Now that oil is creeping up on $ 90 a barrel, and global demand is picking up …due lin part by rising demand from emerging market economies …I have to look back on the historical events which shaped the petroleum markets and rocked the economic landscapes in terms of the ballanced orchestrated inter related impacts our domestic demand for foreign oil had upon equity and treasury markets …specifically those which simulteneously benefited and aided the Bush tax coffers.
And thinking that we have come such a long way since then …I am taking the opportunity to look back on a piece I wrote back in April 2009.
In retrospec, I have to say that we have not come all that far since then.
And after taking a look at this piece, I am ever more convinced that our backs are still up against the wall …the one we have become ever more tightly pinned to.
My take away; gettting down off this wall will not be easy …especially since natural gas and other bridge fuels have not been given the urgent incentives, encouragements and attention needed …nothing note worthy enough which might actually promote the hope for our release from the foreign dependencies to which our backs have become pinned.
In in this regard we truly are …down …just about out for the count …for the second go round.
Today, in our continued wastes of time and in our lack of direction and with a leadership which has been overly occupied …and unable to give a spit …ours is a demise which is just a matter of the function of our scarcest resouces …the natrual time we have been and are continuing to waste.
Why have we become content to take …One step forward …and two back.
So, here’s taking two to look back …and ask why for a second time …while we have the few seconds which remain?
Sunday, April 19th, 2009
Geithner’s Expressed Views:
Below, is an edited version of a letter which I sent to my financial advisor yesterday on Sunday.
Re: Oil Prices …Be careful of the powers which be!! The Rules Are Subject to Change Without Notice.
Just Ask Any Banker
President Obama’s re-election hopes and chances are most likely going to be tied to the price of oil …and oil’s ability to threaten recovery hopes. Therefore the administration’s efforts to reduce this affect …may adversely affect oil plays.
But, I say; oil is not the enemy. However, belligerence, pride and arrogance are.
As the economy heats up; curtailing demand probably will become be a secondary consideration to a market overshadowed by building supply gluts in the wake of contango conditions.
We are awash in supply, and supply is said to be continuing to build.
Drops in consumption translate to falling tax revenues.
Add to this drop in demand, the politically emphasis which has been placed upon alternatives as well as the administration’s energy tax credits …and you have a recipe which may deliver oil a one-two knock-out punch at a critical time.
The government’s focus is a bold departure from traditional energy policies of the past. In this attempt to break oil’s grip upon our economy, such strong bold direction changes will ultimately shift, reshape and redirect demand.
The Busch and prior administrations were heavily tied to oil dependencies. As such, they became more and more reliant upon tax revenues generated by an economy which was evermore growing addicted in a greater reliance upon imported oil.
What tax revenues couldn’t be generated in terms of normal economic activity …by normal consumption (the major bulk of which traditionally has come from oil and fossil fuel sectors of the economy) banking and finance took up the lion’s share of the slack. Yet, deficit spending persisted requiring the government to rely upon sales of treasuries to fuel its deficits.
In true deficit fashion, what tax revenue couldn’t be generated by normal economic activity …was made up by our net debtor partnerships with countries like Saudi Arabia and China.
No doubt, oil prices and the administration’s efforts to shape effective viable energy policies will be key to setting up Obama’s re-election chances.
The extent to which these policies are successful will ultimately play either an additive or a detracting role in building or destroying Obama’s rock star persona.
And it is precisely this perception …as a champion which he has fought to establish.
And this is a strong-hold in which he has won the hearts of his electorate in the battle against the major’s of the petroleum industry and their high energy prices.
In this, the Obama administration has a strong foundation of voter appeal.
It is easy to understand why voters turned to shame and blame the major oil companies. And it is easy to see how easy it would be to polarize the electorate angst in successfully securing a political foothold …the Presidency not withstanding.
However, any hope for (real and long lasting) recovery is sadly being replaced by secondary considerations …power and re-election. Thus, real investments in meaningful, long lasting energy independence legacies will be …overshadowed and eclipsed by the facade of politically self-serving weaknesses and pride.
Truth be told, there is probably enough energy wasted …expended in the bickering which has arisen from pride than that which would be better served in working for freedom in every dimension with the sum total of all the energy resources that our nation has available.
As such, our true national hope for a viable recovery should be based upon every available resource available, and should take into consideration energy independence policies based upon all of our collective energy resources.
In the urgency of our economic plight, the future of America’s hope does not lie with the restrictions of bars and limitations.
Now, more that ever, we can ill-afford to pass on every opportunity before us in our weakness.
We simply do not have the luxury to pick and choose how we fill our politically correct energy basket.
The patient is still on the operating table.
To achieve total independence and strength …our wheel barrel should include off-shore drilling and nuclear …and not merely the pursuits we are currently pursuing.
A comprehensive energy program which favors a viable independence should take into consideration a realistic stance which blends together an over-all, all-encompassing, comprehensive energy program. Placing limits and restrictions on energy sectors should be considered …after ….and only after …independence has been achieved.
Instead, Obama’s administration is seemingly seeking to make big oil the scapegoat and a whipping boy for what has been an industry which has been leveraged by one administration after another in being made to play whatever role the administration dejour saw fit for it to play.
I don’t believe that the average American realizes the size and magnitude of the overall tax revenue generating capacity that oil and natural gas consumption represents as a total percentage of GDP …not to mention also …as a percentage of overall federal tax receipts these industries generate.
We can ill afford to ideal logically overlook any opportunity to build the spring board from which to …in a platform of ultimate health …achieve our goals more rationally, realistically …more efficiently and more affectively …at a lower over all economic cost savings …with less reliance upon further incursions into greater addictions debt …and do it faster so as to be in a better position from which to spring board into truly well established environments of healthy change.
After all, debt benefits only those from whom we are seeking to re-take our freedoms …freedoms which we have all but given away blindly.
Therefore, stimulus will be better served by an economy which is first, well positioned economically in a position of strength …rather than in making changes in weakness. After all, no patient will be fit to run a marathon while still recovering in post-op.
But this administration is so business adverse (focused upon power & re-election)….that the first priority of their blindness …is not the law of the mind which is written in reason. Its reason has all but abandoned prudence by reason of an obsession which is firmly bent on change for no other thought than for merely the sake of change. This is subservient of frustration …not sound reason.
Such as it is, and …so noble as it may be …this administration’s call for change is no more practical than it is when it is bent upon placing added stress on a recovering patient who has just suffered a major stroke. Such a cavalier approach represents a blind lack of consideration for the needs of the patient.
Regardless, the patient will get the bill.
Thus, without honor …in self serving consideration, the administration is deliberately pursuing a reckless, self-serving path of malpractice which is presenting a greater threat to the patient’s recovery than the illness from which the patient is recovering.
Why willfully kill the patient when he has so much to add to the effort and ability to achieve change?
But maybe that is what the Obama administration wants …to kill the patient altogether.
I just hope that the administration wakes up and smells the coffee, before they break the back of the economy, waste and destroy all the wonderful opportunities for a tremendous recovery before us.
God knows! We do not need to dig a deeper rut. We are already buried in debt as it is.
The last thing we need is more despair.
And we do not need to burn a single bridge.
But since we are looking at politics and power which tends to mutually serve the other …primarily for nothing other than for the sake of power …we need look closer to see and examine the man behind the curtain.
If this administration is stressing the recovery of the patient, how are they going to bring him around?
Still, the better yet is the question; “…How are they going to kill two birds with one stone?” …if re-election is their ultimate goal.
How are they going to kill oil (prices and demand) and contain prices while managing inflationary pressures?
I see these answers key leading factors which will …like the administration before it …also show their true colors.
The last thing we need is one more ponzi scheme. What we need is freedom in which our liberty it will be possible to breathe life back into our lungs so that we may once again claim true pride in being truly independent and free Americans.
Once upon a time, not long ago …the Busch administration was successful in driving money out of equity markets by devaluating and weakening the dollar. Such as it were, demand and or speculation (?vs.?) …both conspired with greed together to drive oil prices to + $ 160/brl.
As such, overheated oil prices beat both the consumer and the economy and investors and the equity markets into submission ….and consequently into safe-haven harbors of treasury markets.
Did you hear Bush say; “Come to Papa.” ? Come tax receipts! Come! Sit Ubu! Sit! Good dog. Good dog.
Such as it were, this translated into an abundant cheap source of capital for the Bush administration to fund the wars which are still fighting on two costly fronts.
By the way, have you heard any reports on whether or not our efforts on these fronts are producing fruit for freedom?
Record low treasury yields allowed the Busch administration to benefit in two ways:
1. Continue to generate record levels of (oil-driven) tax revenues.
2. Borrow and enter into (low-cost long term treasuries) record-deficit-fueled spending;
Today, the finance and banking industries continue to recover from their greatly diminished conditions.
As such …the economy is still threatening to contract …all the more.
Then, the question is; now, more than ever ….fixed upon the obsessive “Wimpy Mentality” which …like the “Something-for-Nothing” mentality prays for an indulgence in the form of an empty promise …which, declares with impunity; ” …I would gladly pay you on Wednesday for a burger today.”
This is a merry-go-round is tied to a lack of responsibility. It is not a free ride by any means. And as its debt-load costs an arm and a leg …it is a ride which we must get off of in order to give ourselves the chance of survival …for run away oil prices is the stuff of which what goes around …comes around …time and time again.
And you just can’t afford to have it come back around when you …unlike Regan and Bush Sr. …we have taken on way too much debt to carry any more, because it makes hitting pot holes and road bumps too large of crisis to manage.
…kind of like a wrestler trying to respond to an opponent while carrying a 50 Lb. back pack.
Otherwise, sadly …we will be destined to be ruined by our simultaneous growing addictions to both debt and foreign energy.
And in this; we can neither be ignorant that we have become indifferent to the fact that we are truly addicted to a debilitating escalating reliance on sky-rocketing debt.
Do you hear Obama today, saying how remarkably different he is from Bush’s reliance upon deficits, borrowed money and other resources from net debtor nations? No. I don’t think you do.
And in this, the last thing the Obama administration wants from you is scrutiny …a look which would hold him accountable. The second thing he will not want to offer up is clarity and any depth of transparency.
But we need to take a closer look and peel back the layers of the onion.
Debt is still debt. And Obama is continuing along the lines of a greater willingness to
Eclipse the Bush-like in-vogue fashion of his administration’s spend and borrow policies.
In this, the Obama and Busch policies are more than twin-like in appearance.
They are identical!
And both threaten to cost Lady Liberty more and more of everything we hold dear
…the power of those who are seeking to maintain their positions of self-serving reckless power bases.
It’s kind of a sick thought that we are more willing to fight for the power’s whose promises offer us the greater opportunity to further sicken our dependence upon debt ….more so than we are (determined) to make and set the courses which involve the sorts of necessary healthy sacrifices which must be made in order to re-ordain and re-establish the once aforementioned environments of “…a more perfect union.”
For any such change would by reason of its esteem for liberty, demonstrate a genuine open willingness to break from the past …rather than dive still deeper into and along the derelict courses which have taken us down paths of insurmountable debt..
We are sick in that we want it all, and we want it for nothing.
And we are terminally ill in that we want it now.
We have become deceived with the delusion of entitlement and its alluring promises of NOW …promises which forgo the mention of the order and priority of sacrifice first …sacrifices, which have …until now, prefaced ownership and responsibility.
Instead, we have usurped the law of the mind which seeks instant reward and gratification from any means’ powers which promises now what can be shoved upon the shoulders of the next generation of wimps.
CULTURE SHOCK 101’s WAKE-UP CALL:
Q: Where has Responsibility and Accountability gone?
U.S. CULTURE’S RESPONSE …:
Yo! Dude? Whatever! That’s TMI …too much information. Farm out man! Send it offshore. Let someone else worry about it. I’M TOO INTO ME RIGHT NOW …AND …It really doesn’t concern me. I COULDN’T BE BOTHERED. It’s not my job dude. That’s outside the box.
What I am saying is that; in a culture gone mad …enamored with an embrace of the individual’s, relative subjective definition of truth …what hope is there which would be capable of serving the common good if, accountability and responsibility are not met head-on …in owning up to an active ownership of both?
This “Rob Peter to pay Paulâ€ isn’t getting the job done. Just ask any Boy or Girl Scout and they will tell you that the scout motto is; “Be Prepared!â€
There is a deceit which has lulled Americans to sleep, and this dream is a sad self-deluding dream.
More than ever before, at this crucial time in our history …we, as Americans …need to be willing to be willing to shoulder greater responsibility and accountability out of consideration for others ahead of ourselves.
And this means leaving less debt to future generations to follow …not more for them to clean up in our self-deluding wake.
To bet on debt is the same as to bet on the come.
Debt only serves to open wider the doorway to usher in higher affects of inflation.
Just try saying $ 160 per barrel oil again and see what that will bring back around.
In just one aspect, consider how debt drives inflation and robs the elderly and those who live on fixed income of the opportunities to comfortably enjoy the security of the fruits of their life long labor.
Such is the unavoidable sad reality of the burden of Public Debt …the cost of which must be born upon the shoulders of an indifferent “NOW GENERATION” …carried as the reminder of the social sacrifices which must be paid as a result of carrying too much public debt.
Debt’s cost (the debt load) erodes NOW the government’s immediate ability to return charter goods and services to its citizenry in the form of reduced benefits such as ….health, education and other social services …not to forget mention of defense among many others. This is realized painfully more during contractions in the economy.
Debt negatively impacts the government’s ability to deliver on its chartered obligations …forcing reduced services delivered.
Additionally, growing debt fosters and creates still more of an increasing reliance upon still more debt ….especially in years which the economy fails to grow and expand …translating into fewer tax receipts collected …in which it is easy to turn ever more to foreign creditors to borrow and make up for deficits …especially if spending is not adjusted quickly.
Contracting economies …in such as the one we find ourselves, force grave decisions to be made regarding a whole host of charter government services of all kinds and types.
Unmistakably, more debt, truly is less; and less debt is truly more.
However, like Wimpy; Debt does one thing well. It offers alluring promises today in lies which build upon delivery of nothing tomorrow, but empty propositions aside, deceit …I.E., the something for nothing is still a drag ….a pure and simple avoidance of accountability and responsibility.
What good can come from such deceit if it merely gives rise to a change which fosters and creates a greater illusion …rather than actual departure from the woes and debacles that have failed and cost us so dearly in the past?
For all this, Obama’s policies will do just this.
His spell out a still greater commitment to debt …which call for higher (than Bush’s) levels of debt …promoting the greater addictions which have excused authority (on every level and in every dimension) from taking responsibility for the consequences for anything …save finger pointing, and entering into shame and blame.
At some time, America must be made to realize the true value of debt-free true authority …especially the type which is established on an individual’s commitment to honor that which is executed in consideration of an others’-first priority.
Self interest rÃ©gimes are scams doomed for failure in the narrow limits of their shallow and hollow confines.
One who is all wrapped-up in themselves, makes for a small package.
Therefore, if we do not acquiesce to a higher order of truth …at some time, we will be brought to our knees in submission to a higher authority in the light of the spirit of humility.
It is better to be humble than to be humbled forcibly.
Debt is an invitation which plays upon false pride like Wimpy’s call for a burger today.
The price for escape is willingly overlooked for the sake of pride’s lies and its inability to deal with …get a grip on …and manage reality.
Forced or otherwise …the opportunity to be thankful is a choice which is available to all to consider and make wisely in choosing to be content with such things as one has more than what one doesn’t.
If we are faithful to that which is least, we will be faithful to that which is great.
The corollary is not so inviting:
He that is unjust in the least; is unjust also in much.
Therefore, we must see, stand and be ready …always prepared to take full responsibility for our choices.
UNTIL THEN, OUR PRIDE WILL CONTINUE TO LEAD US along the paths IN THE DARKNESS OF OUR BLINDNESS.
May God help those who help themselves through the knowledge and with the wisdom God gave us all to see and hear what is right and true.
But until then, our addictions to debt and our reliance upon our debtors will be the stuff of which that will continue to threaten to kill the Spirit of our liberty …while robbing the quality of those lives from generations to come …all in the slumbering wake of our stubborn partisan stupidity.
We have been given to be better stewards of our talents …not stewards of our debtors.
It doesn’t take to much intelligence to see through the game: “Let’s you and him fight. The odd man out usually takes both the first and the last laugh.
Isn’t it time we stop fighting ourselves and set about to pull together …in unity …in the same direction?
If we can’t …If we won’t; and …if we don’t ….we are destined to be totally owned by our collective debtors who have successfully been playing us …both ends against the middle …laughing all the way to their banks …and that would be the Bank of China …the Bank of ? Oh! I forgot. The Saudis don’t do banks. They own investment interests in those who run them for them.
Come to think about it, they actually own major interests in more than just banks.
Most Americans have no idea of what stake …as a percentage of our overall + 13 trillion dollar public debt is owned by foreign central banks.
I’ll bet you that this is well known and understood by President Obama and his Treasury Secretary Timothy Geithner.
One thing is sure, it is an unacceptably alarming high percentage …one which we have no business adding to …certainly not at the rate to which the President has shackled our future generations’ generations.
Who owns you baby? Who’s your lord? Who are you serving?
Once an endentured servant …always?
The question is this; are you a slave or are you an American?
Since when is one considered to be the other?
I am not the brother from another mother!
I am free.
Look smart. Think well. Do better. Live prosperously for both yourself as well as those others who will follow you.
Peace and best regards in looking forward to the day we will be free in our unity,