Michael Fitzsimmons

The Economics of Political Spin

as i have written before, obama is just another bush. the US has two big problems:

1) dependence on foreign oil
2) fiat money created, controlled, and distributed by a very small group of well-connected people in complete secrecy with no congressional oversight.

obama has done nothing about either and certainly neither did bush.

when obama appointed shapiro ("dear friend" of madoff), i realized nothing would change (and wrote about it on SA). the only real option we had was ron paul, who understands the ponzi scheme that bernanke (and greenspan b4 him) is in control of: printing fiat money in secrecy with no congressional oversight, giving it to the inner circle buddies (blankfein, dimon, benmosche, etc. etc.) while the "pay czar" feinberg makes sure all these "executives" get as much as possible but not as much as last year to make it look good. the whole thing stinks. obama is nothing but bush warmed over (albeit much smarter and a better speaker). but what we have is fascism pure and simple, and the people in charge are the people who should have more first hand experience in fascism than anyone else....(hint hint). but you can't talk about it without being labelled a bigot. no one will debate you on specifics, because the facts speak for themselves. hell, i couldn't even get my ron paul book review published on Seeking Alpha - that's just more evidence supporting my position on this matter.

so, what do i think about obama and bush? they're both the same and in cahoots with the whole scheme. meanwhile, the unproductive wars continue being funded by the printing presses and more debasing of the currency. just wait until the iran thing heats up, and you know it will, cause those in charge certainly see iran as a big threat (and besides, they have a bit of oil...).

as ron paul says, the US has turned into a welfare-warfare nation based on the unsustainable printing of fiat money by a very small group of bureaucrats who have taken over US economic, monetary, and military policy. there's been no "change" with obama. if anything, all he is doing is continuing and expanding failed bush policy. if your comments were sarcastic vote of confidence in mccann/palin, pah-leeze. there is no difference between republicans and democrats. the two party system is just a ruse to keep voters distracted from what is really going on.

i wish i had my vote back for ron paul. most the rest of em are all paid off and "playing the game". until i read "end the fed", i didn't put it all together. now i have, and now i understand why congress doesn't support natural gas transportation - because it would mean freedom, and a strong middle class. and that is the last thing fascists want.

Why Exxon Should Significantly Increase its Dividend

jdubrox - while you bring up many valid points, some of them actually support my argument that XOM should increase its dividend. the fact that XOM could take over the largest producer of natural gas in the US with an all stock transaction proves they don't need such a large war chest of cash and should return some of it to investors via the dividend. meantime, the approximately $20 billion shaved off of XOM's market value since the XTO deal was announced means investors are looking elsewhere and who can blame them? sure, XOM's efficiencies will keep them in the lead in terms of cash flow and net income, but what good is all that efficiency of performance if the shareholders cannot participate in the rewards via a decent dividends? in this day when CD's are yielding 1% and money markets 0.01%, investors are looking for yield. instead, XOM continues to reward its management with huge salaries and pensions and stock awards while smaller oil and gas companies' management runs rings around them. both BP and CVX pay much higher dividends than XOM and both companies are increasing oil production at a much faster pace than is XOM. further, while XOM did not decline as much as other oil companies during the "crisis", it is down what, -14% YTD in 2009 while the rest of the energy patch has seen huge gains (VGENX is up what, 35%?)! part of this has to do with XOM's huge investment in Qatar nat gas which i am sure was based on their (wrong) idea of shipping LNG to america which is obviously no longer needed. so, they buy XTO in hopes of pushing up nat gas prices to leverage their huge investments in Qatar. meanwhile, we hear absolutely nothing from the company in support of natural gas transportation in America! instead, we get silly commercials about algae(!?) and even one commercial where some XOM "scientist" or "engineer" tells us that "much of the natural gas has CO2 in it". what a ridiculous statement and commercial! do they know how idiotic that commercial appears to people with knowledge about CO2 content in fossil fuels? it was designed to leave the (uninformed) viewer thinking, wow, natural gas has CO2 and it's a big problem and XOM is working on it. when, in reality, any thinking person knows natural gas is by far the cleanest of the fossil fuels with 30% less CO2 than XOM's gasoline, 50% less CO2 than coal, and 100% less of the toxic particulates of both gasoline and coal. and don't even get me started on the friggin algae distraction - pouring money into algae research while natural gas is abundant and cheap and clean and NG transportation technology is ready today, needs no research, and would help solve America's biggest economic problem (aside from the stranglehold bernanke and friends have on the printing and distribution of U.S. dollar bills as well as economic "policy") which is foreign oil imports. if XOM would support nat gas transportation in the US, and the US reduced foreign oil imports, you'd see the US economy take off and prosper and XOM would be in the catbird seat to profit from it. but no, they dont support nat gas transportation, and they don't pay a decent dividend, and instead continue to reward inept management with huge salaries, pensions, and stock rewards. nope, i stand by this article: XOM needs to:

1) increase the dividends
2) support nat gas transportation
3) slim down its bloated management and reduce the outlandish salaries and pensions

otherwise stocks like BP, CVX, and even COP are going to outperform XOM in the future in terms of stock price appreciation.

The Betting Line on Bernanke

not only should bernanke not be reaapointed, but congress and the american people should solidly support ron paul's legislation to audit the Fed. anyone who reads pauls "End the Fed" book will walk away wondering how in the world congress ever allowed a so-called "free market capitalistic" economic system to be dominated by an unconstitutional entity like the Federal Reserve. they secretly and corruptly determine monetary policy and monopolize the money supply and credit. it's economic central planning at its and not only penalizes the middle class while enriching the well connected, but also erodes freedom and liberty for everyone. the Fed should be abolished and we should get back to a gold and silver currency - just like the U.S. Constitution requires. Greenspan and Bernanke should not be idolized - they should be feared and despised.

Book Review: End the Fed by Ron Paul

Dopamine: after thinking about it further (my request for more details i mean), i have come to agree with you. first things first - work for an audit of the Fed. once americans (and hopefully even Congress) sees what the Fed has been up to, i think the movement will gain momentum. in the big picture, the change is fairly simple: go back to a gold and silver standard. however, the devil will be in the details, and the first place to start is to simply stop printing more dollars. wrt paul's demeanor, i was particularly impressed with him the time he was questioning bernanke and bernanke was rolling his eyes and snickering as though paul was some kind of buffoon. paul simply kept questioning him and when it was over, any thnking person knew which of the two was really the buffoon. the situation kind of reminds me of what they did to jim garrison (new orleans DA) after he brought a court case up wrt JFK's assassination. the press and government did everything they could to paint garrison as mentally unbalanced and a whacked. but garrison was a true patriot and a defender of real freedom. same with ron paul.

High Gold Prices: It's the Oil, Stupid

allforone: ok, let's look at those sources of oil: mexico's output is declining rapidly, and canada digs their oil out of the ground, boils it in water, then sends a heavy crude to the US to refine. venezuela? don't get me started. however, this misses the bigger point: oil is a global market, so the rise in the price of oil due to america's consumption (25% of the entire world's oil supply) pushes up prices for ALL producers. so, saudi, iran, iraq, libya, etc. - all the countries inhabited by the "turban heads" you referred to, will (and have been...) prospering greatly from US energy "policy". and this is what is so ironic..the Jewish lobby has such a great influence on US monetary, fiscal, and military policy - but those policies have done nothing but strengthen all of Israel's enemies. for instance iran doesn't look likely to back down and china and russia have alot of economic ties with iran and most likely will veto any UN action. see what i mean? with respect to natural gas: the US has it! lots of it! did you read my article on how much the US has? adopting natural gas transportation won't create "another problem" - it solves the imported oil crisis that is bankrupting america and causing us to lose young men and women in wrong-headed oil wars. all the money going to pay for natural gas would STAY IN THE COUNTRY. people in utah and OK are paying about half to fill up their cars and trucks with CNG versus gasoline derived from foreign oil. the US is swimming in natural gas, and if we build the alaska/lower-48 pipeline and buildout the lower-48 infrastructure, we can power all home heating, all industrial, swap out ALL coal plants to nat gas, and power 50% of the cars and trucks in the US ... ALL this....for the next 60 years (minimum), probably even longer. even if the price were to go up (and i agree it would), the MONEY STAYS HERE. but remember too:

1) the price of OIL is going to skyrocket (remember $145/barrel??)
2) all the $ the US spends on imported oil LEAVES THE COUNTRY

as far as your bill goes, i use a wood stove which i highly recommend if you can attain wood to fuel it.

thatGuy: yes, i am well aware of natural gas well depletion rates. but better to drill for something you have (natural gas) than something you don't have (oil). the US is swimming in nat gas, NOT oil (which is why we import 65% of our petroleum). speaking of depletion rates, the huge oil discoveries you spoke about will be hard pressed to simply keep pace with the depletion rates of prudoe bay, the north sea, mexico and elsewhere. note also that the biggest discoveries (like brazil for instance, which is why i love Petrobras) are not in the US. what i am saying is the US is going bankrupt buying foreign oil so we need to get off OIL and get ON what we have plenty of: natural gas.

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Why do americans not want to refuel their cars and trucks in their garage overnight with American produced, cheap, and clean natural gas???
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Why are Americans so quick to want to fight oil wars and complain about terrorists while supporting energy policies that do nothing but enrich these same people they (supposedly) despise???
**********************...

High Gold Prices: It's the Oil, Stupid

allforone: hey, i am not an obama fan either, and i think i said in the article there is a good possibility he will be the 2nd worse president (after bush of course, who will probably always hold the "honor" of THE worst). bush inherited a balanced budget from clinton, and he doubled the debt in 8 yrs - and that doesn't even count the cost of the unconsitutional war in iraq because that was "off budget" so we don't even know the real numbers. especially since alot of money was (unconstitutionally) funneled to private contractors to fight the war. obama inherited the worst US economy since the great depression thanks to bush's idiotic energy, economic, and foreign policies. so, if you are going to criticize obama, you first have to start with bush. but see, the so-called "conservatives" held a blind eye to bush..."conservatives" are supposed to be for small gov, smart foreign policy, balanced budgets, and freedom and individual rights. for some reason, they forgot these policies for 8 years....

any energy policy that keeps us addicted to oil is NOT an energy policy. i am all for drilling in alaska, but i'd rather see us use natural gas for transportation, and alaska already has huge nat gas ready to send to the US. as far as giving money to millionaires and billonaires and crack whores, well, i'd rather not give ANY of my tax money to any of them! if you want to, that's your opinion. i think it's absolutely insane (not to mention, again, unconstitutional). ever noticed how many times i used the term "unconstitutional" to describe the bush era?

btw, it's "turban" (as in head dress) not "turbine" (as in gas generator). that said, who do you think reaped the most rewards from bush's idiotic energy policies and oil wars? you guessed it, the "turban heads" we are supposed to be fighting a war of terror against! it was all a world of doublespeak under bush. so, by all means enjoy your motorcycles and other toys bush supposedly provided for you.

bobbybutte: sure, markets correct. the key is to get the trend right. oil has corrected, but despite all the talk of "low" oil prices, it's still much much higher than 10 years ago. some with gold. things go up and down, but strategic things trend higher with higher highs and higher lows. i think gold has a long, long way to go. could i be wrong? of course, no one knows for sure.

User790: still haven't found the time to read up on this, but i can say my gut says "why?" when we have all the cheap and clean natural gas we need with distribution directly to 60,000,000 homes (where 130,000,000 cars and trucks could be refueled over night while their owners sleep) in every metropolitan city in the country.

ripskii: the large number of comments are probably due to me being stubborn and argumentative. wrt nuclear, i believe hefner says it's probably inevitable we will need it, but i, like him, would much rather see natural gas generation: it's cheaper and cleaner and there isn't the waste and radiation and terror target issues.

High Gold Prices: It's the Oil, Stupid

roy piper: those thinking gold is causing oil to rise are simply not looking at the evidence. in the 70's it was oil that rose *first* then gold. again, today, we are now seeing gold rise to new highs *after* oil went to $145/barrel. you're putting the cart before the horse.

hidflect: all i am saying is:
1) iran knows the US wants the oil
2) iran has US forces on both the eastern & western borders
3) the US has a history of invading arab nations for energy reasons

now, given those realities, why on earth would the leaders of iran say the things they have said regarding israel to give the US (and israel) reasons to invade? like i said, it's simply shooting themselves in the foot. everytime the issue of nuclear capability comes up, the leaders in the world (not just the US and israel) bring up the israeli rhetoric that iran's leaders have used in the past to keep themselves in power - that is, that rhetoric is used to gain support of the iranian population (who obviously are against the power of the "special relationship"). in the end, all it does is give the US another reason to invade and we all know OIL is the main reason. just to be clear here: i think U.S. foreign policy is, has been, and probably will continue to be abysmal. this is a direct reflection of the lack of a strategic energy policy and the U.S.'s dependence on foreign oil.

allforone: and for the doubling of the U.S. debt in 8 years (i.e. selling us out to china), and for the greatest loss of liberties in the 200 yr history of the country, and for the "patriot act", and for the unconstitutional oil wars, and for $145/barrel oil, and for the lack of an energy policy, and for fear mongering, and for the devaluation of the dollar, and for the rise or the religious right and the NON-seperation of church and state, and for using your tax money to give millonaire and billionaire fraudsters "bonus" money as a reward for their financial fraud and driving their companies bankrupt, and for the biggest economic contraction since the great depression, etc. etc. all that said, just so that you realize i am even handed, obama appears to be continuing and expanding most of bush's policies. but this isn't a white or black issue as you allude, this is the political powers against the middle class. that's the problem. congress and the president no longer make legislation benefitting the majority of americans, they make it for the industries that fill their pockets with money. this is called fascism.

High Gold Prices: It's the Oil, Stupid

storm999: ron paul's legislation does not enable Congress to make monetary policy (although it is true that the U.S. Constitution does, while there is not mention of a "Fed" which was created unconstitutionally by the bankers - so, no surprise who got the bailout money huh?). no sir, paul's legislation wants to *audit* the Fed - that is force the Fed to explain and account for: who got the money, how much, and why? if you are scared of this transparency, that in itself proves there is a problem and means paul's legislation is not only necessary, but vital.

Davewmart: here's the aricle on nat gas reserves. information since this article was written only serve to increase the nat gas reserves in the US (and the world):
seekingalpha.com/artic...

rick12345: unfortunately diplomacy went out the door when bush walked through it. the "special" US relationship with israeli almost assures antagonistic policies toward arab countries. unfortunately, for the US that's where the oil is and why the "special" relationship not only assures israel's eventual demise, but is so strategically flawed wrt US economic and national security perspectives. this is why truman was so hesitant to begin the "special relationship" to support the jewish state and why he and the state dept boys knew it was bad policy to support the state. unfortunately, a jewish friend and a rabbi talked truman into it. great story about this in david mccullough's pulitzer price winning book "Truman". despite all the good truman did (also explained in the book), this was a critical error in judgement and history has proven his state department was correct in their long-term analysis.

Northstar10000: the "fix" you allude to was put in long before obama came to office. he is merely continuing and expanding it rather than inacting the "change" he promised.

WayneS: i am not so sure the average Nigerian would agree with your post.

High Gold Prices: It's the Oil, Stupid

jarco: you must have been leaving a msg same time as me, so i missed you last go round. if ron paul has an "odor" as you suggest, i want to inhale deeply and smell it all. he is the *only* guy who has had the guts in the oversight hearings to call out both greenspan and bernanke for their failed Fed policies. it is PAUL who has written the legislation calling for the Fed to be audited so americans can find out where the money is going and exactly how much. and you might think his following is small, but have you checked out the number of cosponsors this bill has gained recently? further, paul has consistently called out the unconstitionality of not only the Fed's existance and paper money, but also the war in iraq. he has also been a shining light in calling for the Congress to bring the troops home and spend the money on schools, hospitals, roads, and infrastructure in this country as opposed to iraq, afghanistan and the other far flung places on the globe. i wish the hell i had my obama vote back, because that vote turned out to be a waste and a continuation of failed bush policies. as far as the bailouts, the US gov taking my (and all middle class taxpayer's money) and bailing out the richest fraudsters was just wrong (and is, indeed, fascism at the highest level possible). further, you say "NG distribution is meager at best", and this is also grossly inaccurate. in fact, the natural gas pipeline system in america goes to 60,000,000 homes where 130,000,000 cars and trucks could be refueled every night while their owners sleep!! the natural gas distribution system in the US, combined with our abundant reserves is the #1 STRATEGIC ADVANTAGE the U.S. has over every other country on Earth! if the chinese had our natural gas infrastructure, they would be NGV crazy and their officials have said so. but they don't have the natural gas pipeline distribution we have and can only wish they did! wrt the energy plan you said is lacking, there is a link in the article to my energy plan. it is a strategic long-term comprehensive energy policy. please read, and leave a comment! i'll even make it easy for you:
thefitzman.blogspot.co...
also disagree that nuclear should replace coal - to expensive and takes too long. all coal plants should be replaced with natural gas generation ASAP. nukes should be on the drawing board for the future. replace the coal with nat gas now.

GMaximus: gold is rising because oil prices already rose. please look at the chart. the last oil crisis was in the 1970's and look when gold made it's all time highs (right afterward as pointed out in the article). in 2008, oil went to $145/barrel and now gold is going to skyrocket in response. wrt currency, the *reason* the currency is being devalued is *because of* the economic dislocations due to $145/barrel *imported* oil. all the people involved in financial "services" had to create fraudulent ways to "earn" money because the US is making anything any more, and we have a huge trade deficit whose biggest component is, you guessed it, OIL. so, everything is driven by oil: oil spikes, then gold (not the other way around). so, it is OIL that is driving gold prices and US currency devaluation since the US imports 65% of its oil and cannot possible sustain that without printing more paper money. your post and the others along the same line have not changed my opinion on this matter, and i believe the very simple fact that oil spike first and gold follows proves i am correct.

FreeState: what is "PTB" please? wrt peeling the onion, we'd better peel it sooner rather than later or we'll have all the tears a chopped onion would give us without ever getting to actually eat the onion. for the Fed and Treasury to print money, put it on the backs of middle class taxpayer, and give it to their friends (who are all now buying gold and storing it outside the country) is about as bad as it could possibly get and must be stopped. thank god for ron paul and i support his efforts completely, and so should you if you are, indeed, a "free state yank". cause i am (originally from upstate NY)

High Gold Prices: It's the Oil, Stupid

Mahavishnu: well, president johnson eventually felt so horrible about the JFK ordeal...he eventually championed civil rights for black people and then couldn't bare to run again and dropped out of the election. his civil rights acts had the side effect of turning the "solid south" from democrats to republicans...the so called "conservative christian right". as we know after 8 years of bush, there is nothing "conservative" about them (including the deficits and idiotic foreign policy) and they are in fact radical....further..there is nothing "christian" about them either, but boy do they know how to use religion to accomplish their goals.

MarkDivy: i would challenge you right back: how much oil does the US defense dept use everyday? you'll be amazed how much that one dept of the US gov ranks on the list of top world consumers of oil. 2nd, what do you think the geopolitical risk premium due to US led oil wars is putting on the price of a barrel of oil? 3rd, what do you think the US defense dept bill is to secure, protect, and acquire US oil would be if the US gov actually did a thorough accounting of the cost? i'll somewhat answer that question by saying if the true cost were passed on to consumers, we'd being paying a helluva lot more for gasoline at the pump. the issue is similar to coal, if the true cost of health care and pollution due to using coal were passed on to the consumer, our electric bill would be MUCH higher. all this subsidation by the US government of oil and coal is at the detriment of natural gas: the real, cleanest, cheapest, most abundant fuel of all. it is absolutely insane energy, environmental, and foreign policy.

WayneS: well, we cannot get off foreign oil by using fuels that rely on it - this includes diesel and biofuels that require mixing with gasoline. wrt natural gas, there are simply NO studies proving that it is any more dangerous a transportation fuel than is gasoline. there are many countries (brazil, italy, pakistan) not to mention enlighted US states like Utah and Oklahoma that are succesfully using CNG in cars and trucks and it is SAFE (not to mention half the price of gasoline/diesel and much more environmentally friendly). please, don't fall victim to the scare tactics of big oil and coal.

boxed merlot: not sure i am following you...but plz realize i recommend both oil and gold as investments.

High Gold Prices: It's the Oil, Stupid

Mahavishnu: well, president johnson eventually felt so horrible about the JFK ordeal...he eventually championed civil rights for black people and then couldn't bare to run again and dropped out of the election. his civil rights acts had the side effect of turning the "solid south" from democrats to republicans...the so called "conservative christian right". as we know after 8 years of bush, there is nothing "conservative" about them (including the deficits and idiotic foreign policy) and they are in fact radical....further..there is nothing "christian" about them either, but boy do they know how to use religion to accomplish their goals.

MarkDivy: i would challenge you right back: how much oil does the US defense dept use everyday? you'll be amazed how much that one dept of the US gov ranks on the list of top world consumers of oil. 2nd, what do you think the geopolitical risk premium due to US led oil wars is putting on the price of a barrel of oil? 3rd, what do you think the US defense dept bill is to secure, protect, and acquire US oil would be if the US gov actually did a thorough accounting of the cost? i'll somewhat answer that question by saying if the true cost were passed on to consumers, we'd being paying a helluva lot more for gasoline at the pump. the issue is similar to coal, if the true cost of health care and pollution due to using coal were passed on to the consumer, our electric bill would be MUCH higher. all this subsidation by the US government of oil and coal is at the detriment of natural gas: the real, cleanest, cheapest, most abundant fuel of all. it is absolutely insane energy, environmental, and foreign policy.

WayneS: well, we cannot get off foreign oil by using fuels that rely on it - this includes diesel and biofuels that require mixing with gasoline. wrt natural gas, there are simply NO studies proving that it is any more dangerous a transportation fuel than is gasoline. there are many countries (brazil, italy, pakistan) not to mention enlighted US states like Utah and Oklahoma that are succesfully using CNG in cars and trucks and it is SAFE (not to mention half the price of gasoline/diesel and much more environmentally friendly). please, don't fall victim to the scare tactics of big oil and coal.

boxed merlot: not sure i am following you...but plz realize i recommend both oil and gold as investments.

High Gold Prices: It's the Oil, Stupid

WilliamDav: if the last 10 years has shown me anything, it's that the rule of law in the US is on very shaky ground. we had an unconstitutional and unwise war. we had the "patriot act". if the rule of law meant anything, bush would have been impeached in his first term. if we had the rule of law, we'd see many many people behind bars for financial fraud. yet, the big 3 ratings agencies are still rating aren't they? the Fed is still stealing money from middle class taxpayers. it's like the argument everyone makes that the geopolitical risks in other countries is so great, while at the ignoring the huge risks of living and breathing in the USA. but i digress, yes, i have some paper assets as well - mostly all oil since i am a firm believer (obviously) that oil is the most precious commodity of all (and the new world reserve currency!) and that worldwide oil production will not keep pace with worldwide demand given a "functioning" world economy (and the world economy is too built upon oil). but, i like my gold, and no its not under my mattress but buried down by a creek near an old tree where a raccoon protects it ;)

EconomicPh: and i maintain that the world runs on oil, not gold, and therefere gold is simply a reflection of the world's economic problems as oil causes distortions, ala the early 80's and now, both of which gold skyrocketed **after** oil. oil leads, gold follows. it's really very simple if you don't over analyze.

Davewmart: i have already written an article on natural gas reserves, please find and read. shale gas has changed the entire energy outlook. over the last decade, in spite of the fact that big oil was exploring for OIL, more natural GAS was found than oil (!). it's everywhere, it's abundant. XOM, the most conservative oil company on the planet, is ready to build a very expensive pipeline to bring alaskan nat gas to the lower48. why? because the nat gas is *abundant* cheap and clean. please read robert hefner's book "The GET" (i did a book review on this) and then get back to me. thx.

GL Turner: gov sachs is right! anyhow, you hit the nail on the head: natural gas is so abundant, and so cheap, and the pipeline distribution system in the US so mature and extensive, that the thought of americans filling up at home with nat gas at $1.50 GGE would be real FREEDOM, because the gov or big oil cannot control the price! the top 5 nat gas producers account for less than 10% of US nat gas production. that is, it is dominated by small independent producers with royalties being paid to thousands of farmers and landowners. again, this is why nat gas transortation is a symbol of american freedom and democracy...and that is what scares the government...REAL freedom.

ripski: yup, agree nukes are needed. that said, i am skeptical of a model of transportation built on fully electric cars with huge battery packs, which will be expensive and use huge amounts of resources to make and service. i like nat gas and hydrogen as transportation fuel. as hefner so brilliantly puts it, we need to move beyond dirty and expensive solid and liquid fuels of the 20th century (which i think include batteries..) and onto the cheap and clean gaseous fuels of the 21st century (natural gas, hydrogen, wind, and solar). obviously i think the priority in the short term (next couple decades) should be on natural gas as a bridge to hydrogen and while we're building out solar and wind.

tempo dulu: you're certainly entitled to your opinion, even if it's wrong. the "mathematical basis" you seek is the chart, that shows how gold prices pop **after** oil prices pop. that is called cause and effect, and that is what the article is about. the world economy depends on oil, not gold. that is why gold *follows* oil.

tructor: but they are still printing money and spending it...so why not spend it on nat gas transportation? to me, it's a question of acknowledging the problem and funneling the money toward it. but yeah, i got your point, and agree.

auto44: the coal lobby is responsible for alot of very bad policy. however, the coal lobby is not responsible for the current rise in gold prices, that's following the oil price. that said, i agree the electrical transmission grid needs updating!

High Gold Prices: It's the Oil, Stupid

whippet: however, both gold and oil are priced in US dollars and the US must have oil for its economy to function. therefore, not only is the fed printing money to give away to its buddies, but also to pay for all the imported oil we need day after day, week after week, month after month. so it is OIL driving GOLD, not the other way around. the american people and economy could function fine without gold, but try driving to work on the strength of your gold earrings. oil is THE most precious commodity on Earth. instead of acknowledging that, and doing something about it, american policymakers ignore it or fight oil wars to obtain it. therefore, gold is going much much higher in US dollar terms because the nation is no closer to reducing foreign oil imports post $145/barrel as it was when oil was $30/barrel. we live in an ignorant country.

High Gold Prices: It's the Oil, Stupid

buddhabill: well said!

High Gold Prices: It's the Oil, Stupid

wow! some excellent posts this time! it reminds me of my early days on SA! people are thinking again - wonderful give and take! my turn:

ToddPeterson: suppose your AK47 gets you through a currency collapse and you manage to survive on the other side of it. how will you secure your net worth going forward? i maintain in such a scenario gold, silver, and precious metals have historically been the way, and will continue to be the way.

Davewmart: well, i suppose we just disagree: natural gas reserves in the lower48 and alaska ARE for real. so is the natural gas in qatar, australia, brazil, and around the world. wrt making ammonia from natural gas, the question is why bother? since natural gas can power transportation and electrical generation cleanly and cheaply, and since the US has abundant supply, all we need do is simply USE IT.

MelShapiro: awesome post! and you're right, in order to get the "new world order" that bush#1 spoke of and the "one world currency" that the world is clamoring for (and you can bet skull and bones is in on all that...), they first must destroy the american system and the american democracy and the american spirit. that is what bush#2 started and what obama is continuing. that is why i point to an NGV in the home garage being refueled there by a nat gas refueling appliance like the "phill" as a badge of American freedom and democracy. but see, that is exactly what the US gov does NOT want us to have: freedom of mobility and the ability to refuel at home with domestic natural gas. because if we had freedom to be mobile, and freedom from oil prices, the middle class would be STRONG, and they want us weak. anyhow, great post and thanks.

Tructor: how will they be paid for? just think how many cars and trucks could have been converted to NGVs for the cash for clunkers. just think of how many CNG refueling stations and home garage refueling appliances (the "phill") could have been bought for the bonus money the Fed gave to rich executives at AIG, BofA, ML, GS, etc. etc. etc. we could have had an entire natural gas infrastructure for the money the US has spent in Iraq with money left over. the money is there, the key is to force congress, our numbnut presidents, and our ridiculous federal reserve, energy, and treasury departments to acknowledge the foreign oil problem and adopt the solution to this crippling ailment: natural gas transportation.

longoil: thanks, i'll read the article when i have more time and research this issue further.

gravity404: i climb lots of mountains, and if you call being a patriotic american and trying to save the country and democracy by facing our problems head on "beating my head against the wall", then guilty as charged.

waf76: thanks for the compliments and for pointing out PBR's fuel station strategy in brazil - if only exxon, cvx, and cop in the US provided the same. however, i disagree that the US can wean itself off of foreign oil: we could cut 6-7 million barrels of oil a DAY out by simply converting half the cars and trucks over to run on CNG. as far as israel is concerned, i have written before how the "special relationship" will bring both countries down and almost assure the destruction of israel. it's a strategically flawed relationship in a number of ways. that said, have you ever taken a look at how many jewish people are in charge of US policy and also involved in the biggest financial frauds? greenspan, bernanke, shapiro, gensler, madoff, milken, lebowitz, it just goes on and on. i used to not understand why arab leaders called the US a "zionist regime", but now i understand. now, before all the anti-semitic comments come, this is just an obvious observation: that is, a group that makes up such a small percentage of americans have an overwhelming influence on policy and at the same time have oversight responsibilities over others who have close relationships. it's a very unhealthy situation and they are certainly doing a lousy job of making america strong...but, i must say, they are certainly good at enriching themselves...

davewmart: the natural gas is there (here) and everywhere. most all experts are now in agreement on that. the reason i want to shut down all the coal plants is not just CO2, it's the real problem with coal: the toxic heavy metal residue left over after burning coal and the fact that this crap and its particulates are in every lake, river, and creek in the US and now showing up in the water tables all over the country. we've destroyed the fresh water fish, and we are well on our way to destroying our fresh water supplies. it's idiotic to keep doing this when science and evidence is screaming not to. natural gas has 50% less CO2 than does coal, and 100% less toxic particulates (that is, there is no "fly-ash") left over from burning nat gas.

slamstocks: thanks. every time i hear "brilliant" i think of that guinness commercial that says "some guy had the idea to put six of these bottles together. brilliant!"

williamdav: but if there is a true currency crisis, will the paper assets you mention make it through to the other side? i wonder myself. that said, yeah, i own oil stocks - it's really the only thing left after gold and silverand precious metals (imho). oh, and yeah, some international stuff - nothing else here.

jimbo: thanks. both parties are failing america, and failing badly, and the two parties are interconnected at the navel. i believe they are intentionally weakening the US to bring about bush#1's "new world order" and a one world currency. the key to preventing this is by preserving our mobility using our abundant cheap and clean domestic fuel: natural gas. once we are dependent on oil rationing, the grand US "capitalistic democracy" experiment will be over. btw, biofuels in the US is a failed proposition: all they do is blow out food and water resources with terrible dislocations across those sectors. in the end, biofuels in the US are just an excuse to keep addicted to dirty and expensive 20th century liquid fuels instead of clean and cheap 21st century gaseous fuels.

EconomicPh: your theory is completely backwards because oil is the one strategically necessary commodity, not gold. the world economy must have oil to function, not gold. therefore it is OIL that is driving GOLD prices, not the reverse as you say. oil is burned when it is consumed, all gold ever produced is still around - that is yet another reason your theory is flawed and illogical.

kertch: i disagree with you. i think US/Israeli policy is disastrous for both countries and will lead to both countries paying a huge price for such ridiculous policies.

kertch (reply to todd): i agree with you on this post. all one has to do is look at what happened to britain when they lost being the world's reserve currency of choice and devalued. manufacturing fled as quickly as possible (as it now is in the US). that was a good post.

davewmart: yes, i like to use this analogy: let's say the US did not have a nuclear bomb and some other country "X" did. next, we find "X" invaded canada and mexico under false pretenses to steal their oil. now, what would the US do? we'd be fools not to develop a nuclear deterrent - just as iran is doing. it's all really very simple and it's all about oil.

rokjok777: oh, i give jimmy carter lots of credit (and not because he too went to georgia tech). he initiated *real* energy policy and the first meaty mpg fuel standards. and, as i said in a follow up post, despite every president since eisenhower's rhetoric, carter was the only one to reduce foreign oil imports, and that by 50%. but, the reason your post was so great was the very last sentence which i will repeat here:

"Rethink Perpetual War and rethink Big Oil and we'd have plenty of money for all of our other problems."

that said, we must remember that big oil is also big natural gas, and natural gas is the key to solving the foreign oil import problem.