Rokjok777

High Gold Prices: It's the Oil, Stupid

Superb post, yes, the elephant in the room. Glad to see you excoriated both the Bush folks but also the business-as-usual Obamanauts.
Give Jimmy Carter a little credit. He faced up to the issue and applied a windfall profits tax of 1 1/2% of oil company profits for one year. That established a fund that lasted for years and delivered energy conservation projects that are still saving energy today.
If Obama really did stand for something new, he would have taken 1/50th of the defense budget (soon to exceed $1 trillion annually) and funneled it straight to conservation projects. Instead, America gets to pay for troops and bases in >100 countries, 50,000 men in Germany, 40,000 in Japan, $1 million per year buys one soldier to shoot goat herders in Afghanistan. THAT's the other elephant in the room. In WWII, General Motors retooled in about 6 weeks to stop making cars and start making Jeeps. This is no different: it's economic war!
Rethink Perpetual War and rethink Big Oil and we'd have plenty of money for all of our other problems.

Your Oil Stocks Aren't Coming Back

Some thoughts about leverage: for every barrel of oil pumped out of the ground and delivered, Oil companies have to DO something: find the stuff, drill for it, run a pump, ship it in a tanker, etc. The reason people get so excited by tech companies is the unbelievable leverage they get: they spend money developing software, but once it's developed, they buy a blank CD for 9 cents, burn as many copies as they want, and sell them, Voila! Now that's leverage. I used to work for a software company, we charged a customer $10 million to build them some software, then we resold it (with the first guy's permission) for another $10 million (our cost: 9 cents). Just some food for thought. Generally I do like oil & gas plays, too...