Some of you may have heard some noise in the media over the past week about the small dip in ...
One Million Jobs and Energy Independence
One Million Jobs and Energy Independence
December 12, 2011
America's vast energy resources
Who are the speculators?
May 11, 2011
Part of responsibly managing money is being able to sift through the media chatter we are constantly bombarded with. The talking heads on TV and the writers at the newspaper tell you stories to sell advertising space. We understand that deciphering the fact from the fluff can be a daunting task. That’s why you can count on us to vigilantly keep tabs on the happenings in the market and in Washington, and compare it to what hundreds of years of history and decades of experience tell us. With gas prices shooting up here in Nebraska and the rest of the country, it’s easy to look for a scapegoat. But who’s really responsible for rising energy prices (along with the prices of everything else)? Please take a moment to read this article from First Trust Portfolios and keep yourself educated with facts, not talking points from the nightly news.
The Greatest Speculators
Brian S. Wesbury - Chief Economist, First Trust Portfolios
Robert Stein, CFA - Senior Economist
Date: 4/25/2011
It’s as predictable as birds flying south in the winter. When gas prices rise, politicians (most recently, President Obama), feign outrage and then threaten to “investigate” the “speculators.” The irony is that these politicians are the real speculators – making a bet that they can use government to create wealth. No government in the history of the world has made it work, but they keep on trying – with other people’s money.
In one sense, this is all about economic and financial literacy. Of course there are investors who speculate on energy prices. Thank goodness.
Many people have reason to hedge their exposure to changes in energy prices, either up or down. These include energy companies that find, process, or wholesale energy products. Or manufacturers, airlines, railroads, farmers – anyone who uses energy to provide a product or service.
In an ideal world, hedgers worried about a price drop would exactly equal hedgers concerned about price increases. But the world doesn’t work that way. And so speculators – investors who take the other side of a trade even though they aren’t involved in an energy-related business – fill the gap and make these markets function.
One reason speculators show up is that the government makes markets inefficient. Today, in the US, there is an effective moratorium on drilling in the Gulf of Mexico and a continued ban on oil drilling in northeast Alaska. At the same time strife in the Middle East and North Africa threatens oil production. So, supply problems exist at the same time the economy is recovering and the Fed is easy. Why investigate?
Or instead, maybe politicians would be better off investigating themselves. Government is playing the role of venture capitalist, particularly in the energy industry, picking winners among various competing technologies. When should the taxpayer expect a payoff from these tax breaks and subsidies? The government likes to call them investments, but they are using other people’s money to speculate. And the energy produced from these emergent technologies costs more than energy produced using carbon-based technologies.
This is nothing more than crony capitalism, with well connected former politicians appearing to be disproportionately represented among those companies on the receiving end of government “investments.”
Add to this the government’s “speculation” that deficit spending will create wealth. Politicians, using spurious economic arguments, believe deficit spending will create growth and jobs. But this strategy has never worked. Countries that have employed this strategy have always fallen behind in the economic growth and job creation statistics. Free markets create wealth, not governments.
Think what you want of speculators in the oil markets – and we are sure there are many – they are at least doing it with their own money. Ultimately the fundamentals in the oil markets will dictate who wins and who loses, and those who speculate the wrong way will have to transfer purchasing power to those who were right.
This is certainly not the case for those who speculate out of the public trough. Their track record is abysmal and the taxpayer is left footing the bill every time.
Paper or plastic?
April 11, 2011
It turns out the most environmental option might be the one you never suspected.
http://www.american.com/archive/2011/march/a-punching-bag-no-more
Are we out of oil?
March 22, 2011
Or are some in Congress simply unwilling to let it be produced?
http://www.youtube.com/watch?v=MlfmvwxxgHM
More on Global Warming…
December 23, 2010
Global Warming
The Washington Post
The Arctic ocean is warming up, icebergs are growing scarcer and in some places the seals are finding the water too hot, according to a report to the Commerce Department yesterday from Consulafft, at Bergen , Norway . Reports from fishermen, seal hunters and explorers all point to a radical change in climate conditions and hitherto unheard-of temperatures in the Arctic zone. Exploration expeditions report that scarcely any ice has been met as far north as 81 degrees 29 minutes. Soundings to a depth of 3,100 meters showed the gulf stream still very warm. Great masses of ice have been replaced by moraines of earth and stones, the report continued, while at many points well known glaciers have entirely disappeared.
Very few seals and no white fish are found in the eastern Arctic, while vast shoals of herring and smelts which have never before ventured so far north, are being encountered in the old seal fishing grounds. Within a few years it is predicted that due to the ice melt the sea will rise and make most coastal cities uninhabitable.
I neglected to mention that this report was from November 2, 1922 . As reported by the AP and published in The Washington Post - 88 years ago !
Here is one supporting article freom CEI.org: http://cei.org/news-releases/commerce-department-study-finds-unprecedented-arctic-melting
Someone pleeeaaase go take that Nobel prize away from that idiot Al Gore.
What the Ethanol Folks Don't Want You To Know
May 27, 2009
BusinessWeek - Don't let anybody mislead you: The new push to get a 15% ethanol mandate out of Washington is simply to restore profitability to a failed industry. Only this time around those promoting more ethanol in our gas say there's no scientific proof that adding more ethanol will damage vehicles or small gas-powered engines. With that statement they've gone from shilling the public to outright falsehoods, because ethanol-laced gasoline is already destroying engines across the country in ever larger numbers.
From Roland: Forever we've complained that ethanol made no sense, but the media prevailed.
Rising Oil Prices Seems So "Last Year"
November 21, 2008
It's amazing how much the media focused on oil as prices were going up this past summer and people were exchanging their SUVs for smaller vehicles. The fall in oil is another stimulus to the economy as it keeps more money in your pocket but yet it hardly gets any attention.
This Would Fuel the U.S. Economy for an Entire Year
October 27, 2008
Reston, VA - North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.
A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compareed to the agency's 1995 estimate of 151 million barrels of oil.
Technically recoverable oil resources are those producible using currently available technology and industry practices. USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources.
New geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes.
~ From the U.S. Geological Survey
Drill, Drill, Drill For Lower Energy Prices
August 5, 2008
The price of oil fell early Tuesday as low as $118 per barrel and is now 20 percent below the high we saw back in July.
This trend could very well continue but such a decline would be accelerated if more leaders on Capitol Hill sided with Congressman Don Young from Alaska who recently delivered a powerful argument on the House floor in favor of increased domestic drilling.
Watch the clip below:
INTERESTING POINT: Pay attention to how the congressman DELIVERS his argument rather than READING it. Highly effective.
What are your thoughts on domestic drilling and energy prices? Share your views in the comment field below.
Related and Recommended Reading:
Wrong Then, Too by Jerry Taylor at the Cato Institute
My Interview With Alaska Governor Sarah Palin from Larry Kudlow's Money Politic$ blog
