Why buy Gold when you can own Oil? Reply

This is not an advice piece.  I like to think out loud through my blog.  Any investments you might undertake should be consulted with your financial advisor.

With that said, I cannot understand why people would put money into gold when they can buy oil at a huge discount.  As I type this, WTI oil is pricing at $80.91 per barrel.  We haven’t seen this level since Feb. of 2009. That was the midst of the biggest financial crisis our generation has seen.  Guess what, since then our economy has improved.  I know it may not feel like it, but it has.  Matter of fact, usage is up since January where oil was trading well over $100 per barrel.  It is a fact that most oil production companies and countries cannot make a profit selling oil below $80 per barrel, so it is in their best interest to keep the prices at these levels.  Believe me when I tell you that they have the power to do so.  The only exception to this rule is Saudi Arabia.  They can make money all the way down to $70 per barrel.

I don’t want to confuse this situation too much.  The real comparison is to gold.  Gold traded up to about $2k per ounce and has since traded back down to the $1,600 level.  That is a potential of 20% upside from here and will really only materialize if the dollar falls off a cliff with that of the Euro.  Remember though, that is the only real catalyst for gold… hell breaking loose.  As for oil, there are many factors that can contribute to it going back over $100 per barrel which is a 25% gain.  U.S. growth, improved employment numbers, a resolution of the “Euro crisis,” any strife in the middle East, or the upcoming trade embargo with Iran can shoot prices back up.  I don’t know about you, but I’m thinking if I have to pay $4.00 at the pump I would rather have at least made some money on its climb in prices.

July 1st is the deadline for the Iran situation.  Any lack of complete agreement with them will result in a trade embargo which will significantly decrease the world’s supply of oil.  I honestly hope that things don’t deteriorate, but it is a catalyst that can raise prices. If someone would like an idea of how to play it, one could buy the ETFs USO or UCO.  UCO is trading at $25.63.  It is a leveraged ETF and should return to $40 per share if oil trades back up to the $100 range giving you a 56% increase if you hold it that long.  USO is trading at $30.49 and was trading at $40 plus when oil was in the $100 range.  That would give you an approximate of 33% should oil trade back up to $100 levels.    The beauty of all this is that there is a pretty damn good chance that oil will return to $100 per barrel at some point.  I wouldn’t bet against it!

Again, so that no one tries to sue me, this is not an advice piece.  You should consult your advisor before making any decisions based on this information.

Natural Gas exhonerates Speculators! 1

Ok, I have conversed with many via twitter that think speculators are the devil.  While I agree, as a speculator, that they are a part of the problem, I disagree that they drive price.  Instead, speculators only carry the momentum that is already pushed upon it by outside factors.  I am excited to point out the latest example of speculators being neutral when it comes to price.  Natural Gas is a commodity that is played just like oil.  There are a hundred different ways to play this commodity, but the most important point is that it is at multi-year lows.  Has demand gone down? No, but supply has gone up.  Due to fracking (no comment on the legitimacy of this process here) they are finding it under every rock in the U.S.  I exaggerate this on purpose.  Because the notion that it is everywhere is speculation.  Speculators are getting out of the trade because of an assumed over-supply.  They are correct!  This lowers the price to unheard of levels.  It is almost a 1/3 the price is was in 2010.  Where are the Senators now?  Why aren’t they out congratulating us?..  Hypocrites!

The major difference between Natural Gas and Gas at the pumps is that there are more factors for gas at the pump.  When it comes to gas, we are far more subject to feuding countries that supply it, and profit lines of major refiners here in the U.S.  Remember that it is Oil that is speculated, not the price of gas at the pump.  Big oil companies are profiting huge on the difference between the price of oil per barrel and what they can get at the pump.  Here is what I mean: Last April price of light sweet crude was $125 per barrel and oil companies were still able to make a good profit at $3.25 per gallon.  Now that oil is only $103 per barrel, they are able to charge over $4.10 at the pumps.  This isn’t speculation, but profit.

The GOP Conspiracy 1

Before I begin, I must be very clear that I am not a conspiracy theorist kind of guy nor an anti-Republican!  Therefore, it is an internal struggle to put this out there, but after several months of introspection I feel it is time.  The Republican Party seems to have conspired to keep Buddy Roemer out of the race for president.  He would never come out and say it because it opens him up for an all out attack from the party.  He would then have an even smaller chance to win an election.

What are the facts?

Buddy Roemer has all the experience you would want for a commander-in-chief.  At Harvard, he earned a BS in Economics and later an MBA in Finance.  From 1981 to 1988 he served as a Congressman.  From 1988 to 1992 he served as Louisiana’s Governor.  While there he cut the unemployment rate in half, reformed their campaign finance laws, and balanced the state’s budget.  I don’t mention this to get readers to vote for him, but to show how qualified he is to have been a candidate.  The problem isn’t what he has done, it is what he hasn’t: He has never accepted Super PAC, or special interest money.  Matter of fact, this has been his platform to get elected.  The fact that he doesn’t accept this money makes him an enemy of the state, if you will.

Imagine running Buddy out there when his platform of campaign finance reform and getting SuperPAC’s out of politics could make your party look bad, as a whole.  Fox News network, a GOP slanted news network, hasn’t even hinted that Buddy Roemer exists.  He was left out of all debates.  Why you might ask?  At first they told him he wouldn’t be allowed in the debates until he officially signed on as a candidate.  That makes perfect sense until you realize that several others hadn’t that they allowed in debates.  So, Buddy officially announces his running.  Then they told him that he had to have at least 2% of the votes of a given state to qualify.  Again, you might think that this is a fair request.  We cannot have everybody and their brother in a debate, but you have to know that when they required this from Buddy, John Huntsman, Michelle Bachmann, and Rick Perry didn’t have 2% yet they were invited into these debates.  Despite the hypocrisy of the situation, Buddy attained the 2%.  Then they said he had to have 5% of the votes.  At this time only Perry and Bachmann didn’t have the 4% but they were allowed in the debates.  Matter of fact, Buddy was ahead of both of them in the polls.  You still saw no mention of his existence on Fox News and he wasn’t allowed into the debates.  Buddy Roemer was working hard to get the 4%, and then they dropped the bomb.  They told him that he had to have a minimum amount of money raised for his campaign to get in the debates that was far beyond what he had raised to that point.  This, they knew, went directly against his platform.  He will not accept more than $100 per campaign donation.

As a result, Buddy Roemer has dropped out of the GOP race and decided to run as an Independent via the American’s Elect process.  Although I’m voting for Governor Roemer and love his platform of Campaign Finance Reform, this is not my point.  I hate the fact that politics has come to this.  Republicans snubbed one of their own because he was a threat to their pocket-book.  Democrats would have done the same thing if the situation was reversed.  It is a bi-partisan problem.  They will do anything they can to “keep the money in.”  This is why we, as a Republic, have to fight our own apathy and do something about it.  We have to support someone like Buddy.  Even if you don’t plan on voting for him, you should want a man like him in upcoming presidential debates.  His take on money in government shouldn’t be silenced or big corporations will continue to own our democracy.  We have to get the money out, and supporting people like Buddy is a way of going about it.

 

 

 

Apathy vs. misdirection: Winner kills the Republic 1

Misdirection is a form of deception in which the attention of an audience is focused on one thing in order to distract its attention from another.  Apathy is a lack of enthusiasm or energy, lack of interest in anything, or the absence of any wish to do anything.

You have political ADD, prove me wrong and read the entire article.

I was watching a GOP debate in Florida a few months back.  Newt Gingrich had been taking heat from Mitt Romney because of his payments from Freddie Mac for his “historian” expertise.  Mitt was calling him out as an unregistered lobbyist without using the words.  Being that they were in Florida made it extremely poignant because of their high foreclosure rate.  Many people in the audience and in the state are/were profoundly affected by the economic crisis and inclined to hate big banks such as Freddie Mac.  Newt, came prepared, so he thought.  He attacked back.  Gingrich said Romney had personal holdings in “a part of Goldman Sachs that was explicitly foreclosing on Floridians.” He did; it’s called a blind trust. A blind trust is  a trust managed by third-party: a legal arrangement in which a trustee manages funds for the benefit of somebody who has no knowledge of the specific management actions taken by the trustee.  Assuming Newt had done his homework, he already knew this.

Why do I even point this out? It is a game of misdirection.  Government officials of all types are pointing out flaws on the other side to distract us from the big picture.  Democrats are turning the Treyvon Martin shooting into a political debate.  It shouldn’t be a debate of Republican versus Democrat.  It should simply be about convicting a murderer.  Republicans are doing everything in their power to bring down “Obama Care.”  They have turned it into a life-style choice.  Instead of the benefits of this program, they are looking at the fact that traditional medicare generally covers some sort of birth control.  “Why should I have to pay for this person’s sex-life?”  It shouldn’t be a question about paying for a sex-life, but instead about the logistics of paying for a nationwide health plan.  Debate that to death instead of trying to distract us from real issues like the fact that millions are without.  They have a very good argument when it comes to funding it, why not stick to that?  It’s not sexy enough!  They have to have multiple bullets in their distraction roulette game in the hope that one of them will hit their mark.  Democrats have, in turn, turned the Republican raised issue about paying for someone elses birth control with tax money into a “war on women.”  It is a beautiful spin making Republicans look rather sexist.  No matter how you look at it, it is a spin game.  Everything is to distract us from issues they don’t want in the headlines.

The issue that neither Republicans or Democrats want to focus on is campaign finance reform.  What?  You might say that is a huge leap.  You’re right, but hear me out for a moment.  Nothing in government is left untouched by the almighty dollar.  It is campaign dollars that push, manipulate, stall, and even write legislation.  The amount of money it takes to win an election these days is crazy, and it is getting crazier!  To keep their jobs, and their standing within their respective political parties is pushing politicians to continually fundraise.  Literally, they spend 30-60% of their time trying to put money in the war chest.  If you think that campaign donors expect nothing for their money, you are sadly mistaken.  Just looking at earmarks, there are hundreds of examples where donors are getting earmarks.  Matter of fact, I find it hard to find where an earmark didn’t benefit a campaign donor, or someone who spent millions lobbying and the lobbyist contributed to an earmarks sponsor.

If you think it is just earmarks just look at Greg Walden, Republican Congressman, who just introduced the Federal Communications Commission Process Reform Act of 2012.  This act would significantly reduce the FCC’s ability to govern big media companies.  He receives hundreds of thousands of dollars from the very media companies that would benefit from this legislation.

Here is where the apathy comes in.  Your eyes have probably rolled back into your head and I’ve lost your attention.  I was talking to a buddy of mine about this stuff the other day and he said, “that’s just business as usual.”  It killed me! It is only business as usual because we allow it to happen.  We allow them to distract us with topics unrelated to their pay for play government.  We didn’t do this, but it is our job to collectively stand up and say no.  It isn’t ok to sell legislation to your biggest campaign donors.  We need to take our ADD medicine and stay on point.  We need campaign finance reform more importantly than any thing else.  Once real reform is done, we can focus on other important issues.  That way they are not tainted with corporate dollars.

 

Newt’s Super PAC “uncoordinated” Reply

There are several different kinds of PAC’s (political action committee).  You have your connected PAC, un-connected PAC, Super PAC, and Leadership PAC’s.  They all boil down to one thing: raising and then throwing money at a particular issue or political campaign.  For the purposes of this article, I will focus on the campaign type of PAC.  In theory they are an avenue for people of like mind to support their favorite runner in a campaign.  The thought behind this is that it is a form of free speech.  “By donating my money to this Super PAC that supports (insert potential candidate here) I am voicing my support for him or her.”  Leadership PAC’s are very similar but they allow for spending on “non campaign costs” and the party or elected official can start this up themselves.  They can spend said money on traveling, paying administration staff, and setting up the party for which they fundraise.  So, a presidential runner might have a leadership pack to pay for everything not directly related to campaigning and a Super PAC that pays for all advertising.  The major difference is that they are not supposed to coordinate with their Super PAC.

Lets examine the idea of “coordination.” The Webster’s dictionary defines “coordination” as 1. the act of coordinating, 2. the harmonious functioning of parts for effective results.  So to put it in political terms.  A politician is not allowed to speak with his Super PAC to achieve a common goal of ultimately winning an election.  Let’s take that a step further.  Would showing up to a Super PAC fundraiser be coordination?  As the law is defined, it is.  Also, have you ever heard the end of a political commercial where they say something along the lines of, “PAID FOR BY WINNING OUR FUTURE, WHICH IS RESPONSIBLE FOR THE CONTENTS OF THIS MESSAGE, NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE’S COMMITTEE. WWW.WINNINGOURFUTURE.COM.” This is at the end of a commercial attacking Mitt Romney for his Bain Capitol involvement.  The committee is supporting Newt Gingrich by attacking Romney.  It is their “free speech.”  It is run by Becky Burkett and Ricky Tyler. Tyler is his former Press Secretary and Becky Burkett was his Chief Development officer for his 527 called American Solutions for Winning our Future. 527’s aren’t allowed to expressly campaign for one candidate or against another.  Weird how their names are virtually identical.  In the above picture you will see Newt with his staff.  Two feet behind him is Ricky Tyler, but they are NOT coordinating.  That would be absolutely wrong, not to say illegal.  I would never imply that Newt’s staff includes a manager of his Super PAC.  I could be held liable for slander so I will not imply that he would do such a thing.  I’m sure that Tyler just happened to walk into Newt’s staff office accidentally.  While there, he didn’t speak to Newt about where his campaign was going or what messages he was trying to get across.  They certainly didn’t discuss that they should put out more commercials attacking Mitt Romney about Bain Capitol.  Again, that would be illegal and unethical.

What am I getting at here?  Super PAC’s are simply an avenue to dump unlimited amounts of money on a campaign.  There is no way of proving coordination unless we tap their phones.  Is Newt any worse than the other candidates?  No, he is playing the game in front of him.  It’s time to change the game.  The only free speech is that coming from the candidates.  The only difference is that they can get untapped donations to voice their political agenda.  You might say, so what… It’s free speech.  Is it really?  Understand that campaign donors are being rewarded for their donations.  As these donations get bigger, so do the favors they expect in return.  Just look at what donations of $2500 to $5000 are getting donors: http://thelobbyisteffect.com/2012/02/28/earmarks-are-a-microcosm-of-how-government-works/   Casino owner Sheldon Adelson has donated untold millions towards Gingrich’s election bid.  Does anyone really think he wants nothing in return? It goes the same for all the Presidential candidates.  Our government is for sale and the price is only getting bigger.  Money is NOT speech.

What if OWS had a single goal? Reply

Protests used to mean something.  We would protest Vietnam, equal rights, and equal liberties. I think that OWS peeps are onto something.  Just as our forefathering protestors before us, we have real issues at the heart of this movement.  Because these issues are not as overt as a sign outside a restroom door saying, “whites only” it doesn’t mean they aren’t extremely important.  The difference is that our government no longer has our best interests at heart.  They are far more concerned about justifying the huge donation they got from Corporation X.  They are in debt to their campaign donors.  It is dividing our country.

When Occupy Wall Street first began, I immediately thought of them as misguided.  Why? Because they are protesting the rich in general.  What good is that?  I’m not mad at my neighbor because he has more money than I do!  Just the same, I’m not mad at the stock broker on Wall Street if he is successful enough to drive a Lamborghini.  Who we should be mad at is our elected officials for allowing our country to be bought off.  Heck, they didn’t just allow it, they encouraged it.  They paved the way for eliminating the Glass-Steagall Act, increased the potency of Super PAC’s, forced lenders to lend to unworthy candidates, etc. etc.   In the never ending quest for campaign funding, they have sold our Republic’s soul.

I understand the frustrations of Occupiers, I just wish they focused their attention on the “fix.”  If OWS decided they wanted real change, they can force it.  If every occupy movement started communicating with each other, they could come up with common goals.  They all agree that money has corrupted our system, so why not take up campaign finance reform.  If they were to put together a piece of legislation and bring it to a Congressman/Senator that agrees with them, they could use their vast voting leverage to push it through congress.  They could call on media to help spread a single message and reach every single state.  The power of Twitter and Facebook is at their finger tips to help get this message across.

My message to you Occupiers: Stop talking about what is wrong, focus on a goal, coordinate your voting leverage, and try to get legislation into effect that “fixes” the issues.