, Obama did not reconcile racial divisions. He seemed to make them worse.

That was admitted last month by Toni Carter, former deputy mayor of Hanover Park, Ill., who said the African-American community had big expectations that racial tensions would be reduced after Obama was elected. She now believes the country has taken a step backward.

“It seems like a lot more people are (angrier) than they were before,” said Carter, who added that she doesn’t expect any improvement in Obama’s second term.

Good race relations are essential to national unity. A competent President would understand this and not see the country splintered. Instead, Obama seems preoccupied with his immediate political agenda and his future place in history.

T.S. Eliot wrote: “Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm–but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves. ”

Yours in good times and bad,

–John Myers
Myers’ Energy & Gold Report

Band Of Sisters

“From this day to the ending of the World
… we in it shall be remembered
… we band of brothers
.” – A quote from William Shakespeare’s Henry V as it appears in Stephen Ambrose’s Band of Brothers

On Jan. 24, the Administration of President Barack Obama lifted the ban on allowing women in U.S. military combat positions, granting full equality in combat for women.

It is a reversal of more than a 200-year-old policy that kept women off the front line in a combat role. It is pure politics and has zero consideration of the inherent and real physical differentials that exist between the sexes.

This is just the latest step in which Obama is kowtowing to a special interest group — in this case, feminists.

There’s just one problem: Women and men should have equal rights, but please don’t tell me they have equal physical strength.

I have been involved in athletics all my life as a participant and as a coach. Since I was a teenager, I have read everything I could about warfare. And I sat through as many lectures on the subject as I could when I was in school.

What mesmerized me the most was not what I learned in class but a talk I heard 15 years ago in New Orleans at the MoneyShow. It so happened I was standing next to my old friend, Personal Liberty Digest™ contributor Chip Wood. We were listening to Stephen Ambrose speak about his book, Band of Brothers. (This was a couple of years before the book was made into a TV miniseries by Steven Spielberg and Tom Hanks.)

The focus of the book and the miniseries is on the 101st Airborne during World War II. I came to understand the physical hardships they endured from their first day at boot camp until the final defeat of Nazi Germany.

On D-Day the men of the 101st were dropped behind German enemy lines at night, spread apart because of heavy flack fire and carrying up to 120 pounds in gear. So heavy were their packs and weapons that they had to be pulled to their feet and assisted into transport planes and gliders. They parachuted into the night sky, striking the ground at more than 10 miles per hour. This is where their physical strength came in.

There are strong women, but my personal experience is that women are not nearly as strong as men.

In the 1990s, I did a few bench press competitions. To win, a man had to bench 1.5 times his body weight one time. A woman had a different test; she had to push a barbell weighing one time her body weight. I saw scores of men do it but I saw only one woman complete it.

It is not just strength but also speed and endurance that separate the sexes. I will give you another anecdotal example. My son and his wife run at least four marathon races each year. My son runs the race in less than 2 hours and 50 minutes. His wife has a personal best of just more than 3 hours and 15 minutes. Yet my daughter-in-law places slightly higher against women competitors than my son does against the men.

If you are not convinced this is an absolute truth across the board, you have to answer a question: Why is it that in every athletic endeavor men are matched against men while women compete against women?

I’m not the only one who thinks there are physical differences between men and women. Margaret Wente of The Global Mail wrote this in an opinion piece following the Pentagon’s announcement:

Let’s get real. Women cannot equal men in ground combat, the kind of dirty, brutal stuff that (fortunately) makes up a very minor part of modern military life, especially post-Afghanistan. It’s not that they can’t be trained to kill – they can. The issue is that the physical differences between men and women are very large, and on the battlefield, they really matter, and can’t be wished away. Men are better fighters because they are bigger and stronger and can endure far more physical punishment before they break down.

… The average female soldier is “about five inches shorter than the male soldier, has half the upper body strength, lower aerobic capacity and 37 per cent less muscle mass,” Stephanie Gutmann, author of The Kinder, Gentler Military, wrote in the New Republic.

What do America’s ground combat leaders think? They probably don’t want to get into trouble with their political bosses at the Pentagon, but a few have spoken out.

The head of the Marine Corps, Gen. James Amos, went on record declaring he is skeptical about how women will perform in infantry units. He added some combat positions may end up being closed again if not enough females meet the rigorous, physically demanding standards.

Some GIs are worried that in order to incorporate women into combat zones, training standards may have to be downgraded. That would make American infantry forces weaker and put the lives of those who fight on the front lines in greater jeopardy.

At least the feminists are not worried.

“There’s no denying that this decision is a victory for women’s rights, another landmark in women’s hard-fought battle for equality,” gushed the Journal Tribune. “… Full equality has been the goal since the women’s movement began to see success with suffrage in 1920, followed by wider respect with their work on the homefront during World War II, a full-steam approach in the 1960s with birth control and sexual liberation, and a move into the workforce in the 1970s and ’80s.”

While feminists might see it as a step in the right direction, I doubt that the men serving beside smaller and weaker soldiers in foxholes and on the front line will be as thrilled.

I began by mentioning Band of Brothers. I am going to leave you with a line from the blockbuster 1992 movie A Few Good Men, spoken at the end by Col. Nathan R. Jessep (played by Jack Nicholson): “You… people… you have no idea how to defend a nation. All you did was weaken a country today… That’s all you did. You put people’s lives in danger.”

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Guns, Smoke And Islam

“All warfare is based on deception.”The Art of War, Chinese General Sun Tzu, 6th century B.C.

Barack Obama implemented last week 23 executive orders that strike at the heart of the 2nd Amendment. On Monday, he took his second solemn and public oath as the President of the United States.

The good news: The President knows he cannot pry our guns away from us unless it is from “our cold, dead hands.”*

The bad news: Our freshly inaugurated President is Machiavellian in obfuscating the truth behind his ultimate objective, which is to nurture Islamic influence in America and across the world.

The President would love to grab every gun from us if he could.  Testament to this fact is that Obama has surrounded himself with people eager to attack our 2nd Amendment Rights, including U.S. Attorney General Eric Holder who said last Friday that Obama acted within his legal authority.

Reuters reported: “Not one of the executive orders — contrary to what a few have said — impinges upon anyone’s Second Amendment rights or is inconsistent with the historical use of executive power,” Holder told a committee of the U.S. Conference of Mayors at a Washington hotel.

You can watch a video clip from Holder’s speech here.

Best-selling author Richard Minter, who has written for The New York Times and The Wall Street Journal, writes in his new book, Leading From Behind:

Attorney General Eric H. Holder Jr. may be President Obama’s favorite cabinet member. The first black president likes to watch ESPN with the first black attorney general in the White House residence. They have much in common: strong mothers who pushed them to rise, elite educations, a decades-long hostility to gun rights…”

Last Friday, Bill Maher concluded on his HBO program “Real Time” that the majority of Democrats in Congress are committed to upholding the 2nd Amendment. Maher concluded that Obama’s anti-gun executive actions are dead in the water.

If an ultra-liberal comedian such as Maher understands this truth, why is the President making so much noise about restricting guns? I can conclude only that it is a means to a far different end.

Could the President’s ambitions be to reshape the world in his image? It would be shrewd for him to hide his objective by challenging conservatives over our right to bear arms.

Blessed Is Not This Peacemaker

Obama, Holder and secretive Presidential kingmaker Valerie Jarrett take an adversarial view of Israel and are radically in favor of Islamic rights for Palestinians over the rights of Israel, the only stable and democratic nation in the Mideast. This makes Obama the polar opposite of every President we have had dating back to Harry Truman. This President endangers Israel, America’s only ally in the region.

One of the first hints of Obama’s anti-Israel views were made evident in 2008. The Jerusalem Post interviewed Jews who knew Obama well, including Henry Gendler, who lived next door to Obama for 10 years:

Normally, Gendler recalls, Obama would be happy to stand in front of the building and talk but “when it came to Israel, it was not like that.” Instead, he says, “when Israel started to become the topic, he became very cold. He always told me that we need a more ‘balanced’ approach, which in America is a code word for being too pro-Israel.”

Gendler said that when Obama was running for President, he acquired a new affection for Israel.

“Now it’s like he wants to hug and kiss Israel every five minutes,” Gendler said. “That’s completely not the Barack I had as a neighbor. That started this year, when he was trying to get elected.”

Gendler’s words were prophetic. In June 2009, the President took to the stage at Cairo University to deliver the infamous speech in which he said he was committed to build “a new beginning between the United States and Muslims around the world.”

Then came the Arab Spring, a protest movement in Mideast countries that spurred revolutions. The United States seems to have lost any vision or direction for a more peaceful settlement for the most troubled region in the world. The ongoing crisis in Egypt, Libya and Syria prove the President is either blind to radical ambitions or is a leader who actively seeks them out.

In “Barack Obama, the Arab spring and a series of unforeseen events,” Ian Black Middle East editor for The Guardian, wrote: “Now, as the end of his term nears, the answer is clear: Obama was different from his predecessor.”

It is a radical difference and evident to all who will dare to consider the truth.

Obama once pronounced, “Whatever we once were, we are no longer a Christian nation.”

And in his Cairo University speech, the President declared: “That experience guides my conviction that partnership between America and Islam must be based on what Islam is, not what it isn’t. And I consider it part of my responsibility as President of the United States to fight against negative stereotypes of Islam wherever they appear.”

Hello, Mr. President! Did you miss the Iranian President Mahmoud Ahmadinejad’s remarks in 2005? He said that if Germany and Austria feel responsible for the massacre of Jews during World War II, they should host a state of Israel on their own soil.

Ahmadinejad declared most Jews in Israel “have no roots in Palestine, but they are holding the destiny of Palestine in their hands and allow themselves to kill the Palestinian people.”

You would think these words from Ahmadinejad would have given the then-junior Senator from Illinois pause because Iran’s president added: “Some European countries insist on saying that during World War II, Hitler burned millions of Jews and put them in concentration camps. Any historian, commentator or scientist who doubts that is taken to prison or gets condemned.”

The president of Iran and the President of the United States seem like kindred spirits. One year after Ahmadinejad’s rant, Obama wrote in his best-seller, The Audacity of Hope: “I will stand with (Muslims) should the political winds shift in an ugly direction.”

The winds certainly have shifted, as political tornadoes are part and parcel of the Arab Spring.

Could it be that Obama’s most strategic goals are compromise, compassion and a coupling with Islam?

If true, it borders on treason against the Judeo-Christian values that shaped Western civilization and the United States.  Yet the President’s goal becomes more achievable as we waste our time defending something that not even he can yet take away from us: our 2nd Amendment rights.

The Nation senses that something is wrong. The latest NBC News/Wall Street Journal poll — taken days before Obama’s second inauguration — showed 57 percent believe America is “on the wrong track.”

Soon, far more Americans will think the Nation and the world are headed in the wrong direction.

Yours in good times and bad,

John Myers
Editor, Myers’ Energy & Gold Report

*Footnote: As president of the National Rifle Association, Charlton Heston gave a speech in 2000 that garnered the attention of both anti- and pro-gun advocates. You can watch that speech here.

Obama’s Women

I wrote this headline to get your attention. The truth is that President Barack Obama is nothing like President John F. Kennedy. He isn’t even like President Bill Clinton, who pretended to be Kennedy by chasing young interns around the Oval Office instead of sleeping with Hollywood starlets or mob bosses’ girlfriends.

Instead, Obama has a much more complex relationship with women who put the Nation in greater jeopardy than any women who were friends of Kennedy or Clinton. (Fair warning: If you are a women’s rights activist, please stop reading. Otherwise, I will have to wade through all your hate email.)

Obama is no cad; he is, as Arnold Schwarzenegger might say, “a girly man.” He is not strong enough to take a leadership role as President, but instead lets two women run his life and the country. In this way, the President is a weakling reminiscent of King Edward VIII, the man who doted on Wallis Simpson’s every wish. He is not like President Dwight D. Eisenhower, who had a dalliance with his driver, Capt. Kay Summersby, while he was the Supreme Allied Commander.

I have nothing against women as leaders. I would prefer Hillary Clinton as President to Obama. What I don’t like is a man with responsibility who hides behind the designer dresses of women. And, my friends, this is the man and President that Obama is.

Exhibit A: Valerie Jarrett

Late last year, Richard Minter, a New York Times bestselling writer, released his newest book, Leading From Behind.

The book jacket tells much:

Leading from Behind reveals a president who is indecisive, moody, and often paralyzed by competing political considerations. Many victories–as well as significant failures–during the Obama presidency are revealed to be the work of strong women, who led when the president did not: then-Speaker Nancy Pelosi; Secretary of State Hillary Clinton; and Valerie Jarrett, his closest adviser and an Obama family confidante, whose unusual degree of influence has been a source of conflict with veteran political insiders.

Minter focuses on Jarrett, saying she has a “Rasputin-like” hold over Obama. According to Minter, Jarrett is the kingpin in the Obama Administration and she has misused “her extraordinary access” to the President. Upon further research, I discovered she has full-time Secret Service protection and a staff of nearly three dozen.

Born to American parents and raised for the first five years of her life in Iran, Jarrett shares many of the same principles Obama has regarding the future and diminished role for the United States.

Jarrett is an African-American intellectual who launched the careers of both the first lady and the President beginning in the early 1990s. She influences foreign and domestic policies of the President, from Obamacare to his staunch anti-Israel position.

They are reportedly kindred spirits and, while Jarrett has managed to stay under the liberal media’s radar, Minter’s book has flushed out the truth about this woman:

Jarrett’s White House role is unprecedented. She meets privately with the president at least twice a day with no one else present. Her influence is enormous and wide-ranging. She wields informal power, like a first lady; scheduling power, like a chief of staff; and power over policy, like a special envoy.  She has the unusual freedom to put herself in any meeting she chooses and to set the priorities as she sees fit. When The New York Times’s Robert Draper asked Obama if he “runs every decision past her,” the president answered immediately: “Yep. Absolutely.”

Every decision?

Yes, Jarrett’s scope is as unlimited as it sounds. She has “wide latitude over how she spends her day” and that makes her “close to omniscient.”

Exhibit B: Michelle Obama

This comes from People magazine. (I admit that while my wife buys it, I do read it — or at least look at the pictures.) People recently published its special year-end edition which included a long interview in which Obama seems fixated about his wife and daughters. Included among the many photos of the President and the first lady is one with this cutline: “’ANGLE, ANGLE!’ Mrs. Obama (with the President in the Palm Room Dec. 6) tried to position her husband just so. ‘He has only one good side.’”

On May 14, Obama was speaking to graduates of Bernard College: “You can be stylish and powerful, too. That’s Michelle’s advice.”

The first lady’s hands-on style may be far more ambitious than just passing on advice.

Last month, actor Samuel L. Jackson came out as a supporter of Michelle Obama as a Presidential candidate. Jackson, an outspoken liberal who favors greater government involvement in poor urban areas, told Newsweek that the first lady is a “Superwoman” who could hold any office she wants.

If Michelle Obama were to run for the highest office, her campaign would likely be orchestrated by the person who mentored her in Chicago, Jarrett.

Newsweek reported that James Clyburn, a high ranking African-American member of the House, also can see Michelle Obama in office.

“She’s honest and straightforward, which is not what you see in Washington much. She is exactly what we need around here,” he said.

So far, Michelle Obama has denied any political ambitions; but, then again, Hillary Clinton made similar claims.

Most first ladies have considerable influence over their husbands. Nancy Reagan was perhaps President Ronald Reagan’s only close personal friend. And while Nancy Reagan was protective of her husband and even had some top advisers fired, she stayed on the periphery of the Presidency, using her influence to help people “just say no” to drugs.

I am not claiming that the first lady should not be the first and strongest backer of her husband. What I am saying is that we do not cast our vote for the first lady; we cast it for her husband.

My question: Just when you think the end is in sight (regrettably, that will be four years from now), is it possible for the Obama family to remain in the White House for another eight years beyond the end of Barack Obama’s Presidency? It is conceivable that there is enough support for Michelle Obama to make a run at the White House in the 2016 election. Her odds may be slim, but the potential exists to stretch the Obamas’ reign to the year 2024.

I wonder whether either the Clintons or the Obamas have found the loophole around the 22nd Amendment. Passed on March 21, 1947, and ratified by the States in 1951, it limited a President to two four-year terms. It was a different era; I doubt anyone gave consideration to the idea that Bess Truman would extend the Truman Presidency another eight years.

Regardless of what may happen four years from now, we are stuck with Barack Obama, a President who, according to friends and critics, is unusually closeted and who is influenced too much by two women in his White House. Who would think that when it came to Presidential politics we would miss Marilyn Monroe?

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

The Obama Car: Unaffordable, Unreliable And Ultimately Dirty

Four more years with Barack Obama as our President, and we are likely to see many green schemes whose time has not come. Who can doubt that the idiocy of the electric car is just coming into fruition? It will mark only more than a century of engineering on a project that shows little spark and even less hope.

Never fear, electric lovers; Obama has chipped in $5 billion in taxpayer money behind his goal of having 1 million electric cars on U.S. roads by 2015.

Never mind that GOP Presidential Nominee Mitt Romney said it was money wasted on “losers.” It is such a feel-good idea that people couldn’t help but embrace it. Then again, people have never been all that smart when it comes to electric cars.

When I moved to Spokane, Wash., in 1981 with my new wife and our baby I still had the last remnant of my bachelorhood. It was my 1977 Pontiac Firebird Trans Am, fire-engine red with a screaming chicken on the hood that covered the 400-cubic-inch engine. It also had a shaker hood that rattled when the V-8 was just idling noisily as the exhaust moved through the Hollywood mufflers.

Because it was bought in Canada, it also had a block heater on the engine. A block heater is nothing more than a coil that you plug in to an electric socket at night to keep the engine warm so a car will start during subzero-temperature winter nights in Canada.

A middle-aged man in a nice suit saw my muscle car idling at a stop sign in Spokane and noticed the electric plug that came out from the front to power the small electric heater.

“Is that one of them new electric cars?”

I explained it wasn’t and gave it some gas to prove it when the light turned green. Yet the truth was that what I was driving was much more practical than any electric car built during that era.

I know this because my dad — an oil man, of all things — was pretty sure that gasoline costs were going to soar. In the late 1970s, he almost bought a pure electric car from American Motors Corporation: the Electron. The car was extremely expensive. As I recall, it cost more than $20,000, which is $60,000 in today’s dollars. Worst of all, round trip from where my dad lived to his office in downtown Spokane was 30 miles. The extended range on the Electron was about 30 miles. My dad didn’t have to be a genius to know that he would have to push his car home some nights.

More than four decades later, the public is still a long way from embracing the electric car, despite how many tax credits Obama throws at it. Electric-vehicle sales since 2011 totaled fewer than 50,000 through last fall, only 5 percent of Obama’s target.

Bloomberg reported: “The reality is: that business model isn’t there yet,” said Brett Smith, co-director of manufacturing, engineering and technology at the Center for Automotive Research in Ann Arbor, Michigan. “It isn’t there yet for volume. It isn’t there yet for reaching the mass consumer. And it probably isn’t going to be there for a while.”

Yet Tesla Motors, Inc. is pushing its electric car upon the American people with the help of the President.

In November, Reuters reported:

The re-election of President Barack Obama will likely mean a continuation of the U.S. government’s policy promoting electric and hybrid vehicles, Elon Musk, the chief executive of electric car maker Tesla Motors Inc , said on Monday.

“I think that we can expect at least that things will continue as they have,” Musk told reporters at an event in New York. “I wouldn’t expect it to get any worse for electric vehicles, hopefully it will get a little better.”

That certainly was not the conclusion of a new study released at the end of 2012 by the Indiana University School of Public and Environmental Affairs. It cast doubt on the Obama Administration’s goal of putting 1 million plug-in electric vehicles on the road by 2015.

“The perceived drawbacks of electric vehicles outweigh the advantages for most consumers,” the study said.

Stated a press release from the university: “Consumers are somewhat more interested in buying hybrid electric vehicles, with a gasoline-powered backup engine, than electric-only vehicles. This suggests there may be better market potential for hybrids like the Chevy Volt, Toyota Plug-In Prius and Ford C-Max Energi Plug-In.”

Indiana University researchers surveyed more than 2,300 adult drivers in 21 large U.S. cities and found car buyers in Dallas; Fort Worth, Texas; San Antonio; Indianapolis; Detroit; and Nashville, Tenn., show very little interest in electric cars.

Edmunds Inside Line concluded on Dec. 27: “As quickly as battery technology is advancing, pure electric vehicles still present too many compromises for the average consumer in terms of range and cost.”

One last thought: What if Obama and his green backers ever got their way and produced not 1 million but tens of millions of electric cars? What would juice up all those wall sockets that would charge those cars? After all, electricity isn’t free. Just ask any person who has to pay an electric bill. And a car is going to suck a lot more electricity than this computer I am typing on.

Businessman and economist Grady Means may have explained it best in The Washington Times:

Since the 1970s, the U.S. Department of Energy has “invested” more than $1 trillion in “alternative energy” schemes. I say “schemes” because after all of these investments, solar power, the darling of the White House and its friends and the recipient of massive grants and subsidies, results in one ten-thousandth of the electrical production in America. Wind power, after scarring a huge amount of America’s most beautiful scenery, amounts to a whopping 3 percent of electricity production. If these dials have barely moved after 40 years and $1 trillion, they are not going to move much in the next half-century. If electric cars ever roll, they will be powered by electricity from coal (nearly 50 percent of all electricity production), nuclear (20 percent), natural gas (20 percent) and hydro (most of the rest). In other words, expensive “electric cars” are actually, largely, “coal cars” — welcome to the 19th century.

Yes, my friends, expensive, unreliable cars with poor performance may not be so clean after all.

Obama went back on vacation last week to Hawaii. I think this future transportation infrastructure that he has dreamed up works great when he rolls his Presidential golf carts across the rolling green countryside on the Island. But it isn’t very practical when it comes to making America clean or competitive.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

Cliffs: Fiscal And Real

It seems our elected representatives in Washington celebrate the English tradition of Boxing Day. That would explain why Congress took off Dec. 26 before coming back last Thursday, even though the Nation is facing an economic catastrophe.

Like most of you, I was working on Boxing Day and read that President Barack Obama cut short his Hawaii Christmas break to get back to Washington to deal with the impending fiscal cliff.

Monday was the deadline for $600 billion worth of tax hikes and spending cuts.

Economists predict these tax increases and spending cuts could send the U.S. economy back into a recession by the end of next year. Americans will see their January paychecks shrinking as they pay higher taxes that automatically engage unless the George W. Bush tax cuts are extended.

It is expected that the average middle class family will see its tax bill go up by about $2,000 a year.

Regardless of whether Congress was able to cut the mustard before yesterday, a second economic shoe may have already dropped. The United States may have already fallen into a renewed recession. This would make Congress and the President a day late and a trillion dollars short by the time something meaningful is done.

It is already being reported that U.S. holiday retail sales this year were the weakest since 2008. That was the Christmas the Nation was in its deepest recession since the Great Depression.

There is already a litany of excuses as to why retail sales were weak this past Christmas, including bad weather (as if the United States always has good weather in December).

In the final analysis, millions of Americans didn’t spend what they typically do this time of year because they fear that the wheels on the American economy have already slipped over the edge of a very steep precipice.

The Log Jam Of 1983

My Dad, Vern, had a tradition to cut lumber off his acreage at the start of the new year. So it was on Jan. 1, 1983. My best friend, Dave, and I were riding on the wheel covers of Dad’s red Massey Ferguson 35-horsepower tractor, which had a front-end bucket to load logs on after they were cut down with a chain saw.

Men of my generation like to golf or ski, but Dad had been through the Depression and, regardless of any financial success he earned, he was determined to be self-reliant even through his later years. That meant growing a large garden in the summer, canning vegetables in the fall and cutting wood in the winter. He kept a potbellied woodstove in the kitchen and functional fireplace in the living room.

He had 80 acres of land near Chattaroy, Wash. Half of it was on a plateau; that’s where he grew Northwest poplar trees and had a corral for his two horses. The other 40 acres was on a steep slope facing north; it was full of wild ponderosa pine trees.

While he loved the outdoors, my father’s mind typically wandered as he thought about where the economy was headed and, therefore, where his subscribers should invest their money. You can imagine that in cases with machinery and gravity, this could be a hazardous combination.

Besides the gears, the Massey had a high drive and a low drive. We were only in second gear as Dad pointed the tractor toward the steep slope. While I was not nearly as experienced with machinery as Dad was, I had grown up around tractors and I knew we were in high drive as we headed down the steep trail that twisted and turned between the 50-foot high pines.

“Dad,” I shouted over the engine, “we’re going too fast!”

He must have had his mind on the markets. On what was a grade of more than 10 percent, he made a critical error. He forgot the tractor didn’t have a synchromesh transmission. You couldn’t gear it down like it was a sports car. So when he put his left foot on the clutch and tried to shift to low, the 2-ton tractor began to freewheel.

Immediately, we were going dangerously fast, perhaps 20 mph, with Dave and me holding on for our lives.

Dad had the presence of mind to hit the brakes — specifically, the left brake. The Massey had a single brake for each back wheel. That allowed the operator to pivot it. In case of an emergency stop, both brakes should be applied by landing your foot squarely on both of them.

The left rear wheel bit hard, but the right rear wheel continued to spin. The tractor did a sharp pivot. For a moment, I thought it was going to roll.

We got lucky that day. The tractor came to a complete stop. Dad put the gearshift into low, and we slowly continued down the trail to the fallen pines that needed to be culled. A few hours later, the firebox outside the house was full and the fireplace was ablaze.

No Such Happy Ending For America

It would be one thing if America had to endure the fiscal cliff that was presented Monday. But the Nation is so deeply in debt that we face a continuous series of cliffs. The President and Congress are either unable or unwilling to see that the Nation safely navigates this trail. Sooner or later, that means the odds are going to catch up with America, and there is going to be a wreck. In this case, it won’t be just three people; it will be 300 million.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Three Gs In Unlucky ’13

With less than a week before the New Year, I wanted to share with you three pitfalls we face in 2013.

But first let me brag: I am batting 1,000 as a prognosticator regarding the end of the world.

Two years ago this week, I wrote What Would You Resolve To Do If The World Were To End In 2012?.

In it, I said: “I don’t give a whole lot of weight to the Mayans and their calendar, even if they did build a great empire. If they really had a crystal ball you would think they would have been forewarned that the Spaniards were bringing smallpox to the Yucatán in the 16th Century and they wouldn’t have let themselves be enslaved to relatively few soldiers wearing funny hats and riding strange animals.”

I felt the odds were on my side since people have been predicting the end of the world long before Michel de Nostradamus started writing his prophecies in 1550. Besides, if I was wrong and the world had ended last week, who would be left to give me a hard time? It was a good bet.

As for my three predictions regarding what is going to happen in 2013, I think they are almost as assured.

No. 1: Gridlock

The Nation seems as divided today as it was during the Vietnam War.

This was hit upon two weeks ago by retiring Senator Joe Lieberman (I-Conn.), who used his final Senate floor speech to urge Congress to put partisan rancor aside to break Washington’s gridlock.

“It requires reaching across the aisle and finding partners from the opposite party,” said the Democrat-turned-independent, who was Al Gore’s running mate in 2000. “That is what is desperately needed in Washington now.”

After 24 years in the Senate, Lieberman said he wished Washington could erase gridlock because it stands as “the greatest obstacle” to finding compromises to the Nation’s problems.

Lieberman might has well have said that he wishes there really were a Santa Claus and an Easter Bunny.

Just ask the editors of Newsday who ran an opinion piece last month titled “How Barack Obama benefits from gridlock in Washington,” which stated:” Every lobbyist in Washington knows that whoever can advocate that the government do nothing or defer a matter until later has the advantage.”

The fight in Washington next year will be about money. It is a war of attrition, much as World War I was. Neither sides of the aisle are going to do anything other than hang on until a real transformative President is elected (hopefully from the GOP). That means there will be scant compromise by the people we have elected who are supposed to oversee what is best for the Nation and not what is best for them.

No. 2: Greed

The investment scams being orchestrated by Wall Street institutions, especially investment banks, are of the magnitude of which the robber baron industrialists of a century ago could not have dreamed.

Washington is so afraid to let the other shoe drop in the ongoing recession that they have given big banks carte blanche permission for them to continue their reckless lending and investment practices regardless of the long-term consequences to the Nation.

Last week, The Economic Times put the following headline on a story by The Associated Press: “Too big to jail? HSBC executives avoid money laundering charges.”

The AP reported:

When the Justice Department announced its record $1.9 billion settlement against British bank HSBC last week, prosecutors called it a powerful blow to a dysfunctional institution accused of laundering money for Iran, Libya and Mexico’s murderous drug cartels.

But to some former federal prosecutors, it was only the latest case of the government stopping short of bringing criminal money laundering charges against a big bank or its executives, at least in part on the rationale that such prosecutions could be devastating enough to cause such banks to fail.

They say it sounds a lot like the “too big to fail” meme that kept big but sickly banks alive with the support of taxpayer-funded bailouts. In these cases, they call it, “Too big to jail.”

The AP reported that Senator Jeff Merkley (D-Ore.) wrote a letter to U.S. Attorney Eric Holder following the HSBC settlement, in which he wrote that the government “appears to have firmly set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically important financial institution.”

This stems from the Federal government’s dread of ruffling any feathers of big banks for fear that there will be a Wall Street sell-off of the banks’ stocks, which would lead to a domino of failures such as happened in 2008 when Lehman Brothers collapsed. Washington knows it does not have the financial wherewithal to initiate another massive bank bailout.

No. 3: Guns

In the wake of the tragedy at the Sandy Hook Elementary School in Newtown, Conn., on Dec. 14, supporters of the 2nd Amendment are being asked: “Do you want to see this kind of violence continue?”

It is ridiculous presumption, but it is being made every day.

Last week, in TownHall.com, Susan Brown wrote:

Before Americans were able to corporately exhale upon hearing the news about the Connecticut shooting, liberals hopped on the gun control bandwagon. One of MSNBC’s many loose cannons, Ed Schultz, went on a rant saying, “Hiding behind the Second Amendment doesn’t cut it anymore,” and described our founders as slave-owning bigots. It’s real hard to wrap your hands around the hypocrisy of those who cry giant crocodile tears over the loss of these 20 precious children (and they should), but care little about millions of children who will never see the light of day due to abortion.

And here we go again; Progressives are manipulating the Sandy Hook massacre as a way to strike down the Second Amendment. Truth is, gun control is like putting a bandage on a gaping wound.

Brown hit the nail square on. In 2013, we can expect a lot more urging from the liberal media and Democrats in 2013 to limit our 2nd Amendment right.

The good news is that the world won’t end in 2013, and America will carry forward.

I want to leave you with these words from one of the greatest men of the 20th Century, Winston Churchill: “Americans can always be counted on to do the right thing, after they have exhausted all other possibilities.”

We must be patient while our opposition exhausts wrong-minded policies.

Wishing you all the best in the coming New Year,

–John Myers
Editor, Myers’ Energy & Gold Report

The NFL Needs Its Head Examined Before It Advocates Gun Control

December has been a tough month in the National Football League and not just because of the hard-fought games that were played by teams racing to the playoff finish line. The NFL was rocked by a gun crime, and now some around the league are advocating tougher gun laws.

According to Kansas City police, on Dec. 1, Kansas City Chiefs linebacker Jovan Belcher fatally shot Kasandra Perkins, his girlfriend and the mother of his 3-month old daughter, after waiting outside the house that he and Perkins shared. He then drove to Arrowhead Stadium, where he encountered Chiefs general manager Scott Pioli.

“I’m sorry, Scott,” he said. “I’ve done a bad thing to my girlfriend already. I want to talk with (linebackers coach Gary) Gibbs and (head coach) Romeo (Crennel).”

Belcher thanked them for all they had done for him. He then fatally shot himself in the head.

Belcher was a fourth-year player from West Babylon, N.Y., who played college ball at the University of Maine. In March, he signed a $1.9 million contract with the Chiefs worth.

The day after the Belcher murder-suicide was NFL Sunday. During halftime of the “Sunday Night Football” game, renowned sports commentator Bob Costas gave an on-air statement: “If Jovan Belcher didn’t possess a gun, he and Kasandra Perkins would both be alive today.”

[youtube http://www.youtube.com/watch?v=uOi7If0zW9s&w=560&h=315]

Commentators at FOX News agreed that the halftime preaching 24 hours after the murder-suicide was the wrong time and place to speak out against guns.

An opinion piece on FOX News took Costas to task:

Even if no weapon existed, the strength differential is so large that Belcher could have easily killed Perkins in any number of ways. The same is true, sadly, about suicide. There are so many ways that Belcher could have killed himself, including crashing his car at a high rate of speed into a wall or even another car as he drove to Arrowhead Stadium.

That set off liberals who want to use this tragedy as a good reason to weaken the 2nd Amendment.

Two days after the murder, Comedy Central’s Jon Stewart opened “The Daily Show” with the controversy surrounding the Belcher murder-suicide by attacking supporters of the 2nd Amendment who, Stewart insisted, are the real ones who always discuss gun control at inappropriate times. (Keep in mind it was Costas’ anti-gun comments that got the whole thing going.) Stewart even mocked FOX News host Laura Ingraham.
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Battered Brains

Remember the ad with the egg in the frying pan? “This is your brain. This is drugs. This is your brain on drugs.”

They could do another. “This is your brain. This is football. This is your brain on football.”

With regard to collision sports, I have numerous years of experience as a player and a coach. I was a mediocre football player in high school. In my early 30s, I took up boxing and was abysmal. Today, I have aches and pains and, sometimes, I still get jaw pain and headaches which I believe come from the few concussions I received.

Fortunately, I wasn’t good enough to hang around long enough to have serious head trauma issues. But I got to witness plenty of people who had boxed or played football long after they should have retired.

My two sons also got off lucky. My eldest was a runner-up in the U.S. Junior Nationals in boxing and later had a five-year college scholarship in football. While he is a fierce defender of those sports, he admits he got lucky because he was only “dinged” here and there during his playing days. (Being dinged means taking a mild hit to the head — mild being blurred vision, nausea, headaches.)

As a teenager, my younger son trained at a professional wrestling gym, B.J.’s, in Calgary, Canada. That gym was a starting point for many famous professional wrestlers, including Bret “Hit Man” Hart and his brothers — all of whom had illustrious and lucrative careers in WWE.

When it comes to professional wrestling, don’t let the acting and showmanship fool you; wrestlers take terrible punishment, equal to what boxers or football players endure.

These sports gave my sons confidence and lifelong friendships. But if I had known what I know now about collision sports, I wouldn’t have let my sons step on a football field, climb through boxing ring ropes or walk onto a wrestling mat. I have seen too many of these athletes kill themselves and others — often without using a gun. And the notion that these athletes’ brains have not been traumatized and that they are killing simply because they have easy access to guns is ludicrous.

Such is the case with Chris Benoit, a former WWE champion who in 2007 at the age of 40 committed one of the most heinous crimes ever. He did it without using a gun.

Over the course of three days at their large home, Benoit first strangled his wife, Nancy, after binding her. He then strangled to death his 7-year-old son, Daniel, before killing himself beneath a weight lifting machine.

The Fifth Estate, a TV news program in Canada, did an investigation into the Benoit crime and the link between brain damage and violence. The program reported:

The hunt for clues linking damage Benoit had done to his brain in the ring, and his last, ghastly acts, began with a phone call from the former wrestler and Harvard graduate, Chris Nowinski, to Mike Benoit for the brain of his dead son. Nowinski had a theory about the cumulative effects of years of concussions on the brains of athletes like Chris Benoit.

Nowinski had himself taken enough hits in the ring and on the football field to appreciate the long-term damage of concussions.

The Benoit murder-suicide struck Nowinski as being uncannily similar to the former football players who committed suicide after displaying increasingly erratic behaviour.

  • Former Pittsburgh Steeler Terry Long died at the age of 45 in June, 2005 after drinking antifreeze.
  • Ex-Pittsburgh lineman Justin Strzelczyk drove his car into oncoming traffic on September 30, 2004, crashing into a tanker truck, losing his life in the explosion. He was 36 years old.
  • Former Philadelphia Eagle and father of three, Andre Waters, died of self-inflicted wounds when he took a shotgun to his head in November, 2006. He was 44.

Analysis of their brain tissue revealed the presence of a protein usually seen in the brains of elderly people with dementia, but almost never in normal middle-aged men.

Doctor Julian Bailes at the Center for the Study of Retired Athletes, at the University of North Carolina, studied the after-effects of concussions among 3,000 former NFL players in their retirement years.

“What really surprised us was the amount of mental and cognitive problems that they were having, and also depression,” says Dr. Bailes.

An updated list should include Junior Seau, an NFL linebacker named to 12 Pro Bowls. It has been suggested that his decision to die from a gunshot wound to the chest rather than the head was so scientists could study his brain. That would be consistent with the 2011 suicide of former NFL player Dave Duerson, who also shot himself in the chest and left a suicide note requesting that his brain be studied for trauma.

It seems simple. Guns don’t kill. People whose brains are damaged playing extremely violent sports over many years sometimes kill. Boxing, professional wrestling and especially the NFL should make it their focus to protect their athletes rather than spout off about guns.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Hypocrisy Served With Rice

There is no limit to the hypocrisy of the Administration of President Barack Obama. The latest example is the “green” President’s candidate for secretary of state, Susan Rice.

The Democrats have been hypercritical of many Republicans for lining up against a black woman who is Obama’s choice to replace Hilary Clinton to oversee the U.S. Department of State. The race card has once again been tossed into the ring.

Congress’ top-ranking black lawmaker says he suspects Republicans are pillorying Rice, the U.S. ambassador to the United Nations, because she is black.

Criticism of Rice began after her Sept. 16 comments regarding the Sept. 11 attack on the U.S. Consulate in Benghazi, Libya. Rice said the attack began as a “spontaneous reaction” to an anti-Islamic video widely watched in the Muslim world that had also set off protests elsewhere.

Later, we learned that simply was not the truth. According to the State Department, the attack that killed U.S. Ambassador Christopher Stevens and three other Americans was not some spontaneous outburst but a well-executed attack organized and launched by a terrorist cell of al-Qaida.

Many right-thinking Americans were outraged by Rice’s characterization of the Libyan attack, including Representative Jeff Duncan, R-S.C., who penned a letter to President Barack Obama saying Rice’s public comments after the Benghazi attack “caused irreparable damage to her credibility both at home and around the world.”

According to the letter, which was signed by 96 other Congressmen, Rice “either willfully or incompetently misled the American public in the Benghazi matter.”

It said replacing Secretary of State Hillary Clinton with Rice as “the face of U.S. foreign policy” in Obama’s second term “would greatly undermine your desire to improve U.S. relations with the world and continue to build trust with the American people.”

Democrats Play The Race Card

Representative James Clyburn, D-S.C., along with other black Democrats, say upset Republicans continually use variations of the word “incompetent” to describe Rice, a Rhodes Scholar and former senior fellow at The Brookings Institution.

Clyburn, who is the third-ranking House Democrat, told The Washington Post that the Republicans’ choice to be critical of Rice’s remarks is one thing, but calling her incompetent amounts to using racial “code words.”

“We in the South know what that means,” he said. “I take offense when people use those words. I have a problem with them. They are going to disagree with Rice’s politics, but if they do, just say she’s wrong,” Clyburn told The Post. “When you apply the word ‘incompetent,’ that personalizes this thing, it goes beyond politics, because it’s about who and what she is — it’s character assassination.”

If you accept Clyburn’s logic, you can’t say a black person is incompetent. If you do, you are making a racist remark.

And Clyburn isn’t alone in his beliefs. Congressional Black Caucus Chair Marcia Fudge suggested Rice was targeted by the GOP because of her race as well as her sex. (The Democratic Representative from Ohio must have forgotten that the GOP nominated Sarah Palin for Vice President four years ago while a black woman, Condoleezza Rice, was George W. Bush’s Secretary of State.)

Last Wednesday, The Baltimore Sun weighed in the Republican challenge of Rice:

Approval of nominees to cabinet positions is by law the prerogative of the Senate. Certainly the president is entitled to his opinion as to who the nominee should be, but at the same time the Senate is required to state that he has made a mistake.

The president is not omnipotent; he is human in his choices which may involve political considerations and even bias. The Republican Party not only has the right but the duty to question his judgment on any of his cabinet selections, much less one that helps establish our foreign policy.

The Real And Very Rich Susan Rice

Before anybody starts feeling too sorry for Rice, it is important to understand what is really going on with the Democratic Party.

It is politics as usual for the Democrats to portray Obama, a former community organizer on the mean streets of Chicago, and the first lady as people who want nothing more than to help the downtrodden. This fairy tale ignores Michelle Obama’s J. Mendel cap-sleeve jacket that cost $6,800, her $540 Lanvin sneakers or the fact the first family vacations in the ultra-exclusive Martha’s Vineyard.

But the secretary of state, the Nation’s core representative to the world, should exclude politics. And the facts indicate that not only may Rice be incompetent but the Democrats are not being honest about her ability to be an honest broker — especially when it comes to the Mideast, which is in as much or more turmoil right now than it has ever been.

Rice would be the envy of anyone in the oil patch that I have ever met. This poor black woman holds tens of millions of dollars of petroleum stocks locked into a portfolio that makes her look a lot more like J.D. Rockefeller than Rosa Parks.

If this hypocrisy weren’t enough, much of Rice’s money is betting on the future of Canada’s oil sands.

On Earth reports that one-third of Rice’s personal wealth is invested in Canadian energy interests, much of it in Canada’s oil sands industry.

This seems a major conflict for Rice, who has royally screwed the pooch when it comes to reporting honestly about the Mideast.

As her confirmation looms, it is important to remember Arab sands sit atop two-thirds of the world’s conventional oil reserves. Ensuring security in that region won’t be a financial concern for Rice. She has most of her money locked up safely in 12 Canadian oil sands companies — companies that will benefit greatly from a Mideast meltdown.

Planes, Trains And Pipelines

A wonderful movie to watch during the holidays is “Planes, Trains and Automobiles.” In a classic scene the uptight character Neal Page, played by Steve Martin, turns around while sitting on the freeway beside his newfound and troublesome companion Del Griffith, played by the late John Candy. The car that Page believes Griffith rented with his own money is on fire.

“You finally did it to yourself,” says Page laughing.*

In the case of Rice, the Democrats may have finally done it to themselves. Rice’s personal fortune is backing Canada’s oil sands, an industry that is of vital importance to the United States. And while African-Americans in the Democratic Party are enthusiastic to champion her as the future secretary of state, the Greens are not — and for good reason. Huffington Post reports:

(Rice) would oversee the Keystone XL pipeline proposal if appointed to lead the State Department. But the pipeline review isn’t the only environmental issue the next secretary of state will have to handle.

Clinton said earlier this year that energy is a top issue and that the U.S. is reshaping its foreign policy to reflect that. She created a new office within the State Department to deal with energy issues and launched an initiative to attack “short-lived climate pollutants.”

In a recent report, E&E’s Lisa Friedman called Rice’s climate change record “thin,” pointing out that she has done little to fight global warming (this woman can’t be all bad). Friedman quoted Frank Loy, who served as undersecretary of state for global affairs in the Administration of President Bill Clinton, as saying: “She doesn’t have much of a record on climate change issues because they haven’t been really the issues she felt were her job to promote.”

So if Rice is confirmed, there could be silver lining in a dark cloud, if only because she is one of the few Democrats who understand that the Mideast is not a trustworthy supplier of crude oil. Then again, she might be every bit as incompetent as some Republicans say. With the situation in the Mideast the way it is now, that is the last thing that America can endure.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

* Note: It is fun to remember that in the movie “Planes, Trains and Automobiles,” Steve Martin’s character only thought that John Candy’s character had rented the car. It turned out that Candy’s character used Martin’s character’s credit card to rent it.

America’s Economy Is Stuck

Upon his re-election, President Barack Obama pledged to get America’s economy moving again. It is troubling that the President made this same promise four years ago, yet America’s economy is still stuck.

The Federal government and the Federal Reserve have injected trillions of dollars into the economy and reduced interest rates to their lowest levels in history, yet America’s economy is still stuck. And reckless attempts by Obama and the Fed to drag it forward will eventually destroy it.

I grew up in the country, and I saw a lot of things get stuck in snow and mud: trucks, tractors, even a snowmobile. What I remember most clearly is that when I was 10, my dad’s 1966 Lincoln became immobile. It was a white, four-door Continental with the signature rear suicide doors (they opened backward, making it an easy car to jump from if you were in the back).

In the mid-1960s, my father built a log cabin beside Lake McGregor in Southern Alberta. The lake runs along a thin valley he lived above as a boy in the early 1900s, when his parents were homesteaders.

The equipment that built the cabin had come and gone, as had the permafrost. When he took our family to see the finished cabin, the spring thaw was in full force. We drove beside the lake on a cow trail — not a road.

It didn’t take long for the big Ford to sink right up to its fenders. Loaded down with building materials and people, not even the Lincoln’s massive 460 cubic inch engine could pull us free, despite my dad’s heavy-footed attempts to get it rolling.  It turned out to be a car that could pass anything except a gas station or a mud trail.

Eventually, two big tractors towed the car onto dry land. Unfortunately, the car’s transmission remained in the mud and muck. That beautiful car was a write-off.

That car was built during the high-level mark for Detroit. In 1966, U.S. auto companies were building one out of every two cars sold in the world.

A decade after that Lincoln slipped deep into the mud, Detroit was also slipping toward failure. In the 1970s came the Chrysler bailout. In the late 1980s, President George H.W. Bush instituted protectionism for all U.S. automakers. And just four years ago this month, President George W. Bush kept America’s auto industry afloat by giving a $17.4 billion bailout to General Motors Co. and Chrysler.

Just like my dad did that day on the cow trail, the Federal government and the Fed keep flooring the gas pedal. Rather than pumping gasoline into an immovable vehicle they are pumping money into an immovable economy.

Policymakers simply will not accept that the U.S. economy is permanently stuck.

It hasn’t always been that way. Starting with Lincoln (the President, not the car), U.S. gross domestic product grew by more than 3 percent per year. The growth continued until I was a kid. That was 100 years of consistent growth, a record untouched by any nation in history.

But America’s economic growth rates have fallen significantly in the past two decades. America is getting weaker, not stronger.

Reported GMO Quarterly Letter last month: “Going forward, GDP growth (conventionally measured) for the U.S. is likely to be about only 1.4% a year, and adjusted growth about 0.9%.”

Today, American manufacturing contributes 9 percent of GDP. In 1966, manufacturing made up more than 20 percent of GDP. GMO Quarterly Letter predicts that by 2040 manufacturing will make up only 5 percent of GDP.

Another High Level Mark In 1966

The first year the Dow Jones industrial average reached 1,000 was 1966. Today, it trades around 13,000. You might think that if your parents had left you a share in the DJIA, you would be 13 times richer. That isn’t so. What a dollar would buy you in 1966 now costs more than $7. In today’s money, the 1966 DJIA was priced at 7,000. Those numbers are given to us by the Federal government and do not reflect the true decline of the dollar’s purchasing power.

If you bought a share of the Dow 46 years ago and held it (not accounting for dividends), you haven’t even doubled your money.

The Federal government has a lot of people fooled into thinking we can pull out of the economic morass simply by printing more money. Money in itself isn’t more wealth; it is just more money.

It is no different than owning 100 shares of a stock at $100 per share. The board of that company decides to do a two-for-one stock split. One morning, you have twice as many shares. But now they are priced at $50 per share — not $100.

The commentary by Ben Inker in November’s GMO Quarterly Letter sums up how priming the monetary pump isn’t going to be helpful and may, in fact, be harmful:

According to the Fed, an important goal of current monetary policy is to drive asset prices higher, generating a wealth effect that will lead to more spending and economic growth. There is a significant problem with this policy from a theoretical standpoint, though. The problem boils down to this: while Fed policy actually can cause rational investors to bid up the prices of assets, it probably can’t cause a wealth effect if investors truly are rational. Because the truth is that for the majority of investors, current Fed policy is taking them backwards, despite higher asset prices. The slightly odd corollary to this fact is that the less effective current Fed policy is at boosting the economy, the longer it is likely to persist, leaving rational investors in the position of hoping the damn thing works so that it will end, but unwilling to participate in the actions that would lead to success.

Real wealth comes down to real jobs, and the United States simply is not creating them at the pace it once did. The wealth you read about in the stock market is all smoke, and it can dissipate just as quickly.

Action to take: The trading wheels on Wall Street may be spinning just as fast as the double-ply tires on that Lincoln did. But I must tell you: That car didn’t move an inch forward and neither will the U.S. economy. This truth is going to surface early in the New Year when even investors finally see it. When that happens, there will be a rush to the doors. Make sure you beat that calamity and sell any stocks you own as soon as you can. Keep some gold as insurance and put cash into three-month T-bills or physical cash in a secure place like a good home safe or a bank safety deposit box.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

The Repudiation Of Mitt Romney

Mitt Romney’s defeat may mark the neoconservatives’ last chance to win the U.S. Presidency. The re-election of Barack Obama, arguably one of the worst Presidents in decades, underscores how bad a candidate the GOP nominee was. The way in which conservatives have disavowed Romney in the past couple of weeks highlights the scorn for him and the neocon policies he wanted to implement in a world rife with war.

Perhaps Romney’s candidacy was doomed all along. What we are left to do in the next four years will be a test of America’s global influence.

Obama needs to avert a war and perhaps even a social uprising within the Nation’s boundaries. And in four years, the Republican Party needs to nominate a leader that will revitalize the United States.

As Conservatives, We Must Find Our Roots

Romney was big on what he was going to do his first day in the Oval Office had he been elected President. It would have turned out to be a very long day, because the Nation has a long list of things that must be done. And as bad as Obama has been, America decided that Romney was not the one to revive the Nation.

On Aug. 28, 2010, during Glenn Beck’s Restoring Honor rally at the Lincoln Memorial, Sarah Palin addressed the crowd. She spoke out against Obama’s expressed desire to be a “transformational” President.

“I must assume that you too know that we must not fundamentally transform America as some would want. We must restore America and restore her honor,” Palin said.

In New York Times bestseller Suicide of a Superpower: Will America Survive to 2025?, Conservative Patrick J. Buchanan writes of Palin’s message: “It is a contention of this book that America has been changed in our lifetimes, that a revolution has taken place, that though we appear to the world as the same country, we are a different nation on a course far off the one our fathers set.”

Buchanan’s book was written before Romney won the GOP nomination. Yet he speaks out against the very policies of U.S. imperialism that Romney embraced. Most important, warns Buchanan, is that America is further down the road to bankruptcy because of an ongoing expansionism that persists in Washington despite the cold truth that the Cold War is over. The Federal government has spent $1 trillion over the past dozen years in two wars. Yet instead of winning over enemies, we have created more of them.

Buchanan compares the United States to another superpower that imploded two decades ago: the Soviet Union. In his introduction he lays out his comparison:

“Will the Soviet Union Survive Until 1984?” was the title of a 1970 essay by Russian dissident Andrei Amalrik. Forced into exile, Amalrik died in a car crash in Spain in 1980. Few had taken him seriously. Yet, nine years after his death, the Soviet Empire had collapsed and the Soviet Union disintegrated.

What has this to do with us? More than we might imagine.

As did the Soviet Union, America commands an empire of allies, bases, and troops. America, too, is engaged in a seemingly endless war in Afghanistan. America, too, is an ideological nation. America, too, is a land of many races, tribes, cultures, creeds and languages. America, too, has reached imperial overstretch.

These are not the words of an anti-war liberal. They come from a staunch conservative. When words like these are not the rhetoric of the likes of Senator John Kerry, D-Mass, they are difficult to ignore.

Yet that is precisely what Romney was advocating: American involvement in Syria and other nations in the Mideast. It is getting harder and harder for America to be the world’s beat cop, especially with debts of $16 trillion. We are in effect borrowing money (by selling Treasury debts) from China to protect Taiwan from China, borrowing money from Japan to protect South Korea from North Korea and borrowing money from Russia to protect European nations from Russia.

Still, Romney announced that he planned to spend more to extend the global reach of America’s military, which is, by any estimation, huge. Defense spending took up $711 billion of the annual budget in 2011, according to the Peter G. Peterson Foundation. In fact, the United States “spent more on defense in 2011 than did the countries with the next 13 highest defense budgets combined.” Yet Romney wanted to add $2 trillion to the Pentagon budget over the next decade.

Many Republicans were not partial to Romney and his geopolitical ambitions. Romney should have brushed up on history. Fredrick the Great said: “He who defends everything defends nothing.”

This has been proven true for every empire from the Romans to the Soviet Union.

That Obama was able to defeat Romney underscores the problems within the Republican Party. Conservatives must repudiate not only Romney but also the neoconservatives in the GOP. President George W. Bush and the neocons in his inner sanctum cultivated America’s strategy in the Mideast and lead us nowhere but closer to a global war.

We have seen a decade-long abandonment of foreign policies of containment put down by Presidents Dwight D. Eisenhower, Richard Nixon, Ronald Reagan and George H.W. Bush. Those were sound policies. The Republican Party and the United States must return to that strategy. We can only hope that four years from now won’t be too late and that we will have a better candidate than Romney. Otherwise, another Clinton may be President.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

First Obamacare, Now Obamagreen

Over the next four years, President Barack Obama will try to implement more sweeping changes in America, this time under the pretense of saving the Earth.

In 2009, the President slammed Obamacare down America’s throat. In 2013, it will be Obamagreen — with all the pitfalls of higher taxation, a repressed economy and greater power in the hands of Washington.

This is what the President himself said the evening of his victory:

But despite all our differences, most of us share certain hopes for America’s future. We want our kids to grow up in a country where they have access to the best schools and the best teachers. A country that lives up to its legacy as the global leader in technology and discovery and innovation, with all the good jobs and new businesses that follow.

We want our children to live in an America that isn’t burdened by debt, that isn’t weakened by inequality, that isn’t threatened by the destructive power of a warming planet [emphasis added].

It seems the President has determined that America and the world must face the immediate and paralyzing shock from manmade global warming. During his second term, the President will take expensive steps to remedy the problem.

Superstorm Sandy was a perfect storm for Obama. Its occurrence stripped the momentum of the Romney campaign; it also gave the President and New Jersey’s Republican Governor Chris Christie (aka Brutus) a chance to pal around as if they were lifelong friends as they walked among the destruction across the Governor’s home state.

“I cannot thank the President enough for his personal concern and compassion for our state and for the people of our state,” Christie said.

Perhaps Christie saw the writing on the wall and wanted to swing over to the winning side, the Green side. Perhaps the influence of the Green Environmental Machine has begun to influence even good Republicans. The only thing that seems certain is that the environmental movement is almost a religion with its own mantras and even high priests like Al Gore and Obama.

Robert Nisbet, one of the 20th century’s great conservative minds, wrote:

“It is entirely possible that when the history of the twentieth century is finally written, the single most important social movement of the period will be judged to be environmentalism. …  Environmentalism is now well on its way to becoming the third great wave of redemptive struggle in Western history, the first being Christianity, the second modern socialism.”

The President is part of this wave. He launched his re-election campaign in December 2011 by announcing $4 billion in energy conserving upgrades to Federal buildings throughout the country and finalizing efforts to create an ecosystem task force.

Obama has also mandated the first fuel and emissions standards for commercial vehicles and is applying those rules to vehicles built between 2014 and 2018.

The President has also committed $21 billion in taxpayer money to solar and wind energy companies. One of those companies was Solyndra, which received more than $500 million in Federal money only to default on it.

According to Canada’s CTV News, Obama’s re-election has made climate change a “hot topic” in Washington and may lead to a new carbon tax. A carbon tax would force people to pay more for using fossil fuels like coal, oil and gas, which the Greens claim is producing heat-trapping carbon dioxide and creating storms like Sandy.

As blogged on Washingtonpost.com, Sandy has put global warming back into focus for millions of Americans as well as Congress.

Global warming was also a type of wicked problem that led to gridlock and dissension in the nation’s capital, as nobody could quite formulate the link between public policy and extreme weather events.

That is, until Sandy. After being a non-factor until the last week of the presidential campaign, suddenly people want to talk about global warming.

The Post compares global warming as a crisis as great as the Federal government’s “fiscal cliff.” Really?

First, global warming — if it even exists and if it is truly manmade — is a global problem (I have more to say shortly).

Second, the fiscal crisis is all American, and it is a problem created by two Presidents and 12 years of Congress members who were negligent and would probably be found legally culpable if they were working in the private sector.

We know the Federal government is headed for bankruptcy. Social programs are grievously underfunded, defense spending is out of control and, most likely, tax revenues are going to decline. (Higher tax rates won’t mean more money to Washington; they will mean less money because the economy is most likely to implode.) But we don’t know that global warming is a certainty.

The same day The Post published its article, The Wall Street Journal ran a column signed by 16 scientists of note titled “No Need to Panic about Global Warming.”

This is part of what scientists signed off on in the column:

Perhaps the most inconvenient fact is the lack of global warming for well over 10 years now. This is known to the warming establishment, as one can see from the 2009 “Climategate” email of climate scientist Kevin Trenberth: “The fact is that we can’t account for the lack of warming at the moment and it is a travesty that we can’t.”

I got my first writing job three decades ago. All these years later, I am not sure if my publisher was teasing the day I started when he said: “Never let the truth get in the way of a good story.” The Greens have made that an axiom. Every time there is a hurricane or a superstorm like Sandy, they jump up on the highest soapbox and yell: “Global warming!”

If Obama bases new tax and energy policies on Sandy, that storm may be destructive for many years after the rains and wind ceased and power was restored.

There is one more inconvenient truth that the Greens I talk to can’t answer, even if I give them two contingencies that they can’t prove (that there is global warming and that it is manmade): How is the United States going to change this?

According to GrabStats, there are more than 2,000 coal plants in China and one new plant goes into operation every four to seven days.

In 2008, Wired Science reported that if China’s carbon usage keeps pace with its economic growth, the country’s carbon dioxide emissions will reach 8 gigatons a year by 2030. That will equal the entire world’s carbon dioxide production.

This has implications for the United States because what it means is that if Obama pursues Obamagreen the way he did Obamacare, then it will simply be a continuation of making the United States less competitive.

If Obama wins and gets his way with Green energy, do you know what is going to happen? The United States will develop state-of-the-art technologies that still won’t be as competitive as fossil fuels. Then we will sell the blueprints of those technologies to the Chinese, who will manufacture and sell them back to us, using coal to power the factories that produce these products. There is logic in that.

I don’t understand Obama. He either doesn’t follow this logic because he isn’t very smart or, more likely, he does understand it thoroughly but is still giving the green light to Green energy without regard to the cost and competitive consequences to the Nation which he has sworn to protect.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Sour Grapes Or Grapes Of Wrath?

The day after the re-election of President Barack Obama, the stock market tanked with the Dow Jones industrial average falling more than 300 points in the first two hours of trading and closing the day below 13,000 for the first time since Aug. 2. Oil prices also fell, losing almost $4 per barrel to less than $85 per barrel. Prices of every asset other than gold (which rose by $5 per ounce) also declined when the markets woke up to Obama’s second term. It is called deflation, and it is only going to get worse.

The markets are pure. They don’t have prejudices or preferences other than to make money in bull markets and retain money in bear markets. The day after the election, the markets voted — or, more to the point, stampeded — in a massive sale that saw every single stock in the Dow fall sharply in the first couple of hours of trading.

Democrats were quick to point out how the Dow almost doubled during Obama’s first term. The reason for that was an unprecedented amount of money injected into the capital markets and the policies of the Federal Reserve, which has effectively lowered interest rates to less than zero (yield on short-term Treasury bills pays less than the rate of inflation).

I expect more funds moving into Treasury bills despite their paltry rates of return. Investors, especially large mutual funds and even sovereign nations, are more worried about a return of their capital than the return on their capital.

For four years and with the Federal government now holding $16 trillion in debts, Obama has been playing for time with spending sprees that the Roman Emperor Nero could not have imagined.

In comparison to Obama, this information on Nero is interesting:

On July 18, 64 A.D. disaster struck, Rome was ravaged by a great fire that burned over three fourths of the city. Amid this disaster however Nero saw the opportunity to rebuild Rome greater than it had been before. His first task was the construction of a huge elegant palace. Some people believed that Nero started the fire so that he would have a place for his palace to be built. Nero saw himself losing favor with the public so he decided to blame the fire on the Christians.

Substitute Republicans for Christians and Obama’s insistence on blaming them for all of America’s ills, and you can see the parallel.

Yet while Nero’s taxes rebuilt Rome (until it was overrun by barbarians), the upcoming taxes from Obama — set to kick in Jan. 1 — will dismantle today’s modern empire, the United States.

There is growing pessimism over the prospects of Congress finding any common ground in order to stop a string of tax hikes and spending cuts from taking effect at the end of the year. Investors worry the so-called fiscal cliff scenario would send the economy back into a deep recession.

I don’t think that is going to happen. I believe the pyramid of money created during Obama’s first term plus the onslaught of taxes (his redistribution of wealth) and finally his insistence on green energy that is neither affordable nor practical are going to precipitate another depression.

Renowned 20th Century economist John Kenneth Galbraith warned that economic meltdowns inevitably reoccur after the collective living memory of the society has forgotten the errors of greed and avarice that lead to every panic and crash. It has been 80 years since the last financial implosion. The people who are directing the wealth of the Nation see the Great Depression just as they see the Roman Empire — something that had to be studied in order to pass history.

Even worse is the likelihood that Obama will victimize the United States because of his own personal ambitions and successes that have translated into giving him the Presidency for another four years. The difference between being a bad President, like Jimmy Carter, and a disastrous President will come down to those additional 48 months.

In the bestseller Suicide of a Superpower: Will America Survive to 2025?, Patrick J. Buchanan writes:

Obama is caught is a dilemma from which there appears no escape. Democrats are the Party of Government. They feed it and it feeds them. The larger government becomes, the more agencies established, the more bureaucrats hired, the more citizens receiving benefits or checks, the more deeply entrench the Party of Government.

For 80 years, this has been the Democratic formula for success. “Tax and tax, spend and spend, elect and elect,” was the pithy depiction of that policy attributed to FDR aide Harry Hopkins. And herein lies Obama’s dilemma. How does the leader of the Party of Government preside over an era of austerity, in which federal employees and federal benefits are radically reduced, to avert a default on the national debt?

The answer is Obama cannot do this. More to the point, he won’t even try. We have plenty of evidence of that from his first term which was terrible for the middle class that the President says he so strongly supports. The real winner is the government itself.

USA Today reported:

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months — and that’s before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The United States used to be the economic dynamo that powered the world. Over the past decade, America could not even power itself. More and more, we rely on borrowing ever greater sums from nations like China and Germany. Yet the strength for those two economic powers is also in decline. Last week, Bloomberg reported that the European Commission is predicting the eurozone economy will virtually grind to a halt next year as the debt crisis ravages southern Europe and gnaws at the economic performance of export-driven Germany.

The commission estimates that “the 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent. It cut the estimate for Germany, Europe’s largest economy, to 0.8 percent from 1.7 percent.” Meanwhile, China, whose economy has grown at double-digit rates for the past 25 years, has seen economic growth slow to just more than 7 percent.

This plus non-existent job growth in the United States, the onset of higher taxes, soaring debts and a severely devalued dollar tell me that the Obama Depression is fait accompli.

In high school, I had to read The Grapes of Wrath, a novel by John Steinbeck. I found it depressing, but I was affected more when I reread it a decade ago. Steinbeck’s plot could play out today. With the re-election of Obama, I believe it will play out over the next few years.

Action to take: Sell all stocks and bonds, including resource stocks such as petroleum and coal. (I wouldn’t be surprised to see oil below $60 per barrel in the next 18 months and the Dow at less than 8,000.) Convert small amounts of money into cold, hard cash stored in a safe place. I wouldn’t trust large amounts of money to banks, so consider putting anything over $10,000 into three- or six-month Treasury bills. You won’t make money, but you won’t lose your principal. Keep some physical gold on hand if you can afford it. I think bullion might retreat over the short-term, but some gold tucked away is always an insurance policy. If things get extremely bad, only gold prices will rise. As for silver and platinum, I would be an outright seller of both.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Obama Wins: Ouch!

The re-election of President Barack Obama reminds me of the joke my friend tells about me because I have a hard time giving up on things.

“Myers is the kind of guy who goes to the fridge, opens the door, takes out the milk, takes a swig and says: ‘Still sour!’  Then, he dutifully puts the milk back in the fridge.”

My fellow Americans, Obama is “still sour.” The Nation’s future rests upon the hope that his leadership will somehow get better if we can chill over this result of this election.

That is not much consolation except to say maybe we were doomed before this election. Also, what we do now and over the coming months will be a test for American democracy — the longest lived one in the world.

In fact, Founding Father John Adams did not believe it could survive. Adams wrote: “Remember, democracy never lasts long. It soon wastes, exhausts and murders itself. There was never a democracy yet that did not commit suicide.”

And few democracies have been on the edge of a precipice and not fallen from it.

The danger lurks with so many factors that no President could overcome, at least not in time to avert an economic disaster and perhaps even a social uprising. Most of it comes down to the change in the moral compass and the destruction of American values.

White Men Can’t Run?

I watched Larry King interview acclaimed writer and reporter Bob Woodward on the day after Obama’s inauguration. King told a mystified Woodward: “My younger son Cannon, he is eight. And he now says that he would like to be black. I’m not kidding. He said there’s a lot of advantages. Black is in. Is this a turning of the tide?”

I don’t know what is more amazing: that the 78-year-old King now has a preteen son or that his son wanted to be a black instead of a white Jew.

Perhaps it’s not so strange at all. Robert Groves, the head of the U.S. Census Bureau, said regarding the 2010 census data: “This is the decade of Tiger Woods and Barack Obama, where we talked about race combinations.”

Race, ethnic and economic issues are certainly becoming a major hurdle for both the United States and Canada. In 2009, columnist Frank Rich wrote in The New York Times:

“…the inexorable transformation of America into a white-minority country in some 30 years — by 2042 in the latest Census Bureau estimate — is causing serious jitters, if not panic, in some white establishments. … we’re just at the start of what may be a 30-year struggle.”

The problem is that the races are not all coming together as they once did in a giant melting pot. Rather, America is turning into a monstrous salad bowl whose mixed cultural heritage differs on morality and government, a mixture that may not be easy for anyone to digest in the not distant future.

It certainly has happened in Canada and my hometown city of Calgary, Alberta. When I left and moved to Spokane, Wash., to raise my family 30 years ago, Calgary was a white, Anglo-American city built around energy. Energy still powers this city, but its population has more than doubled in three decades. Much of the growth has come from immigration of peoples from the developing world. The common Christian values that the people of Calgary once shared no longer exist. The city is a mishmash of cultures, colors and mores. Adding to the societal stress is the infiltration of street drugs as well as Asian gangs that pedal them.

To deal with the problem, Calgary elected Mayor Naheed Kurban Nenshi. He was born in Canada after his parents emigrated from Tanzania. A smart and likable man elected in 2010, he promised to ease the social tensions in Calgary and bring spending under control. So far, he has had limited success.

I saw similar changes in Spokane. I first visited The Lilac City in 1977. After hosting Expo ‘74, Spokane rebuilt its core with a beautiful park.

People didn’t think to lock their doors at night. Then, there was the case of Kevin Coe, better known as the South Hill rapist. In 1981, he was arrested for and convicted of a series of rapes. A decade later hard drug distribution was so rampant that police warned drivers to be extra cautious driving because some dealers were carrying meth labs in the trunks of their vehicles.

I turn 55 next week; and, over 30 years, I have seen a severe decline in the morals that made both Canada and America great nations. If unchecked, things will get worse, so bad that I fear there will be violence.

The forces facing Obama are gigantic compared to that of any one mayor. Obama’s ability or inability to deal with social and economic problems impacts the Nation and the world. To date, he has not shown much capacity to lead, but now more than at any time in the past half-century, America needs strong leadership.

So far, Obama has done nothing but incite alarm for millions of Americans.

The New York Times bestseller Suicide of a Superpower: Will America Survive To 2025? was written by Patrick J. Buchanan, a strong conservative who was a member of the Richard Nixon Administration. Buchanan opens the second chapter, “The Death Of Christian America,” with these three quotes:

  • “America was born a Christian nation.” -Woodrow Wilson
  • “This is a Christian nation.” -Harry Truman, 1947
  • “… we do not consider ourselves a Christian nation…” -Barack Obama, 2009

The question that stands out to this writer is whether Obama is being a shrewd politician and tapping into that rainbow of voters or does he not think that Christian values and mores are important to the future of the United States? We have four more years to find out. Meanwhile, now is as good a time as any to be taking precautionary steps to secure the future of you and your family.

Yours in good times and bad,

-John Myers
Editor, Myers’ Energy & Gold Report

California Dreamin’

“You know the preacher likes the cold
He knows I’m gonna stay
California Dreamin’
On such a winter’s day”
–“California Dreamin’” by The Mamas & The Papas

California! Home to the gold rush, Hollywood and, once upon a time, the greatest of all American dreams. But as Don DeLillo, the great modern American novelist said: “Californians invented the concept of life-style. This alone warrants their doom.”

I wrote last week about the economic tragedy that has befallen Greece. But the economic crisis is far closer to home than that island nation. For America it may start and end in California.

In the book California Crackup, authors Joe Mathews and Mark Paul explain the economic meltdown for California — whose State coffers may be just as empty as those in Athens, Greece — has legislative districts filled with very partisan people. Every new tax or big spending decision requires a two-thirds majority. Even if a measure finds the needed votes, it can be undone by the voter-initiative process.

Bestselling author Michael Lewis (The Big Short) wrote: “Throw in term limits—no elected official now serves in California government long enough to fully understand it—and you have a recipe for generating maximum contempt for elected officials.”

The California government was designed mainly to maximize the likelihood that voters will despise the people they elect, according to Paul.

“What all the polls show is that people want services and not to pay for them. And that’s exactly what they have now got,” Paul said.

It sounds like what’s going on now in Congress. I find it hard to imagine that either Barack Obama or Mitt Romney will be effective in instituting change.

For Arnold Schwarzenegger, two-term Governor of California, it was a series of economic crises that began with the Internet bubble and ended with the real estate bubble.

In his new autobiography, Total Recall, Schwarzenegger wrote: “Besides being golden and prosperous, California is disaster prone.” He didn’t understand the full extent of this until 2003 when he was elected as a Republican Governor.

“After so many years of ugly, pointless fighting in Sacramento, both sides had lost touch with the art of negotiation. In fact, the legislative districts were drawn to elect the most partisan, uncompromising members of each party; legislators who were bred to fight, like roosters bred for cockfighting.”

It has led to economic failure in what was the land of opportunity.

CNBC reports: “California is on the verge of an economic meltdown. The state, with the second highest foreclosure rate in the nation, is being hammered by the deep recession, rising unemployment and a growing multi-billion dollar budget deficit. … And, while California may be the biggest state in trouble, it isn’t alone.”

How bad is it? I was out at a gathering with all my oldest friends last week. One of them owns the largest motorcycle dealership in California. He has a son and is very worried about his future because of recent events in the State. Yet he said he didn’t know where to go where they would be better off.

That was when I decided to follow up my Greek article and write about California. Only after I did my research did I find that GOP Presidential candidate Mitt Romney had already made the comparison.

Speaking in Iowa in August, Romney compared California’s economy to Greece’s economic crisis.

“Entrepreneurs and business people around the world and here at home think that at some point America is going to become like Greece or like Spain or Italy, or like California.”

Romney also derided California at a fundraiser in Irvine, Calif., earlier this summer when he warned that the ills of that State could spread to the rest of the Nation.

“How have the liberals done in California? Do you want the same policies in Washington that you see coming out of Sacramento? With education, with the deficit, with taxes? Is that the way you want the country to go? I don’t know how anybody in California can keep voting for liberals,” Romney said.

One thing is certain, California is becoming a disaster zone and not because of earthquakes or forest fires. Last month, the Debord Report stated:

The independent State Budget Crisis Tax Force has released its analysis of California’s finances and found that rather than being a whopping $28 billion in debt, as Gov. Jerry Brown alleged with he came to office, the state is actually a nearly unfathomable $335 billion debt. Brown called it a “wall,” as the New York Times noted. But it’s really more like a dozen walls. All stacked on top of each other to make a mega-wall that blocks out the Sun.

This is not an exaggeration. Californian’s total level of debt, on and off the books, is pushing a fifth of the total annual economic output of the state, which is about $2 trillion.

The United States, along with Canada and most Western democracies, has adopted California’s propensity for spending just as it has embraced Hollywood entertainment and La Jolla fashions.

California is the land of illusion. Illusions of prosperity have been adopted worldwide. For his latest bestseller, Boomerang: Travels in the New Third World, Lewis interviewed the mayor of San Jose, Chuck Reed.

Lewis pointed to the fact that San Jose has the second highest per capita income of any city in the United States (after New York) and had one of the highest credit ratings until last March (that was when Moody’s Investors Service cut the general-obligation grade one step to AA1 from AAA).

Reed told Lewis that the city has a problem: It owes so much more money than it can afford to pay to its employees that it could cut its debt in half and still end up broke.

Reed said: “We’re not as bad as Greece, I don’t think.”

Maybe not yet, but for how long? And for how long will the United States be not as bad as Greece? If Washington could not write blank checks because the U.S. dollar is the world’s reserve currency, there would be more serious downgrades to U.S. Treasury debt and that would incur much higher interest rates.

For four years, the Obama Administration has refused to do anything but pass the buck — in this case, to future generations. With a little luck we will at least have the opportunity to see if President Romney has the courage to do more. If not, “California Dreamin’” will become America’s nightmare, and many of us will be stepping into churches to pray.

Yours in good times and bad,

John Myers
Editor, Myers Energy & Gold Report

Our Greek Tragedy

Regardless of who the President is after this close election, the equity markets and the U.S. economy are in trouble. Debt has spread throughout the Western world. The fallout is political dissonance, growing economic hardship and, in some places, mob violence.

Ground zero for the spreading fear and panic is Greece, which was once the world’s greatest civilization and the birthplace of democracy, poetry and philosophy.

There is violent evidence of the contradiction from what the ancients taught and what is unraveling in Greece. It would all just be another boring story at the end of the news day, except there is brewing tragedy that Homer would find worthy of telling: The greatest Nation on Earth, the United States, may be a few short years or months from the economic debt collapse that wreaked havoc from Athens, Greece, to Akron, Ohio.

The onset of the crises began in 2008 after there was a worldwide flood of cheap money that investment bankers leveraged. In eight years, worldwide private and public debts rose from $84 trillion to $195 trillion. To put that number into perspective, the gross domestic product in the United States (the value of all goods and services sold or rendered) will be well below $16 trillion this year, while the total market capitalization of every U.S. stock that is publicly traded is less than $25 trillion.

According to Kyle Bass, the manager of the hedge fund Hayman Capital and one of the few to correctly predict the stock market crash of 2008: “It has been the largest peacetime accumulation of debt in history.”

It was a decade long drunkfest, and the tab is due. With the too-big-to-fail banks already bailed out, the bill for the biggest party ever has fallen on Western governments. To sustain any hope of borrowing another nickel, these democracies have had to make unprecedented spending cuts.

No nation went on a bigger bender than Greece over the past decade. The spending spree happened after Greece was accepted into the European Union. The promises that Greece made to achieve that status were never kept. Now, Germany is faced with the lose/lose prospect of bailing out what German newspaper headlines describe as “Lazy Greeks” or accepting the consequences along with the rest of Europe (and most likely America) if the Greek government defaults on its $400 billion in government debt.

The situation is bleak. Last year, of the 126 countries whose debt was rated, Greece ranked 126th. The acrimony that resulted from deep cuts in government spending just to stave off insolvency has led to political demonstrations, violent protests and murder.

Sowing The Seeds Of Violence

In Greece this autumn, more violence is being harvested. Last month, the nation’s two largest unions went on strike. The strike turned violent after protesters hurled firebombs at police in Athens. As many as 50,000 Greeks gathered to condemn new austerity measures. Still, Greece’s new government rolled forward with $15 billion in further spending cuts that have been imposed on the nation by its creditors, the most notable being Germany.

In May 2010, there were demonstrations that drew tens of thousands of people near the central square in front of Parliament in Athens as part of a general strike that paralyzed airlines, ferries, schools and hospitals.

When some protesters saw 20 employees still working at Marfin Egnatia Bank, they began throwing Molotov cocktails inside the building and then added gasoline to the fire. Most of the bank employees escaped through the roof with the help of the fire department, but the fire killed three workers — including a young woman who was three weeks pregnant. As the bodies were being removed, the crowd screamed that it served them right for going to work. The police stood by, and no arrests were made.

It sounds like a scene from the French Revolution, but it is going on in Greece even as you read this. And while one government has already been toppled, the new one is indecisive. It wants to get a free ride from the Germans and keep lending costs at least somewhat affordable by staying with the euro. However, millions of Greeks are unwilling to live within their means, which would include paying taxes and postponing a retirement age with pensions beginning at age 55 for men and 50 for women.

In his bestseller Boomerang: Travels in the New Third World, Michael Lewis wrote:

As anyone with a brain must have known, the Greeks would be able to disguise their true financial state for only as long as (a) lenders assumed that a loan to Greece was as good as guaranteed by the European Union (read Germany), and (b) no one outside of Greece paid very much attention.  Inside Greece there was no market for whistle-blowing, as basically everyone was in on the racket.

A Funny Thing Happened On The Way To The Treasury

On Aug. 5, 2011, for the first time in history, a credit service (Standard & Poor’s) downgraded U.S. federal government debt from AAA (outstanding) to AA+ (excellent).

In normal times this would cause U.S. interest rates to increase, making it even more expensive for the Nation to finance its daily borrowing requirements. Instead, the crisis that was brought about because of Congress’ opposition to an increase in the debt ceiling actually made government rates fall. A few days later, rates paid on 10-year Treasury bonds dropped to just above 2 percent, the lowest return ever.

It was part and parcel of the investment insanity that is controlling the bond market. Stocks are a different matter. After the downgrade, stock markets around the world underwent a serious correction, which sent investors flocking to safety. That sent billions of dollars into gold (which made sense) and U.S. Treasuries (which made no sense).

All of this was accomplished, of course, because the U.S. dollar is the reserve currency of the world. Because of that, it is free to manufacture as many dollars as it needs to pay off its creditors. As a result, the fear that the United States will someday default is still not considered, according to Lewis.

The stock market crash of 2008 demonstrated investor thinking can change on a dime. That is America’s problem for anyone who holds U.S. stocks or bonds.

Twelve years ago this month, I began writing Outstanding Investments for Agora. That fledgling newsletter, which is the company’s flagship publication, has stayed on course with my original recommendations: that investors should buy gold and other hard assets because the United States was drowning in debt. Since that time, the price of gold has risen from well below $300 per ounce and is currently trading above $1,700 per ounce. Even more telling may be what the greenback has done versus the Canadian dollar. A decade ago, you needed 1.5 Canadian dollars to buy one U.S. dollar. Today, 97 cents of Canadian money will buy you a greenback.

The fact that U.S. interest rates have fallen to all-time lows is an anomaly that historians will look back at with wonder. They will ask themselves why someone with a brain didn’t see it coming.

Meanwhile, if there were an anger index for the United States, it would be at an all-time high. Both Barack Obama and Mitt Romney are campaigning hard these last few weeks for the Presidency, yet neither has laid America’s true cards on the table. Neither wants to precipitate a stock and bond market collapse. Yet it is out there… waiting.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy and Gold Report