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Michael Fitzsimmons
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I focus on investments in the oil & gas sector with an eye for dividend income and long-term capital appreciation. I typically allocate a portion of my own portfolio and devote some of my Seeking Alpha articles to small and medium sized companies offering compelling risk/reward propositions.... More
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  • "QE2" or Natural Gas Transportation? 2 comments
    Oct 14, 2010 11:13 AM | about stocks: COP, CVX, OXY, GLD, SLV
    Who are the great minds that lead American economic policy? Let's take a look:

    Benjamin Bernanke - Chairman, Federal Reserve
    Alan Greenspan - Bernanke's predecessor
    Janet Yellen - Vice Chairman, Federal Reserve
    Tim Geitner - U.S. Secretary of the Treasury
    Barney Frank - Chairman, House Financial Services Committee
    Jared Bernstein - Chief Economic Advisor to Joe Biden
    Jacob Lew - Director OMB
    Peter Orzag - Lew's predecessor
    Larry Summers - Assistant to the President, National Economic Council

    How is it that such an educated group of men and women be so blind as to the fundamental problem of the U.S. economy (foreign oil imports)? This wise group of policymakers apparently think the solution to what ails America is "QE2", a euphemism for "printing money out of thin air". I'm only an engineer, but I can already see the impact this will have: higher commodity prices. We have seen this in oil, gold, silver, corn, soybeans, and across the spectrum. Powering this move is, of course, a weak U.S. currency. This group of distinguished "economists" apparently believe that the key to a U.S. economic resurgence is to devalue our currency. Those opponents of the Federal Reserve, Ron Paul and a handful of other patriotic Americans, know that this is a recipe for disaster. As Paul relates in his great book End the Fed, a one-ounce $20 gold piece in the early 1900's would buy you a nice suit, shirt, tie, belt and shoes. Today, that same 1 oz. gold piece would do the same, but what would $20 buy you? Maybe the belt. Maybe. This massive devaluation of the U.S. currency is the result of placing our faith in an un-Constitutional entity like the Federal Reserve. They print money in complete secrecy, distribute it to their good friends and buddies who just happen to be the CEO's of the largest banks and financial institutions and already rich beyond belief, and all with no Congressional oversight already. Yet when legislation comes before Congress to simply audit the Fed (duh!), even some of the bill's sponsors voted against it!? This shows you the grip on economic policy this small group of people have on U.S. economic "policy". It has had disastrous effects - who can doubt America is on a fast moving train into the economic abyss?



    Not one to complain without offering solutions, there is another path. We could address this country's four major economic problems:

    1) reduce foreign oil imports by adopting natural gas transportation
    2) adopt a strategic long-term comprehensive energy policy:
    http://thefitzman.blogspot.com/2008/08/strategic-long-term-comprehensive-us.html
    3) audit the Federal Reserve and eventually abolish it in favor of a Constitutional monetary standard based on gold and silver
    4) reduce the budget of America's biggest entitlement program - the U.S. military and its imperialistic approach to "foreign policy"

    What would create more American jobs: "QE2" or building out a natural gas transportation infrastructure? Like the interstate highway system, the telephone and telegraph system, or putting a man on the moon, government spending on building a natural gas transportation infrastructure would pay dividends to ALL Americans for decades into the future. We would re-industrialize our energy, automobile, and manufacturing sectors. We would create real JOBS.  Americans could be filling up with domestically produced natural gas in their garages for about half the current price of gasoline ($1.40/GGE vs. $2.65)! More importantly, the U.S. could easily reduce foreign oil imports by 5,000,000 barrels a day within 5 years. At $80/barrel, this is $400,000,000 a day that would stay in the country. You want to talk about stimulus, try that one!!

    Fake monetary stimulus programs like "QE2" simply devalue the currency, funnel money to a select few of already wealthy Americans, and has no long-term benefit to anyone and in fact, is very detrimental to the long term growth and health of the U.S. currency and economy. But, I am just a lowly engineer and not a Nobel Prize winning economist. However, common sense should tell you that if all it took to make a country an economic success was printing money out of thin air, Zimbabwe and the Weimar Republic would be at the top of the heap.



    But alas, the media avoids the topic like the plague, people like Boone Pickens are ridiculed and chastised, and the great minds of this country keep silent on the issue. So, what does it all mean? Oil, gold, and commodities will go higher. Buy Conoco Philips (NYSE:COP), Chevron (NYSE:CVX), Occidental Petroleum (NYSE:OXY), Marathon(NYSE:MRO), and gold and silver bullion or ETFs (GLD, SLV).

    But it's 2008 all over again and we all know how that turned out. The bubble will burst, even these suggested investments could plummet as they did in 2008, and the U.S. will be even weaker than it is now. If you have a garden, a pond with catfish in it, a good hunting rifle and some land with game you'll be better off than most. Meantime, batten the hatches. "QE2" and current U.S. economic, energy and military "policy" seem specifically and consciously designed to welcome the U.S. into the category of 3rd world economies. Meantime, we have a solution right in front of our faces: abundant, clean, and cheap natural gas and natural gas powered cars and truck that are a mature and proven technology. All we need is a government to embrace the fuel and the technology. Don't hold your breath. Pickens is on his own. America seems destined to fulfill Pickens' prediction that we will go down as the stupidest country in history for not addressing the economic, environmental, and national security issues brought about by its addiction and reliance on foreign oil imports. Is it possible that American economic policymakers have a vested interest in America staying addicted to foreign oil? How else does one explain their ignoring such a fundamental and basic economic problem? So sad and so unnecessary. Natural gas transportation technology is mature, safe, and proven alternative to gasoline (foreign oil) powered engines. All we need is some economic and energy policy leadership.

    Educate yourself on CNG transportation here:
    http://en.wikipedia.org/wiki/Compressed_natural_gas

    How ironic that today's U.S. dollar drop is being blamed on a strengthening move by Singapore, a country that has embraced natural gas transportation.

    Disclosure: Long COP

    Disclosure: Long COP

    Disclosure: Long COP
    Themes: Energy Financial Stocks: COP, CVX, OXY, GLD, SLV
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Comments (2)
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  • anarchist
    , contributor
    Comments (1269) | Send Message
     
    What do you think of TOT which pays a dividend of more than 5%. I kind of like a dividend when I get into a stock. I already have some COP which I bought at about $48 so have that one covered.
    Thanks
    14 Oct 2010, 12:20 PM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (8299) | Send Message
     
    Author’s reply » honestly, i don't know much about TOT. but with a 5% div yield and rising oil prices....
    25 Oct 2010, 09:52 AM Reply Like
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