Think About It

Hillary Clinton's Secret Plan to be President

 "Ernie" has some thoughts on Hillary Clinton candidacy for President of the United States.

"Forgive me my paranoia, but for all of you who are celebrating Hillary's defeat and revelling in the fact that she'll never become president, allow me a few moments of nagging doubt.  First of all, Hillary DID NOT terminate her bid for the nomination, she simply suspended it.  Also note that she DID NOT release her delegates to Hussein Obama.  Oh yes, she pledged her support and offered to do whatever she could to insure a democratic victory.  (She also grovelled for the VP job, just in case).  But remember, we're talking about the Clintons here.  They're the masters at dirty tricks and smear campaigns, and blaming it on the GOP.  If you think she's abandoned her hopes for the nomination, you've been drinking Koolaid.

The tip-off that more is yet to come occured about 10 days ago when she said lots of things can still happen.  As she pointed out her husband didn't get the nomination until June, and Robert Kennedy was assassinated in June.  While both are true, the latter point is the more interesting.  You've got to have that bit of data bouncing around in your brain to even make such a comment.
 I'm reminded of the emails that floated around during Billy Jeff's tenure about all the people around him who had died mysteriously.  The number of suicides was extraordinarily unusual.  If you believe Vince Foster killed himself in the park, have another glass of Koolaid.

We're hearing now about Mrs. Hussein Obama's "whitey" video that may or may not be in existence.   Does anyone have any doubts about who tipped of the right to Rev. Wright and other anti-white preachers associated with Barack?  I could be wrong, but I think I know who the culprit(s) are.  So stay tuned politico fans, I think there's a lot more yet to come.  The Clinton's are not going to go down in defeat until the last mudhole has been emptied and slung.  The interesting part will be how they'll convince the drive-bys that McCain is responsible."

The Coming Oil Bust

Whoa, oil hit a record $139.00 a barrel today.  That along with declining employment and Israeli threats against Iran caused the stock market to nose dive 400 points.  The big question that is on everyone’s mind is: Where is the price of oil going? 

The president of Exxon, in recent senate hearings, told the panel that market manipulation is responsible for a sizable portion of the booming oil prices.  Senators have urged the CFTC to look into what is happening in the oil market, but the Commodity Futures Trading Commission is woefully ill equipped to do a full-blown investigation into manipulation of this magnitude.  They have simply shrugged their shoulders and said, “It’s market forces that is driving the price of oil.” 

How much of the oil crisis is caused by speculators?  It’s time to take a reality check.  Yes, China is using more oil.  Yes, we haven’t cut back that much on our gas consumption.  Yes, OPEC production is up slightly.  What is wrong with this picture?   Seriously, is the world using twice as much oil as it did a year ago?  Oil consumption may be up, but not that much.  The difference in price is obviously caused by speculators. 

The second big question is what factor or factors can put the brakes on  increasing oil prices.  We could compare the oil spike to the spike in silver and gold prices when the Hunt brothers tried to corner the silver market.  At that time everyone was hot to invest in silver.  After all, it can only go up.

The government intervened and the price of silver dropped overnight.
The question is how does the government intervene?  In my view at some point the speculators will pull the plug and the price of oil will take a precipitous dive.

Questions:

What would happen if the government released oil from our federal reserves?

Can the U.S. and other countries be held as captives indefinitely?

What will cause the speculators to lose interest and start to sell?

What can be done to assure this won’t happen again?

Oil, Gas and the Economy

As we all know, the price of gas is double what it was a year ago.  In addition to hitting us at the pumps, there is the threat of what higher gas prices will mean to our economy.  And the biggest question is, “Will this push us into a recession?”  As consumers, we simply take the hit, hoping the price of fuel won’t get any higher.  Meanwhile, businesses can simply pass their increased costs on to consumers.

Economists are divided over whether the price of oil has risen high enough to push the economy into a recession.  Richard DeKeKaser, chief economist for National City Corporation, is optimistic about the economy:  "There is nothing magical about $130 oil. It's just more of a drag, more intense."  Some economists believe gas prices would have to go to the $7 or $8 range before it would seriously affect our economy.  Motorists in Europe are already paying these prices.

On the other hand, the Chicken Littles are saying the rise in energy prices is coming too fast and that the US economy is now in an "oil shock" downturn.

Economists say for every $10 increase in the price of a barrel of oil, America’s output of goods and services goes down by 0.2%.  Translated, this means rising oil prices has caused a 1.6% loss in our GDP during the past year.  The President’s stimulus package is expected to add about 1% of our GDP (Gross Domestic Production)

So, what are some of the repercussions of increased gas prices?  Ford Motor Co. announced last week that it was cutting production of some of their larger vehicles by about 40% for the second half of 2008.

The manufacturers of plastic products are estimating the price of PVC products will rise 20 to 30 percent. 

Probably one of the biggest problems with rising oil costs is one of fear.  Many businesses are deferring new projects until prices stabilize.

This brings us to several questions:

Is the oil market being manipulated by third parties?

If so, who?

How high will the price of oil go?

How much does the price of oil has to do with commodity speculators?

Trucks carry huge loads, so will $4 gas or diesel substantially affect the price of the goods they carry?

U.S. Congress Votes to Sue OPEC

The price of oil hit $133 today, but not to worry, our Congress is speeding to the rescue.  Their solution?  Sue OPEC.  The House of Representatives approved legislation by a wide bi-partisan margin that would allow the Justice Department to sue members of OPEC for conspiring to set the price of crude oil and for limiting oil supplies.  The bill would also create an energy task force within the Department of Justice to investigate energy manipulation.

The White House is opposed to the bill as it was with a previous version of the bill.  The Bush Administration says targeting OPEC investment in the U.S. would likely spur retaliatory action against American interests in those countries and lead to a reduction of oil available to U.S. refiners.  The OPEC investment is in U.S. oil refineries, but this investment has been in steady decline for several years.

The White House pointed out that less oil going to the refineries would limit available gasoline supplies, resulting in higher fuel prices.

It appears that Congress is seeking a quick fix to quell the anger of American voters, but they haven’t thought through the long-term consequences.  We are taking a BB gun to hunt Kodiak bear.  This bill, like the BB, will only enrage the bear, and that is bad news for the person with the BB gun.

Questions:

What can the U.S. gain by passing this bill?

How will the OPEC nations retaliate?

How will this affect our relations with Saudi Arabia and Kuwait?

Will an energy task force within the Justice Department be able to make any cases of price manipulation, if so against whom?

Will the OPEC nations be able to cut our supply of oil in that oil is a world commodity?

If OPEC retaliates, how will this affect the November elections?

Kansas Governor Sebelius Vetoes Power Plants

Kansas is emblematic of the war between sanity and the eco-nuts.  At issue are two 700 megawatt coal-fired power plants that were to be built in Holcolmb, Kansas, a small farming town of 2,000 that sits on the plains of southwest Kansas.  The Kansas legislature has tried and failed twice to build the two power plants.  Democratic Governor Kathleen Sebelius,  backed by the Sierra Club, vetoed the bills.  The Kansas legislature failed to muster the necessary number of votes to override her veto even though riders were placed in the final bill that would have mandated the energy company, Sunflower, to invest huge amounts in wind and solar energy.

The Governor’s veto is especially ironic in light of the sharply rising cost of oil, not to mention its availability.  But, in the most ironic twist of all, the U.S. has the largest coal reserves in the world.  America is the Saudi Arabia of coal and has known coal reserves of 275 billion tons, which is nearly twice that of Russia and China.

Coal plant opponents are trumpeting the defeat of the power plant bills, saying this is the turning point at which Kansas will lead the country away from old energy sources toward more environmentally friendly types of energy.  Governor Sebelius, who is frequently mentioned as a possible running mate for Barack Obama, is asking legislators to work with her on a new comprehensive energy policy.

As could be expected, the vote fell along regional lines. Legislators who live in and represent the affected area voted for the bills.  Legislators in the more heavily populated eastern regions of Kansas voted against the bills.

The eco-nuts would have everyone believe that Conservatives love the smell of dirty air and prefer that their children and their children’s children be raised on a polluted planet.

The environmentalists have effectively shut down the building of more nuclear and coal fired power plants.  Solar has proved dicey at best in providing reliable ongoing power, so that leaves us with wind energy.
Wind turbines, as an auxiliary energy source shows some promise, but they are expensive to install - and the wind doesn’t blow all the time.
And, wouldn’t you know it, they are opposed by many environmentalists because they kill birds.  So that leaves us with.......?

As usual, the eco-nuts are long on criticisms, but short on coming up with VIABLE alternatives.

Questions:

At what point, will the people wake up and bring some sanity back to our energy policy?

How long will it take to produce viable alternative energy sources?

Will Obama adopt an eco-nut stance on energy?

Are Oil Companies Responsible for the Food Shortages?

Well, who knew.  It seemed like a good idea at the time.  There is a good chance that Congress will have to repeal the ethanol bill that they passed just four months ago.   In an environmental epiphany, Congress passed the Renewable Fuels Standard (RFS) which requires suppliers to produce 36 billion gallons of ethanol by 2022.  Around 45% of the  ethanol would come from corn.  The bill was pushed by Democrats, but it also enjoyed the support of many Republicans, including President Bush.

Shortly after the bill passed, food shortages began to occur.  These shortages, in turn, caused increases in the price of food.

A coalition of grocers, oil companies, and livestock producers opposed the bill.   Environmentalists and farm groups supported the bill.

Many are now saying the food crisis is overblown.  There was a major tortilla shortage in Mexico, but tortillas are made primarily of white corn, not yellow corn which is used in making ethanol.  Brewers blamed corn shortages on the rising beer prices.  Only one problem, rice and barley are the main ingredients of beer, not corn.

A congressional subcommittee plans to hold a hearing next week on the RFS.

All of this brings us to some interesting questions:

If President Bush is in bed with the oil companies, as the liberals allege, then why did he openly support the bill?

Are the oil companies manipulating the price of corn in order to kill ethanol production?

Did Congress act too hastily when they passed the ethanol bill?

Will Congress be forced to repeal it?

Obama the Marxist

Barack Obama gave us a glimpse into how his administration would handle corporate business in the U.S.  Yesterday, Obama called for a windfall tax on oil company profits. 

"For the well-off in this country, high gas prices are mostly an annoyance. But to most Americans, they're a huge problem, bordering on a crisis," said Obama.  Obama called for heavy federal taxes to be imposed on oil companies selling oil above $80 a barrel.  "And at the same time [we will] go after a windfall profit tax that would be used to provide relief to low-income folks," Obama said.

Regardless of what one thinks of oil companies profits, Obama’s plan is clearly a Marxist scheme to redistribute wealth from the coffers of corporate America and give it to “low income folks.”   Apparently, under the Obama doctrine, any corporation that is thought to be making too much profit would be subjected to an excess profits tax.   This money, in turn, would be handed down with great magnanimity by Saint Obama to the lowest income group.

The last time I checked, all of the major oil companies were publicity held companies, which means the stock of these companies is owned directly or indirectly by average Americans.   It also interesting to note that the federal government already taxes consumers a hefty 15% on each sale at the pump. 

In contrast, John McCain is proposing a plan to cut federal taxes on gas this summer to counter rising prices. 

The questions are: 
If elected, how far would Obama go in his quest to tax excess profits?  Would the pharmaceutical industry be next on Obama’s hit list?   
Where would Obama draw the line on excess profits? 
What is an excess profit for a public corporation?   
Would he decide those on his corporate hit list should be subjected to an excess profits tax?   
Is Obama the new Robin Hood?

Food Shortages or the Beginning of a World Wide Famine?

Are world wide food shortages imminent?  According to many experts, we are entering an era of world wide food shortages brought about by several factors. 

Food prices rose sharply in 2006-2007, and the outlook for 2008 is much worse.  Raw food prices have risen 22% in the past year, which has translated into an overall 6.5% increase in grocery prices during 2007.
Wheat prices rose 92% last year.  The price of corn is up 44% over what it was 15 months ago.  Rice is up nearly 40%.

Russia and India have begun to embargo food for export.  Imported rice is being rationed by many large retailers in the U.S.   Food riots have occurred in several countries.  Starvation is rampant in parts of Africa.  We have been one of the world’s leading exporters of food, but all of this may change.

So, what’s going on?  It appears to be a number of factors coming together at the same time.  We supply about 55% of the world’s supply of corn, but nearly one-third of our corn crop is going into Ethanol production.   This along with other factors has triggered an increase in corn prices.  The demands of the rising middle-class in China and India have driven food prices to higher levels.  Livestock, fed on grain, is also proportionally higher.  Higher fuel prices is adding to the cost of farming and transporting raw food to processing plants and eventually to the stores. 

Add to this the world population explosion.  The world population has doubled in the last 40 years and it is expected to increase by another three billion by 2040. 

The questions are: 
How severe will the shortages become? 
How much of the increases are being driven by commodity speculators?  Will America become the next “Saudi Arabia” of food?
Will the U.S. embargo food? 
Will our position as a leading exporter of food give us the needed leverage with oil producing countries?
Will the world’s population eventually outpace our capacity to produce food?
Will the U.S. drop its Ethanol program?
Are the oil companies conspiring to kill the bio-fuels program? 

A Solution to Global Warming

  There is a school of thought that advances the theory that we will, in effect, save ourselves from the from the doomsday scenario of Global Warming -- because many scientists say we will run out of oil and gas long before the ice caps melt and searing temperatures envelop our planet.

  Geologists from the University of Uppsala in Sweden are saying we have overestimated the amount of oil reserves left in the world.  The Swedish scientists report their studies show there is up to 80 percent less than previously predicted.  Oil production levels will peak in 10-15 years.

  By 2010-2015, production levels will reach maximum levels and natural gas production will peak shortly afterwards.  Many earlier studies by other noted geologists predicted production levels would peak by 2050.  When peak production occurs, fuel prices will reach disastrous levels, which will result in much less fossil fuel being burned.

  With far less fossil fuels being burned, there will not be enough carbon dioxide (CO2) to affect climate change, so the doomsday scenario predicted by the proponents of the Global Warming theory are unlikely.

  The Swedish geologists aren’t the first to advance the “Peak Oil” theory.
The Peak Oil theory was first announced by Shell geologist Dr. Marion King Hubbert in 1956.

  Whether we start to run out of oil in 2010 or 2050, it will have a big impact on all facets of our life.  The real question is will this or has this affected our foreign policy with respect to the Middle-East?    Will alternative fuel sources be developed in time to effectively replace fossil fuels?  Is the “Peak Oil” theory viable?

Gas Prices - The Real Story

  There has been a great deal of public anger directed at oil companies, but is it justified? Yesterday, officials from Chevron, BP America, Conoco-Phillips, Shell, and Exxon-Mobil were hauled into Congressional hearings for a tongue lashing and a few questions.  A couple of committee members suggested that oil companies should reduce the cost of gasoline.  I laid out in yesterday’s blog some of the figures that came out of the hearing.

  Oil company officials stated their profit is 8% of the gas pump price.  This figure was not questioned or disputed by those on the committee, so I would conclude these figures are reasonably accurate.  This would mean that if one spends $ 50.00 to fill up his gas tank, then only $ 4.00 of that would go to oil company profits.

  I think it is important to note if oil companies simply announced they would forego all of their profit, that $ 50.00 fill-up would still cost $46.00, which really doesn’t do much to alleviate the pain being felt at the pump.

  Conversely, if the government agreed to give up their 15% tax, that $50.00 tank of gas would cost only $ 42.50.  Instead, it is clear to me that they plan to increase the amount of tax on fuel.  That should really help the consumer. 

Does anyone really believe the rhetoric of Hillary Clinton or Barack Obama when they claim they will bring down the price of gas?  Think About It.