Obama’s Pump Dream

“This president, systematically, is doing everything he can to raise the price of energy in this country. He’s shutting down all sorts of opportunities for us to drill for oil.”
–Rick Santorum

If you think gasoline is expensive now, just wait and see the price at the pump if Barack Obama is re-elected. His policies have steadily dragged the country toward $5 per gallon. If he gets another term in office, affordable gas will be a faint memory. And that will have Obama and his Green backers tickled pink.

The Obama Administration doesn’t seem to care that every 1 cent increase in the price of gasoline costs the economy $1.4 billion. America is becoming more dependent on Muslim oil while turning its back on a half-century energy alliance with Canada. This has been made evident by the President’s rejection of the Keystone Pipeline.

When Obama was sworn into office, the price of gasoline was $1.80 a gallon. Three years into his term, prices for some Americans are approaching $5 per gallon.

That is just the way Obama likes it. Given another four years, gasoline prices could reach $8 a gallon. This is because Obama has a greater allegiance to the Green Machine that drove home his victory in 2008 and that is fueling his chances for another victory lap come November.

The specifics of what the President promised to the environmentalists if he is re-elected remain a secret. But what we know for certain is that Obama clamped down on deep-water drilling inside the Gulf, tightened Federal restrictions for onshore oil exploration and vetoed the Keystone Pipeline, a major oil artery that would secure dependable Canadian crude to a nation thirsting for oil.

Senator Kay Bailey Hutchison (R-Texas) said the evidence is in, that the Obama Administration has willfully brought higher prices to the gas pump because it has put an embargo on fresh and dependable sources of North American petroleum.

“We can’t slow down global demand for oil and gas, but we can do a lot more here at home to assure that we have the energy we need and to halt skyrocketing costs,” Hutchison said. “President Obama’s policy has resulted in an unprecedented slowdown in new exploration and production of oil and gas.”

Speaker of the House John Boehner said the President has been reckless in mismanaging the nation’s energy policies.

When added up, not passing the Keystone Pipeline and “scrapping leases for oil-shale development” makes the President responsible for $5 gasoline, read a press release from Boehner.

“The Obama administration has spent more than three years blocking efforts to expand energy production and bring down gas prices, while pushing job-crushing tax hikes and taxpayer-backed loans to companies like Solyndra.”

Boehner laid out a timeline showing Obama’s purposeful drive to sending gasoline prices higher:

  • Jan. 7, 2010 – The Obama administration announces new bureaucratic hurdles to American energy production that Secretary Salazar admitted “could add delays to the leasing and drilling process.” Gas is $2.67 a gallon.
  • March 31, 2010 – Instead of opening new areas to energy exploration and development, President Obama blocks deep-ocean energy production on 60 percent of America’s Outer Continental Shelf. Gas is $2.80 a gallon.
  • Dec. 1, 2010 – The president re-imposes and expands the moratorium on offshore energy production. Gas is $2.86 a gallon.
  • Jan. 2, 2011 – TIME reported that the Obama administration issued the first in a series of regulations on January 2 designed to unilaterally impose a national energy tax. Gas is $3.05 a gallon.
  • May 5, 2011 – The White House issues a formal statement opposing House-passed Restarting American Offshore Leasing Now Act and Putting the Gulf of Mexico Back to Work Act, legislation designed to jumpstart [sic] American energy production, address rising gas prices, and help create new jobs. Gas is $3.96 a gallon.
  • June 21, 2011 – The White House opposes the House-passed Jobs & Energy Permitting Act that would unlock an estimated 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Gas is $3.65 a gallon.
  • Nov. 8, 2011 – The Obama Administration releases a plan for a five-year moratorium on offshore energy production, placing “some of the most promising energy resources in the world off-limits,” according to the House Natural Resources Committee. Gas is $3.42 a gallon.
  • Jan. 18, 2012 – President Obama rejects the bipartisan Keystone XL pipeline and the more than 20,000 jobs that would come with it. Gas is $3.39 a gallon, and rising faster and earlier than ever before.

Rising in tandem with gasoline prices has been crude oil.  As you can see from the chart below, crude oil has risen almost 40 percent in the past two years and last week had an upward gap at $105 per barrel. This is a bullish signal and technically indicates the price of oil is going to go higher. More importantly, I think Obama will continue to provide the fundamentals for crude and gasoline to increase, perhaps another 40 percent higher if he is re-elected this November.
Crude Oil Prices Rising Steadily under Obama's Influence
While debating other GOP candidates last month, Newt Gingrich criticized Obama’s national energy program, saying it has been instrumental in driving the price of gasoline to $5 per gallon in some parts of the country.

“[America needs a new] energy policy, getting back to $2.50 a gallon gasoline, outlining both the economic and National Security implications, indicating that instead of bowing to a Saudi King we ought to be drilling, and our goal should be to be so independent that we don’t care what the Iranians are doing in the Straits of Hormuz,” Gingrich said.

That really is a pipe dream for Gingrich and it can only happen if a Republican is in the Oval Office next year.  Short of that, Obama’s pump dream of $8 per gallon gasoline is what we will have. That might good for Green backers and tree huggers, but it will cripple the recovery for the rest of the Nation that depends on affordable gasoline.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Editor’s Note: Last week, TransCanada announced it would move ahead with part of the Keystone XL pipeline, completing a section Oklahoma to Texas. This plan does not require Federal approval. In January, the Obama Administration rejected TransCanada’s proposal to build a pipeline from the Montana-Canada border through Nebraska because of pressure from environmentalist groups.

The Worrisome Frivolity Of Facebook

“I didn’t know what Facebook was, and now that I do know what it is, I have to say, it sounds like a huge waste of time.”
–Betty White, “Saturday Night Live”

“Knowledge is power,” wrote Sir Francis Bacon. There’s little doubt Facebook founder Mark Zuckerberg grasped this when he created his vision for social networking eight years ago this month. Whether you consider Facebook a miracle or a monster, there is no doubt it has changed the way people relate to each other. It also made Zuckerberg one of the youngest billionaires in history.

This year, Facebook is expected to garner its billionth user. It already has more than 845 million users, or roughly one-seventh of the world’s population.

With billions of dollars in earnings, Facebook has in the works a much-anticipated initial public stock offering. The success of that IPO will do much to determine if social networking and the accumulation of what was once deemed personal information translate into raw wealth.

Regardless of how well Facebook’s IPO does, there is one truth about it and other social networks: The members who sign up are giving away their privacy and anonymity.

I find it irritating to watch people obsessing over Facebook. I am in my mid-50s, and I have no desire to share my life with so-called friends who can pass any of my information on to anyone. My wife and I have three children in their 20s who, like many of their generation, are avid Facebook users.

It has been my observation while shopping, walking in the park or driving that multitudes are either reading Facebook posts or updating their statuses. The numbers back me up. Facebook reports that it has 415 million mobile users.

Whether on the laptop at home or on the street with a smartphone, it appears that the principal reason so many people spend so much time on Facebook is to learn and spread gossip.

Evidence that many of my generation are upset over social networking was demonstrated this month when a North Carolina father, Tommy Jordan, responded to his daughter’s disrespectful Facebook rant by shooting her laptop and putting the video on YouTube. Jordan’s video went viral, receiving more than 2 million views in the first couple of days.

 

Jordan’s daughter had written a long Facebook post in which she complained about her chores. She didn’t suspect her dad would find her online tirade, but he did. He was especially upset by his daughter’s use of profanity in her post.

“This is for my daughter, Hannah, and more importantly, all of her friends on Facebook who thought her little rebellious post was cute,” Jordan said before riddling her computer with bullets.

I don’t endorse shooting computers. It is too much like Elvis Presley shooting TVs. I do understand that many older people are angry that our kids seem to give their lives over to their “friends” who number in the hundreds or sometimes thousands on Facebook.

I also realize that Facebook isn’t just for young people.  Social Media Today reported in April 2010 an estimated 41.6 percent of the U.S. population had a Facebook account.

A friend told me at a Christmas party that he has more than 2,000 “friends” on Facebook. I still can’t comprehend that number. I am not sure I have been introduced to 2,000 people in my lifetime.

A wise, old uncle once told me: “If I have three people who are real friends, I am a lucky man.”

The New Economy

On Feb. 1, Facebook filed its S1 document with the Securities and Exchange Commission. The company filed for a $5 billion IPO, one of the biggest in tech history and the largest Internet offering ever. It is estimated that when the IPO plays out, Facebook will be worth between $40 and $200 billion. While there are a multitude of users, no one can accurately predict what this company will be worth after the silicon settles.

While Facebook earned over $1 billion last year, it may pay out those profits in bonuses to its employees and avoid any Federal taxation. I don’t begrudge Facebook legally avoiding taxes, but there is a macroeconomic point most people ignore. As of February 2011, Facebook employed about 2,000 people. The hottest stock to hit Wall Street has an unparalleled ratio of customers to employees. America needs jobs, yet Facebook and the entire social network create little stimulus for the economy.

Then there is the question of productivity. Many companies block Facebook from employee workstations. Those that don’t have to contend with workers wasting time checking new postings on their Facebook page.

On the subject of privacy, I had lunch the other day with a young man whom I coached in football more than a decade ago. He went on to win many football awards and earned two degrees by the age of 21. His MBA thesis criticized Facebook and commented on the lackluster way in which people give away their privacy.

He told me, “Since early civilization, people have strived to protect their privacy. In a few short years, such concerns have been thrown to the wind.”

How exactly is it that Facebook and other social media sites hurt a member’s privacy? I found an explanation from A Nice Guy’s View on Life, written June 23, 2010:

Here’s where the problem is. Facebook is a company which is trying to make money. Your profile (the collection of all your information) on their website belongs to them. They can market that information to anyone and do whatever they want with it. If you put any pictures on there, then they own those photos too. On top of that, every “application” or service that isn’t written by Facebook) knows everything [emphasis in the original] about you and the people you are friends with… which means that if you’ve decided not to install an application that collects e-mail addresses, but your friend does — then that application knows your e-mail address. Wonderful!

All of this makes me think Facebook is less a wonderful enterprise and more like a useful instrument for big business and Big Brother. That should give you pause before you either join Facebook or update your information on it.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Wag The Ayatollah

“Why [wage war against] Albania?”
“Why not?”
–From the movie “Wag The Dog”

The power brokers who dictate our future and destroy the freedoms they claim to protect are hell-bent on engaging America in another war. The tom-toms that Republican Presidential candidate Ron Paul warns of are thunderous. This year, they summon more of our young men and women to wage war against Iran, a country smack-dab between Iraq and Afghanistan.

Expect President Barack Obama’s impending war to look very much like the conflicts that George W. Bush launched a decade ago. But don’t be surprised if the new war isn’t bigger and more bitterly contested than the one against Iraq. After all, there are only nine months until the Presidential election. Obama and his backers understand that millions of Americans will resist abandoning the Nation’s Commander in Chief when U.S. troops are engaged in combat.

That brings us back to why America went to war against Iraq. Few people noticed that the Bush Administration fabricated lies regarding weapons of mass destruction, and they even spread falsehoods that Iraqi leader Saddam Hussein was fast friends with the terrorists who struck on 9/11.

Coming Soon: Thirty Seconds Over Tehran

American jingoism could reach a fever pitch. Already, Defense Secretary Leon Panetta is selling us on war with Iran. Earlier this month, he boasted to U.S. troops stationed in Germany that U.S. armed forces could wage and win simultaneous conflicts against North Korea and Iran.

“We could be fighting a land war in Korea and suddenly Iran moves to close the Straits of Hormuz,” Panetta said.  “We’ve got to have the capability to be able to confront each adversary, to not only deter them, but defeat them.  And we can do that with the force that we’ve put in place.”

It wasn’t hard for Panetta to find U.S. troops in Germany or almost anywhere else. A 2010 report showed there were 1,000 U.S. military bases outside the United States. The cost, not including bases in Iraq and Afghanistan, was more than $100 billion per year. According to anthropologist Hugh Gusterson, U.S. bases “constitute 95 percent of all the military bases any country in the world maintains on any other country’s territory.”

It is beyond me why our government keeps wasting men and materials in Europe two decades after the Cold War ended. Exactly whom must we brace ourselves against?

Perhaps the ruling elite that Bob Livingston alerts us of will not permit us to stand down regardless of the circumstances.

According to Institute for Policy Studies fellow Phyllis Bennis, the Pentagon has been brilliant at spreading military production across virtually every Congressional district. As a result, even the most antiwar members of Congress won’t challenge big Department of Defense projects no matter how high Federal debt levels reach.

Last summer, Katrina vanden Heuvel, editor and publisher of the The Nation, concluded that: “The staggering resources we spend to support an empire of bases isn’t making us more secure. Instead, they fuel resentment and consume resources desperately needed to invest here at home”

The members of the ruling elite don’t care an iota about such deficit spending that is eroding our future while encouraging anti-American sentiment. Whether they are our elected officials or behind-the-scenes puppet masters, their goal is to increase their wealth and influence. As billionare Ted Turner once remarked: “War has been good to me from a financial standpoint.”

In 1947, the Federal government introduced doublespeak when the Department of Defense of War became the Department of Defense. Since then, the United States has not been engaged in much defense, nor has Congressional approval been required for what Presidents are apt to call either a “police action” or “terrorist interdiction.”

Fast-forward to today. How can another President, this one a Democrat, proclaim two additional enemies just as America has pulled out of one war (Iraq) and has announced the pullout of another (Afghanistan)? Yet the groundwork is being laid. Iran is a threat to world peace.

Is it possible that George W. Bush and Barack Obama are really pawns to a secret establishment, perhaps a military-industrial complex that President Dwight D. Eisenhower warned against? I can only speculate, but I wonder if those people really calling the shots ever took an Oath of Office or ever had their names on a ballot. America seems to be falling toward a blueprint that George Orwell predicted in his novel 1984.

As I thought about what seems the inevitable march toward more war, I re-read 1984. I first read it 40 years ago after my English teacher made it compulsory. Over the years, the world has changed and not for the better. This from 1984 struck me hardest:

“To understand the nature of the present war — for in spite of the re-grouping which occurs every few years, it is always the same war — one must realise in the first place that it is impossible for it to be decisive… The labor of the exploited peoples… is not really necessary to the world’s economy. They add nothing to the wealth of the world, since whatever they produce is used for purposes of war, and the object of waging the war is always to be in a better position to wage the next war.”

Consider the impending war with Iran. On Jan. 31, The Washington Post reported that U.S. spy agencies are providing information to the Obama Administration that Tehran may be actively planning to attack U.S. targets on U.S. soil.

Let’s give that idea a quick examination. No sovereign nation has attacked U.S. soil since World War II. (Of course, this doesn’t include U.S. embassies or other American targets on foreign soil.) Let us remember that 9/11 was undertaken by renegade terrorists who were offered protection by the government of Afghanistan. The government of Afghanistan did not attack New York and Washington, yet even its tacit support of al-Qaida resulted in swift and terrible retribution.

Are we to believe that the leadership in Iran is stupid enough to attack Americans within U.S. borders? It sounds like a recipe for Iran to be wiped from the map.

I don’t believe for a moment that Iran’s leadership is stupid enough to launch an attack on American soil. I do believe our government is planting such misinformation to make us fearful and to drum up support for another war. How handy with a Presidential election approaching.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Editor’s note: Over the next several days, we will be making upgrades to our site. During this time, you may see some issues, including but not limited to the site loading more slowly than normal. Additionally, on Thursday morning your ability to post comments will be turned off for a few hours. These upgrades should be completed by Friday morning if all goes as planned. Thanks for your patience. –BL

The Trouble With Mitt’s Money

“Greed, for lack of a better word, is good. Greed is right, greed works.” — Gordon Gekko, “Wall Street”

“Like Gekko, Romney made his fortune buying and selling companies.” — Salon.com, Jan. 9

Republican Presidential candidate Mitt Romney has accumulated a vast amount of wealth and in doing so probably hasn’t broken a law or bylaw. However, Romney isn’t being honest about what kind of business he operated and he greatly exaggerates his business know-how.

Romney made that money not by building things but by tearing things down. His wealth was created through takeovers, buyouts and mergers. So his claim that he knows how to renew the American dream is disingenuous at best.

Vulture Economics

Romney founded Bain Capital in 1984 and oversaw the operations of the firm for several years. That put him in charge of business takeover operations similar to what the fictional Gordon Gekko ran ruthlessly in Oliver Stone’s movie “Wall Street.”

Private equity firms like Bain shift capital around. They prey on companies that they take over. Sometimes, they burden them with huge debts. Sometimes, they leave them with zero real assets. Many of the companies go bankrupt while the private equity firms pad their balance sheets.

Private equity firms buy companies they plan to bankrupt. They don’t care about how many pink slips are handed out. Their goal is to make sure that creditors collect as little as possible. To accomplish their goal, they transfer the assets of the acquired companies into other companies. That means big profits for private equity firms, but the economy gains nothing.

There is nothing illegal in it (unless, like Gekko, you use insider trading to fatten your profits), but it doesn’t add jobs. If anything, Romney is in the business of slashing jobs to get a bigger bottom line.

Romney Is No Henry Ford

Romney uses his resume to proclaim that he knows how to energize the American economy. Buying companies and trading stocks and bonds doesn’t so much as put a shingle on a barn.

Romney argues that he was helping workers and investors. Ron Paul disagrees. According to Paul, under the terms of a typical leveraged buyout, “The wealth is taken from the middle class and it goes to the select few, who are the insiders.”

Former GOP Presidential candidate and Texas Governor Rick Perry agrees with Paul.

“I happen to think that companies like Bain Capital could have come in and helped these companies if they truly were venture capitalists,” Perry told voters in Lexington, S.C.  “But they’re not — they’re vulture capitalists.”

Romney doesn’t help himself. Not only does he wear expensive suits like Gekko, but he seems to have some of the same attitudes. In “Wall Street,” Gekko says, “If you need a friend, get a dog.”

Romney expressed pretty much the same view when he said: “I like being able to fire people.” Like Gekko, Romney could have added: “Lunch is for wimps.”

On Jan. 19, Sun Sentinel.com ran a column by Bill Press that argued against Romney’s public relations blitz regarding his business expertise.

There’s a big difference between the attacks on John Kerry’s war record in 2004 and the questions raised about Mitt Romney’s business record in 2012. The entire Swift Boat campaign was nothing but one big fat lie. But Gingrich and Perry are only telling the truth. Corporate predators like Bain Capital do, in fact, swoop in on distressed companies, leverage them with debt, strip them down, fire workers or export jobs, and then sell companies off for scrap — while investors walk away with huge profits.

Citing the success of Domino’s, Sports Authority and Staples, Romney brags about creating a “net 100,000 new jobs.” But he’s offered no proof of that claim, and his numbers don’t add enough. The 100,000 figure includes current employers of all three companies, hired long after Bain left the scene. And it doesn’t factor in the thousands of jobs Romney/Bain destroyed by looting other companies. Indeed, out of 77 companies taken over by Bain, the Wall Street Journal found that 22 percent had either filed for bankruptcy or simply shut their doors. The truth is, Romney was never a job creator. He was a wealth creator. And it’s a lie for him to suggest otherwise.

Just as it’s a lie to suggest that he ever lived in fear of getting a “pink slip.” As reported by the Boston Globe, Romney had a deal with Bain Capital that allowed him to return to his former job at his former salary if things didn’t work out. For him, there was zero financial risk.

There is also the contradiction between Romney the venture capitalist and Romney the political leader. As the Governor of Massachusetts, his reduction of the State bureaucracy was modest, as Boston Globe reporters Scott Helman and Michael Kranish report in their book, The Real Romney: “After four years, he reduced the payroll of agencies under his direct control by 603 jobs, according to his administration’s tally.”

Helman and Kranish point out that Romney’s predecessor, Republican Governor William F. Weld “had closed state hospitals, privatized services, and slashed about 7,700 jobs during his first term, though the numbers had later increased when the economy improved.”

The Men That Built America

As for Romney, the businessman, some of you may believe that plundering is straightforward economic Darwinism — a necessary and, ultimately, good thing. If that is true, then Bain Capital not only survived but thrived under Romney’s leadership.

What is not true is that Romney has business experience that builds up corporations and creates a vast number of jobs. Perhaps that is not his fault. He might have been born a century too late.

I came across a list of the richest individuals in history. Nobody alive is on that list. Men like Bill Gates and Warren Buffet are not even in the same ballpark as that crowd. The Americans who are on the list are the magnates of industry who were building their fortunes and the Nation in the early 1900s.

John D. Rockefeller is noted as the richest individual ever. His personal fortune peaked at $318.3 billion in 2007 U.S. dollars.

The second richest ever — Andrew Carnegie — had his personal wealth top out at $298.3 billion, again adjusted for inflation.

Others in the top 10 list include William Henry Vanderbilt, Andrew William Mellon and Henry Ford. They were the builders. The others in the list were plunderers, including: Marcus Licinius Crassus at No. 8 with $170 billion; and Nicholas II, the last tsar of Russia, at No. 3 with $253.5 billion.

What America so desperately needs today are leaders and builders like Carnegie and Ford, not pillagers like Crassus and Nicholas. What disturbs me most about Romney in his campaign for the Presidency is that his business model more closely resembles the latter than it does the former.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

The Winter Of Our Discontent

Any notion of growing disappointment was left out of President Barack Obama’s State of the Union speech last week. It shouldn’t have been.

The seeds of discontent are being sowed across America. Obama is more prolific than Johnny Appleseed. Obama hit on the familiar: The wealthy are not paying enough; the middle class is getting shortchanged. Noteworthy was that Warren Buffett’s secretary Debbie Bosanek had a seat to hear the speech. It’s too bad for Obama that they couldn’t make room for Buffet’s many housekeepers and groundskeepers.

Obama did not and will not admit this fact even though America is struggling to sustain an economic recovery while energy costs are rising and the budget deficit is in uncharted territory. However, he did immediately hit upon the wealthy. Just as Congress had taken their seats, the President said: “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by.”

Toward the end of his address, Obama said: “Now, you can call this class warfare all you want.” That’s exactly what Obama is calling it.

Had Obama been honest, he would have admitted that the United States is an empire in decline and that his Presidency has only accelerated the Nation’s demise.

I wonder what author John Steinbeck would think of the current State of the Union. After all, his masterpiece was The Grapes of Wrath, published in 1939. It is a fictional account of personal hardships brought about by the Great Depression.

King Barack

The title of Steinbeck ‘s last book, The Winter Of Our Discontent, was derived from the first line of William Shakespeare’s play “Richard III”: “Now is the winter of our discontent.”

Richard III died more than a century before Shakespeare wrote a play about him. History made note of him because he dragged England into one of its bloodiest civil wars.

Richard III was also the basis for Shakespeare’s fictional king, a man who was cunning, conniving and charismatic. It was his charisma that made it so difficult for those that opposed his rule and who wanted to expose his evil.

Shakespeare’s Richard III presents himself as the rightful heir to the throne, pretending to be a modest and devout man, lacking of great ambition. What the audience already knows is that Richard is devoid of all these qualities. He even announces it: “I am determined to prove a villain and hate the idle pleasures of these days.”

So begins the story of destruction at the hands of a tyrant who has created a poisonous atmosphere within his court and even beyond its walls.

Some people might suggest that nowadays another real-life Richard III has taken up residence in the White House. I don’t know about you, but I feel like I have been strapped down and forced to watch this tragedy play out.

Already the dominoes of America’s demise are lined up. They all will tumble if Obama is re-elected.

A Global Tragedy

In Shakespeare’s play, Richard says: “The world is grown so bad.”

Last April, Obama said: “We’ve got some global enormous challenges out there.” The President could easily have said the same refrain as Richard.

Like Richard III, Obama has done much to make things worse as was pointed out earlier this month when the GOP Presidential front-runner appeared on NBC’s Today Show, hosted by Matt Lauer. According to Mitt Romney, Obama is creating an atmosphere that is dividing the country, especially with regard to the public protesting that happened late last year.

Romney said:

I think it’s about envy. I think it’s about class warfare. I think when you have a president encouraging the idea of dividing American based on 99 percent vs. one percent, and those people who have been most successful would be in the one percent, you’ve opened a whole new wave of approach in this country, which is entirely inconsistent with the notion of one nation under God.

The Washington Examiner agreed wholeheartedly with Romney. A Jan. 12 editorial read:

Liberals like Lauer may not like to hear that Obama is sowing envy and class warfare by attacking capitalism, but two new polls from the Pew Research Center show that is exactly what is going on. Two weeks ago, Pew released a poll showing that support for capitalism has fallen since Obama began promoting the issue of income inequality. Not only that, but most people in three demographics highly supportive of Obama (the young, liberals, and African-Americans) told Pew they now support socialism. Except for blacks, that was not true before Obama was elected.

Pew has released a different poll showing growing numbers of Americans believe there are deep conflicts between rich and poor. Overall, 66 percent of Americans now say there are “very strong” or “strong” conflicts between the rich and poor, a 19 point increase since 2009.

Representative Louie Gohmert (R-Texas) called Obama “a divider, not a uniter.” He added that Obama is trying to promote envy among lower-income Americans who are struggling to find work so he can expand the government.

“He’s using class warfare; he’s dividing America,” Gohmert said in an interview with the Daily Caller. “He’s trying to say, if you don’t have a job, then you need to look around and be jealous of people who have money, who have a job, and want what they have.”

Dividing a nation for political and personal gain was what Richard III did. Obama is no different. We can only hope that like Richard III, Obama loses his realm; that last week’s speech was his final State of the Union Address.

It may take a revolt on the part of Democrats to save the Nation. Keep in mind Richard’s downfall came during the Battle of Bosworth Field only after his loyalists deserted him.

As Shakespeare wrote, the battle raged and Richard was knocked from his horse crying: “A horse! A horse! My kingdom for a horse!”

He never got that horse. Only then did England rebuild and unite.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Your Choice: Ron Paul Or A Wheelbarrow?

You might have good need for a wheelbarrow, especially if the Presidential election turns out the way I fear it will. After we know the victor, the smart thing to do will be to run out and buy wheelbarrows to replace our wallets, purses and even bank accounts.

The United States is creating money to a degree that has happened only twice before in its history. It was initiated to overcome the Great Recession of 2008. On Seeking Alpha, contributor Jeremy Robson writes:

The Federal Reserve balance sheet has expanded from $869 billion on August 8, 2008, to $2.929 trillion on December 28, 2011. This is an average increase per month of $55.1 billion or an annual increase of $661 billion.

A similar situation is occurring in Europe. Greece, Ireland and other nations could quickly fall into default.

Robson points out: “The rise in the balance sheets of the big 4 central banks over the 2008-12 period will amount to about 15 per cent [sic] of GDP, which is equivalent to over 50 per cent [sic] of the cumulative budget deficit of these countries over the same period.”

One can legitimately argue that central banks are financing government deficits. This certainly sets up the possibility for hyperinflation in 2012 and beyond.

St. Louis Adjusted Monetary baseEvidence of the underlying problem is in the graph above, the U.S. base money supply. Trillions of new dollars are being created by the Federal government’s computers and the rollout of ever greater Treasury debt. But this money is not being circulated through the economy, and that makes us vulnerable to hyperinflation.

Only twice in American history has the Nation had to endure hyperinflation: 1779 and 1861-1865. Both occurred during wartime.

Three generations of Americans have lived through good economic times. That is not to say there haven’t been some hardships in American life. The rolling recession of the early 1980s was tough on the Nation, and the Crash of 2008 scared most of us witless.

America is not immune to economic catastrophe. Currently, a $1 trillion per year deficit is being backstopped by the Fed which is now buying more than 50 percent of all new Treasury debt. China holds more than $1 trillion in Treasury debt, and it may soon believe it is sitting on fool’s gold. More and more dollars are being created by a keystroke on the Fed’s computer. This means that every existing dollar holds less value.

If China or other foreign investors start to sell off their Treasury bills, notes and bonds, it will create a flood of new money. Rampant Treasury liquidations could tip off a period of hyperinflation and that would drive an already shaky economy into oblivion.

Who is going to stop it? Not President Barack Obama. He has done more to create catastrophe than any President since Herbert Hoover. Will Mitt Romney engineer a rescue for a Nation that has failed to deal with economic realities for the past three decades? How about Newt Gingrich, a consummate Washington insider? I doubt that any of these three have the will to take the draconian steps necessary to save the U.S. dollar and to save the United States.

Gingrich talks a good game. Last month, he proclaimed that he is now running on a hard money platform. While campaigning in South Carolina, the candidate recommended a “commission on gold to look at the whole concept of how we get back to hard money.”

I suggest that Gingrich’s promises to the Nation are as empty as the promises he made to his former wives.

According to CNN Money:

Gingrich would model his “gold commission” after one put in place after Ronald Reagan was elected, when the nation was battling double-digit inflation. But even then, the commission overwhelmingly rejected the idea of a return to the gold standard.

One of only two members of the 17-member commission to endorse a return to the gold standard was Ron Paul.

Jim Rogers, a hard-asset guru and billionaire who has hit big-market trends correctly over the past 25 years, believes that Republican Presidential candidate Ron Paul can save America from an economic catastrophe.

Rogers told Beacon Equity Research that he believes Paul understands the problems that are facing America.

Rogers pointed out that unlike the other candidates for the Oval Office, Paul is willing to implement painful cuts to U.S. debt levels including severe budget cuts and the slashing of defense spending. That isn’t just a bitter pill for the Nation, it is major surgery. And let’s face it; the majority don’t like Paul’s prescription to make America well.

The Huffington Post Canada pointed out this week:

Both Democrats and Republicans seem to have this problem with Ron Paul, but Democrats tend to like the opposite 50 percent of what Ron Paul says from the 50 percent that Republicans like. Democrats tend to like the part about protecting civil liberties and reducing military spending, while the Republicans tend to like the 50 percent that’s about slashing social programs, but hate the part about withdrawing all our troops from around the globe. As Rick Santorum said, “The problem with Congressman Paul is, all the things that Republicans like about him he can’t accomplish and all the things they’re worried about, he’ll do day one.”

That is, if Paul gets the chance.

It is like millions of people who are told by the doctor every year to give up smoking or drinking. Most of us change our habits only after we get a terrible diagnosis, and then it is often too late.

Paul is both a real doctor and a realist. He has given his diagnosis to the Nation. I bet few Americans have the courage to accept it.

This will ensure old policies and overspending by Washington and the continued destruction of the U.S. dollar. Short of some miracle, now is probably a good time to buy a few additional ounces of silver and gold. Buying a wheelbarrow wouldn’t be a bad idea either.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Keep China Happy: Vote Obama

Good news: You don’t need to fret about global war, the economy or even the future value of outstanding U.S. Treasury bills, notes and bonds, at least if China has any say. It is not going to do a single thing to rock America’s boat. In fact, Beijing hopes that things stay smooth as glass, because it holds more than $1.1 trillion of U.S. Treasury debt. And with the direction America is going, the country would love nothing better than to see Barack Obama re-elected.

China’s leaders are not stupid. To them, Obama is the best thing to come along since one-minute rice.

One prominent Republican agrees. Last month, self-promoter extraordinaire Donald Trump wrote an open letter to the President. Trump took issue with Obama regarding the advantages in trade that China is being given, writing: “How little respect the Chinese government has for you.”

Last week, Trump added to his complaints against Obama’s China policy, saying: “They’re having a field day with the United States and our leadership.”

You would have to be an idiot to discount China’s global ambitions. Beijing is covering all of its bases, building a 21st Century military, piling up IOUs and putting capitalism to work. (Poor Mao Zedong. All he did was turn hundreds of millions of kids into robots and wear a stupid cap.)

The new leaders in China are not peasants like Mao, nor are they blinded by Communist doctrine. They have set their sights on global domination and one of their biggest allies is Obama.

China’s Ambition: Drink Canada Dry

Welcome to Calgary, a global epicenter for energy and home to thousands of Americans, including yours truly. Most of us transplants love it here, and why not? The politics are conservative, the economy is booming and the petroleum industry is strong.

But don’t expect to walk around downtown and see Texans ambling by in cowboy boots and Stetsons. It is more likely you will encounter Chinese nationals staking out the city’s finest restaurants and hotels.

The likes of J.R. Ewing don’t throw much of a wake. However men like Jiang Jiemin, the chairman of PetroChina, do.

Much of the blame lies with Obama because he refuses to renew America’s claim in Canada’s incredibly rich oil sands. By placating the Greens, Obama is frittering away a windfall of petroleum just waiting to be harvested for the benefit of all North American people.

Consider that Canada has the second largest oil reserves in the world. Only Saudi Arabia has more. Canada’s reserves are mostly in the form of shale oil. I have visited the oil sands projects in Northern Alberta, and they are a moonscape. Digging up ground to squeeze oil from rock is a dirty process, but also an effective one. When I first started writing about energy 30 years ago, it cost almost $30 to make a barrel of crude from oil sands. With new technologies, the price has fallen to about $10 per barrel.

While Greens in the United States cry foul over some dead ducks caused by Alberta’s oil sands reservoirs, China appreciates the bonanza that exists here and desperately wants to tap into it.

It won’t be long before China is consuming more oil than the United States.

In September, China’s Ministry of Public Security released a statement indicating that the number of automobiles in China has surged to 100 million. As of the end of August, China registered 219 million motor vehicles in four categories: motorcycles, tractors, trucks and automobiles.

As the President and his Democrats delay Alberta’s oil sands imports that can easily be harvested, China is pouring billions of dollars into Canada. Since 2009, China has invested $16 billion in cash into Canada’s energy projects.

This investment has come about as Ottawa has changed its hard-line policies toward China. Today, Ottawa is busily reassuring Beijing that its investment is safe in Canada.

In response, China has been eager to roll its U.S. dollars into Canadian petroleum projects. Why wouldn’t it? After all, the greenback has been steadily weakening for more than a decade. More recently, the turmoil in North Africa and the Mideast has demonstrated to Chinese investors something that leaders in Washington used to understand: Canada is a safe, secure democracy worth investing in.

The foremost reason for this marriage between Canada and China is that Congressional Democrats openly reject Canadian crude. After 200 years of a peaceful alliance and after fighting two world wars together, Obama and his Green coalition are denouncing Canada — even if it means embracing Muslim Sheiks who enacted two oil embargoes against the United States in the 1970s and who continue to finance Islamic extremists.

Last week, The Financial Post wrote this about the growing alliance between Canada and China:

Canada’s recent Asian market diversification drive after the U.S. State Department delayed the approval of the Keystone XL pipeline has given Chinese energy companies further incentive to invest in Canada. Although keeping a low profile in the intensifying Canadian debate on building more pipelines to the West Coast, China and other Asian countries hope to have access to Canadian oil and gas in the near future.

Communists better understand the advantages of investing in Canada and the most strategic commodity on Earth: oil.

Perhaps we should not be surprised. In the ancient treatise The Art of War, Chinese philosopher Sun Tzu wrote:

A wise general makes a point of foraging on the enemy. One cartload of the enemy’s provisions is equivalent to twenty of one’s own, and likewise a single picul [133.3 pounds] of his provender is equivalent to twenty from one’s own store.

The bottom line is that a vote for Obama is a vote for China. He will continue his policies of the past three years, making Beijing very happy. China’s leaders are well-educated in history and have undoubtedly have read what Napoleon Bonaparte said: “Never interrupt your enemy when he is making a mistake.”

Yours in good times and bad,

–John Myers
Myers Energy & Gold Report

 

Mr. President: Stop Appeasing Islam!

Brace yourself for at least another year of President Barack Obama selling out America’s interests to Islam, regardless of the economic or social consequences.

An open letter to Obama:

Dear Mr. President,

It is time for you to stop sucking up to Islamic nations and the grand ambitions of Islam. After three years in the Oval Office, you should have realized one very important lesson: appeasing Islam only weakens America. Millions of Muslims hate our guts, and no amount of foreign aid or good will is going to change that fact.

It is my most sincere hope that when the next President takes office in 12 months, you will begin to see the error of your ways.

A citizen with deep concerns,

–John Myers

America’s Faustian Deal

Obama is hardly the first President to try to appease the Islamic world. A policy of spending and appeasement of the Arabs began in 1944 when President Franklin D. Roosevelt appointed Col. William A. Eddy as the first U.S. foreign minister to Saudi Arabia. Ibn Saud, the founder of Saudi Arabia, told Eddy, “We will use your iron, but you will leave our faith alone.”

After more than six decades, the United States has spent and invested almost $3 trillion in oil and arms on Saudi Arabia. Washington has given once-poor Bedouin camel campers some of the most advanced weaponry and technology in the world.

None of it has fundamentally changed the makeup of Saudi Arabia’s ruling princes. They pride themselves in believing the teaching of Muhammad while practicing a lifestyle that is the envy of Hugh Hefner.

In case you think that Saudi Arabia is progressive, consider this: In 1974, 90 percent of Saudi exports were oil. Just last year, 90 percent of Saudi exports were oil. All the while, sheiks and princes have demanded that America dare not interfere with Saudi religious beliefs. That allows the Kingdom to use oil money to export Islamic extremism in the form of the official Saudi religion, Wahhabism.

In The New York Times in May, columnist Thomas L. Friedman wrote:

The Saudi ruling bargain is an old partnership between the al-Saud tribe and the Wahhabi religious sect. The al-Saud tribe get to stay in power and live however they want behind their palace walls, and, in return, the followers of the Wahhabi sect get to control the country’s religious mores, mosques and education system.

The Wahhabis bless the Saudi regime with legitimacy in the absence of any elections, and the regime blesses them with money and a free hand on religion. The only downside is that this system ensures a steady supply of “sitting around guys” — young Saudi males who have nothing other than religious education and no skills to compete — who then get recruited to become 9/11-style hijackers and suicide bombers in Iraq.

Progressive Saudi writer Mai Yamani wrote the book Cradle of Islam. The daughter of Saudi Arabia’s former oil minister, Yamani underscores the truth about a nation that Obama holds in high esteem — despite the fact Saudi money stirs political ferment and even revolution.

In The Daily Star of Beirut, Lebanon, Yamani wrote: “Despite the decade of the West’s war on terror, and Saudi Arabia’s longer-term alliance with the United States, the Kingdom’s Wahhabi religious establishment has continued to bankroll Islamic extremist ideologies around the world.”

Say what you will about the paranoia during the anti-Red frenzy; at least in the 1950s and ’60s, the United States and its leaders recognized that communism was a danger. Two generations later, Islam in the extreme is just as dangerous.

In his book America Alone: The End of the World As We Know It, Mark Steyn wrote: “The Saudis fund mosques that radicalize distant Muslim populations from Indonesia to Oregon, and schools that turn out terrorists on every continent on the face of the Earth. They set up Islamic lobby groups that put spies in our military bases and terror recruiters in our prisons. They endow think tanks that buy up and neuter the massed ranks of retired diplomats, and assistant secretaries of state, and national security advisers: as the journalist Matt Welch remarked, if you close your eyes, America’s ex-ambassadors to Saudi Arabia sound like they’re Saudi.”

In 2005, a 23-year-old American citizen named Ahmed Omar Abu Ali was convicted of conspiracy to commit terrorism, including a plot to assassinate President George W. Bush. Abu Ali had gone to Saudi Arabia to study after graduating from The Islamic Saudi Academy in Virginia. Abu Ali was the 1999 valedictorian of the school, which is run by the Saudi government.

Steyn writes: “It’s on American soil but it describes itself as ‘subject to the government of the Kingdom of Saudi Arabia’ and its classes are based on ‘the curriculum, syllabus, and materials established by the Saudi Ministry of Education.’”

Wahhibism is being taught not far from our Nation’s capital. Can you imagine Virginian kids attending Mao Zedong High in the 1960s?

Americans do not enjoy reciprocal freedoms in Saudi Arabia, a nation that doesn’t even allow women to drive.

The Saudis harvest what knowledge and technology the United States can provide in return for their oil, which is now priced above $100 per barrel — five times higher than it was on 9/11. It is a good deal for Saudi Arabia; and under Obama, the United States will become ever more dependent on Saudi oil. With the Greens in the Democratic Party, a blockade is being set up to stop imports of oil sands from Canada. Meanwhile, new leases to drill offshore are few and far between and development of Alaska’s rich reserves is at a standstill.

As new technologies fail to deliver on the promises made by the Greens, we are more and more at the mercy of Islam. And in case you haven’t noticed, Islam is not big on mercy.

Perhaps a new President will change directions. But if Obama is re-elected, expect the cancer that is extreme Islam to spread and threaten not only our economy but our way of life.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Coming In 2012: Target Tehran

Target Tehran is a new production set to be released worldwide in 2012. Washington hopes it will be a blockbuster.

The story is of an all-out air and naval assault on Iran by the forces of freedom and democracy: the U.S. Navy and Air Force. It is yet to be decided if the U.S. infantry will be written into the script; but with an unlimited budget, it very well may happen.

Details of the story are undergoing final edits at the Pentagon. President Barack Obama has already signed on to direct the project. Insiders say it could save his career.

(Unfortunately,  Target Tehran will not follow the same plot as its namesake, Target Tokyo. When that film was released in 1945 — narrated by Ronald Reagan who, ironically, would become president — there was no doubt that America was fighting a global struggle for freedom. Many historians have called it America’s last good war.)

The first production, Iraq II, was directed by two Presidents at a cost of $1 trillion. Not since Ishtar has there been a bigger desert bust.

Almost 4,500 U.S. soldiers perished during the making of Iraq II. Another 32,000 U.S. soldiers were wounded. No U.S. agency officially keeps track of the “other side,” but estimates indicate that between 100,000 and 300,000 Iraqis died.

Counterpunch.com describes the Iraq war in a paragraph that reads like a movie review:

In the U.S. narrative — as repeated in U.S. media — this war was waged to prevent Iraq from terrorizing the world, never mind that all the “evidence” was trumped up. It is mind-boggling the notion of killing and maiming untold tens of thousands of Iraqis and displacing hundreds of thousands of them, and for U.S. politicians to continue to invoke notions of U.S. sacrifice and heroic deeds in the same breath.

There were also indirect costs of Iraq II, including a five-fold increase in the price of oil and a declining opinion of the United States. Two generations ago, America was seen as the great liberator. Today, many people consider it the great instigator.

There is no happy ending. Iraq is as far away from democracy as it was during Saddam Hussein’s rule.

Saddam was a ruthless butcher, but that hardly distinguished him as a Mideast ruler. Today, Iraq is being ripped apart by sectarian violence and is on the verge of a bloody civil war.

Such post-production details matter little to the neoconservatives who conceived the project.

Only a few weeks ago did production shut down in Iraq. In response, The Washington Post published this opinion piece by Jessica T. Mathews, president of the Carnegie Endowment for International Peace:

The public may also never know exactly why or when the Bush administration made its tragically misguided decision to go to war. Former Treasury secretary Paul O’Neill has said that unseating Saddam Hussein dominated a meeting with President George W. Bush 10 days after Bush’s inauguration — eight months before the Sept. 11, 2001, attacks. Among the many reasons posted — avenging an Iraqi attack on Bush’s father, getting the United States’ hands on Mideast oil, extending democracy across the region — only the charge that Hussein was building weapons of mass destruction came close to selling the American people on war.

Bullets Over Broadway

As misguided as it was for America, Iraq II was embraced by Obama, the second director brought in on the project. Continued work ceased only after the Iraqi government, which owns the lot where the production was being made, declared that U.S. forces could face prosecution for their actions.

It seems almost impossible to believe that the U.S. government, which seamlessly transformed Japan and Germany into rich democratic nations following World War II, could fail so miserably in the Mideast, yet that is exactly what has happened.

Springtime For Hitler

Washington is intent on further Mideast productions. In a case of life imitating art, Target Tehran seems much like Mel Brooks’ production The Producers.

Obama and Secretary of State Hillary Clinton seem as careless as Max Bialystock and Leo Bloom in turning their play into a flop — as long as their careers can be furthered by it.

On the PBS program Victory In The Pacific, the narrator says: “The emperor, who had worried about a rebellion from his subjects, helped ensure his position by posing as their savior.”

I expect the same of Obama in 2012. His re-election looms in less than 11 months, and nothing has proven to be a better prescription for winning than engaging in war. What better target than Iran? Unlike George W. Bush, Obama doesn’t have to lie about weapons of mass destruction. Many Americans are convinced Iran actually has them, and Washington is already in pre-production mode. Consider the recent public relations offensive:

  • In a speech at the 71st General Assembly of the Union for Reform Judaism on Dec. 16, Obama said: “Another grave concern — and a threat to the security of Israel, the United States and the world — is Iran’s nuclear program. And that’s why our policy has been absolutely clear: We are determined to prevent Iran from acquiring nuclear weapons.”
  • In an interview with CBS Evening News With Scott Pelley that aired on Dec. 19, Secretary of Defense Leon Panetta declared that Iran might be only a year away from acquiring a nuclear bomb. “If they proceed and we get intelligence that they are proceeding with developing a nuclear weapon, then we will take whatever steps necessary to stop it,” Panetta said.
  • On Dec. 20, CNN reported that Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, said “I am satisfied that the options that we are developing (for attacking Iran) are evolving to a point that they would be executable if necessary.”
  • In a Dec. 21 interview with Israel’s Channel 10, Dennis Ross, Obama’s former Mideast adviser, said: “This is a president who has prided himself on doing what he says, so I think if he draws the conclusion that what is required is to take a certain kind of step, he’s prepared to take those steps. It means that when all options are on the table and if you’ve exhausted all other means, you do what is necessary.”
  • On Dec. 23, former Pentagon adviser Matthew Kroenig’s essay “Time to Attack Iran” was published in Foreign Affairs. Kroenig builds his case that an American assault on Iran should be undertaken sooner rather than later.

Further Irony

Over the holidays, Obama’s Hawaii vacation included a workout at the Kaneohe Marine Base. Later, he hiked with family and friends along the Lanikai Pillbox trail on the Windward side of Oahu, a short distance from Pearl Harbor. Not far away, Obama was likely planning his re-election campaign and the centerpiece of it: Target Tehran.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

2012: The Year Of Living Dangerously

Despite talk about the end of time, I fully expect the world will survive 2012; but it will be a bumpy ride this year. Expect the U.S. economy and the Nation’s standing in the world to further weaken. Expect more protests, both at home and abroad. And expect us to have to endure another four years with Barack Obama as President.

The United States faces myriad problems that will exacerbate an already sick economy giving birth to a second financial crisis in four years. Meanwhile, the Federal government and the Federal Reserve do not have the wherewithal to prevent a major economic meltdown.

We could be in for an economic shock the likes of which the Nation has not seen since the Great Depression. Only this time, the social upheaval and overall violence resulting from an economic crisis will be far worse than anything our grandparents experienced in the Dirty Thirties.

This is my third annual forecast column for Personal Liberty Digest™. Let’s review how well I did for 2010 and 2011.

In my Jan. 6, 2010 column, I wrote: “Gold continues to shine, although expected profit taking will happen along the way. Washington and other governments would love to keep a cap on the price of bullion, but right now they have much bigger fish to fry. My expectation is that the Midas metal will top $1,500 per ounce before year’s end and silver will rise from the $17 range to $25 per ounce.”

On the day my column came out, bullion was trading at $1,130. On Dec. 30, 2010, bullion closed within a few dollars of its high point for the year at $1,405 per ounce.

Also on the day my forecast column for 2010 was published, spot silver was $17.89 per ounce. On the last trading day of 2010, silver was trading at its high for the year: $30.63 per ounce.

On Jan. 5, I wrote my forecast column for this year. I predicted prices for gold would rise higher in 2011, despite coming off all-time highs.

A year ago, I wrote: “My expectation is that we have yet to see the spectacular blow-off for either gold or silver… with gold moving close to $2,000 per ounce and silver hitting $50 per ounce. Therefore there is more leverage in silver than in gold, but both are worth buying and holding.”

The day my prediction came out, gold was at $1,388 per ounce. In September 2011, gold hit $1,895 per ounce. Meanwhile, silver, which was trading at $29.21 when I wrote my forecast column, hit $48.70 in April.

Check my archives and you will see that I was also correct about my prediction for higher oil prices. I was wrong about both the U.S. stock and bond markets. I anticipated a severe correction that did not occur. I believe a severe correction is inevitable and would not be surprised to see the Dow Jones Industrial Average, which is now trading just under 12,000, to be below 8,500 within 12 months.

I expect both gold and silver will decline over the short-term before this correction has run its course. As a result, I would not buy either yet. Given the substantial commission on physical precious metals, I wouldn’t be selling them either.

I expect we will get further quantitative easing from the Federal Reserve going into the election. Look for gold to reach $2,500 per ounce and silver to hit $75 per ounce.

Silver is a more practical investment for ordinary investors than gold. Silver has more leverage than gold.

I think we will see inflation in 2012. Obama’s mission is to get re-elected. I don’t believe he cares what the final cost to America will be to see his ambition achieved.

The U.S. money supply has been growing at an annual rate of nearly 10 percent per year since the Crash of 2008. By 2013, I expect the money supply to be growing in excess of 15 percent per year.

Obama’s Ambitions And The Prospects Of War

I don’t make forecasts on the basis of what I want to happen but rather on how I think things will happen.

My hope is that Ron Paul wins the Republican nomination and the Presidency, but I don’t think he has a realistic chance. He is offering America some bitter medicine to cure our economic ills.

The other GOP contenders, especially Newt Gingrich, have serious character flaws. Meanwhile, Mitt Romney must overcome being a Mormon as well as his knack for changing his mind.

Recently, Romney gratefully accepted the endorsement of Republican elder and onetime Presidential nominee, former Senator Bob Dole.

However, in 2008, Romney didn’t think very much of Bob Dole’s endorsement– at least, not when it went to his competition, Senator John McCain. When Dole sent a letter of support to talk show host Rush Limbaugh, Romney said: “Well, it’s probably the last person I would have wanted to have write a letter for me.”

A weak field in the GOP ranks, along with the powers inherent for a sitting President, lead me to conclude that Obama will be re-elected in 2012. That will mean greater spending by the Federal government, more gridlock in Congress, and continued quantitative easing by the Federal Reserve.

To win re-election, Obama may even launch another war — this time against Iran or possibly North Korea and its leader, 20-something Kim Jong Un. Not much is known about Kim Jong Un. North Korean state media call him a “great successor.” Before dying, Kim Jong Il made his son a four-star general.

If President George W. Bush could sell a war against Iraq on threadbare evidence that Saddam Hussein had weapons of mass destruction, how hard will it be for Obama to rummage up a war against Iran or North Korea?

North Korea’s nuclear arsenal is estimated to consist of perhaps six operational nuclear warheads, and Iran may be on the verge of nuclear armament.

The re-election of Obama, bought with greater debt and a new war in the Mideast, will have devastating consequences over the long term. The inevitable result will be growing protests and more lawlessness across the United States and around the world.

Action to Take: Dedicate yourself to accumulating basic provisions and protection for you and your family. I wish I could suggest more carefree New Year resolutions.

I would be happy to write next year to point out how wrong I was and say that a true conservative will soon be sitting in the Oval Office and that America is starting to get back on her feet. But as the English Proverb suggests: “Hope for the best, but prepare for the worst.”

Yours in good times and in bad,

–John Myers
Editor, Myers Energy & Gold Report

 

Editor’s footnote: The Year of Living Dangerously is a novel made into a 1982 movie. It is set in Indonesia during the rule of the nation’s President and dictator, Sukarno. Described as the great puppet master, Sukarno stayed power by balancing opposing and increasingly antagonistic political forces inside Indonesia.

Gold: Christmas Past And Present

Gold prices have been undergoing a minor correction the past couple of months. I believe it is a healthy correction with higher prices for gold to come in the new year. However, I appreciate that very few people can take advantage of rising gold prices. Bullion has gotten too expensive and doesn’t have the upside it had a few short years ago.

One thing is certain: When it comes to gold and this Christmas, it is far different from Christmas 1979. During the closing days of that year, the gold bubble was about to burst. Over the next 20 years, gold lost 80 percent of its real value (accounting for inflation).

Of course, nobody thought gold was set to correct during the days leading up to Christmas in 1979.

I was lucky to get a firsthand look at the frenzy that was going on. I was a senior at the University of Calgary, and I was visiting my parents in Spokane, Wash., where my dad was publishing his newsletter.

The hub for it all was on the fourth floor of the Peyton Building, one floor above my dad’s office. The Spokane Stock Exchange consisted of one large room that had a blackboard on which an elderly man busily scribbled prices as brokers and a handful of private investors shouted out their bids.

The frenzy went on throughout the week before Christmas and became so intense that it was reported nationally on the CBS Evening News on Christmas Eve. That alone should have been a sure sign that gold and silver prices were close to a blowout. Yet I doubt one in 20 gold speculators — including my father, who was one of the three original gold bugs — saw it coming. (However, my dad, C.V. Myers, got his subscribers out of gold over the next year at an average price of $650 per ounce.)

I know that some of you are concerned that gold may have hit its high. Bullion prices are down nearly $300 per ounce from the all-time highs it set earlier this year. Yet the fundamentals indicate to me an even weaker U.S. dollar and higher prices for precious metals.

Consider today’s price of bullion of roughly $1,700 per ounce. That is twice the price of bullion right before the bubble burst. However, if you factor in the depreciation of the dollar over the past 32 years, you will discover that is not actually the case. For gold to eclipse its 1980 high, it would have to trade above $2,500 per ounce.

Another measure to determine gold’s relative value can be made by comparing gold to the Dow Jones Industrial Average. Gold is overvalued when it takes only one ounce to buy the DJIA. For instance, when the stock market bottomed out during the Great Depression, one ounce of gold at $35 per ounce bought a single share in DJIA. That relationship happened again in 1980 when an ounce of gold was $850 and the DJIA was under 800. By 1999, it took 40 ounces of gold to buy a single share in the Dow. And while today it takes seven ounces to buy a share of the Dow, bullion is seven times cheaper relative to the stock market than it was in the days that followed Christmas 1979.

The most powerful argument that the gold bull lives is the relative amount of bullion in the world compared to the number of U.S. dollars. The gold price boom three decades ago resulted in steadily increasing global production from 1200 tonnes annually to a peak of above 2600 tonnes in 1999. Production has declined slightly from this level to a large extent because the richest veins in the world, notably in South Africa, have been depleted. Since 1999, the world’s above-ground supply of gold has increased by about 2 percent per year. Thus, there is only 22 percent more gold in the world than there was 10 years ago.

Consider the huge quantities of U.S. dollars. As the graph below shows, since Christmas 1979, a standard measure of the amount of dollars — M2 — has increased eightfold.

M2 Money StockM2 has risen from $1.5 trillion in December 1979 to $9.7 trillion in December 2011. As you can see, the increase has been most pronounced since 2001, doubling in just 10 years. This was Washington’s reaction to 9/11 as well as the massive wave of fiat money created following the Crash of 2008.

The Fed Is Gold’s Best Friend

Gold investors can also count on the Federal Reserve. In 1979, under the new leadership of Chairman Paul Volcker, the Fed mandate was to protect the integrity of the U.S. dollar. Times certainly have changed. Under Fed Chairman Ben Bernanke, the Fed demonstrated repeatedly that it is more of a political tool than a central bank — at the ready to finance foreign wars and bail out big banks, major investment houses and even a couple of automobile manufacturers.

The Fed has been cutting interest rates in the midst of the worst dollar bear market ever. This would have seemed incomprehensible to Volcker and the Administration of President Jimmy Carter. In fact, Volcker helped kill the 1970s commodity bull by piling on higher and higher interest rates.

But today, America is inundated with debt. The United States has a debt load of nearly $50 trillion, or eight times more than our gross domestic product. And get this: More than 80 percent of this debt has been created since 1980.

Household sector debt, a large component of which is mortgage debt, now totals about $13 trillion. That comes to more than $42,000 per American.

Bullion Needs A Stock Split

The economy is looking sick and likely to get even weaker. That is good news if you already own gold. But gold has a very serious problem. It has become too expensive for all but the wealthy to invest in.

I started buying gold more than 40 years ago, and I have been writing about it for more than 30 years. I have yet to find a better leading indicator for America and the dollar.

A week ago, I contacted an old friend who is a reputable coin dealer. The spot price on gold that day was $1,660 per ounce. To buy an American Eagle cost the spot price plus $70, or $1,730.  If you were to sell that American Eagle back to that same dealer, you will receive the spot price, so you are paying a considerable commission.

With gold at around $1,700, it lacks the leverage it packed just three short years ago when it was under $800 per ounce.

I no longer recommend gold. I suggest investors hold the gold that they own, because I do think it will go somewhat higher.

As a practical alternative, I think silver is a good choice. Silver does not offer the protection gold does if the economy falls into a deflationary collapse, but I don’t believe that is going to happen.

If I am correct about how bad things will become, water, guns and ammo will be of much more use than gold, silver or platinum.

Yours in good times and bad,

–John Myers
Editor, Myers Energy and Gold Report

Dickens Must Be Spinning In His Grave

My two Christmas wishes are that Santa were real and money could be created out of thin air. The media tell me they can come true; I just have to believe in the President.

They warn of a dastardly Scrooge promoted by the Tea Party ruse. But if Barack Obama has his way, we will be stuck with him for another 1,800 days.

To see his dream come true, Obama Claus is working day and night to drive away economic blues. To explain better I borrowed a classic verse, knowing full well you may think my version much worse.

The unemployed were nestled all snug in their beds,
While visions of government checks danced in their heads.
And mamma in her ’kerchief, and I in my cap,
Had just settled our brains for a long winter’s nap.

I rubbed my glasses and peered through the lens,
Only to see a miniature sleigh, and eight tiny Dems,
with the tall sprightly driver, so lively and merry,
I knew in a moment it must be St. Barry.

More rapid than eagles his coursers they came,
And he whistled, and shouted, and called them by name:
“Now, Brown! Now, Cardin! Now, Leahy and Levin!
“On, Mikulski! On, Reid! On, Frank and Pelosi!

“To the top of the porch! To the top of the wall!
“Now dash away! Dash away! Dash away all!”
As dry leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky;
Propelled by fresh money, the coursers they flew.

And then, in a twinkling, I heard on the roof
The prancing and pawing of each little goof.
As I drew in my head, and was turning around,
Down the chimney St. Barry came with a bound.

He spoke not a word, but went straight to his work,
Only after pumping out money did he turn with a jerk.
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose!

He sprang to his sleigh, to his friends gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, ere he drove out of sight,
“Vote for me next fall, and to all a good-night!”

The Left’s Spin On Dickens

Another Christmas classic was written by Charles Dickens, who was wealthy and renowned when he rushed A Christmas Carol into print in December 1843. The book changed the way the world thought about Christmas. In the 19th century, Christmas was not celebrated to the extent it is today.

The book was immediately popular and it is perhaps the most famous work of literature associated with Christmas. Dickens wrote the story as a condemnation of greed.  Through Scrooge, he wanted to convey an optimistic message that individuals could change and show charity to those less fortunate. The key word is “individuals.” A century and a half ago, the government had no role in taking care of people. Of course, popular culture and the growth of Liberal ideals have changed that.

Take Disney’s animated 3-D incarnation of A Christmas Carol, released during the holidays in 2009.

According to Big Hollywood Blog, Scrooge does not care about the fate of the poor, but he thinks government has a role.

Of course, charity and welfare are different, points out Jonah Goldberg of The National Review. With charity there is freedom of the individual to choose, to weigh the merits of giving and to give to those who will use the help to better themselves.

With welfare there is only government spending taxpayer money indiscriminately, often to the detriment of those who receive funds. Most important is the lack of choice. We all have to pay those who will not pay their own way. It is an entitlement philosophy. Taken to its extreme, it was the dream of another 19th century writer: Karl Marx.

This Christmas more so than on many in the past, we need to be reminded that Hollywood is free to interpret A Christmas Carol or anything else any way that suits its agenda.

Had Marx gotten his way, Hollywood wouldn’t exist and, most likely, Dickens’ great book would be banned. When we consider these truths, do we really want our government to play Santa Claus?

I urge you to have some charity in your heart. I also urge you to oppose the Obama Administration and its plans to spend your money in ways that he and those in his Liberal stable believe are sensible.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

Is Obama An Agent For OPEC?

We are staring into the face of $180-per-barrel oil. Under President Barack Obama, the Nation is not producing enough oil and is importing far too much of it from potential enemies. This is a reckless game engineered by the President, because oil is America’s economic lifeblood.

It recently become apparent that Obama either does not understand the danger the country is facing or, worse, is willing to ignore it because he has conspired with Arab oil exporters to give them dictatorial powers over America’s energy needs and economic future.

The United States is critically dependent on imported oil, consuming almost 10 million barrels of foreign crude every day. That is about three times more oil than the United States imported 25 years ago. With Obama’s restrictions on further oil exploration, especially offshore, the United States may import 18 million barrels per day by 2020.

Gang Green

“Gangrene” is a medical term used to describe the death of one part of the body. It happens when the blood supply is cut off to the affected area.

I witnessed gangrene overtake my dad’s legs after he underwent surgery on a bulging abdominal aorta at the Loma Linda University Medical Center many years ago.

I never studied medicine, but I have spent my lifetime studying economics. It isn’t a stretch to use the analogy that petroleum is the lifeblood to the U.S. economy.

Keystone Kops Or An Agent For Saudi Arabia?

Petroleum is essential for the United States. With so many hostile governments selling it to us, it would be easy to think that Canada would be America’s energy oasis. The two countries haven’t had so much as a skirmish in 200 years, and more than any other nation, Canada has stood shoulder to shoulder with the United States. So close are the two peoples that I can’t tell the difference between being in Montana or Alberta.

Both Nations have Judeo-Christian values and common law borne from the Magna Carta. American and Canadian men fought and died together during the two world wars.

On the surface it seems like a pretty simple equation:  Canada has 180 billion barrels of reserves, second only to Saudi Arabia, the kingpin petroleum producer and de facto leader of the Organization of Petroleum Exporting Countries.

Canada has a democratically elected parliament. The House of Saud is a desert fiefdom run by a few dozen billionaire princes. Whereas Canada has combat troops stationed in Afghanistan killing Muslim militants, Saudi Arabia provides tens of millions of dollars to Islamic terrorists bent on killing Westerners.

Beyond this, Canada has been a rock-solid energy supplier to the United States. In fact, thousands of Americans work in the Canadian petroleum industry, and there are hundreds of U.S. corporations that have a large stake in further developing Canadian petroleum. Scores of Canadian corporations are traded on the New York Stock Exchange. Conversely, Saudi Arabia has nationalized its oil properties, and it implemented two oil embargoes against the United States in the 1970s.

It only makes sense that the United States would sign on to buy more Canadian crude. But with Obama, common sense is not at all common.

TransCanada Corporation is seeking Presidential authorization to build its $7.5 billion Keystone XL pipeline. The line would transport tar sands crude oil from Alberta through Montana, South Dakota and Nebraska on its way to refineries on the Gulf Coast.

A number of groups, comprised mostly of environmentalists and liberals, have banded together to oppose its construction. Obama is leading the crusade against Canadian crude.

The President said last month: “Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood.”

The President doesn’t seem concerned that 1,661-mile pipeline would deliver 700,000 barrels per day of crude from the oil sands to the United States.

The Hawaii Reporter recently ran this headline on an opinion piece: “Obama’s Catastrophic Pipeline Copout.”

David H. Wilkins, U.S. ambassador to Canada from 2005-2009, wrote:

The proposed Keystone XL Pipeline offers nothing but promise: tens of thousands of desperately needed jobs, and a big step toward ensuring North American energy security. But in mid-November, promise gave way to politics when President Obama punted on the pipeline permitting decision, delaying it until after the 2012 election. The Wall Street Journal called the decision a “Keystone Cop-Out.”

I call it a catastrophic cop-out, one with certain economic and diplomatic consequences. The decision on the KXL permit was expected before the end of this year and elected officials in both Canada and the United States rightly called it a “no-brainer.”

The project would reduce dependency on petroleum from the Middle East, a region that is rife with civil war. And what of the economic recovery that Obama promised three years ago? You would have to have been in a coma to see that things are no better and that, overall, the U.S. economy might be in worse shape than when he took office.

This gets me back to why the United States should be begging to sign this pipeline deal. It is estimated that the project would create a minimum of 20,000 well-paying U.S. jobs. That economic bonus would span far beyond all those families that could again have a wage earner and would spill over to every part of the economy, from Wal-Mart to mom-and-pop shops.

In fact, the pipeline deal will add more than $20 billion to the U.S. economy. An extra $5.2 billion in State property taxes would be collected.

Crude Consequences

The United States will have to deal with the consequences of turning its back on Canadian crude. First and foremost, Ottawa is building closer trade ties with Beijing with a great deal of emphasis on a possible blueprint that would deliver Alberta’s oil sands to the West Coast, where it could be delivered via tankers.

Last month, Canadian Prime Minister Stephen Harper met with Chinese President Hu Jintao about future Canadian oil exports to China.

Harper said: “This does underscore the necessity of Canada making sure that we are able to access Asia markets for our energy products.”

Canada is counting on China to be a key investor in Alberta’s oil sands projects and a big buyer of crude which would flow through a proposed Northern Gateway Pipeline if Canada encounters further opposition from the Obama Administration. This will make the United States all the more dependent on Arab oil. You would think Obama would understand this. The truth might be that he understands it all too well.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Bury Your Treasure

Even at these prices, I like physical gold as an investment. I prefer bullion to gold stocks. Everyone who has ever owned an ounce of gold wonders how to store it safely. I have experienced a search for missing gold; it was a nightmare.

It happened at my dad’s home in Spokane, Wash.

“Boys,” shouted the old man. “I need you in here.”

It was autumn 1979. My brother, Brian, and I had flown in only hours earlier to be with our dad. It was a Friday, and Dad was pleased as punch about our visit and the fishing trip we had planned the next day.

“Let’s have a nice cup of coffee,” said the old man. He often said that.

After he poured three cups, we sat at the kitchen table. The kitchen was always the meeting point for important Myers gatherings or even entertainment. Living rooms were something left for city folk.

“Boys, we need to do something.”

Brian and I shared a look. Dad always said we, which meant us not him.

He said he needed us to dig up some of his secure “assets.”

Brian and I both knew that secure meant buried, and that buried meant gold, silver or cash. On that particular night, it meant all three. The old man often dug deep when it came to putting away such things.

Brian and I had been on such digs before. They could be a pain, but they were always exciting.

“Down there by the garden,” Dad said, pointing to part of the property. “I need you two to go down and fetch something. I have about 300 ounces of gold, 2,000 ounces of silver and some cash.”

Some cash certainly meant a lot of money.

“I want you to go down there and dig it up and fetch it back.”

We knew we were in for some work, and the day’s light had faded. We had a job to do, and Brian knew how we could get it done.

As Dad continued to drink his coffee, Brian gave me my instructions: Get a shovel and a flashlight.

We got to the spot and began digging.

It was a moonless night. We each took turns with the shovel while the other held the light. Soon, our hole grew deeper and wider. Then, we hit pay dirt.

Brian’s shovel hit something, so we both fell to our knees to retrieve a multi-gallon container filled with silver.

Brian motioned to me and said, “We’re not done yet.”

We returned to our pit, dug some more and found a set of plastic lunch boxes. Inside them were Thermos™ containers stuffed with $1,000 bills (this was back when $1,000 bills were in circulation).

“Just the gold to get now,” encouraged Brian.

We were in the country, but there were houses nearby. Beside us was a lot of silver and money.

I told Brian I had read that a guy in New York was killed over $20.

“Oh, I know,” said Brian, his brown eyes expressing both our fears.

We both began to dig furiously.

It felt like we were being swallowed up. We were waist-deep when we struck a large rock.

Brian knelt down and began to tug on the boulder. I scrunched in tight beside him. Out of nowhere came one word: “Well?”

I jumped up, my arms swinging as I desperately tried to see what evil had crept up behind us.

I struck something hard with my elbow. It was my brother.

“Ahh,” moaned Brian pulling his hands toward his face.

“It’s just me,” Dad announced. “I just wanted to see if you boys needed anything.” Then, he told us to climb out of the ditch, and he scanned the hole in the ground with the flashlight. The gold was missing.

Over coffee we talked about how our hole could be so big and deep and still no gold to be found. Dad decided that the morning sun would shed some light on where he may have put it.

The next morning, he remembered that he had buried the gold in another spot. (My father had been accumulating gold coins in Canada since the 1960s. Under Canadian law, they were legal to own.)

I tell you this story because I know some of you wonder exactly where it is safe to store physical gold. Make no mistake: If things get as bad as I think they might, you will want physical gold. I don’t have faith in putting it in a bank safety deposit box.

Most of you probably don’t live in the country, so I recommend a really good safe. A word to the wise, don’t tell anyone about the safe or the gold. The second worst thing that can happen is to have thugs show up with guns and force you to open your safe. The worst thing would be for them not to leave any witnesses.

If you bury assets, make sure you keep them in something that is airtight and watertight.

Also, put aside a coded map somewhere and tell the person you trust the most in the world where you keep it in case something happens to you. There’s no need to tell him or anybody else what is buried there. All he needs to know is that you have something important and that it will be necessary to dig it up and distribute it to the people you love.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

No Recovery In Sight

You don’t have to be a news buff to have heard about the deadbeat protesters that are occupying cities in North America and Europe. I have seen lots of coverage but little insight. What I have noticed in big Canadian cities is that the protesters are angry without cause.

Canada is in the midst of an economic recovery. The unemployment rate is slightly above 7 percent, and the Canadian dollar is up 25 percent against the greenback in just the past 2.5 years. While people rage against spending cuts in nations like Greece, there isn’t a hint that Canadians will have to endure any reduction in government benefits. In other words, Canadians have never had it so good; yet they, too, are angry enough to take to the streets.

Canadians recently demonstrated that they don’t need a good reason to riot. Hundreds of people tried to burn downtown Vancouver last June because their hockey team lost the Stanley Cup. Those riots tell me that there is more to this growing global unrest than just a bunch of anarchists and addicts, even though two of the protesters in Vancouver have overdosed on heroin during the crusade. Nobody would confuse those two with a Leon Trotsky or Maximilien Robespierre.

Article continues below…

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I am not going to concern myself with the cause of the unrest in Canada or anywhere else. Long after the Russian and French revolutions, historians cannot agree on what caused them. What concerns me and what you need to protect yourself from are civil unrest and the response by our government.

When Revolutions Spin Out Of Control

It is worth remembering that the French Revolution started slowly but quickly gathered steam. What began with concessions from Louis XVI sparked the Liberté, which morphed into Robespierre and his Reign of Terror. At one point, more than 1,000 French people were guillotined every month. Robespierre lost his head before it ended.

The bloodshed during the Russian Revolution was far worse. It is estimated that 5 million to 10 million people were killed during that revolt. To that total, add more than 40 million Soviets who died at the hands of the resulting dictator, Joseph Stalin.

Obama’s Blame Game

I understand there is a lot of anger in America. I, too, am an American citizen and I am angry. However, I don’t blame big corporations or big banks for this worsening crisis. I lay it where it belongs, squarely on the shoulders of the Federal government.

The Administration of President Bill Clinton was eager to do away with financial regulations. The Administration of President George W. Bush wanted everyone to own a home, whether he could afford it or not. And when it all blew apart three years ago, the Federal government forced U.S. investment banks to accept $125 billion in taxpayer money. (I urge you to read the bestseller by Andrew Sorkin, Too Big to Fail.)

It began in the summer of 2008. When the markets began to crash, the Chinese and Russians threatened to sell their $1 trillion in U.S. assets. Then-Treasury Secretary Henry Paulson held the system together until American International Group Inc. began to fail. AIG had never been regulated. Why? In the words of Paulson, the former chairman and CEO of Goldman Sachs Group Inc.: “Because everyone was too busy making money.”

And So Now We Fall

Washington’s turning a blind eye to regulating investment banks precipitated this crisis. Since they were let off the hook, the investment banks did what they are dictated to do under a free market system; they made as much money for their shareholders as they could.

When it all broke down in September of 2008, Federal Reserve Chairman Ben Bernanke and Paulson took the extraordinary measure of getting the Federal government to inject the largest bailout ever organized. But Washington’s malfeasance didn’t stop there.

Congress’ first vote for the Troubled Asset Relief Program (TARP) failed. Paulson forced the nine largest U.S. investment banks to accept the bailout. Even banks that didn’t want Washington’s ownership or participation were forced to swallow it.

The dominoes paused. Even though the stock market declined another 37 percent, the injection of money and the nationalization of the banks stopped an economic collapse.

It will prove to be a temporary solution. It is still tough to borrow money. Unemployment in the United States is still close to 10 percent, and the recovery Obama promised seems farther away than ever.

This is why there is anger in the streets. This is why there will be blood in the streets. And what exactly is Obama doing to clamp down on the unrest? He is complicit with the reactionaries in blaming Wall Street.

Obama has failed to accept his role in the ongoing collapse, even though he helped panic the markets in 2008 when he warned that the banking crisis could cause a financial panic.

The President has promised a recovery, but it is a mirage. He understands that, and his chances for re-election depend on his ability to deflect blame onto corporate America. He is willing to incite class warfare, regardless of the consequences.

The dominoes that began falling more than three years ago continue to tumble today. In 2008, the big banks were falling one after the other. Now, individual nations and even communities are set to tumble.

I urge you to take the proper steps, to be the “1 percent” who prepare for the whirlwind that is coming. Consider Sun Tzu’s words in The Art of War:

“Therefore one who is good at martial arts overcomes others’ forces without battle, conquers others’ cities without siege, destroys others’ without taking a long time.”

It’s called “strategic siege.” It is a long-range strategy to achieve one’s goals. Even as you read this, it is being practiced against you. It wasn’t engineered by fat cat bankers. They are the fall guys. It is being orchestrated by our President and by the very Congress that has falsely sworn to protect us.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

Obama Can’t Tell The Truth, So Help Him Allah

Moammar Gadhafi is dead! Long live Libya! That is the newest mantra from the Administration of President Barack Obama. Then again, Obama has been known to play fast and loose with the truth, especially when it comes to Islam.

Now that Moammar Gadhafi is gone, who will lead Libya? Nobody knows, but if America keeps rolling down the same track it has been for a decade, it could be someone or some group worse than Gadhafi.

If what happened in Iraq is any indication of American diplomacy in the region, then what has been already a decade-long war against Islamic extremists could continue indefinitely, and at a huge cost.

The Obama Administration is beating the victory drums about Iraq. What President Obama fails to admit is he ran into a classic case of: “You’re fired!” to which he yelled back, “You can’t! I quit!”

True, Obama and Iraqi Prime Minister Nouri al-Maliki agreed to a complete U.S. military departure that will fulfill a promise important to Obama’s re-election effort. But one of the latest lies from our President is over why this is happening. It is not because he or the previous Administration magically created a peaceful and democratic Iraq. There will be no one like Gen. Douglas MacArthur accepting a sealed surrender from the enemy.

Instead, Obama has left Iraq teetering on the brink of civil war. The nation is falling more and more under the influences of its nuclear neighbor, Iran. The truth is America didn’t win a thing. Under Obama’s leadership, we got kicked out of Iraq and we left. In the end, we left as peaceably as the town drunk when he is thrown into the street by the saloon bouncer.

All of this reminds me of what Lt. Col. David Kilcullen, counterinsurgency adviser to Gen. David Petraeus, said a couple of years ago: “Just because you invade a country stupidly doesn’t mean you have to leave it stupidly.”

Stupid or not, Iraqi officials nixed a chance for victory and real reforms in Iraq. Because Maliki, facing dissent from inside Iraq and from bordering Iran, decided he would not provide legal justification to U.S. troops after Dec. 31. In other words, U.S. troops could be arrested, prosecuted and even executed by Iraqi civilians for so much as providing protective assistance to their own forces or even Iraqi civilians.

Of course, the Obama political machine quickly announced another victory parade, adding the withdrawal from Iraq to its list of Mideast accomplishments, which include the killing of Osama bin Laden and helping in the overthrow of Libyan dictator Gadhafi (more on that fiasco shortly).

The bottom line is Iraq is a bigger abyss today than it was when Saddam Hussein displayed his obsolete army on the parade grounds. The United States is going to be left with fewer than 200 Marines assigned to help protect the huge U.S. Embassy compound in Baghdad. It hasn’t been decided yet whether a small number of other personnel will provide training related to the fancy new military hardware which could easily fall into the hands of a belligerent and extremist Iraq.

“The rest of our troops in Iraq will come home,” Obama bragged at the White House on the final Friday of October, adding that the troops will “be home for the holidays.”

“After nearly nine years, America’s war in Iraq will be over,” the President said.

The Washington Post has already warned that sectarian strife or other violence could break out in Iraq the moment U.S. forces have left.

So America’s war in Iraq ends, with a whimper and not a bang. Never mind that U.S. military intervention in Iraq cost the United States $1 trillion and more than 4,400 American lives and left a power vacuum at the epicenter of the world’s oil.

You won’t hear a word about that from Obama’s re-election campaign. Rather, the campaign will tell voters that Obama oversaw the conclusion of the Iraq conflict. Count on such slogans as: “He brought the boys home!”

Then again, so did Richard Nixon if you count American troops being overrun by the North Vietnamese.

It is ironic that America’s inability to create stability in Iraq, the one must-win war, simply adds one more nation to a growing list of Arab countries that are imploding.

Which brings me back to Libya. The neoconservatives began arguing last winter that America must intervene to save the “rebels.” Obama has struck out in Iraq, and Afghanistan is a quagmire. Obama must have been hoping that intervention in Libya would salvage his reputation.

Right after the murder of Gadhafi, Obama hailed the declaration of freedom in Libya, saying, “a new era of promise” is under way in the African nation. Not so fast, Mr. President.

Libya is controlled by rival tribes and competing interests, none of which have one iota of democratic tradition. The way that Gadhafi and more than 50 of his close associates were assassinated has led to speculation that Libya’s future is prefigured by the chaotic violence that befell Somalia after the overthrow of dictator Mohamed Siad Barre in 1991, which has persisted ever since.

Reuters pointed out the obvious last week: that after the killing of Gadhafi, Libya itself risks tribal violence, insurgency and chaos.

DAWN.COM hammered at this point:

Gadhafi leaves behind a country with no proven governmental institutions or political parties, little or no independent civil service and civil society, no tradition of civil rights, free speech or free media, a one-track economy almost wholly dependent on oil export revenues and a system of national administration based on the fickle favour of the “Brother Leader,” family ties, patronage and corruption.

Its army broken, its borders defiled, its sovereignty outraged, Libya’s future direction is, as of this moment, more a matter of fond hope than settled policy. Democracy in Libya is an idea. It has as yet no roots and no substantive presence. Islamism, of various shades, and tribalism are, on the other hand, vibrant forces that may now feed on the power vacuum.

That sounds an awful lot like Iraq doesn’t it?

It is yet to be determined what Iraq will evolve into. As it stands today, many parts of Iraq remain giant safe houses for terrorist organizations like al-Qaida.

Peter L. Bergen makes a stunning comment on this point in his recent New York Times bestseller, The Longest War: The Enduring Conflict Between America And Al-Qaeda.

What the Bush administration did in Iraq (invasion) is what bin Laden could not have hoped for in his wildest dreams: America invaded an oil rich Muslim nation in the Middle East, the very type of imperial adventure that bin Laden predicted was the United States long-term goal in the region… it provoked a “defensive” jihad that galvanized jihadi-minded [SIC] Muslims around the world.

There is a groundswell of instability in the Islamic world. Obama can make all the victory speeches he wants and try to placate the American people with more lies. But the Holy War that began just over a decade ago is still raging, and there is still no victory in sight.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

Luckily, Money Doesn’t Buy Happiness

I spent some time in the steam room of the Spokane Club, drinking a cold beer, on an autumn Saturday some 30 years ago. Four times a week, my best friend and I would lift weights at what was and is today a rather swanky athletic and social club. I went there because my company paid for the membership and it had a terrific weight room, not because I wanted to hobnob with Spokane’s rich and famous.

On that particular afternoon, I noticed the other men in the steam room. We were quite the crew: two lawyers, a life insurance salesman, a realtor, two stock brokers and, in my case, an investment writer (yes, I get the irony in my writing about this subject).

I commented to my best friend Mark that none of us were really contributing to building a better society — at least not in a way that could be easily measured. The Spokane Club was a world apart from the Calgary Petroleum Club, a place where my dad sometimes took me to when I was a kid.

Fifty years ago, the people at the Petroleum Club were mostly geologists, contractors, engineers, wildcatters and cattle ranchers. There were a handful of stock brokers and car dealers as well; but back then, they were the minority.

America Is One Big Service Center

For many years, I had an old diesel Mercedes-Benz. My friends used to tease me, saying it was so old that Heinrich Himmler had driven it. Sutherland Mercedes in Spokane was up the street from my office, so I took my car there to get the oil changed. There’s no question Mercedes-Benz makes a beautiful car, but I doubt its new $100,000 sedan is four times nicer than a new $25,000 Ford sedan.

One day, I was sitting in the nice showroom drinking cheap coffee and waiting for my oil change. A doctor I knew was car shopping with his trophy wife, who looked to be half his age. The salesman was selling them a big Mercedes that would be her car.

She was giddy at the prospect of getting it. Why wouldn’t she be? I doubt she had to contribute a nickel toward the black Autobahn-slayer which she was itching to show off to her South Hill society friends.

The salesman knew he had the doctor on the ropes so he told the couple: “You know, if you buy a new car from us, we will hand wash it for you free and have it ready in 15 minutes.”

“Hear that, dear: free car washes,” gushed the wife.

The thought crossed my mind to tell them that after they paid twice for the Benz what they would pay for a new Lincoln, the car washes really weren’t free. I remembered my old car was still up on the hoist and decided it was better to keep my big mouth shut.

Economic Crisis Alert: Protect your money now or kiss it goodbyeLove What You Do, Not What You Have

Many studies have demonstrated that being poor will make you miserable, but being rich does not make you happy. At some level, society has always understood this. The ancient Greeks talked about the elusive notion of what made a good life. They called it “eudaimonia.” It’s the philosophy that happiness comes from work that helps others, not worldly possessions.

There is still a lot of money sloshing around in today’s economy. The professionals that bet on derivatives make six-figure and sometimes seven-figure salaries without really contributing anything productive other than leveraging other people’s money. I suspect that many of these professionals do it because they love the job and not solely because of the money.

Of course, you can’t tell that to the millions of people who line up to buy super lotto tickets each week hoping that one lucky number will grant them heaven on Earth. And for those who can’t beat the odds? Over the past decade, tens of millions of Americans have borrowed more money than they can afford to pay back. That has left a faltering economy which is impacting most people.

The Christian Science Monitor (CSM) reports that the standard of living for Americans has fallen further and more steeply over the past three years than at any time since the U.S. government began recording it five decades ago.

According to the CSM, the average individual now has $1,315 less in disposable income than he or she did three years ago at the onset of the Great Recession, even though President Barack Obama continues to proclaim the recession has ended. That means that an average person has less money.

More telling is that the misery index — which combines inflation and unemployment — has fallen almost back to where it was 30 years ago. That was after inflation had reached 13 percent and stocks had been going down for 16 years, a correction which eliminated two-thirds of the Dow Jones Industrial’s worth when accounting for inflation.

The remarkable turnaround that began in the early 1980s was because of the Reagan recovery and the tech revolution, which created millions of new jobs and trillions of dollars in new wealth in America. That turnaround was helped considerably by the fact that in real terms the price of petroleum fell by more than two-thirds in the 1980s.

This time around, we are not going to be so fortunate. The tech revolution that sent stock indexes soaring is spent, and there does not seem to be a Presidential candidate like Ronald Reagan on the horizon. Meanwhile, Federal government debt is more than 10 times larger than it was during Reagan’s first term.

Can Simpler Be Happier?

My grandparents took a wagon train pulled by horses from Oklahoma to Alberta a century ago. They were not chasing happiness. They were trying to build a life for themselves on “their” land during a period of abundant liberty. They were also intent on giving their children a better life. They lived through severe hardship in a tiny 12-by-12-foot home. Somehow, they survived the Dust Bowl and the Great Depression and they were able to raise three children and put them through college. They were industrious, content and, yes, even happy people.

There is a paradox, says bestselling author Raj Patel in his book, The Value of Nothing: Why Everything Costs So Much More Than We Think.

“After a certain point, more money doesn’t make us happier,” writes Patel. “Instead, we find ourselves on a hedonic treadmill, in which happiness is about matching our level of consumption with our peers, and when they do better and we don’t, even if we are better off in absolute terms, we are less happy.”

Happiness is a relative thing. Many people are convinced that German automobiles and Japanese electronics will help make them happy. When they find out that those things do not make them happy or, worse, that they lose the opportunity to acquire these things because they lose their jobs, a great many people feel cheated. This is the dark underbelly of today’s economic crisis: The ancestors of those who built a better world now have grandchildren and great-grandchildren that are angry over lost opulence.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

When Revolutions Roll Out Of Control

This is the autumn of our discontent. I believe something sinister is coming down the pipe. Week after week of demonstrations around the world could be a harbinger of revolt and even mass violence.

I am in the second half-century of my life. All my life, I followed the news because I was at the side of my father, a writer and publisher whose job was to predict investment trends. Not once in all these decades have I seen such troubled times, and that includes my memories of the 1960s.

I suspect a spark has been struck and we are all headed down a very destructive path, one that will not only destroy wealth through economic deflation but something worse: a period of violence wrought by tough times and widespread anger.

It will be up to historians to decide if the genesis of economic and social implosion began with the crash of 2008, the discontent that followed in Europe, or recent events — the mass protests that have been visited on major centers from Wall Street to Warsaw, Poland.

What is certain is that Western democracies are reaping what they sowed, especially in the United States. What began as a small group of protesters in Manhattan’s financial district has grown steadily. It now encompasses student groups, labor unions and, in some cases, the dregs of society.

The protesters in the United States call themselves “the 99 percent.” They say they represent the vast numbers of Americans struggling to pay their bills, while the income gap between the rich and the middle class widens. Throughout the ages, we have seen how small protests can turn into whirlwinds of violence.

Henry Ford said, “History is bunk.” I am convinced that the good and evil that have been expressed throughout the ages reside in today’s world. The worst evils are committed by “the crowd.” It is “the crowd” that rolls forward like a hand grenade with its pin set to slip out any second. It is “the crowd” that created the bloody madness that was the French Revolution.

The similarities between those events that lead to The Terror in France and what is occurring in the citadels of today’s civilization should not be ignored. Key to anticipating the future is an understanding of the past.

Like the United States that fought both the Cold War and decade-long wars in Afghanistan and Iraq, 18th century France spent decades fighting wars it could not afford. This overextended King Louis XVI’s treasury. Rather than taxing the elite of French society in an attempt to make up the imbalance, the king taxed the commoners who faced higher inflation as well as greater demands from the crown. The Bourbon Dynasty, which had persisted for 500 years, was forced to make compromises to the French people in 1789 because masses of unemployed people drifted toward urban centers where they were stirred into a frenzy.

In 1781 Louis approved a new council. A year later, the monarchy was abolished. However, that did not save the king’s head or the head of his wife, Marie Antoinette.

France had all the ingredients for revolt that we see in the United States. It had a leader who was impotent, and an economic crisis that could not be corrected. Only the wealthy elite were protected from the ravages of rising taxes and higher inflation.

One final link: The Court of King Louis XVI was hamstrung when it came to the nation’s energy needs. Coal was in short supply in France and had to be imported at great expense from other countries, many of which were seeking France’s ruination. It sounds much like America’s reliance on Arab oil today.

Wars were crucial in the demise of Bourbon France. In his book, The Rise and Fall of the Great Powers, famous historian Paul Kennedy writes:

The cost of a sixteenth-century war could be measured in millions of pounds; by the late-seventeenth century, it had risen to tens of millions of pounds; and at the close of the Napoleonic War the outgoings of the major combatants occasionally reached a hundred million pounds a year.

Kennedy adds that, “the link between national bankruptcy and revolution was all too clear.”

No sooner had I read this than I watched Republican presidential candidate Representative Ron Paul, R-Texas, on CNN. According to Paul, military expenditures have cost the United States $4 trillion over the past decade.

The Second American Revolution

I do not believe that what is going on today around Wall Street is what Thomas Jefferson had in mind when he wrote in a letter to James Madison on Jan. 30, 1787, in reference to Shay’s Rebellion: “I hold it that a little rebellion, now and then, is a good thing, and as necessary in the political world as storms in the physical.”

I don’t think we are facing a little rebellion. All rebellions start small; but some, like the one France experienced and what we may have to endure, could be earth-shattering.

The reasons are simple: too much debt and too little economic growth. Consider the facts:

  • The U.S. unemployment rate stands above 9 percent. The true unemployment rate, which takes into account people who have given up looking for work, is close to 17 percent.
  • For the past decade, U.S. stock indexes have been flat.  Accounting for inflation, they have actually declined. Many Americans have lost a lifetime of savings.
  • The U.S. money supply has grown threefold in the past three years. If the investment banks ever stop collecting bonuses and lend this money, it will trigger double-digit inflation; an event which will make Americans even more angry.
  • Since the stock indexes peaked in 2007, real income for Americans has dropped 10 percent. Despite the addition of trillions of new dollars courtesy of the Federal Reserve, many Americans are undergoing the greatest loss of wealth since the Great Depression.

The U.S. and other Western democracies stand at a precipice. It is a situation that is sending citizens to the streets in protest. Economic collapses and protests can quickly spill over with violence.

In case you think I am exaggerating the danger, consider these recent words from columnist Frank Miele of Daily Inter Lake:

The Russian Revolution (which coincidentally was another October Revolution) started out with slogans and protests, too, just like “Occupy Wall Street.” Of course, life in 1917 Petrograd was a lot harder and a lot more desperate than it is today in Philadelphia or New York — but the ruffians on the streets don’t care about that because they don’t study history. If they did, they might be more apt to follow the Russian example and overthrow Obama’s czars who have imposed absurd and unwieldy regulations on banking and business instead of trying to destroy the capitalists who actually have the capacity to create wealth — and jobs.

Action to take: I usually sign off suggesting you buy precious metals or a resource stock that looks good. This week, I urge you to consider what you will do if you and your family are beset by an emergency. In that case, Krugerrand gold or American Silver Eagle coins will not be of much use. I suggest you store lots of fresh water, canned foods, guns and ammunition. I hope I am dead wrong, but these items may be critical. In 30 years, I have never written such extreme advice. However, we may be entering the most extreme period of our lifetimes.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Faith In The President

What is more important: the religious faith of the candidates running for the Presidency or voters’ faith that this time they get it right and choose the best candidate to be the next President?

My mother always told me not to discuss religion. I am breaking with her this one time. The reason is the spotlight that has been thrown on the former Governor of Massachusetts and front-running GOP Presidential candidate Mitt Romney. You probably have heard that Romney is a Mormon.

It was much publicized earlier this month when Pastor Robert Jeffress called Mormonism a “cult” at a political gathering. Jeffress told hundreds of congregants this at his Texas megachurch where he welcomed the opportunity to warn people about the “false religion.”

Following his cult comments, Jeffress introduced and then endorsed the current Governor of Texas and Republican Presidential candidate Rick Perry.

To his credit, Perry, an evangelical Christian, rebuffed Jeffress’ comments and said he does not believe the Mormon faith is a cult. This is no doubt good news to Jon Huntsman, the former Governor of Utah and another Republican Presidential candidate who is also a practicing Mormon.

The Jewish Journal summed up the religious questioning by Jeffress this way:

I guess no Jewish politician will ever get Jeffress’ blessing if he’s running against Christians. This is in the same spirit as the pastor’s laughable assertion a few years ago that “Mormonism, Islam, Judaism and Hinduism … lead people to an eternity of separation from God in hell.” He has also stated that the Catholic Church represents the “genius of Satan.” If LDS Christianity has run afoul of Pastor Jeffress, it looks like we’re in good company: 14 million Mormons + 1.5 billion Muslims + 14 million Jews + 850 million Hindus + 1 billion Catholics, all condemned by the 10,000 members of Jeffress’ megachurch in Dallas.

Is The Oval Office For Evangelicals Only?

I haven’t studied Romney’s leadership plans enough to speculate on what kind of President he would make. However, I believe the covenant Romney has between his God and himself should not eliminate him from Presidential consideration.

Consider former President Jimmy Carter. By all accounts, Carter was and is a mainstream Christian. Most of the world holds Carter in high esteem. However, that did not make him a good President.

Frankly, I don’t care about a candidate’s spirituality as long as he or she believes in God. That signifies to me that he or she believes in something larger than himself or herself and his or her ambitions. Rather than worry over a candidate’s religious convictions, I want to know if he or she is the best person for the job.

I think this is what Thomas Jefferson believed when he argued for the separation of church and state. Two hundred years later, church and state sometimes seem inseparable.

In 1787 Jefferson wrote: “The legitimate powers of government extend to such acts only as are injurious to others. But it does me no injury for my neighbour to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg.”

The Mormon Church Is Hardly A Cult

I think what Jefferson was saying is that all Americans have the right to choose which religion to follow. By extension, even American Presidents have this right.

Before you write your letters of protest, let me add this caveat: I do not tolerate theological beliefs over secular solutions. That eliminates candidates who practice a religion built upon hate and intolerance. So, yes, I would eliminate a candidate who believes in radical Wahhabism or other extremist religions that really are cults. Just because you call yourself “Reverend” doesn’t mean you can pass out the Kool-Aid to the ignorant or unsuspecting.

Romney may make a fine President. I don’t think being a Mormon should disqualify him.

Out Of The Mouths Of Babes

Only a few times have I had an important vote.

The first time was when I was on the junior varsity basketball team in high school and voted for team captain. I sided with the majority and voted for a kid named Steve who was serious about winning and who didn’t mess with booze or drugs. Steve was the first kid to come to practice and the last to leave.

It turned out Steve was a Mormon. I can’t remember how I found out, but it wasn’t important. Steve only talked about winning and getting better.

Our high school had a great debate team, and I was part of a unanimous vote for our captain, a kid named Lern. I knew Lern was Jewish. I also knew what everyone else at our school knew: Lern was not only smart but spent endless hours looking up trivia. This was eons before Google. Lern was instrumental in our school defending its city championship in a televised program called “Reach for the Top.”

I also voted for our high school class president and valedictorian. I voted for the winner, Brenda, who was an incredibly focused and ambitious girl who made a great class president. Years later, Brenda was the evening anchor for CBC News, Canada’s largest TV network. I never did learn what her religious beliefs were. It still doesn’t seem important.

I am not saying that being school valedictorian and being the leader of the free world are the same. I voted for them because of their abilities. Their religion never influenced my vote.
Finally, ask yourself one question: If you needed double bypass heart surgery what doctor would you choose? I am certain you would pick the best doctor, regardless of his religious beliefs.

More Than Ever America Needs a Great President

What the United States needs now is a leader who can guide the country toward a better future.

Your next vote for President may be the most important one you ever cast. If you get it right, does it matter if he or she is Protestant, Catholic, Jew or Mormon? Who cares if he or she reads the spiritual writings of Joseph Smith? Let’s just hope he or she also reads the economic writings of Adam Smith.

I don’t know if John Kennedy was a good President or a bad one. Whichever he was, I don’t think it had anything to do with his being Catholic. I do think Richard Nixon was a terrible President, even though as a boy he is said to have been a devout Quaker. 

A candidate’s voting record is fair game. So, too, is what he or she has said, and how he or she has lived life. I hope that no candidate is disqualified because of religion.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

P.S. In case you are wondering about me, I was baptized Protestant.

Obama’s Islamic Alliance

The Wall Street Journal recently pointed out that when it comes to job and energy security, President Barack Obama simply doesn’t get it. The WSJ is right. For all his soaring rhetoric, the President’s September “jobs speech” demonstrated zero insight into how America could really grow its economy while reducing its dependence on Mideast oil, as that region becomes ever more chaotic.

Despite his abilities as a campaigner, Obama continues to demonstrate his inabilities as a leader. The nation has suffered because of Obama for three years. Hopefully, there’s only one more year to go.

The WSJ reported how briskly Canada’s economy has recovered from the crash of 2008 and how secure Canada is when it comes to its energy self-sufficiency.

“Canada has recovered all the jobs it lost in the 2009 recession, and Alberta’s oil sands are no small part of that. The province is on track to become the world’s second-largest oil producer, after Saudi Arabia, within 10 years. Meanwhile Mr. Obama clings to his subsidies for solar panels and his religious faith in green jobs.”

Obama is not alone with his Green dreams. Liberals in entertainment have been back at it, protesting Alberta’s oil sand projects on Canada’s Parliament Hill.

A core issue for the latest protest has been blocking the construction of TransCanada’s Keystone XL pipeline. Liberals want to make sure that permits for its construction are blocked. What they don’t take into account is that the construction of the XL pipeline would mean an investment of $20 billion. And according to TransCanada, the project construction phase will result in 13,000 direct hires and 118,000 indirect jobs in the United States.

That is the benefit from just one project. According to a study commissioned by the American Petroleum Institute and released last month, pro-development policies in fossil fuels in the U.S. and Canada could create an additional 1.4 million jobs, and raise more than $800 billion in additional government revenue over the next two decades.

It is estimated that Alberta’s oil and gas industry supports 30,000 jobs plus hundreds of thousands of indirect jobs in industries such as construction and manufacturing. Because of petroleum, the province has an unemployment rate of 5.6 percent.

And it turns out that having a strong oil sands industry in Alberta is good for America. There are almost 1,000 U.S. companies doing work in the Alberta oil sector.

What America needs is for Washington to open offshore drilling as well as domestic oil and gas exploration in the arctic. Such programs would create jobs and allow us to finally tell the Arabs to choke on their oil.

Hollywood Must Love Islam

Obama either believes in the science fiction fantasy that affordable renewable energy will be developed any day, or he simply won’t give up a devilish deal with the Organization of Petroleum Exporting Companies — most notably the decade-long commitment to support Saudi Arabia, regardless of how many terrorists are born and bred there. What secret arrangements Obama may have with the House of Saud, I can only guess.

What puzzles me more is why some U.S. celebrities hate Canadian crude even if it means being dependent on the brethren of Osama bin Laden.

Most people in the entertainment business probably could not find Saudi Arabia on a map. But this boot that is planted in the heart of the Mideast is controlled by a tribe of billionaires who have grand ambitions — even if they have to bootstrap jihadism to keep their oil fiefdom together.

While I am all for keeping ducks safe from oil ponds, I am much more worried about a much bigger evil: the House of Saud.

So what is the real Saudi Arabia like? My only information comes from the news, books and the stories my dad told me after he returned from a month-long business trip to the Kingdom in 1962.

Dad interviewed Prince Fahd bin Abdul Aziz Al Saud for his publication, OilWeek Magazine. The Prince, who would become known as one of Saudi Arabia’s most progressive leaders, was a good host. My father was able to see some Holy Shrines and the Ghawar Oil Field, by far the largest conventional oil field in the world. And just so my old man didn’t get bored, he also got some front-row tickets to a public beheading.

In the decades since then, Saudi Arabia hasn’t changed much. The Toronto Star reported that the Kingdom recently beheaded a man for, believe it or not, sorcery.

What Obama and his liberals don’t understand is that Green technologies don’t work and Alberta’s oil sands are a far better option than depending on Arab oil, especially Saudi oil.

Keep in mind that 15 of the 19 hijackers on 9/11 were Saudi born. Also remember that the House of Saud launched not one but two oil embargoes on the United States. If you remain unconvinced that the majority of Saudis (including the royal family) hate America, pick up Robert Lacey’s recent book Inside the Kingdom: Kings, Clerics, Modernists, Terrorists, and the Struggle for Saudi Arabia.

Lacey’s book is a chilling examination of the changes that have happened between U.S. and Saudi relations over the past three decades and how the majority of Saudis despise the United States even as they are gleefully happy to sell the country their enormous reservoirs of oil.

Lacey recounts how one young Saudi science teacher was horrified as he watched the planes crash into the Twin Towers on 9/11. The man shared his outrage with other teachers who warned him that he must keep his opinions to himself and not dare make the mistake of talking to his students about the terror attack. Another teacher warned him: “If an Islamic court finds that your thoughts are ‘secular,’ they take that to mean that you’re a Muslim who has renounced the faith, that you’re an ‘apostate.’ And the penalty for apostasy is death.”

Most disturbing is the quote Lacey attributes to Prince Amr Al-Faisal, a member of the House of Saud and a well-known Saudi businessman. “As a Muslim, I condemn what bin Laden did. But the Saudis are daring people, and it is not surprising that one of the most daring terrorists in the world should be a Saudi. As many Muslims saw it, the falling of the twin towers was a lesson to the pride and complacency of the Americans. It gave them just a little taste of what the Muslims have been going through.”

Do we face a future in which the United States will have to depend on the likes of Saudi Arabia for our energy needs — this tribe of Bedouins, most of whom hate the United States? It seems so. Obama is counting on his coalition of Greens to block Alberta oil sands projects and restrict U.S. oil and gas exploration.

I suggest you ask yourself this when you vote next year: Is Obama a President that the United States can afford?

Yours in good times and bad,

John Myers
Myers’ Energy & Gold Report

Shanghaied By Gore And The Greens

Editor’s note: This is part 2 in a two-part series on the dangers of going green.

In 1992, Chinese leader Deng Xiaoping said: “The Middle East has oil. China has rare earths.”

American liberals are determined to sell out America — even it means a deal with the devil: China, a nation whose ambitions include world domination within the next 20 years.

The only thing standing in Beijing’s way is the United States, a quickly fading superpower that owes more than $1.4 trillion in Treasury debt.

America’s total servitude may soon stretch beyond money. If the Greens get their way, America will need China just to power itself up each day. That is because China has a near monopoly of rare earth elements, the essential ingredients that power renewable energy — something President Barack Obama and the Democrats in Congress insist on.

Last week, OilPrice.com told the dirty truth about clean energy: “It’s official — China’s de facto monopoly on current rare earths production is a threat to the global economy.”

Rare earth elements were the substance discussed at length during the Sept. 21 meetings by the U.S. House of Representatives Committee on Foreign Affairs Subcommittee on Asia and the Pacific.

New American Security analyst Christine Parthemore laid out what was said at the national security meeting: “Reliable access to critical minerals is a matter of both economic and geostrategic importance to the United States. … Today, no minerals are more troubling to U.S. security and foreign policy than rare earth elements. … Supplies are concentrated mostly in the hands of one supplier [China] with its own rising demand, and the United States today has no good options for recycling rare earth minerals or substituting more easily obtained minerals.”

What are rare earth elements? Noted energy analyst and writer Robert Bryce points out that lanthanides power most green technologies. Within them is a subset that is the cornerstone to clean energy: neodymium and praseodymium.

According to Bryce, these two materials, along with the other elements found in the lanthanides’ row of the periodic table, are essential commodities in nearly all of the technologies that are seen as solutions to our energy challenges, from wind turbines and hybrid cars to solar panels, computers and batteries.

Why are they so important? Lanthanides, which are also called “rare earths,” have special features at the quantum mechanics level. The configuration of their electrons allows them to have unique magnetic interactions with other elements. In other words, they have the elements to power the green industry.

There’s just one catch: The characteristics make lanthanides a key choke point in the development of the green economy.

Made In China

This has been one of the biggest lies that Al Gore, Barack Obama and other Greens have told the nation. According to these liars, if we simply use more hybrid cars, wind turbines, solar panels and other such inventions, we will no longer have to go begging sheiks and mullahs for Middle East oil.

Rather, we will have to beg somebody else: America’s rival for superpower status. You see, China controls almost all of the world’s lithium, the essential element in all high-capacity batteries.

Bryce writes: “In its headlong rush to go ‘green,’ the United States may simply be trading reliance on one type of import for reliance on another. Instead of requiring oil supplied by dozens of producers located in the Persian Gulf and elsewhere, it will need rare earth commodities produced by the Chinese as well as lithium mined by a handful of foreign countries.”

It was reported just last month that China now produces nearly 95 percent of the world’s rare earth materials. In today’s “Go Green” society, this gives the Chinese a future monopoly over America’s future energy dependence that the Organization of Petroleum Exporting Countries only could have dreamed about.

People like Gore are either willfully ignorant of this truth about China’s monopoly over Green components or they gleefully ignore it, so they can collect their own green.

In 2007, Gore won his Nobel Peace Prize and declared that the United States should commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years. In a November 2008 opinion piece in The New York Times, Gore said the nation must replace “dangerous and expensive carbon-based fuels with 21st-century technologies that use fuel that is free forever: the sun, the wind and the natural heat of the earth.”

Earlier that year, Gore and the Alliance for Climate Protection launched a $300 million media campaign designed to stop global climate change. Their goals were backed by a number of Web sites, including Wecansolveit.org, Climateprotect.org and RepowerAmerica.org.

In less than a year, more than 2 million people had joined and had agreed to the statement, “I want to Repower America with 100 percent clean electricity within 10 years.”

Gore’s grassroots partners include the National Audubon Society, the Evangelical Environmental Network and many other groups. All Gore’s partners seem either very stupid or shortsighted.

It is true that most Americans have no idea why rare earth elements are important or why the Chinese monopoly on them is so dangerous.

The American Dream reported last month that China is enforcing strict new quotas on the export of all these essential metals. Why is that a problem? According to one Web site: “(It is because) these metals are essential in an increasing number of high technology products.”

We are just into our second decade of the 21st century, and China owns the minerals that make critical products, including:

  • Hybrid car batteries,
  • Supercomputers.
  • Flat-screen televisions.
  • Cellphones.
  • iPods.
  • Radar systems.
  • Missile-guidance systems.
  • Satellites.
  • Aircraft electronics.
  • Smart bombs.

We may not be able to alter the world’s geology. We may have to make deals with Beijing to import these goods that are essential to America’s future. But we don’t have to turn our back on the proven power of petroleum only to further enable our Communist competitors in China.

On the eve of 2012, America can count on two things:

  1. Petroleum remains the best source of energy in the world.
  2. Washington must not be allowed to mortgage America’s future on unproven clean energy, the key components of which belong to China.

The only other alternative is Green energy, a future in which America’s biggest enemy — communist China — dictates our future and our eventual servitude.

Joseph Stalin said: “When we hang the capitalists, they will sell us the rope.” It is an ideology that persists in China today.

Yours in good times and bad,

John Myers
Editor, Myers Energy & Gold Report

Electric Cars: A Bad Idea Whose Time Has Come

Editor’s note: This is part 1 in a two-part series on the dangers of going green.

The road to hell is paved with good intentions. I have little doubt that the road President Barack Obama envisions is built around renewable energy; the only vehicles that traverse it are electric. It is the world of science fiction. America’s problem is that this world will hasten our downfall.

Case in point is Solyndra Inc.’s slide into bankruptcy earlier this month. The Fremont, Calif., solar-panel maker was magically awarded a $535 million Federal loan guarantee in September 2009. It is all part of the President’s dream to remake America green. It began with a loan from the Energy Department from funds derived from the 2009 Obama stimulus package.

Bad news for the White House and Obama Democrats came on Sept. 6 when the company filed for bankruptcy protection. Two days later, the FBI raided the company’s offices.

There was more bad news last week. Solyndra said it needs more than the initially expected four weeks to find a buyer to take over its idled solar panel-making operations.

Solyndra said it had a plan to try to find a buyer by early October, a company that could restart its recently shuttered factory and rehire some of its 1,000 staff. Maybe Solyndra can find some magic beans. It could grow something green that would stretch to the sky, something both the environmentalists and the Obama Administration need.

Recently, an opinion piece of the WNYC website summed up the failure of Solyndra:

That the government invested in a non-viable company because it wanted a “Green” photo-op and that this investment was part of a sweetheart deal to reward an Obama donor is disgusting but typical. The fact is, when the government pours money into a business or a program or an initiative, no one cares too much whether it succeeds or fails.

After all, are any of the people who made the decision to fund Solyndra going to see a pay cut to their own paycheck? Of course not. That remains the number one argument as to why the government should not have the power to use OUR money to fund their pet projects.

It’s also the most reasonable argument for why private businesses always do better than public ones. For example, Fed Ex and UPS have to balance their budgets, make cuts when necessary and care about meeting their bottom line. The US Postal Service? Less.

At least the U.S. Postal Service uses proven technology. The Obama Adminstration wants to reinvent the world with things that, frankly, don’t work — at least not yet. Solar panels are just one failed scheme. Another is the Adminstration’s support for the electric car.

A Lemon That Runs On Electricity

If you listen closely enough to Obama, you might think the Electric Age has just begun when in fact it dates back more than a century. The President has announced his goal of having 1 million electric cars on American roads by 2015. His Administration has even allocated $2.4 billion in “stimulus” money to subsidize production of them, along with the batteries and other components that they use.

Earlier this month, Forbes contributor Louis Woodhill weighed in on what he thought of Obama’s seed money for the electric car:

Unfortunately, electric cars are about to do a barrier crash into economic reality, and all the airbags in the world won’t be able to save them.  The taxpayers’ $2.4 billion is destined to join Obama’s $535 million investment in solar-panel manufacturer Solyndra at the bottom of the crony-capitalism “stimulus” rat hole.

Woodhill was specific in his criticism of Obama’s plan, especially when it comes to mass-produced battery electric vehicles. He points to Nissan, which is engineering state-of-the-art lithium batteries into its new car, the Leaf. “It costs more than twice as much ($35,430 vs. $17,250) as a comparable Nissan Versa,” Woodhill wrote.  And before you rush to save the Earth and sacrifice your pocketbook, keep this in mind: The battery-powered car provides far less convenience and performance than the car that burns gasoline.

The Leaf has terrible acceleration and has only 25 percent the range of a comparable gasoline car.

Given the cost of using batteries for the Leaf versus an economy car you can fill at $4 per gallon with gasoline, you would have to drive your new electric car 164,000 miles just to recover the additional purchase cost.

Factor in interest on your money, and you would have to drive your electric car almost 200,000 miles before you break even. It’s too bad about not being able to merge on to the freeway because of the car’s terrible performance. And it is impossible to drive a Leaf more than 60 miles per day.

That the electric car is a poor substitute for a gasoline car is nothing new. In 1896 Thomas Edison panned the electric car: “Electric cars must keep near to power stations. The storage battery is too heavy.”

More than a century later and with new lithium technology, the fortunes of the electric car still have not changed. In 2009, when speaking of the Chevrolet Volt (a big name among enthusiasts), the president of Audi America, Johan de Nysschen said: “There are not enough idiots who will buy it.”

With the exception of Forbes, the popular press has never given up on trying to find idiots to buy the electric car.

In Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future, author Robert Bryce wrote:

  • 1911: The New York Times declares that the electric car “has long been recognized as the ideal solution” because it “is cleaner and quieter” and “much more economical.”
  • 1915: The Washington Post writes that “prices on electric cars will continue to drop until they are within reach of the average family.”
  • 1959: The New York Times reports that the “Old electric may be the car of tomorrow.” The story said that electric cars were making a comeback because “gasoline is expensive today, principally because it is so heavily taxed, while electricity is far cheaper” than it was back in the 1920s.
  • 1967: The Los Angeles Times says that American Motors Corporation is on the verge of producing an electric car, the Amitron, to be powered by lithium batteries capable of holding 330 watt-hours per kilogram. (That’s more than two times as much as the energy density of modern lithium-ion batteries.) Backers of the Amitron said, “We don’t see a major obstacle in technology. It’s just a matter of time.”
  • 1979: The Washington Post reports that General Motors has found ”a breakthrough in batteries” that “now makes electric cars commercially practical.” The new zinc-nickel oxide batteries will provide the “100-mile range that General Motors executives believe is necessary to successfully sell electric vehicles to the public.”
  • 1980: In an opinion piece, The Washington Post avers that “practical electric cars can be built in the near future.” By 2000, the average family would own cars, predicted the Post, “tailored for the purpose for which they are most often used.” It went on to say that “in this new kind of car fleet, the electric vehicle could pay (sic) a big role—especially as delivery trucks and two-passenger urban commuter cars. With an aggressive production effort, they might save 1 million barrels of oil a day by the turn of the century.”

The sacrifice is all worth it, argues Obama, if only to get the nation off of its addiction to Middle East oil. There’s just one hiccup. While America is hooked on Arab oil and all the problems that come with that, green technology depends on rare earth elements. And the nation holding the bulwark of those materials — perhaps as much as 90 percent — is China.

That means that America is trading away its energy dependence on one region of the world to a single Communist country, China, a nation that has grand ambitions for the 21st century. It is China’s monopoly on these elements that is the real threat America faces if we choose to go green.

Next week, in part 2 of this report, I will tell you about China’s dominant control of critical rare earth elements that the United States could soon depend on.

Until then… yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

Planes, Trains And Stock Markets

Autumn is nearly here, and I am reminded of stock market crashes and one near plane crash.

The September equinox marks the anniversary of when my Uncle Richard and I took off from the homestead runway in his Cessna 172. No sooner were we airborne than we heard the stall horn howl inside the cockpit. The ear-piercing squeal told me something I already knew: Our airplane was falling from the sky. In scant seconds the plane’s landing gear slammed onto the wheat field.

No sooner were we down than the airplane bounced skyward. A lucky gust of wind grabbed at the wings; and, almost as quickly as we fell, the plane began to climb.

Later, I realized how fortunate we were. It wouldn’t have taken much to turn that propeller into a plow.

I haven’t had such a close call since, yet I have a lot of anxiety these days — not about flying, but about the stock market.

The first thing I do each morning is turn on the business channel to see if the Dow Jones industrial average is having another bad day.

You don’t have to have an MBA to know that the air keeping the stock market aloft is growing frightfully thin. Worse yet, the people flying “our” plane are acting reckless. So, each morning, I brace myself for the bad news that Wall Street’s stall horn is blaring. There won’t be a damn thing the President, Congress or corporate leaders can do about it.

Brace! Brace! Brace!

The one good thing about the terror I felt that day in the plane is that it was over quickly. The worries I pack around with me nowadays are different because I can’t shake them.

I suspect that some of you feel like I do: that with President Barack Obama at the controls, the country is spiralling out of control.

But our problems are deeper than having Obama as President. The economy is providing no lift to the stock market, and the nation is carrying so much debt that I don’t believe changing pilots will help much. I don’t think that a true Conservative or a Tea Party candidate in the White House in 2012 will save us. So hold on tight; we are going down.

The Fear of Flying

While I am no engineer, I understand a few things about airplanes. They have to be flying fast enough or else they stall. Right now, the stock market — a leading indicator — is telling us that the economy is stalling.

The Credit Crunch has ended but the Debt Disaster is pushing uncertainty strong upNotice the graph above. It measures the volatility of the U.S. stock market over the past 21 years. As you can see, equity investors have only had one worse case of the jitters since 1990, and that was in the midst of the credit collapse in 2008. Last week, the EconoMonitor commented on the current investment and economic climates:

The past summer has been filled with bad news, the current economic slowdown, financial stress and political tensions in Europe and the U.S. are in fact the logical extension of the first leg of the crisis that hit in 2008-2009. There is one major difference, though: the policy tool box to deal with financial and economic shocks is now significantly smaller than it was in 2008. Interest rates are at 1.5% in Europe, 0.5% in the UK, and 0.25% in the U.S.

In Europe, banks own large amounts of sovereign debt, which creates the possibility of a self-fulfilling crisis of bank runs and bankruptcies if fears of default on sovereign debt leads the interest rate on this debt to increase, causing a default and bank runs.

As you can see, interest rates have been cut to almost zero, and central banks can’t make money any more affordable than it is. That leaves governments with one option, injecting even more money.

Money Needs Velocity

Let me use the airplane analogy one last time. A plane needs to be going fast enough for the wings to provide lift. The economy needs velocity, which is money moving throughout the economy. If Washington pumps a lot of money into the economy but nobody spends it, it won’t provide any lift to the economy.

The United States has lots of money sloshing around. The Federal government has injected well over $1 trillion into the economy in the past three years. But the government cannot get people to spend or lend money. If these huge injections of capital get stashed in mattresses, the economy stalls. That is what is happening.

This is reflected by the consumer confidence graph below. It shows that only once in over a decade has consumer confidence been lower than it is now. Obama’s pledge to uplift America and bring new confidence to the country is nothing more than an empty promise.

United States Consumer ConfidenceBanks are not lending, and consumers are not spending. That means the American economy is set to crash.

Given the multitude of economic problems facing the United States, plus a real lack of leadership in the White House and Congress, I believe we are headed for tough times. September and October historically have been bad for stock investors as far back as 1929. As an investment writer, I have experienced market crashes three times: in 1987, 1989 and 2008. I think there is a good chance the stock market may crash again in the weeks ahead.

Action to take: Continue to hold precious metals and, in some cases, stocks that are leveraged to rising prices for real assets (petroleum, gold and other hard asset companies). Liquidate all other U.S. paper instruments. U.S. interest rates may soon spike, so I urge you to sell bonds other than cash you have tucked away in three- to six-month U.S. Treasury bills.

Next year is shaping up to be a bad year for U.S. paper instruments. Anxious investors are already disrupting the markets. I would not be surprised to see U.S. stock indexes fall below their March 2009 lows (the Dow industrials hit 6440). Don’t be surprised by a 50 percent correction in blue chip stocks. Long-term bonds — with maturities of more than 10 years — may fall in equal measure.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report