Michael Fitzsimmons

The World's Revenge

optionsgirl: i just wanted to say that i am totally in agreement about most americans not knowing what is happening to them financially.

The World's Revenge

User142: counting my words?? why don't you actually do some *thinking* and write something worth reading.

options: nice rant :) i don't know where to begin...but the campers next door invited me over for a beer...so...maybe i will get back to this. that said, i am heading out of internet range for a week or two. i am sure all the "Users" on here will be glad to hear that!

The World's Revenge

User: you're all fluff - why don't you tell me *exactly* what i am wrong about instead of calling me a "liberal" and thinking you have actually said something. is it the US dollar drop i am wrong on? this is a fact that is easily verified. is it the deficits bush has run up that i am wrong on? this is also a fact easily verified. is it the performance of the S&P that i am wrong on? fact, easily verified. is it inflation? also a fact anyone with a brain knows, but unfortunately i cannot point to US gov statistics. so, User, *exactly* what is it that i am wrong about and what is so great about bush - please, tell me something of some substance. anyone can just throw stones...i did in kindergarten. grow up dude, be a man (or a woman?) and SAY something. wrt to iraqi oil, we WILL be pumping it out and would have been sooner if boy george had gone in with the number of troops his generals told him were needed. security has been the problem in case you are still on mars. that said, the oil contracts are going out to BP, XOM, TOT, CVX etc. etc and the US will soon be pumping what we went in for. thanks again for a real substantive comment (not).

optionsgirl: i do have some SLV buried in the backyard and i agree with you that it appears to be more undervalued than gold when taking into account the historical ratio between the two. that said, i hafta say that i am kind shocked that oil and inflation are what they are and gold is under $1000/oz. wrt MERKX, i hold it as a substitute for cash not really an "investment" per se. it's up what 5 or 6 % so far this year, which is better than a money market for sure.
btw, i take delivery of all precious metals - it makes no sense to have them in a bank vault or in london storage or whatever. if the #$%* really hits the fan and you need the gold to barter with, what good will it do ya in a bank vault? sorry you're having a bad day...i wonder sometimes where u work and what it is you do...don't expect you to answer on here...just curious is all.

wrt politics, apparently you have come to the same conclusion i have about bush - only i used to live in austin and knew he was a moron from when he was govenor (he was instrumental in the legislation that let enron become, well, enron). wrt obama, the man can think..and he will absolutely destroy mccain in debates. unfortunately, mccain has gone back on everything that used to be mccain and is now simply a clone of boy george. the bad news (for me anyhow) is that obama just doesn't seem to get energy, which as you know if you have been reading my poop is what i believe is the greatest threat to the US economy, security, and equity markets. obama has been wishy washy on nuclear, said he wants windfall profits taxes (i wrote on SA why this is ridiculous), and doesn't seem to want to drill. anyhow, i am, like kurt vonnegut, a man without a country. i am ashamed at what has happened to the US, ashamed of our government, and ashamed at the people for letting it all happen. all that said, today was a good day on the river for me and i busted some golden brown trout :) who are you going to vote for? isn't mccain simply going to follow the (now proven) failed economic policies of georgie boy?? can we afford another 4 years of that? if so, the S&P will be under 1000 again soon..it might be anyway!

The World's Revenge

dilittant: could not have said it better myself - thank you sir!

User: part of "einsteins" thesis of oil going to $145 (it hasn't hit $150 yet) is the "geopolitical risk" premium which the unilateral action the US took in iraq has placed on oil. add the supply/demand reality and the 50% drop in the US dollar your "conservative" leader's financial "leadership" has given us and you have your $145/barrel oil.

again: if you want to see my SOLUTIONS simply scroll up above and read my response to "golden". i have been writing about my SOLUTIONS to the bush derived financial and energy crisis on this site for months, so, don't mouth off about my lack of solutions simply because you are too damn lazy to read them. constructive criticism i don't mind (and in fact applaud). lazy republican ideologues that cannot admit or fail to see failed bush policies for what the are i have very little time for. thanks alot for your mindless comment of little substance.

The World's Revenge

Coelacanth: i couldn't care less about currencies?? do you think i don't care that all my US dollar savings and investments have been devalued by 50% since bush took over?? obviously you have not been a consistent reader of mine. btw, i am a republican...a REAL republican. if you don't think bush's political policies have affected your investments, you are living on mars. come back to earth, and reality.

greencheeks: not sure why his earlier comment was deleted. Fox??

captbob: please read my earlier response to golden about solutions, starting with my energy policy:
thefitzman.blogspot.co...
i have published my solutions on here many times. what are yours?

GMiki: hmmm....i don't believe i have ever supported Congress to run monetary policy. what i AM saying is that the current administration's policy appears to be simply to print more US dollars so we can continue to pay interest on the huge debt it has run up as well as to pay for the 65% of the oil we import. this is simply unsustainable, and we are seeing the effects (falling dollar, rising inflation, rising oil prices) now. that's all. we just need to kick these idiots out of office and start over. and, start over with an energy policy as the cornerstone of a new administration. here is such an energy policy:

thefitzman.blogspot.co...

The World's Revenge

thanks for all the comments. as usual, the author likes to jump in:

greencheeks: nice name but i am not comfortable with SDS and agree with FoxV's comments (see above) especially the last line.

DavyJ: true that.

mickel98: let me give you some non-emotional FACTS about your bush administration's financial policy's results:
1) an S&P 500 that has gone NO-where in 8 years
2) a US dollar that has dropped 50%
3) inflation that is raging so bad the gov has to lie about it to keep I-bond and COL adjustments down or the deficit would be larger
4) the biggest growth in US government EVER
5) an economy in ruins
6) a middle class that is quickly going extinct.

yeah boy, some prosperity these tax cuts for the super wealthy are giving us! with prosperity like this, why don't we just let them pay no taxes at all so we can end the US by 2010? btw, "engineering" alone is not going to fix the worldwide oil supply/demand problem going forward.

golden: what would i do? the most important issue facing the US, and the most direct threat to our national security, economy, and way of life is OIL. here is my solution to that problem:

thefitzman.blogspot.co...

bookmark this link, send it to your friends and your politicians. a sane energy policy is our only hope going forward. once the government controls how much gas we can use, and that is where we are headed by doing nothing, real "freedom" will be a thing of the past. this may explain why Congress has done nothing, but that is the cynic in me talking...

the next priority would be to bring back sanity to our financial house, which the republicans have quite simply wrecked. this means taxing and spending need to be balanced. this will require sacrifices, but to do nothing means we go the way of the weimer republic (notice they are no longer around...).

lastly, we must restore our foreign policy to a position of respect. we cannot afford the unilateral actions of the bush administration going forward. we pay economically for such brash bs. we need other countries just as they need us.

those 3 points would be a damn good start. the energy policy though is the cornerstone to restore US economic might. without it, we're quite simply toast as oil prices are going to continue headed upward, and the US dollar downward. it's simple economics, not ideology.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

barnburner: actually, vanguard is "precious metals AND mining" because i like steel almost as much as oil. so, i like the VGPMX (up over 20% so far this year) because i get exposure to gold, silver, platinum etc. etc along with the mining. also, they view coal as mining too, and some coal stock are really jamming. i hate friggin coal...refuse to buy the individual coal stocks...so, i guess this is my way fooling myself into having some coal. i fear the longer the US keeps from adopting a sane energy policy, the more coal will be a necessity - and the more mercury gets dumped in all my trout fishing waters :(

In Light of Peak Oil, Financial Diversification Is a Bad Idea

One more thing: the Fed cannot raise interest rates to fight inflation like Paul Volker did. This is because the US consumer is in debt up to his and her's eyeballs: credit card debt and upside down in their home and auto loans, with little or no savings to back it up. Therefore, the US dollar will continue to slide and, you guessed it, push oil prices up more in the US on a comparable basis, than country's with more sound monetary policies.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

mkreisal: i suppose it is possible they have information about a potential solution to the energy crisis that no one else (or at least not me) knows about. that said - why don't they come out with it? i mean berkshire's stock is down for the year and surely it is being negatively affected by the recessionary US economy and housing markets - after all, the are exposed to the consumer with their paint, bricks, and carpeting investments. Besides, I have heard Charlie Munger speak out about the difficulty of oil supply keeping up with worldwide oil demand. However, I have a simpler reason for believing they don't hold "secret" information: I believe Buffet has great love for his country and has immense integrity. If Buffet had secret information that could prevent the pain that the US citizens are feeling due to high energy prices, it would be an uncommonly unpatriotic move for him not to come public with it. Don't buy it.

Pangaea: it IS different: oil prices have doubled in the last year, and are up 6x over the last 10 years. meanwhile, the supply "cushion" that existed the last time we had an energy crisis (1970's) not longer exists. Therefore, it is different. Not to mention that fact that oil traded at a record $134 recently, the US treasury is for all intents and purposes bankrupt while simultaneously fighting two undeclared wars and giving tax breaks to the uber-wealthy. Man, if that's not different than the 1970's, I don't know what else to tell ya.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

cheeks: your coment about the super rich is interesting, because that assumes the currency the super rich hold is worth something. if civilizations fall, it won't matter how much paper money, or perhaps even gold, one has accumulated if the basics of food and transportation are not available. that is why i have contacted the foundations of bill gates, warren buffet, the google guys, the templeton foundation, all of whom have these great charitable projects which will all FAIL if the realities of oil are not addressed first. they have all ignored me, and i wasn't asking for money! i was asking them to use their influence with government and media to truthfully deal with the realities of oil supply/demand, to stop the denial, and to adopt sound energy policies to protect the US from the "oil fallout". all i can do is try.

KenC: yes, i see countries that export oil as being "strong" and countries that import oil being "weak". the US being amongst the weakest as we are not only the biggest user, but the biggest importer. we are exposed bigtime. yet, the politicians and media are for all intents and purposes appear oblivious to what is about to happen.

barnburner: i have no problem with the strict oil and natural gas ETF's - i am just more comfortable with owning energy companies just like i would rather own gold producers. i keep thinking that if you can find companies in both these markets that can increase production, you get the price appreciation and the growth in net income. i think, in the coming years, there will be big jumps, followed by consolidation (like now in oil) and times when the straight ETFs won't do much. that said, long term, i agree with your point. i just haven't gone overboard myself in that direction - but you have me thinking about it some. thx.

xander: i agree we should be drilling. i think congress and environmentalist (which i consider myself to be actually) we be re-thinking US exploration policies when gasoline hits $10 which it will in the next few years. bad news: it takes some years to bring alot of these resources online - meanwhile, steel, pipe, compressors, turbines, etc. etc. are all going up in prices....

wobatus: with all due respect, i think the big danger not only to your personal finances but to civilization is to believe oil WON'T keep going up forever. sure, we'll have some consolidations, but long term, you've got big powerful countries all bidding after the same pool of oil resources. huge supply increases simply have not come online, nor, do i think they will - at least not in the volume to offset demand and depletion rates. big problem. world in denial. hey, i should write a song: "World in Denial". perhaps with a reggae beat - it wouldn't be taken seriously anyway. i can't even get the WSJ to publish my energy policy article :(

In Light of Peak Oil, Financial Diversification Is a Bad Idea

sam: a couple more eye-opening books: "the oil factor" by stephen leeb. published in 2004 this book now reads more like a history book as every prediction he made wrt oil and the US economy, housing, and US dollar have come true. if anything, more so than he predicted. After that, read "the coming economic colapse - how you can thrive when oil is costs $200 a barrel", again by stephen leeb. in it, he recalls the history of easter island, where they cut down trees to build monuments to their leaders. they continued to do so until all the trees were cut down. then no wildlife, soil erosion, and the easter island civilization was no more.

galew: i would not be so sure. we had a bigtime recession in the 1970's and oil & oil service stocks powered higher. it will be that times 10 this decade, IMHO.

philips: exactly.

pursley: the more i think of it, the more the debate about peak oil is irrelevant. the bottom line is this: oil is today over $120/barrel and doubled in a year. quadrupled (or more) in the past 10. the US dollar is weakening and inflation is rising. regardles of the peak oil debate, the question is, what should the US do about it and how should one invest. so, do you disagree with my investment advice? do you think the US should not adopt a comprehensive energy policy? saying there is plenty of oil out there as the price zooms ahead and is having a very substantial economic impact on the US is, imho, quite irrelevant even if you were to be correct.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

great comments guys & gals! i love to see it. as usual, i must participate in the to-n-fro:

pursely: i thought we declared a truce for 5 years? meanwhile, after reading the WSJ article on page A8 last week, please explain to me while the oil exporter's production is dropping while oil has quadrupled - this is political?

oldgoldbug: yes, bush wanted to go into iraq no matter if the majority of the 9/11 hijackers were saudi (the saudis already supposedly "like" us). it was either iran or iraq - iraq was easier to manufacture reasons for, not to mention if the US goes into iran and the straits of hormuz are shut, oil doubles or more even from $126/barrel. i think bush and his buddies were even shocked by their inability to keep iraqi oil flowing and the geopolitical risk premium point on oil due to their actions. that said, i suppose their thinking is that it's easier to steal iraqi oil than to adopt a comprehensive energy policy.

scott: agree oil affects europe too, but they are much farther ahead in terms of france's nuclear and germany & spain's wind. however, when it comes to currrencies, i'd put my bet on brazil, russia, and even the middle eastern currencies if they get off the dollar peg, which they will have to unless they want to enjoy the inflation that goes with that. massive amounts of money is (and will continue to) flow to oil and gas producers from the importing countries. US's biggest trade deficit component is $650 billion/year for oil. can't say that is a scenario for a strong dollar. not to mention, the US can't fight inflation by raising interest rates because of the massive debt load of its non-saving citizens. therefore, US dollar weak, oil high, inflation high. thus, the portfolio i recommended.

sharpPA: agree. you must have worked the oil fields of western NY and PA with my grandpa, who managed to stay independent in spite of rockefeller's lock on railroad transportation of penny crude oil.

flylines: my field is (was?) electrical engineering with an eye toward systems architecture for wireless. what is "magical" about the past 8 years is this:
- US currency devalued over 50% (!)
- huge US fiscal deficits and an insane tax policy in time of "war"
- largest growth of the government in 8 year period in history
- takeover of publicly traded investment house by the Fed (Bear)
- lowering of interest rates when inflation is rising
all this by a "conservative" republican. these are facts. there is nothing "conservative" about these policies. they are the most RADICAL policies certainly in my lifetime.
you wanted examples of 25-30% gainers over the last 5 years, well, they are pretty much the recommended picks, so check them out.
you want to talk about stability of government?
you talk about stability like the US is and will be: what is so stable about a government that imports 65% of its oil and prints money like there is no tommorow. ever here of the weimer republic in germany? sure we have military superiority, but look how we use it: unilaterally while dissing our old allies? just like the little schoolboy, security is measured by the number of friends you have. we don't have any left. agree with your food comment, add a pond for fish and a mineral bag to attrack deer. thanks for your review - very thorough! and yes, plz send feedback on my energy policy. i have two late additions to it: 60 mph top speed limit; 4 day work week.

blah blah: good username selection for you.

papagiki: i have no problem with ETF's and hold some myself. that said, i absolutely love my positions in Vanguard Energy and Fidelity Select's Nat Gas & Energy Services. there performance over the last 5 year is probably close to 8-10x the S&P500. can't beat that with a stick man.

phil: demand for oil goes down? only in the case of a depressiona nd we're all hosed anyhow. so, not in my lifetime.

richjoy: i have invested for close to 30 years. i used to be a fan of diversification. peak oil has changed that for reasons i explained. i am still a big fan of diversification: within the energy and precious metals sectors! ;)

jjsason: "There are a lot of *people* who are not going to let the OPEC cartel rig oil prices along with the commodity futures exchanges." what, are the people gonna take over all the oil rigs in all oil producing nations? get real.

yetiv: well said! pursley and i have supposedly called a truce, but feel free to go after him yourself wrt depletion rates, which he appears to be in a state of denial.

ann: hi, i love it when the ladies participate. with respect to my strategy being "all for me", it's hard for me to watch the government rape the treasury and devalue my currency (and therefore my net worth) by 50% and stand by and watch without taking action. wrt money flowing into oil and pushing the price up, this is a good thing! high priced oil might be the one thing that gets the US off it's butt an adopt a comprehensive energy policy based on transitioning OFF of oil. i think we are on the same page here. have you read my energy policy?
seekingalpha.com/artic...
would appreciate your feedback plz. wrt 5%, it would be more on the order of 20-25%.

paulk: i like the railroads and ag too, that said, to me they are still peak oil plays.

richjoy: plz be more specific on my "blather".

philips49: is your first name conoco? :)

kat: i used to be against nuclear too. problem now is we have ignored oil and energy policy for so long, we simply have no choice but nuclear. i take coal generation off the table because, forgetting the CO2, it is simply destroying our water table, our lakes, streams, river, and fish with mercury poisining. and yes, i know the half-life of mercury. agree we need massive wind and solar, and agreed the government must get involved due to the sheer magnitude of the energy void which is coming. thx for your comments.

freefall: the picture is atop mt. conejos, 13,172 ft, san juan wilderness colorado. great day hike. not a 14'er, but will give you a good work out. besides, the cutthroat in tobacco lake, which you will pass on the way to the peak, are *huge*.

peark2k: from the article in the WSJ the other day on the US military's oil consumption, i figured out that the US military uses 1.5 days of total worldwide oil production per year.

pursely: very patriotic of you to buy the hummer. you're the best friend russia and the middle east has.

gr8ideas: good luck with the S&P500 and bonds in the coming years. i'll check back with you in 5 years and see if you are keeping up with inflation and the falling US dollar. wrt gold, please check out the 1970's action on gold, and compare to the action on gold the last few years - see any simliarities? now, after the 70's gold dropped along with oil when the saudis turned on the "spigot". i maintain there is no "spigot" any more, and the rise of oil will be as far into the future as you can see.

hackensack: again, plz read the previously referred to article in the WSJ and tell me why so many oil exporter's production is down while oil prices have gone up 4x? what kind of "politics" is that?

blah blah: again, no substance and your username was very well chosen.

Kezorm: oil, oil services, and gold creamed the S&P500 in the 1970's. high oil prices and rising inflation will do the same now. in fact, if the S&P didn't have the energy related companies in it, the outperformance would even be more exceptional.

lksseven: there is no guessing with respect to worldwide oil production and worldwide oil demand. politically unhinged? please read my bullets up above about what has happened financially during bush's administration and defend them. republican ideology seems to accept non-republican policy and blinded you to the truth of finances just as it did to the truth about iraq. you njever heard me say bush is manipulating the entire global economy - please point to those words in my article. you cannot. if you are going to debate me, at least debate ME, not yourself and your own words or interpretations of what you think i said.

zack: who is suggesting two energy stocks? did you not see the entire list of recommendations?

In Light of Peak Oil, Financial Diversification Is a Bad Idea

CLH: Your constructive comments are appreciated - thanks for taking the time to write something substantial - and good luck in the S&P500.

Ozarker: that cracked me up.

cynical: ur on the right track...it's not being cynical when the facts line up.

pursley: i won't debate you any more - we agreed after my last paper to simply check back in 5 years to see who was right. that said, the dollar is down about 50% since bush took office, yet oil is up over 6x - it ain't all about the dollar...it is supply/demand. not sure why supply/demand works for all other commodities but not oil. part of the denial process i suppose.

FoxV: excellent rebuttal! :)

bluesmoke: i'm flattered and would be glad to do the job for free! because i DO love my country and boy do we need somewhere there who acknowledges peak oil....otherwise, i fear we are toast.

User: good point. if we dont get an energy policy to deal rationally with peak oil, i can envision a scenario where the US gov takes over the big oil companies claiming "national security". i have oftened wondered if this is not the real reason why the US gov is ignoring peak oil and a rational energy policy to deal with it. once they control the oil, the have ultimate control over the population.

GMiki: that's right - non-peakers always talk about the new oil discoveries, but they never factor in the worldwide depletion rates of the current fields, currently depleting at the rate of about 4.5 million barrels/day. not to mention that the number of new elephant fields discovered since 1960's has slowed down dramatically, i.e. roughly less than 10 during that entire time.

enviro: i hear you wrt to the majors. that said, it seems a bit unwise in an era of peak oil not to hold a company that can produce 4 million barrels a day (XOM). i like ConocoPhillips as much for their nat gas exposure and Lukoil as i do for their oil production capability. plus, i Mulva is the best CEO in the business. and, i agree with you about XOM stock buybacks...they should be rewarding their shareholders with increased dividends! they have the lowest yield of the majors, by far, yet the best balance sheet, cash flow, and net income. i would much rather the rutkus at the shareholder's meeting be about the buybacks vs dividends than most of the poop that was discussed there.

scholastic: well, peak oil has happened many times in many places: continental US, prudoe bay, north sea, mexico's cantrell, etc. etc. the energy crisis of the 1970's was a political crisis (an embargo due to US Israeli policy). what we have now is a true supply/demand crisis due to increased consumption in china, india, russia, and the middle east at the same time production is beginning to top it. sure, we mights see a few million more barrels come online, and some of the top execs (Mulva at CEO) think we could perhaps top at 100 million BPD. that said, the EIA and DOE energy estimates are predicting demand will hit 135 million BPD. that is a huge huge disconnect. the US is the most exposed country in the world to peak oil: we use 20% of the world's oil (5% of the population) and import 65% of that. that is why i am so adamant about the US adopting a comprehensive energy policy to deal with it. time is quickly passing by and the last 8 years have been a complete waste.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

For those peak oil non-believers (yes, there still are some), I refer you to yesterday's (5/29/08) article on page A8 of the WSJ (yes, even the Wall Street Journal is coming around! fantastic) titled:
"Oil Exporters Are Unable to Keep Up With Demand"
In particular, check out the production numbers of many countries are going DOWN as the oil price has skyrocketed. We'll see $200/barrel oil by 2010.

In Light of Peak Oil, Financial Diversification Is a Bad Idea

The author apologizes: 21% above should be 16%: 6% energy + 10% commodities.