Mark Divy

High Gold Prices: It's the Oil, Stupid

Actually, a major portion of the defense budget does go to conservation projects that actually save the government millions each year in utility costs. Based on presidential mandates under Clinton and increased under Bush - most installations are expanding their green initiatives. You shoul dexplore the information available on such items as geothermal projects, solar, and natural gas projects, electric vehicles across the country - funded with defense budgets - cutting use of oil/NG/coal generation.

Do a search for Executive Order 13423 -

Search for Solar and Fort Carson as one example - you would be amazed at how much the DoD is really doing.


On Nov 24 03:54 PM Rokjok777 wrote:

> Superb post, yes, the elephant in the room. Glad to see you excoriated
> both the Bush folks but also the business-as-usual Obamanauts.<br/>...
> 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.

Oil and Natural Gas: Ratio Explodes in 2009

I completely agree with manya05

Kurt Wulff published an article back when oil was 150 BBL, saying NG would soon be at $20, Cramer calling for buys on NG during the oil spike due to the ratio.

Bottome line - they are not interchangeable - relationship does not work. Why keep beating the incorrect assumption that they are linked?

If you would like stock recommendations during a low cycle in NG, why not take a look at those that are underperforming their cash flow - due mostly to factors external to their business. BBEP is an example of a company with majority of NG (and oil) production hedged until 2011 - but has been beaten down of late due to lower NG prices (which do not hurt their cash flow) and temporary loan covenant issues that do not allow for paying dividends due to institutions lowering their available credit. BBEP has no credit problems, repaying outstanding loan balances every quarter, and plenty of cash to spare. Would suggest this one as a double - especially when they restart dividends in the not so distant future.