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

Our Hundred Years’ War

The race for the Presidency has been interesting, not because of what either GOP nominee Mitt Romney or President Barack Obama has said, but because of what has been ignored.

The most notable taboo topic is the Nation’s continued involvement in Afghanistan as well as the progressive deterioration of American strategic goals for the Mideast.

Neither candidate has been candid on a geopolitical blunder in Afghanistan that continues to rack up hundreds of billions of dollars in additional debt and potentially thousands of American deaths.

Phyllis Bennis, a fellow at the Institute for Policy Studies and author of Ending the US War in Afghanistan: A Primer, contends that neither candidate has a way for America to extricate itself from Afghanistan.

In an interview, Bennis said:

Candidate Obama has now stopped talking about Afghanistan this time around. Candidate Romney has said that Obama is not tough enough, but what he has called for has not been different in any substantive way. He has said that we should keep troops there, not pull out right away. President Obama is not pulling out right away, so there’s very little substantive difference.

What is inescapable is that this month marks the beginning of the 12th year of war in Afghanistan; it is America’s longest war. What has been ignored by American strategists is that Afghanistan is a desolate, Stone Age nation that refuses to be civilized and has successfully resisted past and present superpowers, a group that includes not only the United States but also the British Empire and the Soviet Union.

Washington has ignored this historical truth and has so far invested nearly $1 trillion in fighting a losing struggle that has cost us more than 2,000 dead.

Obama has promised to end the U.S. combat role in Afghanistan by December 2014, although the United States has pledged to continue some undefined military and economic support well beyond that date. How far the United States will offer support beyond that date is open to speculation. Given the growing conflict with millions of radical followers of Islam, it doesn’t seem impossible that right now America has a future President who is in college and who, decades from now, will be deciding his strategies to defend America from an ever-expanding Muslim mob.

Afghan war strategists in the Obama Administration agree there is little chance of negotiations with the Taliban that would bring a political settlement to the war.

The question is why would the Taliban want to negotiate with the United States? Some 12 years into this war, American soldiers on patrol can’t determine who the biggest threat is: the enemy fighters in the countryside or their Afghan allies who once protected their backs but have increasingly been taking aim at them.

Gareth Porter, a historian and investigative journalist on U.S. foreign and military policy, said: “The Taliban have been able to carry out spectacular attacks on U.S. bases that have gotten much farther and done much more damage than anything the Vietcong and North Vietnamese were ever able to do during the Vietnam War.”

In an interview with The Guardian newspaper, NATO Secretary General Anders Fogh Rasmussen admitted the killings of almost 50 allied troops this year by Afghan security forces has damaged the relationship between the international forces and the Afghan police and military.

The Much Bigger War

Unspoken by both Presidential candidates is how America can win the war far beyond Afghanistan, a war without borders against an elusive enemies with unspecific goals united only in their hatred of the United States.

“The enemies we face in the future will look a lot like al Qaeda: transnational, globalized, locally franchised, extensively outsourced–but tied together through a powerful identity that leaps frontiers and continents,” wrote Mark Steyn in America Alone: The End of the World as We Know It.

“All dominant powers are hated–Britain was, and Rome–but they’re usually hated for the right reasons. America is hated for every reason. The fanatical Muslims despise America because it’s all lap-dancing and gay porn; the secular Europeans despise America because it’s all born-again Christians hung up on abortion; the anti-Semites despise America because it’s controlled by Jews. Too Jewish, too Christian, too godless, America is George Orwell’s Room 101: whatever your bugbear you will find it therein; whatever you’re against, America is the prime example of it.”

We no longer face a monolithic enemy like communism. What we do face is an enemy that will persist in its extremism and its hatred of the United States long after the upcoming occupant leaves the Oval Office.

And yet our policymakers continue to be like old generals and persist with fighting the last war. That war was won by outspending the enemy. Eventually, the Soviet Union imploded because that empire simply could not afford the cost of the Cold War. Today, America’s strategists are spending even more money on everything from nuclear aircraft battle groups to ultra-sophisticated fighter-interceptors like the Raptor F-22 which costs $420 million per plane.

Expenditures on these types of weapons put the Pentagon’s budget at $670 billion this year, about 18 percent of total Federal spending. The dollar amount has more than doubled since 2001 when the United States began its wars against Islamic extremists. It is hard for me to see how jet inceptors or nuclear submarines can effectively combat the growing radical contingent within Islam which continues on its jihad.

From Yemen to Libya, revolt rolls forward. Not long ago, nations like Egypt were our vanguards, influencing at least some stability on the region. In the past three years, one regime after another has been toppled, and there is growing radicalization inside the governments of almost each of these former allies. That could, as Steyn suggests, leave America alone.

When I was a kid, there was a joke about the IQ test for dummies. One of the questions was: Who is buried in Grant’s Tomb? Another was: How long did the Hundred Years’ War last? This second question isn’t so easy because it turned out to be a series of conflicts between England and France that lasted from 1337 to 1453.

That is trivia. But there is another question we should all be asking: How long will America’s war with Islam last? Tragically, we are into the second decade of this conflict and there is no end in sight.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

On A Rig And A Prayer

Let us hope Mitt Romney is uncorking non-alcoholic champagne in 34 days. If Romney is victorious, the caps being blown won’t only be on bottles from Romney’s stock. Across the land, there will be celebrations as hundreds of rigs get set to drill and capture oil inside the United States and along the Nation’s coastlines. Included in the festivities are new jobs created by Keystone Pipeline.

The GOP Presidential candidate has gone so far as to promise North American energy independence in the next eight years. If this sounds like déjà vu, you are right. American Presidents have been raising their glasses to the promise of American energy independence since President Richard Nixon proposed it four decades ago.


Brian Beutler demonstrated this in the graph above published by TPM.com on Sept. 11. The numbers, taken from the Energy Information Administration, show petroleum imports as a percent of U.S. petroleum consumption. Headlined are the years that three Presidents promised American energy independence.

President Barack Obama also has plans to reduce America’s oil imports, but his solution is mostly meant to please his liberal constituency and is centered on greater investment in unproven, unreliable and uneconomical green energy.

Romney is more realistic than past Presidents because he is calling for North American energy independence, which would allow Canada — yes, with its gummy oil sands — to move American transport, heat America’s homes and malls, and power its factories. The moose and ducks in northern Alberta may not like the off-world landscape that the oil sands leave behind, but I have a feeling that North Americans will find it a lifesaver.

What has led to U.S. oil dependence on OPEC has been half a century of restrictive drilling inside the United States, plus a growing mountain of green legislation that threatens to block pipeline imports from Canada. America has become more involved in one crisis after another in the Islamic world — home to two-thirds of the world’s conventional oil reserves.

Romney stands head and shoulders over Obama when it comes to energy. Last week, Romney pushed for energy independence at a rally in Jefferson County, Colo.

Romney said: “We have kind of an ace in the hole that came along to us because someone learned how to drill into the earth, not just vertically but horizontally. I will double licenses and permits, and I’ll make sure we’ll drill in the outer continental shelf and drill in Alaska and bring in that pipeline from Canada.”

On Sept. 25, on the campaign trail in Ohio, an outspoken Romney condemned Obama’s plan to invest in green companies: “He spent $90 billion and sent them to companies in many cases that were owned by campaign contributors of his.”

Romney’s emphasis on the drill bit over the windmill is certainly right-minded, but that has not stopped a storm of criticism by wind-power advocates who oppose Romney because he wants to do away with the Federal tax credit extension for wind power.

While Romney is accused of saying what is needed to win, Obama is worse. The President has gone so far as to obstruct petroleum exploration.

“There is an entire new world of geology out there that’s awaiting us,” said Harold Hamm, CEO of Continental Resources Inc., at a House Energy and Commerce Committee subcommittee hearing last month.

According to Hamm, Federal regulations hinder development by delaying the permits needed. As a result, his Oklahoma City-based company avoids drilling on Federal lands. Hamm added that he wasn’t representing the campaign in his testimony.

Bloomberg recently reported that oil production climbed to almost 6.2 million barrels a day this year (from less than 5 million barrels in 2008), helping reduce imports to 42 percent of total consumption from more than 60 percent in 2005.

Through fracking, a process that injects a mixture of water, sand and chemicals thousands of feet below the surface, companies like Continental can access fossil fuels trapped in shale rock formations, whereas conventional techniques require the oil to flow to the well, according to Hamm.

Noble Causes

Representative Henry Waxman (D-Calif.) rebutted that the Republicans’ energy plans are too reliant on fossil fuels which release gases that scientists have linked to climate change.

That should read “some scientists.” The key point is that even if there is global warming (and no one is certain that there is), it is manmade.

One person who wonders about all the outrage over global warming is Anthony Watts. A former meteorologist, Watts attended Purdue University. While he doesn’t claim to be a scientist, he certainly questions the science of global warming.

Watts was recently interviewed by PBS Newshour (not a conservative program). The first question: “What’s the thing that bothers you the most about people who say there’s lots of global warming?”

Watts’ answer: “They want to change policy. They want to apply taxes and these kinds of things may not be the actual solution for making a change to our society… There’s a term that was used to describe this. It’s called noble cause corruption. And actually I was a victim of that at one time, where you’re so fervent in your belief that you have to do something. You’re saving the planet, you’re making a difference, you’re making things better that you’re so focused on this goal of fixing it or changing it that you kind of forget to look along the path to make sure that you haven’t missed some things.”

What Of China And India?

Watts points out that global warming has become a business in its own right. If so, it is a business that obstructs U.S. energy advantages but has no impact on America’s new competitors: China and India.

In 2006, China became the largest national emitter of carbon dioxide. It was reported this past summer that the average Chinese person’s carbon footprint is now almost equal to the average European’s.

The Guardian reported: “Chinese CO2 emissions are now around 80% higher than those of America. This widening gap reflects a 9% increase in total emissions in China in 2011, driven mainly by rising coal use, compared with a 2% decline in the US.”

What Obama and the Democrats don’t understand is that cleaning up America’s carbon emissions will give nations like China and India an economic advantage at a time when the United States cannot afford it. This is something Romney and the people in charge of his energy policy understand, and it is something Obama and his loyalists are either willfully ignorant of or else understand all too well and simply don’t care.

Romney’s understanding about energy makes him a much better candidate to be the next President of the United States. He will put rigs back to work, and that is enough reason for me to pray for his victory.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

The War With Islam

Around and around we go. Violence and death of innocents on Islamic soil seems to be a perpetual phenomenon. The most recent round of senseless violence was said to have been sparked by the surfacing of a sophomoric YouTube video that pokes fun at Muhammad.

A handful of Muslims in the eastern Libya city of Benghazi became so enraged by the incident that they attacked the U.S. consulate, killing U.S. ambassador Chris Stevens along with three other Americans.

It didn’t bother the executioners that Stevens had fought beside Libyans to free Libya from dictator Moammar Gadhafi, who had ruled the country for 34 years.

Also, protesters in Egypt scaled the walls of the U.S. embassy in Cairo and replaced an American flag with an Islamic banner. Again, Islamic extremists have problems with their short-term memory. It was the United States that supported the revolution in Egypt that removed that nation’s dictator, Hosni Mubarak.

Those acts were the first such assaults on U.S. diplomatic facilities in either country. There was a flurry of excuses for the murder of Americans whose only sin was trying to build Islamic civilizations in a region that refuses to become civilized.

Let me get back to that YouTube film whose very existence justifies a death sentence even to those who had nothing to do with its production.

You see, the video goes so far as to mock Islam’s holy prophet.

I don’t know if some of you watch the TV show “Family Guy” which FOX, of all networks, produces. It sometimes makes fun of Jesus Christ. In one episode Christ is shown as a hippie working at a used record store. That hasn’t resulted in attacks on the show’s creator, Seth MacFarlane, by Christians. Call it free speech and the Western world’s ability to laugh at itself even when it comes to our religious beliefs. We certainly don’t go on murderous rampages every time our sensibilities are hurt. That is not the way for much of Islam.

Further evidence of violent Islamic tendencies was provided last week when al-Qaida’s affiliate in North Africa urged Muslims in the region to kill U.S. government representatives.

“We encourage all Muslims to continue to demonstrate and escalate their protests and to kill their (American) ambassadors and representatives or to expel them to cleanse our land from their wickedness,” read the statement from al-Qaida in the Islamic Maghreb.

The group also called the killing of Stevens “the best gift you (can) give to his arrogant and unjust administration.”

There’s more. Also last week, a Taliban-allied insurgent group claimed responsibility for a suicide attack that killed at least 12 people, including eight South Africans, in Afghanistan. The group said it was in response to the YouTube video.

A spokesman for Islamic militant group Hizb-i-Islami said a 22-year-old woman named Fatima carried out the attack. She drove a car packed with 660 pounds of explosives into a van on a road leading to the Kabul International Airport.

Suicide attacks by women are rare in Afghanistan — maybe because it’s a sin for a woman to drive a automobiles.

“The anti-Islam film hurt our religious sentiments and we cannot tolerate it,” spokesman Haroon Zarghhon told The Associated Press.  “There had been several young men who wanted to take revenge, but Fatima also volunteered and we wanted to give a chance to a girl … to tell the world we cannot ignore any anti-Islam attack.”

That’s lucky for Fatima — although, I am not too sure what she is going to do with the 72 virgins that are waiting for her.

Radical jihadists can’t even come up with original reasons to be anti-American; they have to spend their days scanning YouTube to find some insult. Don’t these Islamic believers have better things to do, like build schools and roads? Yet it was determined that murder had to be meted out because some idiot made fun of Muhammad.

Isn’t it time for the West to wash our hands of Islam? A growing part of Islam, regardless of whether President Barack Obama will admit it, is at war with the United States and Western society. During the Cold War, the United States faced rational and educated leaders of the Kremlin. The opposition leaders in this war are crazed religious fanatics who have already demonstrated they are crazy enough to blow up themselves — and often many innocent Muslims who happen to be in the way — because they have nothing better to do than to kill Westerners.

You can blame it on the brain trust of Islamic militants. One man that helped shape al-Qaida’s philosophy was Sayyid Imam al-Sharif, also known as Dr. Fadl.

In an article for The New Yorker, Lawrence Wright relayed Dr. Fadl’s doctrine:

Fadl contends that the rulers of Egypt and other Arab countries are apostates of Islam. “The infidel’s rule, his prayers, and the prayers of those who pray behind him are invalid,” Fadl decrees. “His blood is legal.” He declares that Muslims have a duty to wage jihad against such leaders; those who submit to an infidel ruler are themselves infidels, and doomed to damnation. The same punishment awaits those who participate in democratic elections. “I say to Muslims in all candor that secular, nationalist democracy opposes your religion and your doctrine, and in submitting to it you leave God’s book behind,” he writes. Those who labor in government, the police, and the courts are infidels, as is anyone who works for peaceful change; religious war, not political reform, is the sole mandate. Even devout believers walk a tightrope over the abyss. “A man may enter the faith in many ways, yet be expelled from it by just one deed,” Fadl cautions. Anyone who believes otherwise is a heretic and deserves to be slaughtered.

So here we stand in 2012; the Middle Ages intersect the Internet.

Obama continues to waste billions of dollars in aid to Islamic nations — even countries like strife-riddled Egypt which collects $1.5 billion a year from Washington. The Obama Administration played a crucial role in the overthrow of Mubarak only to witness the ascension to power of the latest Egyptian despots who are even worse than Mubarak. A recent headline from the Daily Beast said it all: “Obama’s Foolish Embrace of Egypt’s Muslim Brotherhood.”

Mr. President: If by chance you get re-elected, please change your policies regarding Islam. Try not to take a society out of the Stone Age. Too many believers in Muhammad (like your father was) are committed to killing those who have done nothing other than invest themselves in trying to bring a better future to a rundown region which is becoming the globe’s gutter.

Hopefully, Republican Presidential nominee Mitt Romney will prevail in November. If so, he must understand he has an undeclared war on his hands with much of Islam. The Muslim Brotherhood is gaining murderous momentum throughout the Mideast — especially in Egypt. It controls the Suez Canal, a choke point for petroleum and other essential trade.

To date, the Muslim Brotherhood has not renounced the doctrine of its late founder, Hassan al-Banna: “It is the nature of Islam to dominate, not to be dominated, to impose its law on all nations and to extend its power to the entire planet.”

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Your Vote Won’t Save The Buck

America will take the biggest wager it has made in generations in just 48 days. Either President Barack Obama or GOP Presidential nominee Mitt Romney will be given the task of rebuilding America.

Liberals believe Obama is the man who can do it if he is given another four years.

Many Republicans think that another four more years of Obama will ensure the economic destruction of the United States. The GOP is resting its hopes on a Romney Presidency.

I have some bad news: The United States is in a permanent state of decline that neither candidate can, or is even willing to try to, fix.

Obama’s plan comprises the tried and failed policies of big government: renewed regulation and higher taxes. As for Romney, he hasn’t presented much of a plan to reverse the four-year recession that has all the makings of a depression.

Both Obama and Romney are big spenders. Their preference on where they will spend differs, but one fact faces them both: America has $16 trillion in Federal debt.

I believe whatever solutions they have can result only in a larger Federal deficit and the continued meltdown of the dollar.

Whoever is President will have a partner in this crime: the Federal Reserve, whose sole purpose in the 21st century is to float trillions of dollars in fiat money regardless of the future cost.

Kids’ Stuff

When I was in my 20s, I did the research for my father’s investment newsletter. This was a decade before the Internet. The Federal Reserve would send out a monthly newsletter, with all the data on interest rates such as the Fed funds rate, plus all the statistics on the money supply.

What I didn’t know then is that reviewing this material made us like the last of the Mohicans. In the future, the Fed wouldn’t operate with restrictions. Federal Reserve Chairman Paul Volcker, who operated the Fed first for President Jimmy Carter and then Ronald Reagan, believed the excesses of the economy needed to be squeezed out. He promptly did what a responsible central banker should do; he raised interest rates.

In 1975, America was road blocked by gasoline lines and escalating inflation. Volcker decided he had to follow what he believed to be the first fundamental obligation of the Federal Reserve: squeezing out excess money. He certainly did. The Fed increased the fed funds rate, what it charged to other banks to borrow money from 4.6 percent in January 1977 to 19.1 percent in January 1981. That kind of rate change had never been absorbed by the United States, yet Volcker bet it would cure the economic malaise that had been part of the Carter experience and that with Reagan’s tax cuts would put America back to work.

There was a price for this aggressive action taken by the Fed, especially in the farm and commodity sectors, which underwent a rolling recession. Yet because of it and the stability that was returned to the dollar, the U.S. began two decades of unsurpassed growth. It also made America an oasis for foreigners to invest their money.

I remember commenting to my dad in 1982 that I was surprised that M3 money supply (a large measure of the money in the economy) was declining.

He said something about the Fed fixing the excesses of the 1970s. By then, he had told his subscribers to sell gold and to accumulate Treasury notes, some which paid 15 percent interest. He believed the actions of the Fed would strengthen the dollar, and he was right.

Because of the Fed’s intervention, the Nation was saved from dollar maelstrom. Instead, the great economic expansion lay ahead, a period during which the Dow Jones Industrial Average would rise more than tenfold. And the dollar would reach heights never achieved before against other currencies.

This Isn’t Your Father’s Fed 

Since 9/11, the Federal Reserve has rejected any obligation to protect the integrity of the dollar. It has created trillions of dollars out of thin air to fend off the liquidity crisis that began in 2008 and persists to this day.

Congress and the past two Presidents have played a role in making the dollar into Monopoly money. The Troubled Asset Relief Program bank bailout added $700 billion into the coffers of big banks. In the HBO movie “Too Big to Fail,” the question asked at the end is whether the banks can be counted on to lend it. The conclusion by the Chairman of the Federal Reserve and the Secretary of the Treasury is that of course they will.

Yet they didn’t. Like a gambling addict, the big banks have just doubled down on this easy money. And like any gambler, they will lose it, too. It won’t be just their loss but the Nation’s loss while the United States continues to forfeit its superpower status.

In his 2009 book End the Fed, Representative Ron Paul (R-Texas) writes:

The Fed itself claims that part of its job is to keep inflation in check. This is something like the tobacco industry claiming that it is trying to stop smoking or the automobile industry claiming it is trying to control road congestion. The Fed is in the business of generating inflation… the entire reason for the Fed’s existence is to generate more, not less, of it.

Paul is dead right; in the past decade, the Fed has given Washington a book of checks to accumulate as much debt as it wants. And from what I have seen proposed by Obama and Romney, they plan to spend the Fed’s windfall like a homeless person would spend $1 million in lottery winnings.

In the first day of Economics 101, my professor pulled an apple from his desk (that was no doubt given to him by a suck-up) and asked: “What do you think this apple is worth?”

There was a lot of chattering. People said it was worth maybe a nickel (don’t forget this was in 1976).

Then the professor asked: “What is it worth if I told you that it was the only apple left in the world?”

We were all stupid teenagers, so we missed his point, which was that it would be priceless.

The professor taught us over the next eight months. We came to understand that the value of one apple would be immeasurable.

That is the problem the President-elect faces. Consider it when you look at this graph:

Graph of St. Louis Adjusted Monetary Base


The amount of U.S. dollars that is sloshing around has doubled in the past four years. America has never seen that kind of monetary eruption. With the exception of Weimar Germany and countries ruled by Latin dictators, neither has any other nation.

This is surely a prescription for the dollar’s destruction. And yet neither Presidential candidate will even mention the impending crisis. That should be all you need to know about getting out of U.S. dollar instruments.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Editor’s note: It’s time to make your submissions for this month’s You Sound Off! feature, which will run Sept. 26. Get your submission in by Sept. 24. It should be no more than 750 words (if it is longer, we probably won’t read it). We will select the one or two we think are the best of the week to publish. We reserve the right to edit for grammar and style but will try not to alter the meaning.

Send your submissions to yousoundoff@personalliberty.com. Please include your name, address and telephone number (only your name will be published) so we can contact you if we need to clarify something. Anonymous submissions will not be considered.–BL

Getting A Job

The race for the Presidency is focusing on which candidate will best help people get a job. During the Democratic National Convention, Michelle Obama weighed in on the matter: “We (she and husband President Barack Obama) have to fix this. We have so much more to do.”

Whoever is elected in November, whether Obama or GOP Presidential nominee Mitt Romney, it will be his priority to improve the economy. If the economy does improve, that will create jobs. Yet two things strike me:

  1. The individual, not the government, must assume responsibility for his career path.
  2. It always has been difficult to find the job you want.

I was reminded of this when the first man to give me a job as a writer died last week at age 83. His name was Harald Gunderson and, as a teenager, he was a working cowboy. Later, he joined the Royal Canadian Navy. After that, he worked as a brakeman with the railroad until he finally got an opportunity to be a reporter for a small-town newspaper. A few years later, he got his big break and became a reporter for a large daily. He went on to successfully publish several magazines.

My dad, C. Vernon Myers, had a similar path.

In 1932, Vern had a college degree in geology and was awarded a gold medal as his college’s most outstanding graduate. He was certain he could get a good job and parlay that into the career that he wanted — to be a writer.

The Great Depression interrupted his ambitions for 12 years. There were no jobs available in the mining business, and the oil boom had not yet taken off in Canada.

Even though his parents had put every nickel they had in sending my dad away to college, he had to come back to the community and work on his parent’s homestead. He used to recount the shame he felt in their sacrificing so much only to see him working in the pen with hogs.

With his connection to a packing plant, he was able to get a job as a shipping clerk and had a guaranteed salary of $60 per month. He took various orders for hog livers, bacon and pork chops. He told me years later that he was dreadful at this job because he couldn’t keep the orders straight. And even though he was married at the time to his first wife (the daughter of the owner of the meat-packing empire), he wasn’t liked by the family. He was shipped off to the shipping floor where this once-college valedictorian spent his days hauling and packaging just-butchered pigs and cattle.

My dad had flat feet and was in so much pain he could barely walk home after a 10-hour shift. Physically spent and mentally unchallenged, he took his next job selling life insurance. He made a little more money and kept thinking about his ambition to be a writer. He read a book by Thomas H. Uzzell, who said: “When you write a million words, you will be competent at your craft.”

So Vern bought a used typewriter and after trying to sell life insurance six days a week, he would come home and pound out short stories. He later told me they were terrible but that after a couple of years and almost 1 million words, his work was showing improvement.

He tried to show his stories to newspaper editors, but to no avail. It was still the Depression, and new jobs for reporters were going to paper boys.

Finally Vern got a break because of World War II. He took a job helping to plan an oil pipeline from Canada to Fairbanks, Alaska. He was making $300 a month. He wrote a book in his spare time: Oil to Alaska.

After the war ended, he put all his savings into printing 1,000 copies of his book. He said they sold like “hotcakes.”

At the same time, there were two major oil strikes in Alberta. The two Calgary daily newspapers wanted someone who knew something about oil and who could also write. My dad walked into the publisher’s office with a copy of his book. The man skimmed it and after a few moments said: “Congratulations. You’re the new oil editor for the Calgary Herald.”

Nothing Worth Having Is Handed Out Freely

I knew the adversity my dad overcame, but I always assumed it was because of the Great Depression. I, too, wanted to be a writer; and I wrote for the university newspaper.

When I graduated in 1980, I was sure that some oil company would hire me as a public-relations writer. However, in 1980, Alberta’s oil boom had gone bust.

My dad had a successful investment newsletter, but he wasn’t going to give me a job out of the gate because he said I wouldn’t learn how to write if I was working for a monthly investment letter. He also wanted to see if I was willing to pay my dues.

Things had gotten so bad in Calgary that I was offered one job: to be a bank teller. I spent three months at that (I was abysmal at balancing my cash register) and quit my job on a Monday morning three days after marrying my wife Angie.

My parents paid for me to study journalism at a technical school for a year while Angie paid our living expenses with the salary she earned working at the hospital.

The next year, I was passing out my new resume. I wasn’t getting anywhere, but I still had one last place to go: Gunderson Publications. I did some research at the public library, got the latest copy of its flagship magazine, World of Beef, and saw that the publisher had just returned from his daughter’s cattle ranch in Ontario, Canada. I leveraged that to get into his office and started asking him about his trip, and how I wouldn’t disappoint him if he brought me on as a writer. He hired me. My starting salary was $700 a month.

I put in 3.5 years working for Harald. I covered one massive train wreck but spent most of my time at cattle shows and reporting on the results.

After a time, Vern thought I was good enough to start off as a researcher for his newsletter. My starting salary for MFE was $1,200 per month.

Nobody Owes You A Career

In the former Soviet Union, every citizen was guaranteed a job. What kind of job was decided by some committee. It doesn’t work that way in the United States, where there is still some liberty. Yet many people think they should be able to do what they want without the sacrifice — that the government or society should make it happen.

For example, my eldest son is a teacher in England. He has a life-long friend who calls himself a writer. This young man travels the world on the family’s money and writes a personal blog. He writes about things that interest him in his travels, and his writing is dreadful. I have suggested to him that if he wants to make a living as a writer, he has to make some sacrifices — like taking on a real writing job. Like so many people today, he doesn’t want to pay that price.

If these attitudes do not change, America’s fortunes are poor — regardless of who is elected President in November.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Keeping Up With The Obamas

President Barack Obama and GOP nominee Mitt Romney have been trotting out their wives, hoping the women will swing votes to them in the upcoming election. For almost four years, we have had to hear the media idiots report on how Michelle Obama grows a fresh garden on the grounds of the White House and how determined she is to see that our children eat healthier food. Not to be outdone, the Romney campaign has recently repeated ad nauseam that Ann Romney does the family’s laundry.

All of it is nonsense, and it leaves voters less informed about either candidate’s plans to revive the American economy. It also needs to be noted that some great first ladies have been married to terrible Presidents. (Rosalynn Carter comes to mind.)

It is more idiocy pressed upon us by media executives whose cash-cow programs are patterned after the likes of “Keeping Up with the Kardashians.”

It used to be that becoming a celebrity was a by-product of talent. Today, people like Paris Hilton and the Kardashians are celebrated and financially rewarded simply because they turned themselves into celebrities through living an extravagant lifestyle. On that score, may we please add the first lady?

Recently, on The Tonight Show with Jay Leno, Olympic gymnast Gabby Douglas said she celebrated her gold medal by enjoying a McDonald’s Egg McMuffin.

Seated next to her was Obama, who preaches endlessly about healthy diets for our Nation’s young people. Obama told Douglas, “You’re setting me back, Gabby.” She declared that Americans should never be encouraged to eat Egg McMuffins.

BayouBuzz.com noted: “Michelle Obama needs to stop lecturing Americans on what they eat and start focusing on her own diet. In case anyone did not notice, she doesn’t exactly possess a model like figure.”

However, it is true that the first lady has the wardrobe of a rich supermodel. At an Olympics reception for heads of state at Buckingham Palace, Obama was sporting a J Mendel cap-sleeve jacket that reportedly costs $6,800. The jacket is from the designer’s 2013 collection but is not yet available to the public. That means that even the Kardashian gals are simply going to have to wait.

There is plenty more that is disparate between Obama’s recollection of her poor family roots and the lifestyle she is living. Last summer, while bicycling near Martha’s Vineyard (the furthest thing from a discount vacation), Obama was photographed wearing a $156 T-shirt. The good news is she got it on sale from its original $200 price. I didn’t even know they made $200 T-shirts, but it turns out that Ann Romney won’t be outdone and has a $900 shirt.

Still the first lady is sticking to her story that she lives an ordinary life with the exception that she works out at 4:30 each morning. No comment from her on whether she trains in the $540 Paris house Lanvin sneakers she was seen wearing in 2009 at a Washington-area food bank.

And while President Barack Obama may be every bit as ineffective of a leader as former President Jimmy Carter, he certainly doesn’t live the spartan lifestyle of Carter, who bought his suits off the rack. While the Obamas play it poor, they are very much part of the wealthy 1 percent.

Jodi Kantor, in her book The Obamas, writes:

Even the president made uncomfortable jokes about why his wife needed so many new things. Behind the scenes, aides said, the Obamas were concerned about money: the president’s books could only sell so many copies, and it would be years until he could write more and the first lady could write her own. From vacation rental homes big enough to accommodate the Secret Service to all the personal entertaining they did at the White House, their lifestyle had grown fearsomely expensive.

Kantor, who began covering the Obamas for The New York Times in 2007, based her book on multiple interviews with 33 White House staffers.

National Review Online offers proof of how atypical the Obamas are:

President and Michelle Obama’s combined adjusted gross income in 2009: $5,505,409.

President and Michelle Obama’s combined income in 2010: $1,728,096.

President and Michelle Obama’s combined income in 2011: $789,674.

The Obamas’ combined adjusted gross income for 2008, their last year before moving into the White House, was $2,656,902.

The Millionaire Versus The Billionaire

A lot has been made out of GOP Presidential nominee Mitt Romney’s vast wealth and the rich-and-famous lifestyle he and his wife enjoy. Although Romney may not be worth $1 billion (at least not yet), we must assume he has a net worth in the tens if not hundreds of millions of dollars. Yet it turns out that the Obamas are millionaires and will be worth a lot more after he leaves office (hopefully, sooner rather than later).

The problem for America with either Obama or Romney is that there is a disconnect between people with that kind of wealth and ordinary Americans who are still struggling to get out of a four-year recession — a downturn that could still turn into a depression.

Years ago, I was reading about the collapse of the Soviet Union. The writer said that for decades the members of the Soviet Politburo lived far from the poverty that had infested Moscow. They came to Red Square each day from their isolated villas in limousines whose windows were so darkly tinted they couldn’t even see the conditions that the people faced.

America will elect a President in two months. The Presidential candidates, along with the increasingly wealthy members of Congress, are ignorant of the growing economic burdens faced by Americans. (Forty-seven percent of Congress — 249 current members — are millionaires, according to a November 2011 study by the Center for Responsive Politics.)

This is the sort of isolation that contributed to the implosion of the Soviet Union. It is not incomprehensible that this could happen to America.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Ryan Not A Real Libertarian

Presumed Republican Presidential nominee Mitt Romney tagged a man named Paul for Vice President. There’s just one problem: He picked Paul Ryan (R-Wis.), not Ron Paul (R-Texas). The latter is a real libertarian, while the former is a big-government conservative.

Jane Aitken, founder of the New Hampshire Tea Party Coalition, wrote an opinion piece for Bedford Patch. The headline read: “Paul Ryan is no Ron Paul.”

The Daily Caller also weighed in last week: “It didn’t take long for libertarians to condemn Mitt Romney’s selection of Paul Ryan as his running mate. Ryan may have required his staffers to read Ayn Rand’s novels, but he’s no John Galt (a fictional character in Ayn Rand’s novel Atlas Shrugged). Over his nearly 14 years in Congress, Ryan has cast several votes unfit for an advocate of limited government. He voted for TARP, auto bailouts, and Medicare expansion. He also voted for No Child Left Behind and twice voted for stimulus spending.”

Paul cannot be excited about Romney tagging Ryan for the VP spot. In an interview given to Fox News last March, Paul called Ryan’s budget proposals timid and said that Ryan did not address the Federal government’s propensity for warmongering. Paul said he didn’t like that the Ryan plan might balance the budget in 30 years and did nothing to address America’s vast overseas military presence. Paul said instead of the Ryan plan he would slash overseas spending by first stopping “militarism” while maintaining spending for national defense.

As reported by Huffington Post, Paul said:

In my program… I address that first [cutting overseas military spending] I want to get home so that you don’t have to attack child health care or Medicare, even though those programs are bankrupt and you have to deal with them. But even in my first year of cutting a trillion dollars, I don’t touch that stuff [child health care or Medicare].

I’m not going after the benefits the Medicare, I’m not doing that initially… I would cut the money that they are screaming about, this overseas militarism.

I see people coming together… 67 percent people now want to come home from Afghanistan… I think the Republican lose the political argument immediately. [The Republican plan is] We want more weapons but we are going to deny the elderly for their healthcare.

Yet Ryan is likely a smart pick for Romney in that his nomination as Vice President will help Romney win the Presidency because it will garner votes from Tea Party supporters. That doesn’t mean that Ryan is anything other than a pretend libertarian. And he certainly isn’t alone in that category.

In his book Fed Up!, Texas Governor Rick Perry wrote: “If you don’t support the death penalty and citizens packing a pistol, don’t come to Texas. If you don’t like medicinal marijuana and gay marriage, don’t move to California.”

While Perry was running for the Presidency, a Des Moines Register reporter asked the former Texas A&M yell leader: “What yell would you give to urge on your campaign?”

Perry replied: “Rick Perry. Liberty. Rick Perry. Freedom. Freedom is working. Liberty is working. We’ve got to get America working again.”

I wondered: what does it mean to be free? I looked up the definition of “libertarian.” The Free Dictionary defines the word as: “One who advocates maximizing individual rights and minimizing the role of the state. One who believes in free will.”

Perry doesn’t have a clue what it means to be free. Freedom — and here is the key caveat — is doing what you want as long as you are not hurting another individual.

Let me say it straight: If my neighbor on one side is in a gay union and the neighbor on the other side smokes grass (and if is not hurting me or anyone else), why can’t they? That’s how I look at it; I am a true libertarian.

Perry dresses up in libertarian clothes, pretends to embrace individual freedoms and then at the first instance (when he doesn’t like what he sees) demands government intervention. That is not liberty my friends, that is pretend liberty and something very dangerous to the state of the union.

Romney may pretend to embrace smaller government and less taxation, but his track record as Governor of Massachusetts doesn’t support his argument. Nor does his businessman-first-and-foremost argument carry a lot of truth. As then-GOP hopeful Newt Gingrich pointed out to Romney during one of the GOP Presidential debates: “The only reason you didn’t become a career politician is because you lost to Teddy Kennedy in 1994.”

None of this makes the Romney/Ryan ticket less desirable than the alternative: another four loathsome years of Obama/Biden. It does, however, mean that this election isn’t going to give the sweeping changes that libertarians were hoping would come out of the grassroots Tea Party movement.

Barack Obama fashions himself an old-style Democrat, the likes of President John Kennedy. But what Kennedy wanted for the Nation half a century ago was affordable then. As the upsurge in Federal debt shows, it simply is not possible now.

If Obama looks to the Kennedy era, expect Romney to be a replay not of President Ronald Reagan, but his successor, President George H.W. Bush. That will mean continued excessive military spending and interventions overseas. It will mean continued large deficits.

Led by Romney/Ryan, the country may be 20 percent to 30 percent improved over what will happen if the Obama/Biden team is re-elected. But that won’t be a renaissance for America, and the end result will fall far short of making libertarians happy.

Finally and perhaps most importantly, while a Romney/Ryan victory is in the cards, I don’t think it will resuscitate the U.S. dollar. That inevitably means a continued deterioration in the greenback’s purchasing power — something you should consider before you buy any U.S. paper and before you sell any precious metals you have accumulated.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Mitt Romney Won’t Bring Back Norman Rockwell

A visceral longing to renew America and return to its gilded age along with growing fears over what direction the Nation is headed have brought a modicum of hope to many people that presumptive Republican Presidential nominee Mitt Romney can restore American greatness if elected in November — so much so that renewal in America is a central theme to his election platform.

After four dismal years under President Barack Obama, it is a cherished hope for the country. Yet I believe that if Romney is elected, it will be an empty dream; he will be just the latest President to preside over the United States’ grand decline, which began decades ago. Neither Romney nor a new Congress can rebuild the United States; the Nation’s greatness is fading faster than the paint on anything Norman Rockwell painted.

Yet that is not what the Republican candidate is claiming. The Romney public relations team rightfully attacked Obama’s mind-boggling comment: “If you’ve been successful, you didn’t get there on your own.”



The Romney ad campaign is entitled “These Hands.”


What are the chances that Romney — even with a new and better Congress (impossible to imagine how it could be worse) — has the tools to rebuild the Nation and bring back the America that so many of us are nostalgic for? I would lay the odds at somewhere between zero and nil.

Even Romney admits that the United States is in decline. Last month, he told a group of California donors that the Australian foreign minister warned him there is talk abroad that America is “in decline.”

That is hardly a shocker. The peak of Pax Americana happened sometime around when I was born in the 1950s. Back then, the United States had the largest trade and budget surplus ever amassed and the most dominant military since Julius Caesar. The country was producing almost half of all automobiles, oil and steel consumed by the world.

Half a century ago, well-paying manufacturing jobs accounted for more than a third of the Nation’s workforce. Today, they equal fewer than one in 10. In the past decade alone, 5 million manufacturing jobs have disappeared. Almost half of the 12 million that still exist hang by a thread as rivals such as China and India make more of the world’s goods. America is left with Wal-mart-like retail jobs that pay less than $19,000 per year (less than one-third of the inflation-adjusted salary earned on an average manufacturing job in the 1960s).

Things are not going to get better, forecasts The McKinsey Global Institute (MGI). According to MGI, U.S. manufacturing will not add any new jobs to the economy between now and 2021 and that was the institute’s “positive scenario.” A more negative prediction from the firm indicates that America will continue to be hollowed out with even greater job losses in industries that build “things.”

Steel is a perfect example of the loss of American might. Once the largest steel manufacturer in the world, the United States now employs 153,000 workers and produces just 7 percent of the world’s steel. China accounts for 40 percent of global steel output. And in the next decade, India may exceed China as a steelmaker.

The trend isn’t much better in technology. Foxconn, the Chinese computer and cellphone manufacturer, employs more people than Microsoft Corp., Intel Corp., Hewlett-Packard Co., Apple Inc., Dell Inc. and Cisco Systems Inc. combined. At the same time, more and more American industry giants are shifting production offshore. General Electric Co. has a workforce of more than 300,000, but more than half of these highly skilled jobs are overseas. Just a decade ago, IBM had only 6,000 employees in India and 135,000 workers in the United States. IBM now employs 110,000 in India. India now has a larger IBM workforce than does the United States.

While the Administration of President Barack Obama is staffed with money men whose experience comes from Wall Street, China’s leadership is dominated by engineers. Seven of the nine members on China’s Politburo Standing Committee are engineers, yet there isn’t a single engineer that can be named among Obama’s advisers. Given Romney’s history with Wall Street, it seems unlikely that things will change in that respect.

While Washington doesn’t understand the plight of the Nation, some of the few remaining leaders in industry do. Nucor Corporation (NYSE: NUE) is one of the largest steelmakers in the United States. The company’s Website contains the phrase “A Nation that makes and builds things.” Yet Nucor’s Chairman, President and CEO Daniel R. DiMicco is fed up with the direction the United States is heading. Reportedly, he is fond of saying: “Do those idiots (that shape American economic policy) think we can survive by pushing paper around?”

The immediate problems that Romney will face if elected are even more entrenched than just our Wal-Mart-based economy. Education in the Nation is a morass; to a large degree because of the liberal education system and teachers unions. There is also a sense among students learned from their parents that they are somehow entitled, even if they are unable to achieve.

In his new book Time to Start Thinking: America in the Age of Descent, author Edward Luce writes:

More than a quarter of a million students drop out of high school. Many of the rest present a different challenge.  Teachers avoid issuing verbal reprimands for errant behavior (to avoid disciplinary action). Parents remonstrate with teachers if their kids get C grades. And every child gets to win some trophy or other at school prize day (“effort” and “punctuality” are my favorite perennials). So sheltered have American middle class teenagers become that the deans of small American colleges have recently begun using the phrase “tea cups” about incoming freshman (because they are so psychologically fragile).

Luce points out that State Department officials were shocked a year ago when at the induction meeting for its summer intern program they were handed statements from students which included remarks: “We don’t like to be criticized,” and “It is really motivating to get praise.”

Yes, it is nice to get praise; but it used to be that you had to earn it. These days, in many ways the United States isn’t earning it; and the arrogance of our high school graduates comes to some extent from that arrogance in Washington that America has a preordained right to greatness. Our leaders who believe this axiom must not be listening to the markets, because the U.S. dollar has been in a downward spiral for a decade and I can’t see how it is going to reverse itself over the next four years.

I expect a Romney victory in the wake of Obama’s sheer incompetence as President, but I am not going to delude myself that Romney can rebuild the Nation. If America were a ship, then it’s already hit the iceberg. Switching captains now won’t stop it from sinking.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

China’s Growing Chokehold On Oil

If you don’t like the Greens now, wait a decade and you might really hate them. That is because by then China could lock-down much of Canada’s oil sands production and be shipping it across the Pacific to power their 21st century ambitions as the world’s only superpower. At the same time, America may be floundering because of acute energy shortages and or because we are under the thumb of Arab oil.

A couple of weeks ago China took a historic step toward reaching its goal to becoming a global resource powerhouse when it bid $15.1 billion (U.S.) to buy Calgary-based oil producer Nexen Inc.

The offer by state-backed CNOOC, Ltd., is the largest by any Chinese firm to purchase a foreign company. It is evidence that China wants to use Canada to fuel its global economic and military ambitions through strategically secure oil reserves — the same reserves the United States has been reluctant to tie down because environmentalists maintain oil sands damage the environment.

If the deal is approved by the Canadian government as expected, it will be the largest in a string of earlier acquisitions by Chinese firms in Canada’s oil sands sector. It would also be the second-largest deal ever in Canada’s energy sector and the sixth-largest takeover ever in Canada.

The Nexen bid was announced within hours of a $1.5 billion deal by China’s top refiner, Sinopec, Corp., to acquire a 49 percent stake in the North Sea operations of Talisman, one of Canada’s largest oil and gas exploration companies.

According to Bloomberg, China has funneled more than $53 billion into Canadian oil interests over the past 10 years, dwarfing the $31 billion or so the U.S. has invested in Canada.

China has been building on its long-term strategy to build partnerships in Canadian petroleum projects that will give it access to energy regardless of what happens in the Middle East; that volatile region upon which Washington is betting.

“The slogan of the Chinese government for their major companies is to go global,” said Richard Herd, the chief China economist for the Organization of Economic Cooperation and Development. “They are hoping they can earn better returns in resources in direct investment abroad than they can in investing in U.S. treasuries.”

That is a double assault on the United States that could find it desperately needs Canadian oil at the same time it must finance the Nation’s day-to-day operations by selling ever more billions of dollars in treasuries to Beijing.

Nexen and other Canadian companies like it could give China a stranglehold on Canada’s oil sands reserves; the third-largest recoverable crude deposits in the world.

Virginia Republican Congressman Randy Forbes, founder and co-chairman of the Congressional China Caucus, has long warned of China’s growing military and economic power. Forbes is worried by China’s latest bid for an increased presence in Canada’s oil sector, especially because it allows China to be “right off our coast,” Forbes told Reuters. Forbes pointed out the other obvious problem with the Nexen deal: For China, it secures Canada’s finite energy resources that could otherwise be made available to America.

Obama Bends To The Greens

“More than a foot in the door, this is a body in the door for the Chinese in the North American energy market,” Forbes told Reuters in July, slamming President Obama’s decision to delay approval of the Keystone XL pipeline, a project designed to funnel oil from Canada to refineries on the Gulf Coast.

Forbes and many other Republicans want Obama to immediately approve the pipeline to give the Canadians an alternative to doing business with the Chinese. That is not going to happen before the election and if Obama is reelected it probably will not happen. That is good news for Beijing whose global ambitions are built upon fossil fuels and not the fantasy of unproven clean energy.

In Canada, plans are being drawn up to move oil from Alberta west through British Columbia via a newly constructed Northern Gateway pipeline.

The Wall Street Journal summed up the situation on July 25th:

Mr. Obama’s rejection of the $7 billion Keystone XL has no doubt concentrated Chinese and Canadian minds. The pipeline would have moved oil from Canada and North Dakota to refineries on the Gulf Coast, and Mr. Obama’s bow to American greens was a direct snub to Canada, which provides nearly 30% of U.S. imports. Prime Minister Stephen Harper promptly said that Canada needs to diversify its energy markets, perhaps by building a pipeline from Alberta to the West Coast to export to Asia.

The lesson for America, and especially Democrats, is that Canada’s oil sands will be developed, whether their green financiers like it or not. If the U.S. doesn’t want the oil, China and the rest of Asia will gladly take it. The world wants to grow—must grow to reduce poverty—and it needs abundant, cheap energy to do it. Why is that so hard for some Americans to understand?

Canadians understand. After the rejection of the Keystone XL, Calgary-based Enbridge moved to the forefront with its $5.5 billion pipeline project that will carry Canadian oil sands crude to Canada’s west coast where tankers could transport it to Asian countries, none of which have a more critical need for oil than China.

This is China’s century. Every great power that has dominated has fallen into permanent decline. Why should it be any different for the United States which has insurmountable debts and an overstretched military? Just as those world powers rotted from within because of corruption and terrible leaders, so, too, will the United States.

Earlier this year East Asia Forum wrote, “China is now strong enough to contest America’s leadership in Asia, and is plainly doing so. That means the old days of uncontested American primacy, and the Asian order that has been built on this foundation, are already history.”

China is building a war chest not only for Asian domination but for global domination and a key component of it is buying up oil from America’s next door neighbor. Those reserves might be crucial to the U.S. someday but American Greens can comfort each other that they didn’t dirty up the environment… when they talk or text in Mandarin.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

Watch Your Mouth!

Last month, a professional British soccer player was arrested and faced charges in an English court for something he said on the pitch during a game.

Celebrated soccer captain John Terry’s fate was in a court’s hands. The question: Would Terry’s 600-game career be forever tainted by a criminal conviction for racially abusing opposing player Anton Ferdinand?

The question was not whether Terry physically assaulted Ferdinand. The question was: Did Terry abuse Ferdinand with three hateful words?

The central fact of Terry’s trial was that he called Ferdinand “black,” couched between vulgar swear words. That was never in dispute.

The Telegraph reported:

The offending words were caught on camera and broadcast live to millions of viewers across the world from Loftus Road, where Chelsea were losing a Premier League game 1-0 to Queens Park Rangers.



Keep in mind these are not fifth graders, but professional athletes.

The maximum penalty Terry faced was a $4,000 fine. However, a conviction would have enormous implications for Terry’s career.

The prosecution argued that the Chelsea captain intended to offend Ferdinand when he used those words.

Did Terry intend to offend Ferdinand? The answer might depend on how you feel about the policing of words and whether the law can make us more polite even at the highest levels of sporting competition.

Chief magistrate Howard Riddle took the middle ground. While Riddle did not find Terry’s explanation of events persuasive, other misgivings nagged at the magistrate. In his judgment, he wrote:

It is highly unlikely that Mr. Ferdinand accused Mr Terry on the pitch of calling him a black (expletive). However I accept that it is possible that Mr Terry believed at the time, and believes now, that such an accusation was made.

The prosecution evidence as to what was said by Mr Ferdinand at this point is not strong.

It is therefore possible that what he [Mr Terry] said was not intended as an insult, but rather as a challenge to what he believed had been said to him.

In those circumstances, there being a doubt, the only verdict the court can record is one of not guilty.

So Terry was found not guilty. But the verdict was rendered not because it didn’t matter that in the heat of a professional football game that some bad words were exchanged. Instead, it was because there was reasonable doubt as to the exact intent of his words.

Had the magistrate ruled that Terry had “meant” that despicable phrase as an injurious insult to Ferdinand, Terry would now have a criminal record.

I know it’s England. I know it is soccer where a rip-roaring game is 1–0 and, if a player gets a hangnail, the ambulance drives onto the field. But really, as unmanly as this game is, can’t players even utter a bad word? It certainly isn’t the kind of organized sports I played when I was a kid. All kinds of comments were made back and forth discretely out of coaches’ and referees’ earshot.

If you think “So what, that’s England and who cares?” you had better think again. The language police are everywhere and — just like the old KGB — you might not know they are standing behind you.

Twenty years ago, I was in Spokane, Wash., standing outside the Spokane Club. It was pouring rain, and I was thinking of the quickest way to get to my car. Crossing a boulevard from the other side of the club was a man with a white cane and dark sunglasses. Because I sometimes think out loud, I said: “That guy does great for a blind guy.”

Two steps behind me was a woman of whose presence I wasn’t even aware. Indignant, she shouted: “He’s not blind! He is sight-impaired!”

She had no connection to the man navigating across the road. She simply wanted to correct my thinking.

A month later, I got a call from Society for the Blind. While I was on the phone with the gentleman who was asking for a donation, I asked him: “What do you call yourself?”

He said: “I’m blind.”

It made me think that the woman behind me that day — the woman who could see — was wrong in telling me what to say to myself or how to think.

Bad Words Are Bad

I hate the “N” word. I never use it, along with a few other words that upset me. That said, black people use it freely all the time. It is part of the rap culture;for some people, it is part of their everyday life.

Years ago, I was jogging alone in Spokane’s Riverfront Park and a couple of young black men saw me. One of them said to his friend: “Look at the [‘N’ word] run!” I laughed then, but later I wondered what would happen if I used that word. If it is terribly offensive for me to use it, shouldn’t it be offensive for others as well, despite their complexion?

This brings me to the word “black.” I see on the news every day that most white commentators call dark-skinned people African-Americans. That is a longer name for a group of people that not long ago were politely called “black.” And it is strange because on the news I see most dark-skinned people refer to themselves as black. If people of African heritage call themselves black, why can’t the rest of us?

Some Just Can’t Wait To Be Offended

We live in a world of political correctness — so much so that there are two words many people consider offensive but which our Founding Fathers highly respected: “Creator” in the Declaration and “Lord” in the Constitution.

A recent Psychology Today article warned about George Orwell’s classic, 1984, and went on to suggest that some of that nightmare is coming true today. Society and even the courts are telling us what words we can and must never say:

What is not fiction is the way the present day language police have established an elaborate protocol of what is called a beneficent censorship. Politically correct school boards, bias and sensitivity committees now review, abridge, and censor texts which in their opinion contain potentially offensive words, topics, and imagery. The members of sensitivity and bias committees are people with backgrounds in counseling, diversity training, guidance, bilingual education, and so forth.

Diane Ravitch’s book The Language Police laid bare “an elaborate, well-established protocol of beneficent censorship, quietly endorsed and broadly implemented by textbook publishers, testing agencies, professional associations, states, and the federal government” that steadily and stealthily reduces schoolbooks to packages of pabulum. The arbiters of political correctness on the left have joined with the fundamentalist guardians of morality on the right to foster a censorship apparatus that serves the political and social agendas of both, scorns the interests of students, and ensures that students will not be exposed to anything that might bother anyone, anywhere, for any reason.

I have bad news for some people: Some words and phrases are going to bother you. Choose to ignore them.

Words are a key to freely express ourselves. When people and the courts say it is criminal to use certain words, we have taken an irreparable step back from any hope for future liberty.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

The Dog Days Of Global Warming

There have been massive forest fires and record temperatures across North America this summer. With this heat wave impacting so many millions of people, it must be definitive proof of global warming — or so the Big Green Machine would like us to believe.

I will admit that it has gotten so hot where I live that I had to go buy a couple of fans.

On July 1, even The Washington Post declared that Colorado’s destructive wildfires are global warming’s “smoking” gun: “Lightning and suspected arson ignited them four weeks ago, but scientists and federal officials say the table was set by a culprit that will probably contribute to bigger and more frequent wildfires for years to come: climate change.”

Remember The Coming Ice Age?

It all sounds familiar and for good reason.

In January 1971, my father decided my brothers and me were going to help him build a big reservoir that he could stock with fish. It was a natural gully filled with brush and trees. The spring runoff would provide the water after dirt was hauled in and one end was dammed.

I remember how cold that winter was. Between New Year’s Day and the end of February the thermometer rose above 0 degrees Fahrenheit only one day.

It had to be climate change right? That’s what the mainstream media were saying. Magazines like Time and Newsweek ran cover stories on the coming Ice Age, and climate experts predicted that humanity was on the brink of an environmental crisis.

The Big Chill was coming, said the scientists. It just so happened that it was a movie by that same title and it was released a decade later.

And Then Came Ozone

That was followed up in the 80s and 90s by fear over the depletion of the ozone layer. The ozone layer, scientists said, protects all DNA of all surface-dwelling life by absorbing Ultraviolet B from our sun.

Environmental scientists stated that the Earth’s future depended on people not using a certain version of Freon because it was eating away the lifesaving ozone layer. They made such a big deal about it that the Federal government got involved and forced all of us to pay more to replace the Freon in our cars and refrigerators. This pushed prices higher, plus the consumer had to pay for disposal fees.

These environmental idiots said they had proof that these things were damaging the environment — scientific proof.

Who Decided Scientists Know It All?

We all give so much credence to these experts that it shocks us when they are wrong or they admit that they may have been wrong.

That is what occurred a few months ago when James Lovelock — the man referred to as the “godfather of global warming” — recanted his catastrophic climate change predictions. The 92-year-old now says those predictions were “meaningless drivel.”

The implications were extraordinary because Lovelock is not some politician campaigning for votes or the latest pork barrel Green project. Lovelock is a world-renowned scientist whose Gaia theory — that the Earth operates as a single, living organism — has had a major impact on the development of the global warming theory.

Lovelock, a former NASA scientist, invented the electron capture detector in the 1950s that allowed scientists to measure CFCs (chlorofluorocarbons) and other pollutants in the atmosphere. To some extent, Lovelock gave birth to the Greens.

Today isn’t like the Middle Ages. The Pope did not force Lovelock to recount. He did it on his own when he acknowledged:  “The problem is we don’t know what the climate is doing. We thought we knew 20 years ago.”

Lovelock gave an interview to the UK’s Guardian newspaper in which he delivered bombshells that must have angered environmentalists.

Lovelock blasted the Greens for their religious fervor.

“It just so happens that the green religion is now taking over from the Christian religion,” Lovelock said. “I don’t think people have noticed that, but it’s got all the sort of terms that religions use. The greens use guilt. You can’t win people round by saying they are guilty for putting (carbon dioxide) in the air.”

Lovelock also mocked something I have made fun of for 30 years (after I first saw them outside Palm Springs, Calif.): wind turbines.

Lovelock told The Guardian: “We rushed into renewable energy without any thought. The schemes are largely hopelessly inefficient and unpleasant.

“So-called sustainable development (like wind power)… is meaningless drivel.”

Lovelock admitted what most scientists will never confess: They are not all-knowing.

“One thing that being a scientist has taught me is that you can never be certain about anything. You never know the truth. You can only approach it and hope to get a bit nearer to it each time. You iterate towards the truth. You don’t know it,” Lovelock told MSNBC.

If the men and women who practice science don’t know the truth, then neither do politicians, reporters or news anchors. This could just be one unusually hot summer.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

Bully For Sheila Jackson Lee

With more than 8 percent unemployment and Federal debt approaching $16 trillion, we might believe Washington is taking steps to preserve a Nation on the brink of catastrophe. If you think that, you are wrong. Instead, the Federal government is launching other initiatives; one of them is to stop a scourge that has befallen America: bullying.

It’s ironic that the Federal government, known for being the biggest bully (legally and sometimes not so legally), has vested itself in spending money it doesn’t have to solve what Representative Sheila Jackson Lee (D-Texas) calls a problem plaguing the Nation.

This week, the House likely will approve legislation that will provide grant money to States to stop bullying at schools. Yes, I said stop, as if kids being mean to other kids is something government can stop.

“It is time for us to stand together and stop bullying,” said Jackson Lee, the sponsor of the bill. “Everyone deserves to feel safe and free from persecution.”

Jackson Lee should know about this problem. The Daily Caller pointed out: “The congresswoman known for giving her staffers profanity-laced nicknames, throwing temper tantrums and, at times, throwing objects, has introduced anti-bullying legislation.”

It is another case of Democrats who want us to do as they legislate, not as they do.

“I urge my colleagues from both sides of the aisle to vote in favor of my bill in order to keep U.S. citizens safe from harassment and to work toward making America bully-free,” said Jackson Lee.

The bill, H.R. 6019, would amend a current law that already allows Federal grants for programs meant to boost school safety: “establishing and maintaining accountability-based programs that are designed to enhance school safety, which programs may include research-based bullying prevention, cyberbullying prevention, and gang prevention programs, as well as intervention programs regarding bullying.”

Grants to stop bullying would be permitted under the Juvenile Accountability Block Grant program. The bill would authorize the spending of $40 million a year for fiscal years 2013 through 2017.

New York Governor Andrew Cuomo, a Democrat, does not want to be outdone when it comes to protecting children. This month, he signed an anti-cyberbullying bill into law. It requires that schools be more vigilant about cyberbullying of students and take steps to prevent it.

Legislators believe the problem can be handled with more government money. They want to make schools take greater responsibility to stop bullying students by using new protocols to make it easier for students to report online harassment. As if educators didn’t have enough on their plates, now they have to develop “bullying prevention strategies.”

Cuomo and his backers in the State Legislature say they will do all they can to ensure children feel safe at school.

The Associated Press reported that Assemblyman Daniel O’Donnell said the following in his sponsors’ memo:

Cyberbullying is a new and especially insidious form of bullying. It allows bullies to do their work at a distance, outside of schools, in front of a broad audience and sometimes under the protection of anonymity. The use of technology to rapidly transmit vicious content to a wide audience makes acts of cyberbullying highly visible, more pervasive. Research has revealed a link between cyberbullying and low self-esteem, family problems, academic problems, school violence and delinquent behavior.

Sticks And Stones… But Names Will Never Hurt Me

I looked up the definition of cyberbullying: “It is when a child, preteen or teen is tormented, threatened, harassed, humiliated, embarrassed or otherwise targeted by another child, preteen or teen using the Internet, interactive and digital technologies or mobile phones.”

It sounds like name calling to me, which makes my experiences with bullies as a boy a lot different.

Between grades 5 and 7, I was a fat kid with asthma. We lived in the country, and I spent three hours a day on the bus riding to a rural school. Almost all the kids called me names — Fat Albert was their favorite — but three brothers terrorized me. I can’t say I took daily beatings, but they happened at least once a week. I explained the cuts and black eyes to my parents as my clumsiness on the playground. I knew if I told them and then the principal was told, I would face worse. It turned out that my intuition was correct because two of those three brothers were convicted felons as young adults.

There was no getting around taking that bus every day. You can imagine I am not very sympathetic to kids who go on Facebook and have others say “mean” things about them. Here is an idea, kid: Quit Facebook! Quit anything that is cyber-something where others say cruel things about you.

Instead, we have Big Brother to rescue kids, to make schools ensure that the kids are nice to each other in cyberspace.

What exactly are the schools going to do if they catch Joe or Jill bullying another classmate in cyberspace? From what I can gather, they won’t do very much.

Let me give you two quick stories. In 1976, a kid had been robbing the boys’ locker room, stealing sneakers, money and anything else. On my last day of high school, I walked down the stairs to the locker room and saw my football coach — a man feared and revered by everyone — holding the thief up against a wall. I heard the kid bawling as I did a quick pivot and walked back up the stairs. It was a big school; I had never seen that kid before, but I think he got his lesson about stealing.

Go forward 30-plus years to my son who teaches middle school kids in London, England. A kid in the front row didn’t like something my son, a starting middle linebacker in college, said. The student picked up a large book, threw it and struck my son square in the face. The student’s punishment was a visit to the principal’s office and a one-day suspension.

When I was in school, the students were afraid of the teachers. Today, especially after Columbine, teachers are afraid of the students.

Whose fault is it? It’s the parents’ fault. And no amount of government money or proclamations from Federal and State lawmakers is going to make kids be more civil to each other. It is going to take the steady and sometimes stern hand from a father and mother to reduce bullying. It wouldn’t hurt kids to get thicker skins. Words are just that, words. And if you don’t like them, here is a suggestion: Go offline.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Warning: The Supreme Court May Be Hazardous To Your Health

Unless you are living in a cave, you know that last month the Supreme Court made one of its most controversial decisions since Roe vs. Wade. Conservative Chief Justice John Roberts sided with the four “liberal” members of the court and upheld the Patient Protection and Affordable Care Act (Obamacare). Many Americans who were upset about the decision vented that anger on Twitter. I find it bizarre that many Americans tweeted about “moving to Canada” to enjoy better medical care.

“I’m moving to Canada, the United States is entirely too socialist,” tweets @wallyweldon.

“The supreme court upheld Obama Care. That’s it. I’m moving to Canada!” tweets @lucasdargis.

As an American who has spent more than half my life living in Canada, I want to say this to wallyweldon and anyone else who is packing his bags: Stop! Even if Obamacare remains, the quality of medicine has a long way to fall before it will reach the rock-bottom levels that my wife Angie and I live with in Canada.

A Typical Trip To The Doctor

The red light on the old alarm clock read 7:00. The morning news began with the top stories. It was the first Monday of the month, so my wife and I began our pilgrimage to the emergency clinic in Calgary, Canada. My extended family saw one doctor for 40 years; but because he retired and there are so few doctors in family practice, we now have to visit day clinics.

This particular Monday was during winter. A blizzard had rolled in off the Rocky Mountains, making the roads almost impassable. We felt strong enough to walk 3/4 of a mile in snow-drifted sidewalks to the clinic to get the prescriptions we need for Angie’s lupus and my asthma.

The real emergencies the clinic deals with every day are a shortage of doctors and waves of patients. Some of the patients, like us, just want a refill of a prescription; others are junkies, looking for a sympathetic doctor to give them their fix.

It might seem ridiculous to walk through a blizzard to get refills of medications that we have both been taking for years. But that’s universal healthcare in Canada.

You can’t simply phone your doctor and ask him to call in a refill. That is against the rules. Under the guidelines here, prescription renewals have to be personally handed out during an office visit. This allows the doctor to pocket the same fee he would get if he were attending someone with a broken leg.

By 8 a.m., we saw the illuminated lights of the clinic through the falling snow.

The clinic doesn’t open until 9 a.m. but a line had already started on the front steps of the clinic. There were no benches, so the people in line huddled beneath the snow.

We were lucky that day. The snowstorm made it difficult for people to arrive early. Only four others were ahead of us; more than a dozen were behind us.

There was a complication. The snowstorm had delayed the clinic staff. At 9:15 a.m., the doors opened. We dutifully walked in and collected our numbers — just as I did as a kid at the barbershop. Over the next half hour, we sat and waited for our number to be called.

Checking in allows us to be seen by the “doctor of the day.” Chances are about one in two that we have met him before, because they rotate in the city.

At 10 a.m. we were called to the examining room. The handsome doctor with a Polish accent seemed genuinely to care. (Often, the doctors are desperately tired or simply fed up with their job.) He took a few minutes to learn about our ailments. Then he passed us our prescription slips. At 10:30 a.m., three hours after we began, we began the walk home.

Medical care in Canada seems like the Dark Ages. It has been especially hard for us because, just more than a decade ago, we would make appointments in Spokane, Wash., to see our doctors at Rockwood Clinic. There, fine coffee was served in china cups, and rarely was the length of the waiting-room stay more than a few minutes.

No ‘Free’ Car Wash

Two decades ago, I was sitting in the showroom of Sutherland Mercedes, a car dealership in downtown Spokane. The shop in the back was changing the oil on my 20-year-old 300D Mercedes-Benz.

As I sat in the corner, a respected cardiologist was looking at a new car with his second wife. She couldn’t have yet been 30; he was pushing 60. The salesman showed them the most expensive Mercedes sedan on the showroom floor. The wife loved it. To close the deal, the salesman mentioned that, if they bought the car, they could have free car washes from the dealership for as long as they owned it.

“You hear that?” gushed the wife. “Free car washes!”

I had to stifle myself. Across that very street was the Lincoln dealership with the then-new Town Car. If you bought it, you didn’t get a free car wash. However, the Lincoln cost half what the Mercedes did.

That sums up healthcare in Canada. Almost everyone up here thinks Canada has “free healthcare.” The truth is Ottawa and the provinces foot the bill for universal healthcare. It is a spending program that has made Canada’s government debt levels soar.

Canadians have become so indoctrinated that even intelligent people don’t account for the fact that the average family in Canada pays roughly 50 percent of their income in taxes each year just to fund the healthcare system.

To meet the growing expense, governments will have to raise taxes and even further reduce the quality of healthcare. While this is not a winning blueprint for a society, it seems that the U.S. Supreme Court is willing to embrace it.

Perhaps the justices should have read this quote in The New York Times on Feb. 28, 2006: “This is a country (Canada) in which dogs can get a hip replacement in under a week and in which humans can wait two to three years.”

Calgary has many great things going for it. It is a hub for energy and a progressive city in so many ways. Yet I miss the United States and the healthcare system. In the United States, doctors had the time to treat patients like patients — not just a number in line.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

An American Story

On a hot June afternoon in 1998 in Spokane, Wash., I raised my right hand and pledged my allegiance to the flag and to the United States of America.

Today, I have that pledge framed and hanging on my office wall. It reads in part:

I hereby declare, on oath, that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state or sovereignty, of whom or which I have heretofore been a subject or citizen; that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic…

I felt a lot of emotions that day. I had become a citizen of the greatest Nation on Earth. Yet in some ways I didn’t feel much different, no doubt because of my paternal roots.

I remember leaving my small country school to attend the biggest high school in Calgary four decades ago. The kids teased me with words like “Yankee.” I never disputed what they thought were catcalls and proudly embraced the fact they believed I was an American.

I remember the dinnertime stories my father would tell about his father Amil and his grandfather, Gustov, a bearded German who spoke English with a harsh accent.

Amil was all of 9 and had just become a naturalized citizen a few weeks before he and his father embarked on one of the greatest American adventures ever: the Oklahoma land rush of 1889.

Those Unassigned Lands were considered some of the best unoccupied public land in the United States. The Indian Appropriations Act for 1890 was passed and signed into law with an amendment by Representative William Springer (D-Ill.). The Springer Amendment authorized the President to open Unassigned Lands for settlement. Because of the Homestead Act of 1862, signed by President Abraham Lincoln, legal settlers could claim lots up to 160 acres of surveyed, unclaimed public domain. If the settler lived on the land for five years, improved it and paid claim registration fees, he could receive the title to the land.

My American heritage is hardly blue-blooded; but as much as any group, the people of that time put down stakes for a Nation that would dominate the world in just 50 years.

Stubborn Men And Beasts

An estimated 50,000 people lined up for their share of the land. The race began at high noon on April 22, 1889, when starting signals were given at the points of entry.

Gustov and Amil Myers were among the settlers in a hastily built wagon box that was pulled by an aged gelding and a mean mule.

Everything they owned was in that wood-and-iron wagon, and everything they dreamed lay in front of them.

It was a dash the moment the gunshot echoed across the prairie. Gustov’s mixed-team raced the first half mile. The horse was breathing hard and the mule would not run any farther than she had to.

Those behind were on bicycles or on foot. My grandfather remembered one man carrying four wooden stakes tied to his belt loops, but no hammer. Those ahead were disappearing on the horizon; the richest land would be theirs.

Gustov and Amil were under a 72-hour-deadline to stake their claim; they made it in less than half that time. The family would go on to farm and ranch off this land and would be part of the greatest population expansion ever.

A decade later, Amil was a young man. He staked another claim, this one on the rich homestead land offered in Southern Alberta by the Canadian government. He and my grandmother went on to have three children, survive the Great Depression and expand their land from 160 acres to more than 1,000 acres.

The Leftover Legacy

I marvel at the things my grandfather and father did. My dad was born into a 12-by-12 foot shack on the cold Canadian prairie 100 years ago. At age 6, he rode a pony eight miles to school and back. My uncle, Amil’s youngest son, now age 84, sold the final quarter section of the homestead last month.

The descendants of the man who as a boy was part of the Oklahoma land run have gone on to be lawyers, dentists, teachers and writers. Whatever our accomplishments, they pale in comparison to those of our ancestors who pioneered North America.

I can recall the asthma attacks I had as a child. May dad would say that if I were of his generation, I would not be alive. It was true. Perhaps because the challenges we once faced no longer exist, there is a great deal that we Americans no longer dare.

There is a lesson in this as we pick the next President of the United States. Many of you share my feelings of despair that our Presidents are not the quality of men that they once were. But then again, are we? Let us hope that fortitude is within us as we celebrate this Fourth of July.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Dumb And Dumber

“She gave me a bunch of crap about me not listening to her, or something. I don’t know, I wasn’t really paying attention.” — Jeff Daniels as Harry Dunne in the movie Dumb And Dumber

Americans have a right to be upset as we head toward November’s election. It is a two-man race for the Presidency, and both candidates embrace big government and big spending. Barack Obama and Mitt Romney favor military intervention abroad, and both the President and the challenger have interfered with the free market with Obamacare and Romneycare, respectively.

Obama has put on such a dismal one-term performance that he makes Jimmy Carter’s Presidency look Churchillian. Romney is, at best, a moderate candidate along the likes of George H.W. Bush — able to win because the field of Republican nominees was so weak.

If the Nation is looking for a transformative President along the likes of Ronald Reagan, Romney will disappoint.

In 2006, then-Governor Romney said of Massachusetts’ healthcare reform bill, a sweeping effort to provide healthcare coverage: “We’re spending a billion dollars giving health care to people who don’t have insurance, and my question was: Could we take that billion dollars and help the poor purchase insurance? Let them pay what they can afford. We’ll subsidize what they can’t.”

Liberals loved it — so much so that Senator Edward Kennedy (D-Mass.) stood beside the Republican Governor when he signed into law the bill mandating universal healthcare coverage.

Members Of The Same Establishment

If you get the chance, pick up the book The Presidents Club: Inside the World’s Exclusive Fraternity by Nancy Gibbs and Michael Duffy. The authors explain how close the ties are between current and former Presidents and how their ideals never stray far from one another. Past and current Presidents compete against each other in the pages of history; but, foremost, past Presidents are loyal to the man in the Oval Office more than they are to the parties they represent or the ideals upon which the Nation was founded.

The book explains the enduring friendship between Harry Truman and Herbert Hoover after President Dwight Eisenhower was elected. It also tells of the close personal relationship between George H.W. Bush and George W. Bush with Bill Clinton. Even arch-Liberal and former President Lyndon Johnson conspired with Conservative GOP President Richard Nixon in selling the Vietnam War to an America that was tired of the blood and expense of that military intervention.

Gibbs and Duffy point to the 1960 book Kennedy or Nixon: Does It Make Any Difference? that was written by Arthur H Schlesinger Jr., an esteemed historian who became a top aide to President John F. Kennedy.

Last week, Daily Maverick also pointed to Schlesinger’s decades-old book:

For many years it has been something of an article of faith with both the hard left and the libertarian right in America that it really doesn’t make any difference – Democrat or Republican. They all come from the same political elite cloth, they are ultimately working in the interests of a ruling class or some super-secret elite cabal, and those interests are ultimately determined by the hard truths of the economic substrata. .. There is always that knowing, cynical French observation, “plus ça change, plus c’est la même chose” – the more things change, the more they stay the same.

This truth was evident this month when Romney was interviewed by Time’s Mark Halperin.

Halperin asked:

You have a plan, as you said, over a number of years, to reduce spending dramatically. Why not in the first year, if you’re elected — why not in 2013, go all the way and propose the kind of budget with spending restraints, that you’d like to see after four years in office? Why not do it more quickly?

Romney answered:

Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%.  That is by definition throwing us into recession or depression.  So I’m not going to do that, of course.

If not the first year, then when? By President Romney’s fourth year? Probably not. Romney wants to cut taxes/revenues and increase military spending.

Meanwhile, Obama has proposed reducing the size of the military following the end of the U.S. combat role in Iraq and plans to remove troops from Afghanistan by the end of 2014.

“We have two courses we can follow: One is to follow the pathway of Europe. To shrink our military smaller and smaller to pay for our social needs,” Romney said a month ago. “The other is to commit to preserve America as the strongest military in the world, second to none, with no comparable power anywhere in the world.”

The Obama Administration and Republicans in Congress have agreed to cut almost $500 billion dollars in military spending over the next decade. But even with that reduction, the United States would own the world’s most powerful military. The Pentagon’s budget this year exceeds $600 billion, or six times the amount of money that China is spending on its military.

Yet Romney will need more, especially since he has been painting Russia with the same stain as the “Evil Empire” that was the Soviet Union. But Romney needs to check recent history. The Soviets imploded because they could no longer finance their global aspirations. Neither can the United States.

A Warning, Not An Obama Endorsement

The truth is that, if elected, Romney will carry on most of Obama’s spending programs. That means a continuation of massive deficit spending by Washington and the near certainty that the United States will be thrown in the trash heap of history. This is not to say Romney won’t be better than Obama. It is hard to imagine he could be worse. But expect him to be only incrementally better at a time when the United States needs an exceptional President.

One final note: If Romney wins the Presidency, expect him and Obama to be friends once Romney’s tenure in the Oval Office is over. Historians may someday refer to them as dumb and dumber.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Will Bernanke Buy An Obama Victory?

The economy could not be collapsing at a worse time for President Barack Obama. With the vote coming in less than five months, stock markets are being whipsawed, unemployment is rising and the credit meltdown in Europe could wreak havoc on the world’s economies. But Obama has a powerful ally in the Federal Reserve. The central bank is set to launch a third round of quantitative easing (QE3) to keep interest rates artificially low and perhaps rescue his Presidency.

Fed fixing will certainly bleed the value of the greenback over the long term, but it just might give the economy enough lift to give Obama a second term.

Quantitative easing is when the Federal Reserve steps in to buy U.S. Treasury debt at weekly auctions during periods when individual investors and foreign nations are no longer keen to take on more of Uncle Sam’s IOUs.

Quantitative easing was rare before the economic crisis of 2008. That was when the Fed decided it had to pull out all stops to reflate an economy that really needed the excesses squeezed out of it.

When I started writing about such things in 1981, the primary buyers of U.S. Treasuries were American individuals and corporations. By the late 1990s, countries, particularly China and Japan, started buying Treasury bills, notes and bonds.

In more recent years, individuals, companies and foreign powers were no longer so willing to buy Treasuries. Still, the Federal government had to finance its spending sprees.

The Fed has been bankrolling Obama. Since his Presidency began in January 2009, the Federal Reserve’s holdings of U.S. government debt have quintupled. The Fed’s official numbers show that Treasury holdings have risen 452 percent in the past 3.5 years.

When Obama moved into the Oval Office the Fed owned just over $300 billion in U.S. Treasury securities. The latest data indicate the Fed owns 5.5 times more in U.S. Treasury securities, or $1.668 trillion. With Federal Reserve Chairman Ben Bernanke mulling over a third round of Treasury purchases, the central bank may own $2 trillion in Federal debt by election time. That would be one hell of a summer kicker for the economy going into the November election, and it would boost Obama’s chances of winning.

Obama’s Legacy And The Law of Diminishing Returns

Total U.S. government debt has grown from $10.6 trillion when Obama took office to $15.8 trillion this month. That is an increase of $5.2 trillion in 41 months. That is more debt than the U.S. accumulated between 1977 and 2002. The biggest buyer, the Fed, has to date rescued Obama from being a worse President than Herbert Hoover.

Yet the Fed must understand the law of diminishing returns.  I learned it as an 18-year-old during in my first economics 201 lecture.

“Say you put in a tough day’s work,” said the professor.  “You get home and there in the fridge is a case of Coke. The first bottle is amazing because you are so thirsty. The second bottle is good, but not as good. The third bottle…”

It is no different for the Federal Reserve and its systematic program of bailing out the President through quantitative easing.

But would QE3 really be enough of an economic game changer to alter the current political dynamic? According to The Wall Street Journal, it cannot resurrect the economy:

The bulk of the accumulating evidence suggests that the Fed’s initiatives made financial conditions easier than they would otherwise be. …

But easing financial conditions isn’t an end in itself. “It [QE] had an effect on the Treasury market, but did it translate into output and employment?” asks Philadelphia Fed President Charles Plosser, a QE doubter.

Even some QE defenders see a problem, which is one reason unemployment remains so high. “The channels through which monetary policy stimulates the economy are weaker than normal right now,” New York Fed President William Dudley has said. Mortgage rates are way down, for instance, but it’s so hard for would-be home buyers or refinancers to get loans that the economic oomph is diluted. Interest rates are lower, but small-business owners find borrowing against home equity or credit cards tough. Similar issues plague the Bank of England.

Larry Summers, a Democrat, agrees about the ineffectiveness of the Fed’s Obama bailout policies and their lasting impact on the economy. According to Summers, President Bill Clinton’s treasury secretary, another round of quantitative easing may drive interest rates down temporarily but will not encourage borrowing by corporations or even individuals. If companies and people don’t borrow, jobs will not be created.

Agora Financial LLC’s Whiskey and Gunpowder was more direct in its assessment last week: “QE, … by Bernanke’s own admission, is a giant placebo: It is not true medication as it evidently does not address the economy’s fundamental ills, but a tool for nationwide mass hypnosis. It is a kind-of anti-depressant, a kind of monetary Prozac.”

In the end it means the Federal Reserve is buying more of Uncle Sam’s debt, which may rescue only one job: Obama’s.

Bernanke’s Bet

It is hard to know whether Bernanke and the regional presidents of the Fed will buy hundreds of billions of dollars’ worth of additional Treasury debt just to support Obama’s re-election or if they will do it out of fear that without this intervention America may fall off a cliff.

That conundrum brings me to my second memorable lesson in economics, one I learned from my late father. He said the power of the markets to deflate will always trump the power of governments and central banks to inflate. Given that tens of trillions of dollars were wiped out during the global stock market crash in 2008, I am convinced that he was correct.

The bottom line is that two things are happening simultaneously: The global depression that began four years ago is a sword still poised over all of our heads, and whatever fiddling the Fed does over the next few months will only delay the falling of that sword. In the end, all of the king’s horses and all of the king’s men will not put the dollar back together again.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Protect Yourself From Economic Crisis

The Occupy Wall Street leftists may have a lot less square footage to trespass on, given the way the global economy is imploding. Stock indexes around the world are down and commodity prices are in their worst slump since 2008. If the trend continues, the Dow Jones industrial average could be valued at half its current price in 24 months.

That will mean that Wall Street fat cats could soon look more like feral felines. That wouldn’t be a heartbreaker except for the fact that the destruction of Wall Street would bring suffering to tens of millions of Americans.

Global markets took it on the chin this month in the wake of unemployment numbers that underscore the weakest U.S. economic recovery in decades.

The Four Horsemen Of Deflation

Not once in the 30 years that I have been researching the markets have I witnessed the troubles that the world now faces: a stock market slide, falling gross domestic product, rising unemployment and waning confidence.

In just the past few weeks, Big Board U.S. stocks have erased most of the gains they made during the first five months of this year. Only because of a 287 point rally last Wednesday — its strongest single day performance this year — the Dow is now comfortably over 12,000. But the Dow Jones Industrial Average is not immune from Europe’s problems, and a break below 12,000 could soon push the index below 10,700. The next support for the Dow would be 9,000.

Big Board stocks have been responding to the likelihood of a double-dip recession. U.S. GDP has been slashed from 2.2 percent to 1.9 percent. The U.S. economy is not adding jobs. As stagnation has spread into manufacturing, consumer confidence is beginning to tank.

American payrolls increased by just 69,000 last month, far below the 150,000 that analysts had expected. The unemployment rate rose to 8.2 percent from 8.1 percent, while revised estimates show that fewer jobs were created in the past three months than originally expected. The Obama economic recovery has run out of steam.

Then there is Europe. Crises in Spain and Greece have sparked a bank run that has pushed yields on relatively risk-free assets like U.S. Treasuries and German Bunds to record lows. The two-year German Bund has even dipped into negative territory. Yields on the 10-year U.S. Treasury have fallen to 1.40 percent. Those are yields not seen since the Great Depression. (See Treasury chart further below.)

Nervous investors are throwing money into the U.S. and German government bonds knowing they’ll get back a negative return when adjusted for inflation. This is becoming a panic — and for good reason. Europe’s wholesale funding market is broken at a time when Spain’s banking system is teetering toward bankruptcy.

Worse Than 2008

My old friend and Personal Liberty Digest™ columnist Chip Wood signs off each Friday with this phrase: “Keep some power dry.”  Unfortunately, the people who run the Federal government don’t read Wood’s columns.

When the economic calamity hit four years ago, governments around the world began injecting money into the economy. The Administration of President George W. Bush and a complacent Congress immediately shot $700 billion with the Troubled Asset Relief Program. That plus other bailouts left the United States with a Federal budget deficit of $1.17 trillion in fiscal 2012.

Last week the Congressional Budget Office (CBO) released a report showing that the national debt will soar over the coming years.

“The growing imbalance between revenues and spending, combined with spiralling interest payments, would swiftly push debt to higher and higher levels,” the CBO said in its 2012 Long-term Budget Outlook. “Debt as a share of GDP would exceed its historical peak of 109 percent by 2026, and it would approach 200 percent in 2037.”

Gross Federal Debt In 20th Century

The Federal government has not the means to inject another trillion dollars or more into the economy because they have burned all their powder. If Washington were to try another rescue like they mounted four years ago, the U.S. Treasury market would implode.

The result of that would be higher interest rates. The bulk of bidders at U.S. Treasury auctions these days are foreign powers, particularly China. However, if China and other nations begin to think the United States is another Argentina, they simply won’t throw good money after bad into U.S. Treasury bills, notes and bonds. The result is that America would have to go begging to get buyers of its debt. That would mean higher interest rates because if the marketing of U.S. debt securities slowed, the U.S. government would cease to operate.

Higher rates forced on Treasury auctions would send interest rates across the board higher. Higher rates for mortgages, car loans, credit cards, you name it. And that, my friends, would be a death knell for an economy that is struggling with interest rates at their lowest levels since the 1930s.

10-Year Treasury Constant Maturity Rate

Crude Is Crashing

The price of oil is in its worst retreat since 2008. Crude fell 18 percent in May. In fact, oil prices traded down in 17 of the 22 trading days last month, the worst single monthly performance for oil since 1997. Given the poor prospects for the U.S. economy, China’s economic woes and the debt disaster in Europe, oil could give up 50 percent of its value. That would put crude around the $40 per barrel mark. This would throw petroleum stocks into a devastating bear market.

Keep Only Your Core Gold And Silver Holdings

Gold is off its highs, but it is one of the few real assets that has held its value. I wouldn’t recommend the purchase of additional gold just yet, because I think the bullion bull has stalled. But it is impossible to predict what crisis might erupt, including the collapse of the greenback. If you can put a few dollars away — something that is getting tougher to do these days — you should keep at least 20 percent of savings in physical bullion. More than 25 percent of your savings in gold is not wise, because I think it will correct further downward. Long term, however, gold will rise well above $2,000 because of the bleak prospects for the U.S. dollar.

What to do? I think anybody holding from a small nest egg to a fortune should get heavily into cash.

If you have $10,000 or less, and given the poor rate of bond returns, I think you should find a good safe and lock it up along with your gold and some survival silver. A safety deposit box is another alternative. Even if your bank fails, I think you will have access to your box.

If you have more than $10,000 saved in a safe or a bank safety deposit box. I recommend you buy three-month to six-month U.S. Treasury bills. Most banks will sell you U.S. Treasury securities. You can also buy U.S. Treasuries in paperless electronic form from TreasuryDirect. You can go online and research more about them and more about U.S. Treasuries by clicking here.

Don’t buy Treasury instruments that have maturity longer than six months. Interest rates cannot stay at these historic lows and once they rise, longer maturity debt instruments such as notes and bonds will lose a significant amount of their value.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

The Spread Of Violence

Four years ago, Barack Obama convinced millions of Americans that he would unite the country and the world. He has failed. Inside America, as well as around the world, there is a huge divide between what people want and what they have. In places like the Mideast and Africa, it is a bloody divide. The question many people want answered is: Will violence come to America? It seems possible given global events, terrible leadership and a wrecked economy.

Many people expected more from Obama, the son of Christian and Muslim parents. Barack Obama Sr. was a Luo from Nyang’oma Kogelo, Nyanza Province, Kenya. With African heritage and an Ivy League education, this President may understand the world and hope that he could reduce the ongoing tribal wars in Africa and, more recently, in the Mideast. But more than three years after Obama took office, violence in large tracts of the world has reached pandemic proportions.

Why Every Liberal Should Visit Africa

As a teenager, I had liberal ideals. My father, who had traveled often to Africa and the Mideast, told me that I could not speak intelligently on those regions and their peoples until I had been there. I got my opportunity in 1990 when I spent one month traveling through South Africa with my uncle.

When we arrived in April, apartheid was on the verge of collapsing. Nelson Mandela was about to be released from prison, and many people in the country were bracing for a civil war. The situation had become so dire that the 747 on which we flew to Cape Town was almost empty. (On the way back to London, every seat was taken.)

I took the trip because my father’s subscribers had much of their money invested in South African gold mining stocks. If those companies were nationalized, many of the newsletter’s subscribers stood to lose a lifetime of profits. It was a trip I had to take.

Because of a world boycott, the South African government and businesses were desperate for anyone to report on what they thought was positive change. Doors were thrown open to us that would have been under lock and key five years earlier.

Our first meeting was with South Africa’s ambassador to the United Nations. Another meeting was with one of the richest men in South Africa. His penthouse office looked out over Cape Town.

During our visit, there was a fear that persisted throughout the country. A few weeks before our arrival, savage fighting had erupted between Nelson Mandela’s African National Congress supporters and the rival Zulu-based Inkatha Freedom Party, led by Chief Mangosuthu G. Buthelezi. It started when thousands of Zulus were forced out of their homes in ANC-loyal areas of the province of Natal.

History records that 1990 had the bloodiest clashes in modern South African history. I witnessed some of it in the streets of Johannesburg and in the gold mines where warring tribesmen fought.

The Darkness Is Spreading

Violence is as old as humanity in Africa. Joseph Conrad understood that when he wrote Heart of Darkness in 1899.

In that novella Conrad wrote: “He (Kurtz) declared he would shoot me unless I gave him the ivory and then cleared out of the country, because he could do so, and had a fancy for it, and there was nothing on earth to prevent him killing whom he jolly well pleased.”

To see how little Africa changed during the 20th century you only have to read the book (also made into a movie) The Bang-Bang Club: Snapshots from a Hidden War. It is the true story of four photojournalists who covered the violence in South Africa from 1990 to 1994. It was during this period that the country transitioned away from apartheid. It explains the fighting between ANC and IFP supporters.

That was the South Africa that I saw, and it was a story the Western media weren’t telling.

The Spread of Violence

Two decades later, major media groups are doing little to cover the violence that has spilled into North Africa — most notably in Libya and Egypt. And with the falling of one dictator after another, it appears that the Mideast is settling in for a long period of bloodshed.

The violence in Syria has left more than 12,000 dead since March 2011, while tens of thousands of people are homeless. Two weeks ago, in the town of Houla more than 100 people were killed. The United Nations says government forces went house to house and slaughtered men, women and 49 children.

This violence has happened during Obama’s watch as the leader of the free world. So far, he has provided no leadership and no solutions as to how America can stop mass murder. Will Obama slow down this violence? If he cannot, social discourse will spread further out of Africa and beyond the borders of the Mideast.

We have already seen rioting in Europe and even in a couple of North American cities. To date, public outrage is relatively mild; but it won’t remain that way unless the economy starts to grow.

That is the prediction of Wall Street insider Charles Ortel, who warned earlier this year that a worsening economic picture across the globe will see civil unrest hit the streets of America, not on behalf of leftist Occupy Wall Street groups, but by an armed “irascible and vocal Majority.”

Ortel, a managing partner with Newport Value Partners, LLC in New York City, predicted that a crisis in the financial markets will precipitate “a widespread civil insurrection and cross-border war.”

Ortel believes Americans’ access to firearms will cause riots to be bloodier than anything seen in Europe.

Out Of Africa

I remember how happy I was sitting on that plane when it lifted off the runway and I knew that the start of my 45-hour return journey had begun. Today, I don’t like the thought that violence may have followed me halfway around the world. And just as I took precautions during my trip to not do anything stupid (like leave the hotel at night), I also believe it is essential to take precautions at home while we still have the chance.

It is a sucker’s bet to think that the President or the Federal government will protect us and the ones we love. It is up to us to take the steps we must take to protect ourselves.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

‘The Thing’ That Scares Romney And Obama

“I supposed you’d all feel better if someone else was in charge.” — Donald Moffat as Garry in “The Thing”

Few things have scared the wits out of me more than seeing the movie “The Thing” 30 years ago. With just six months to go until the election, both President Barack Obama and Republican front-runner Mitt Romney seem to have their own “Thing” that scares them: the economy. Neither candidate has said how he would deal with what could be the hardest challenge America has faced since World War II.

One of these two men will have to lead the Nation for the upcoming four years. We know where they stand on gay marriage, gays in the military or, in Obama’s case, having a gay old time with Hollywood friends.

Supporters of both candidates have weighed in on other issues such as extending low interest rates on student loans, who bullied whom in high school and who had a tougher time growing up.

Is gay marriage important? That depends. For some people it must be, because so many people have weighed in on it. But I have a hunch that those same people won’t really give a rat’s behind about gay marriage if the economy implodes.

If millions of people lose their jobs and cannot feed their children, who among us will even care about gay marriage as an issue?

My mother used to say: “Everyone is principled until the wolf comes knocking at the door.” Having survived the Great Depression, my parents knew all about the wolf. More than anything else, it shaped who they were. I will never forget how my dad used to smoke his cigarettes right down to the filter even after he became successful. There was always a part of him and my mother that remembered how hard it was to put food on the table and pay the rent.

Most of us don’t have a memory of really tough times. And not one in 100 would even believe that times could be that tough again. Yet in many ways the world’s economy is hanging by a thread, and we might be facing something even worse than the Dirty Thirties.

I believe the President’s and Romney’s advisers have told them how bad this “Thing” can get, and that is why neither candidate has a clue as to how to handle this economic crisis. Both Obama and Romney seem worried that anything too negative could start a panic in the investment markets that one of them will have to deal with as President. This explains why we have witnessed the stupidest Presidential campaign in living memory.

If you think economic collapse can’t happen, you should start paying attention to the warning signs.

It’s Alive!

Four years ago, the financial meltdown that almost turned into a depression began at the doorstep of Lehman Brothers CEO Richard Fuld Jr.

That first domino fell hard, and Fuld could not believe his firm would not be rescued by the Federal government. But it wasn’t. Not until the autumn of 2008 did Congress approve the Troubled Asset Relief Program, which allowed the U.S. Department of the Treasury to purchase up to $700 billion of “troubled assets.”

The acclaimed book Too Big To Fail by Andrew Ross Sorkin explains why Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke believed that without a bailout the Nation was headed for an economic crisis worse than the Great Depression.

It was the largest Federal government economic intervention since the Civil War. There was one huge problem with the solution: The government gave banks hundreds of billions of dollars in taxpayer money but did not require they lend it out or rein in salaries and bonuses. In other words, they gave the banks a clean slate to start all over again. And banks like JPMorgan Chase & Co. have done it in spades.

What Would Harry Truman Say?

This month, JPMorgan Chase announced it made a bad bet that resulted in a $2 billion loss. CEO Jamie Dimon said he was sorry — so sorry, in fact, that he forced Chief Investment Officer Ina Drew to resign. Dimon believes the buck stops with Drew, even though he is at the forefront of what is turning into the second banking crisis in four years.

Dimon even apologized to shareholders, but he isn’t sorry enough to take a cut on his $23 million pay package.

One thing I have learned over the past 30 years is that if one big bank is taking on risk, so are all the others. That was the case in the 1980s with the titanic amount of bad Latin American debt, and it was certainly the case five years ago with the trillions of dollars in bad bets the banks made on derivatives.

Right now, the mainstream media are underplaying the JPMorgan Chase problem. That’s exactly what they did four years ago when Lehman Brothers’ ugly losses were coming to light.

We may soon see a problem far too big to ignore — a problem that can again take down the financial markets and the economy with it.

The Federal government has already shot its ammo. Interest rates charged by the Federal Reserve to banks are close to zero, and the bond market cannot stomach further credit injections into the financial system. And nobody, especially the Presidential candidates, even wants to talk about it.

Who will handle this monster? It will be either a former community organizer or a venture capitalist. We are in a lot of trouble.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

So Simple A Caveman Would Own It

The arrogance on Wall Street always amazes me. I have lived through three stock market crashes, one rolling recession, near hyperinflation and what was almost an economic depression. In all those cases, Wall Street was caught unaware. People who manage financial institutions were incredulous as the events transpired.

The Street’s ignorance was on full display this month when Warren Buffett’s top investment adviser Charles Munger explained that gold is a useless relic.

On May 4, the eve of the Berkshire Hathaway annual meeting, Munger, age 88, said: “Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939, but I think civilized people don’t buy gold, they invest in productive businesses.”

Munger thinks people should either be facing a Nazi occupation or else be as stupid as cavemen in order to purchase gold. If this reminds you of the Geico cavemen commercials, you won’t be surprised that Munger is big on investing in that company.

Munger said he loves Berkshire Hathaway’s portfolio, which includes Burlington Northern railroad, specialty chemicals firm Lubrizol and insurance giant Geico.

“We just have a wonderful portfolio in business, if you average them out,” Munger said. “By and large they’re doing productive, useful work.”

So confident are Buffett and his associates on Burlington Northern that in 2009, Berkshire Hathaway bought the company for $34 billion. This is just one example of Buffett’s showing faith in Barack Obama’s management of America’s economy.

Buffett and Munger forgot to consider that Berkshire Hathaway’s portfolio is mostly traded in U.S. dollars. Perhaps Munger slept through the past decade. Only that would explain how he missed the worst bear market ever for the U.S. dollar and one of the biggest bull markets for gold.

When I began as the editor for Outstanding Investments in the autumn of 2000, I urged subscribers to load up on gold. Bullion was then trading for less than $280 per ounce. Today, it trades at about $1,600 per ounce.

During those same years, the value of the dollar has gone to hell. The evidence in the graph below shows the greenback’s dreadful decline.

The U.S. Dollar Index

Munger doesn’t seem to understand that when the dollar declines, even against other currencies, the purchasing power of the dollar declines. Even if we accept the Federal government’s cooked books on the Consumer Price Index, what cost $100 in 2000 costs $133 today.

Burlington Northern stock has gone from $25 per share in 2000 to $100 per share now (in large part because of the spike caused by the Berkshire Hathaway purchase). But you have to discount one-third of that increase because of the declining worth of the dollar.

Another Obama Term Will Send Bullion Soaring

Munger does not understand what the dollar will face if Obama is re-elected.

In the 1970s, dollar inflation decimated Big Board stocks. The Dow Jones industrial average hit 996 in 1966. That index stood at 742 in 1980, a loss of 25 percent. If you factor in the decline of the dollar’s purchasing power, the DJIA was really 321 in 1966 dollars. Over those 14 years, the DJIA lost more than two-thirds of its value.

Uncivilized people like my father got his subscribers into gold starting in 1970 at $35 per ounce; that investment climbed to $850 by January 1980. Using the same inflation calculator, the 1980 price of that gold was $428 per ounce in 1970 dollars. So even in real terms, the price of bullion, bought by cavemen, increased twelvefold.

The Wall Street establishment wouldn’t listen to a word the “gold bugs” said. In fact, my dad, Vern, was a guest on PBS’s “Wall $treet Week with Louis Rukeyser” in the mid-1970s. Rukeyser and his panel openly laughed at my dad’s suggestions that investors should buy gold. One came right out and said such advice was un-American.

While Wall Street investors were losing their shirts, gold investors who followed people like James Dines, Harry Schultz and C.V. Myers made themselves tidy fortunes.

You would think an experienced man such as Munger would remember those times. And given the unprecedented increase in the U.S. money supply over the past three years, men like Buffett and Munger might even think it prudent to put some assets into gold.

Perhaps such men cannot think outside the box. I don’t know. What I do know is that modern money changers refuse to believe that anyone other than a caveman would even consider investing in gold.

Most people listen to the investment establishment. I have a friend who is an accountant. He knows several multimillionaires in Alberta’s oil patch. I asked him not long ago if he thought any of them owned gold. He told me he didn’t believe even one owned a single ounce. That tells me there is a lot of upside to gold prices even though bullion is undergoing a correction right now.

Unfortunately, I think Obama is going to be re-elected. After he is, he will move forward with socialist policies, which will mean even larger Federal deficits. More debt means more dollars, and that means the continued decline of the greenback. If successful people ever get a taste of stagflation (a stagnant economy and higher prices), I think investors are going to invest in precious metals. The gold market is so thin that it won’t take much buying to push the price of bullion to $2,500 per ounce.

They Thought My Mother Was Crazy

There are legions of men and women like Munger in the world. I still remember when I first met one.

It was 1970, and it was legal for Canadians to buy gold. My dad was heavily invested in gold along with his subscribers, and my mother had about $3,000 in savings. I went with her to the Bank of Nova Scotia one day.

The main branch in downtown Calgary had a trading desk. She told the man at the desk that she wanted to take the money out of her savings account and buy 1-ounce gold South African Krugerrand coins.

Gold was trading at $35 an ounce back then. Most people who worked in the financial industry believed that once the United States freed up, the price of gold would fall.

The man at the gold desk looked at my mother as if she were crazy. He tried to convince her that she was speculating with her life savings and that it would be much better if she left it in her account. When my mother insisted she wanted to buy the gold, we were escorted into the branch manager’s office. The manager urged my mother to reconsider her recklessness. When she wouldn’t, he said the bank would not accept the transaction. She then asked the manager to phone my father, who had a much more sizable account with the bank and a much more forceful personality.

I don’t know what my dad said to that bank manager that day; but after a very brief phone call, the manager was happy to help my mother purchase her gold.

I guess it is true what the kid said to me more than four decades ago on the playground: “Myers, you’re a caveman!”

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report