Fearmongers Past And Present

“It’s a lousy war, kid… but it’s the only one we’ve got.”
–James Cagney as Capt. Flagg in “What Price Glory”

In the 1986 remake of the movie “The Fly,” Geena Davis’ character, Veronica Quaife, said to Jeff Goldblum’s character, Seth Brundle: “Be afraid. Be very afraid.” For half a century, that is exactly what the ruling elite have been telling ordinary people like you and me.

I am dating myself on this, but I can still remember our “Duck and Cover” drills in grade school. One day, my older brother told me it was a waste of time; no amount of ducking would save me from an atomic bomb. From that moment on, I spent lots of nights worrying about the end of the world.

[youtube http://www.youtube.com/watch?v=IKqXu-5jw60&w=560&h=315]

That was just the way our leaders wanted it. Even today, the Federal government sells fear the way Madison Avenue sells soap.

While expensive, the Cold War certainly had its advantages. Best of all, it kept everyone on edge and got us to trust in our government. After all, the government was all that stood between us and the enemy. And we all knew who the enemy was. We even knew the enemy’s plan: world domination. Nobody objected to an absolute truth: Billions of dollars had to be spent each and every year to stop the godless Red Menace.

Just how big of a threat were the Communists? Looking back, it seems they were not the warmonger heathens our leaders told us they were.

In the late 1950s, the neocons were scaring the Nation about Soviet first-strike capabilities. President Dwight D. Eisenhower knew better because of top secret U-2 flights.

Yet people like Edward Teller, known as “the father of the hydrogen bomb,” were spreading fears of America’s imminent destruction. It reached a fever pitch in the autumn of 1957 when the Soviets launched Sputnik. Teller decried the challenge from the satellite that was about the size of a beach ball as defeat worse than Pearl Harbor.

Mainstream newspapers began to report that the United States was in a dire situation. In an editorial on Nov. 10, 1957, The New York Times indicated it hoped the United States would return to “a race that is not so much a race for arms or even prestige, but a race for survival.” On Dec. 20, 1957, The Washington Post ran a front-page story with the headline “Enormous Arms Outlay Is Held Vital To Survival.”

Politicians jumped on the story. Presidential hopeful John Fife Symington Jr. argued that the Soviets would soon have at their disposal 3,000 intercontinental ballistic missiles (ICBMs) that could wipe the United States off the map.

Within months, U-2 flights revealed the truth to Eisenhower; the Soviet ICBM force consisted of exactly four missiles and two launch pads. (If you want to check the facts on just how weak the Soviets really were in the 1950s and 1960s, I recommend the Pulitzer Prize-winning book, The Dead Hand: The Untold Story of the Cold War Arms Race and Its Dangerous Legacy, by David E. Hoffman.)

After Sputnik launched, there was no stopping American neocons, writes Stephen Glain in State vs. Defense: The Battle To Define America’s Empire:

Eisenhower successfully challenged the military industrial complex and he had the courage to expose it as a threat to republican democracy. But he could not shut it down. Even in his time, it had grown too large and feathered too many political and corporate nests for one man, even a great one, to dissolve.

Until the downfall of the Soviet Union, the Cold War kept American defense spending at a fever pitch. It was later learned when sealed Kremlin documents were released that the Soviets were fighting a defensive struggle and that the two world wars had decimated their population and their economy. As far back as Joseph Stalin’s time, the Soviets understood they could not win a nuclear showdown with the United States.

American neocons probably didn’t understand that while the Cold War was being waged. But one has to wonder whether they would have allowed a President or Congress to curtail defense expenditures had they known.

Neoconservatives have managed to increase defense spending over the past 20 years even though the Soviet Union no longer exists and what remains — Russia — is having a difficult time keeping its economy above water.  Regardless, our government does not want us to feel safe.

With the exception of Ron Paul, the remaining contenders for the GOP Presidential nomination have said they will increase defense expenditures.

Despite America’s record deficit, the Federal government has proposed $851 billion in military spending next year. America already has the best submarines, fighter jets, strategic bombers and missile systems. But the neocons tell us that these are dangerous times made all the more so because we don’t exactly know who we might face.

It is too bad that a now-bankrupt Nation didn’t heed the warning Eisenhower gave when he left office:

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence–economic, political, even spiritual–is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

Eisenhower couldn’t stop the fearmongers who control so much of our society. Nor has any President since been able to stop them. The cabal puts us on constant alert and makes us build swords rather than plowshares. And here is the kicker: We do it with money lent to us by the principle enemy we stand against.

Few people seem to understand the idiocy of owing almost $1 trillion to China to upgrade our armed forces so we will be prepared to fight China.

I have news for the neocons: China doesn’t need state of-the-art aircraft carriers and submarines. It just needs to throw a few hundred billion dollars of its U.S. Treasuries onto the open market. That would make the Crash of 2008 seem like a slight downtick.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Welfare Killed The Little Red Hen

The yoke that is the welfare state has thoroughly infected America. If voters re-elect President Barack Obama, he will brainwash all Americans into thinking they are entitled to government handouts. Most Americans don’t understand that independent people are losing their way as the President crusades to build his Nanny Nation — a country so transformed that even the oral traditions that were taught for generations have been eradicated.

To be fair, it is not all Obama’s fault. In my lifetime, the United States has been moving away from its ideals of hard work, self-sacrifice and personal responsibility.

Bedtime Stories Our Children Never Hear

Some of you may remember “The Little Red Hen,” the bedtime story of an industrious chicken that lived with an indolent cat, a lazy dog and a mouse that behaved like a sloth.

I can still remember the story from half a century ago. My dad always had a glimmer in his eye, sitting at the head of the dinner table and telling us kids the fable of the cat that slept, the dog that napped and the mouse that snoozed. They only survived, said my dad, because the Little Red Hen worked so very hard.

One day, while busy in the garden, the Little Red Hen found some seeds of wheat. The hen asked her friends the following:

“Who will plant this wheat?”

“Who will cut this wheat?”

“Who will grind this wheat into flour?”

“Who will make a cake from the fine flour?”

To each question, her friends replied: “Not I.”

Finally, the Little Red Hen asked, “Who will help me eat this cake?” The cat, the dog and the mouse all shouted: “I will.”

“No, you won’t,” replied the Little Red Hen, “for I alone did all the work, so I alone will eat the cake.”

When I was a child, The Little Red Hen was a big hit at our house. But when I told the fable to my own children, they just didn’t seem to get it.

“Why wouldn’t the hen share, Daddy?” asked my little girl.

“Because she did all the work,” I replied.

“But my teacher tells us we are supposed to share,” she said.

“Sharing is good,” I told her, “but you can’t be lazy. You have to share in the work too.”

A puzzled look spread over her face. I remember being a bit exasperated, and I asked: “Don’t you read stories like ‘The Little Red Hen’ at school?”

“Not really,” she said. “Most of the stories we read are about helping each other.”

I realized that the values held sacred by my parents, grandparents and great-grandparents were not even contemplated by my children or most of their generation.

Obama is accelerating America’s welfare revolution. He is finishing what President Franklin Delano Roosevelt started when he introduced the New Deal 80 years ago. Three generations later, there are fewer Little Red Hens and far too many cats, dogs and mice.

I fear that the welfare creed has become so ingrained in our culture that America will probably never extricate itself from its growing socialist grip. That may have been FDR’s intention from the start.

Roosevelt bragged: “… no damn politician can ever scrap my social security program.”

But FDR only engineered the welfare state. Its grand developer was President Lyndon B. Johnson. His “War On Poverty” and his plan for a Great Society have built a welfare system second to none.

An American Thinker article addressed the issue:

As it stands now, Obama appears headed toward an economic legacy that may very well surpass Jimmy Carter in its level of failure.

We have seen under this president an expanding number of citizens who are partially or wholly dependent on the government for their very livelihood, as the data show that the U.S. has become an ever-growing welfare state under Obama.

Government dependence, which is defined as the percentage of persons receiving one or more federal benefit payments, is at a staggering 47%, its highest level in American history, while 21 million households are reliant on food stamps.  In fact, government spending on food stamps in 2010 ($68 billion) was double what it was in 2007, with the 2011 figure likely to be even higher.

As the graph below shows, government welfare payments have soared over the past 42 years, from a few billion dollars to $800 billion. If the trend continues, payments will exceed $1 trillion dollars per year. Add in defense and national security spending and immediately the Federal government is spending almost $2 trillion each year. This cannot continue, yet it seems almost impossible to stop until people believe that they need to be industrious, that they should not depend on government to help them make their way.

My dad told me other stories when I was growing up: hard-luck stories about what he and his generation faced during the Great Depression. He graduated from college with a degree in geology in 1930. Yet it took him 12 years to do anything but menial jobs. He worked selling vacuum cleaners and he sold life insurance door to door. He even worked in a slaughter house. The government didn’t help him. Quite frankly, if the help had been offered, I doubt he would have taken it. He didn’t have much time for government, either in getting things from it or paying toward it.

The grandchildren of those who went through the Great Depression don’t think this way. Liberals, from those in the education system to those in the entertainment industry, have convinced most young people that government should do more to make society better. They want to reward the cat, the dog and the mouse while making the Little Red Hen pay for it.

The problem is the Little Red Hens are getting tired of carrying the load for everyone else. Until we wake up to this fact, we will be faced with continued social and economic crises, and the standard of living will fall for all of us.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

The Militarization Of America

America is a declining empire trying to resurrect itself through military intervention and armed occupation.

The more than $1 trillion decade with Iraq has finally ended. But neocon dreams of democracy for Iraq did not pan out. Iraq has a corrupt, shaky and ineffective government. Thousands of people continue to die in sectarian violence as Iraq wallows in a bloody civil war.

As for Afghanistan, most of the original terrorists in al-Qaida who planned 9/11 are either dead, in prison, on the run or holed up in Pakistan. Washington tells us that Pakistan is our most trusted Muslim ally, ignoring Peter Bergen’s 2011 New York Times bestseller The Longest War: The enduring conflict between America and al-Qaeda. Bergen writes that Pakistan has consistently been found to be “one of the most anti-American countries in the world.”

It seems obvious that the continued occupation of Afghanistan — a country that has defeated the armies of the Russian tsars, the British Empire and the Soviet Union — is doomed to fail.

We Need Cronkite

What makes news today are celebrity overdoses, dirt on Presidential candidates and the best new reality series. But consider what Walter Cronkite said on Feb. 27, 1968, following the Tet Offensive: “It seems now more certain than ever, that the bloody experience of Vietnam is to end in a stalemate. To say that we are closer to victory today is to believe in the face of the evidence, the optimists who have been wrong in the past.”

Cronkite made this statement four years into that war. America is into its second decade of fighting in Afghanistan, and even a stalemate now seems impossible.

If the goals of victory were the killing of Osama bin Laden and the almost complete destruction of al-Qaida within Afghanistan, then victory has been achieved. But if the neoconservatives still believe we can institute a democratic government in Kabul, they are either naïve or initiating wars simply for the sake of war.

For decades, our government has been arrogant in imposing Western principals and ideals. Washington cannot understand that Afghanistan, a tribal and Muslim country, will not accept Western ideals any more than we would accept a prescript declared on us by a foreign power.

Imposing On Others

I am a peaceful fellow who is past middle age. I always tried to either walk or, better yet, run away from a real conflict. But if armed Chinese soldiers occupied and patrolled the streets of my city, I would clean the barrel on my hunting rifle. I am willing to bet that a great many of you would do the same to resist foreign occupation.

Yet Washington thinks American ideals should be welcomed with outstretched arms. Some of this has to do with the experience of World War II and how Europeans welcomed the United States as a liberator.

Here is the catch: The period 1925 to 1945 was an aberration — 20 years of dictators. Consider that before Francisco Franco, Benito Mussolini and Adolf Hitler, much of Europe had thrived for decades with democracy. The United States helped restore that political order (except in Spain, which suffered with Franco until his death in 1975).

While the United States left scores of military bases in Europe to protect the West from a possible Soviet invasion, there was no occupation. The boys were back home months after victory in Europe. The Nazis had occupied Europe. Because of that, the murderous will of the French, Polish and Dutch resistance was visited upon German troops.

On this subject I was struck last year while re-watching Ken Burns’ PBS series, The Civil War, first broadcast in 1990.

In one segment the documentary tells of how Union cavalry surrounded a lone Confederate soldier who had no horse and whose clothes were dirty and tattered. A Union officer said to him that it was obvious that he had no wealth and not the means to own slaves. The officer asked: “Why are you fighting this war?”

The Confederate answered: “Because you are here.”

The Washington establishment fails to consider this universal truth in human nature. Senator John McCain continues to advocate the bombing of both Syria and Iran. And with the courageous exception of Ron Paul, the contenders for the GOP Presidential nomination strongly favor using the military over diplomacy and oppose any reductions in defense spending.

Exactly who is this enemy that America must outgun? Nobody has a good answer.

Neoconservatives always call upon the lesson the world learned when British Prime Minister Neville Chamberlain appeased Hitler. How much better the world would have been, they argue, if Britain had stood up to Germany.

But is that the only lesson of the past 100 years? What of President John Kennedy’s refusal to launch a military strike during the Cuban Missile Crisis? It can be argued that America’s diplomacy-first gambit saved the human race.

If you don’t like the Kennedy example, consider World War I. Because some crackpot shot Archduke Franz Ferdinand, war erupted. That war cost 20 million lives. Diplomacy could have prevented that war and, as a result, prevented the rise of Hitler and, thus, World War II.

I can only scratch my head when I listen to leaders like McCain. Have any of them read history?

Wars Serve A Purpose

Why war trumps diplomacy is explained by Stephen Glain in his new book, State vs. Defense: The Battle to Define America’s Empire. Glain concludes:

U.S. relations with the world, and increasingly America’s security policy at home, have become thoroughly and all but irreparably militarized. The culprits are not the nation’s military leaders, though they can be aggressive and cunning interagency operators, but civilian elites who have seen to it that the nation is engaged in a self-perpetuating cycle of low-grade conflict. They have been hiding in plain sight, hyping threats and exaggerating the capabilities and resources of adversaries. They have convinced a plurality of citizens that their best guarantee of security is not peace but war, and they did so with the help of a supine or complicit Congress. Since the collapse of the Soviet Union, U.S. presidents have ordered troops into battle twenty-two times, compared with fourteen times during the Cold War. Not once did they appeal to lawmakers for a declaration of war.

I am not saying we should never use force. I believe America has enemies, and those enemies should be dealt with in a swift and deadly manner. I also believe that only if another nation is a real and “legitimate threat” to the United States should we initiate war.

America should be using the best special forces in the world with surgical strikes on those that would do us harm. America should use the RQ-1 Predator drones armed with Hellfire missiles on terrorist groups and even possible terrorist groups. I am prepared to live with some collateral damage that will result from such strikes. This will be less deadly to foreign civilians and will save the lives of our young men and women in uniform, while helping to restore America’s standing in the world.

Compare this strategy to the armed occupation of Afghanistan. It is a non sequitur, and the real powers who run this country know it.

They know, and they just don’t care.

Yours in good times and bad,

–John Myers
Editor, Myers’ Energy & Gold Report

Editor’s note: It’s time to make your submissions for this month’s You Sound Off! feature, which will run March 28. Get your submission in by March 26. It should be no more than 750 words (if they are longer, we probably won’t read them). We will select the one or two we think are the best of the week to publish. We reserve the right to edit for grammar and style but will try not to alter the meaning.

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

Rush To Judgment

Barack Obama must love Rush Limbaugh. The Conservative talk show host that some have called the conscience of the Republican Party went off on a tangent while ignoring Obama’s Machiavellian power grab.

Rather than leading a thoughtful discussion of Obamacare and the true aims of the President to make Big Government even bigger, Limbaugh instead made obscene and bizarre comments about a female college student.

Unless you live in a cave, I am sure you have heard the story: Sandra Fluke, a Georgetown University law student, addressed a Democratic panel last month in support of contraception access paid for by the Federal government.

The left argues that poor Fluke was talking only about oral contraceptives for health reasons and not for the government to pick up the tab for her to have worry-free sex. That is a stretch. The number of women who take the pill for any reason other than to not get pregnant is small.

The liberals need to be reminded of what Senator Dale Bumpers argued 13 years ago at President Bill Clinton’s impeachment trial: “When someone says it’s not about the sex, it’s about the sex.” That was Bumpers’ variation on a quote attributed to H.L. Mencken: “When someone says it’s not about the money, it’s about the money.”

On this, Rush is right; and I am not giving Fluke a pass on her testimony being about anything other than sex.

But unlike Rush, I am not going to call Fluke a “prostitute” or a “slut.” Most people in her age group are enjoying a healthy sex life, and a great many of them don’t want to get pregnant. (As far as I know the only person that is going to have a problem with me saying this is the pope, and I doubt he is reading.)

I do expect a great many of Personal Liberty Digest™ readers like Limbaugh and listen to his program. So I ask this: Are you really trying to say that Limbaugh has had sex only with his wives within the sanctity of his marriages – all four of them?

I defend Limbaugh’s right to say what he wants. Like him, my career exists because of our 1st Amendment right to free speech.

But I cannot defend this statement from Limbaugh: “If we are going to pay for your contraceptives and thus pay for you to have sex, we want something for it. We want you to post the videos online so we can all watch.”

First, he should speak for himself. I don’t want to watch anybody have sex; I expect neither do most Americans.

Second, why would he say such a thing? It is an outlandish statement.

Finally, is he saying pornography is OK, but birth control is not?

I don’t need a liberal to tell me the “yuck factor” in what Limbaugh said.

I don’t think Limbaugh thinks about much besides getting more listeners and getting paid more money. And Limbaugh either cannot make sound arguments against the left because he is not a deep-enough thinker or he does not mind another term for Obama, so he is distracting the Nation from the real issues.

I think Obama is the engineer controlling a runaway train. Meanwhile, Limbaugh is worried about what a couple of passengers are doing in the sleeper car.

America Needs Right-Minded Thinkers

Just three decades, ago we lived in the gilded age for conservatives and the Republican Party. Ronald Reagan spoke of a shining city on the hill and he had the moral fiber to convince Americans that the Nation could renew itself. While Reagan may have been the heart of the conservative movement, William F. Buckley Jr. was its brains.

I graduated from college in 1980. At age 21, I was a borderline liberal. My parents were libertarians, and they urged me to get an education. They suggested I read Buckley. I found Buckley offered overpowering conservative arguments as to why right-minded people should embrace libertarianism. I came to reject the left whose brain-trust were people like Senator Edward Kennedy and Speaker of the House Tip O’Neill.

This is what The New York Times wrote in its Buckley obituary:

… marshaled polysyllabic exuberance, famously arched eyebrows and a refined, perspicacious mind to elevate conservatism to the center of American political discourse…

Mr. Buckley’s greatest achievement was making conservatism — not just electoral Republicanism but conservatism as a system of ideas — respectable in liberal post-World War II America. He mobilized the young enthusiasts who helped nominate Barry Goldwater in 1964 and saw his dreams fulfilled when Reagan and the Bushes captured the Oval Office. …

To Mr. Buckley’s enormous delight, Arthur M. Schlesinger, Jr., the historian, termed him “the scourge of liberalism.”

Buckley once said: “Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views.”

I would argue it is more dangerous that liberals do not want to listen to conservatives than it is for them to hear the wrong message from the right. Discussions by Limbaugh or anyone over issues such as sex and birth control are worse than a waste of time. They obliterate the truth, that people should have the right to pursue happiness and not have that right infringed upon by government.

Americans should be outraged over what Obama is doing: the debt he is racking up, Obamacare, his plans to remake America a Green Nation no matter what the cost. If Buckley were alive today, he would be making those arguments and people would be listening.  So well-grounded would be his convictions that even liberals would pay attention. Instead, we have Rush Limbaugh talking about sex, sluts and pornography.

America can right this listing ship only if conservatives get an intelligent standard bearer to carry forward their message. The garbled, guttered wisdom of the Limbaughs and Glenn Becks of the world do nothing but hurt the cause.

Patrick Henry gave a watershed speech. He said: “Give me liberty, or give me death!”

What does Limbaugh proclaim? “Give me more money. If not, at least give me some OxyContin.”

Yours in good times and bad,

–John Myers
Editor Myers’ Energy & Gold Report

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.

[youtube http://www.youtube.com/watch?v=kl1ujzRidmU&w=560&h=315]

 

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