So, these people are not unemployed, they just aren’t interested in employment due to retirement, sickness or most likely, long term unemployment for more than 99 weeks. After you stop collecting unemployment from the government, and have still not found a job, you will drop off unemployment rolls and be in some kind of suspended animation I guess. Who knows what the current political regime thinks you are?

While many economists expected the labor force participation rate to go up, the troubling sign is that it is still dropping since the recession officially began in December of 2007. The rate at that time was 66% and has since dropped to 63.6% with the latest statistics from April 2012.

Below is a chart that shows the decline back from January of 2001. These are troubling statistics no doubt:

Source and chart from Heritage.org

While this is temporarily strengthening the US dollar while it is weakening the Euro, the immediate effect is to lower the price of gold. However, once new President Hollande figures out he can’t possibly pay the bills with such early retirement and tax policy foolishness, economic stagnation will begin in France (worse than it already is) and spread around Europe like cancer. And with Greek voters rejecting any austerity measures, Eurozone collapse is soon to follow thus making for that possible day of reckoning that will put the price of gold through the roof.

The next few short months in Greece should be quite interesting as all the hard fought austerity measures and agreements hashed out to try and bring some stability to the sinking ship that is the Greek economy gets scrapped and everybody goes back to the drawing board. That is surely something German Chancellor Angela Merkel as well as German voters won’t be happy about. There probably won’t be much tolerance for shenanigans from Greek riots and then asking for bailout money from the rest of Europe once again.

The day of reckoning is much closer.

Source: MarketOracle.co.uk

“The idea that something coming out…that’s being offered with significant commissions, all kinds of publicity, the seller electing the time to sell, is going to be the best single investment that I can make in the world among thousands of choices is mathematically impossible.”

And Munger goes on to say:

“I don’t invest in what I don’t understand. And I don’t want to understand Facebook”

But don’t think the two Berkshire partners are all that negative on Facebook, in fact, they think they are fantastic companies along with Google and Apple. The problem they say is that they cannot come up with a good projection as to where these companies will be in 5 years. That could be good advice as anyone else considers buying into the Facebook IPO as the web is still relatively new as a business medium and change is about the only constant online these days. Just take a look at MySpace. Just a few years ago it was the social network to be a member of, but with the growth in popularity of Facebook, its decline was fast and furious.

While Apple is likely to be a contender in 5 years because they have real assets and produce a physical product, Facebook and Google on the other hand are pretty much digital businesses and no one really knows what will happen in 5 years in the web.

Source: CNN.com

As the world economy teeters on the brink and rising oil prices threaten to de-rail the delicate roots of recovery Oilprice.com asked legendary investor Dr. Marc Faber to join us and give his views on high gasoline prices, the shale boom, alternative energy, developments in the Middle East and much more.

In the interview Mark talks about the following:
Why investors shouldn’t buy oil right now
Why alternative energy investments are a bad idea for investors
Why Iran should be allowed Nuclear weapons
Which direction oil prices could go and why
Why Investors should be taking money off the table NOW.
Why we shouldn’t be pinning all our hopes on natural gas
Why selling down the strategic petroleum reserve to reduce oil prices is a useless strategy.
Why the shale boom won’t affect US foreign policy priorities
Why Obama is a disappointing president

Dr. Faber is a very well known commentator throughout the investment community. He regularly appears on CNBC and is a member of the Barrons round table.

Marc is the editor and publisher of the Gloom Boom & Doom Report, which is a very popular investment newsletter that highlights unusual investment opportunities for its subscribers. You can find out more about the Gloom Boom & Doom Report at Marc’s website: www.GloomBoomDoom.com.

OilPrice.com: A number of our readers have been enquiring about the recent oil price increases, where a few weeks ago we saw them rise to a ten month high. Where do you see oil prices going from here, and what do you see as the main reasons for the rapid increase?

Marc Faber: I think there is a risk that oil prices will go much higher. At the same time, the bullish consensus on oil is now at one of the most elevated levels it’s ever been. In other words, from a contrarian point of view, you shouldn’t buy oil right now.
I think it may go down somewhat. In general, if trouble breaks out in the Middle East, or if there is a war, I think the price of oil could go much higher.

OilPrice.com:What are your 3-5 year projections for oil prices?

Marc Faber: Well, you’ll have to give me a second. I need to call Mr. Ben Bernanke and ask him how much money he will print. Commodity prices were in a bear market from 1980 to 1998, and since then they’ve gone up. But because of expansionary monetary policies and artificially low interest rates they have increased more than would have otherwise been the case. We don’t know exactly how long this asset bubble will last – but say if you had interest rates in real terms, of five percent, instead of negative five percent, then I think all commodity prices, including gold, would be lower.

OilPrice.com: Obama is being pressured by the Democrats to use the Strategic Petroleum Reserve in order to flood the market with a large supply of oil in an attempt to drive down prices. Some commentators seem to think that this will help, although only in the short term because low supply isn’t the cause of the high prices. Do you think it’s sensible advice to use the reserves now to lower short term prices or should Obama remain strong and only use the stockpile for what it was designed for?

Marc Faber: I think selling down the reserves would be a useless strategy as one of the main reasons prices are rising is due to international tensions. It’s possible for an increase in supplies to drive down the price a little bit. But in emerging economies like China and India, the demand continues to go up. Now, it may not go up every year by the same quantity it did in the last 3 years, because in the last 15 years, oil demand in China tripled, from 3 million barrels a day to 9 million barrels a day.
So it’s conceivable that in a recessionary environment in China, oil demand will not go up substantially for one or two years. But because the per capita consumption is so low in countries like China and India compared to say the U.S. and Japan and Western Europe, I think the trend will continue to increase.

OilPrice.com: There’s a great deal of political theater going on around the Keystone XL pipeline. Do you see the pipeline as being essential to U.S. energy security and something that has to be pushed through at some point?

Marc Faber: Yes, I think it would be important to have the pipeline. But as you say, there’s a lot of political pressure and so forth. I think it would be very desirable for the U.S. to become energy self- sufficient.
Some observers and forecasters say they can achieve this goal within ten years, due to advances in natural gas extraction. I don’t believe it, but I have to respect the view of some
experts.

OilPrice.com: The media has been full of reports on the coming shale gas boom. What are your thoughts on shale gas? Is it the energy savior we are hoping for?

Marc Faber: I doubt it. But as long as the market believes it, we have to translate every forecast and every view into investment opportunities. I think a lot of people believe in shale Gas’s potential and so this may underpin some strength in equities and currencies. But as I said, I don’t believe it.

OilPrice.com: Do you think the shale boom could lead to a change in U.S. foreign policy priorities?

Marc Faber: Well, I don’t really believe it. But as you know, Mr. Obama has engaged in more foreign policy initiatives in Asia. For what, I’m not quite sure. The thinking is in the U.S. is that China is a threat. Therefore, they have to increase their cooperation with Asian countries, such as India and the Philippines.

Personally, I think it’s an ill-timed move, because I don’t think that China has any military ambitions in Asia. But put yourself into the chair of China’s leadership. What is the top priority?

China obtains 95% of its oil from the Middle East. The top priority is to make sure that this oil continues to flow and that the supply is secure. So they have to secure the oil shipping lanes, from the Middle East, past the southern tip of India, through the Straits of Malacca, up the Vietnamese coast, into China.

Each time they do that or attempt to do that, America and it allies in Asia perceive it as a threat. So the tensions increase.

OilPrice.com: You just mentioned that you don’t believe China has any military ambitions in Asia, but we’re seeing quite a lot of tension in the South China Seas, especially the Spratly Islands and the energy resources located there. How do you see the situation playing out between China and its small neighbors in this region who all have a good claim on the resources?

Marc Faber: As I just mentioned, China’s a huge country. They have certain views about territories in Asia, and I think the U.S. would not react particularly positively if say China or Russia or any other nation had numerous military and naval bases, in the Caribbean or in the Pacific, and military bases in Canada and Mexico.

You have to look at the world from the perspective of the Chinese. I’m not saying that because I’m super-bull about China. On the contrary, I think the Chinese economy faces numerous problems. But I’m saying that if you put yourself into their position, a top priority is to secure a regular supply of oil, iron ore, and copper. If you look at the Kondratiev Cycle where Kondratiev said it’s not a business cycle. It’s a price cycle, and certain things happen during the downward wave, and certain things happen during the upward wave.

During the upward wave, we have rising commodity prices, which is a symptom of shortages. Then countries become more belligerent, because they begin to be concerned about the supply of commodities, and so tensions increase.
I’m not saying war will break out tomorrow. I’m just saying the conditions have improved.

OilPrice.com: Aside from the South China Seas, where do you see the potential flash points in the world over resources?

Marc Faber: Well, I think a big potential flash point is obviously the Middle East and Central Asia, because neither Russia nor China wants permanent American military bases in Central Asia and to be encircled. The Chinese are encircled by the Americans in the Pacific with naval bases, plus the Americans have 11 aircraft carriers. The Chinese have just one.
Plus, in the last 12 months, Mr. Obama has made initiatives to have India as a strategic ally. The result of this is that China, which always had good relationships with Pakistan, has
strengthened their relationships with Pakistan. This of course has increased tensions in the region.

OilPrice.com: Moving off fossil fuels, what role do you see renewable energy playing in the future? Do you think government should help innovation in this area?

Marc Faber: This is a very difficult question to answer. Basically, I’m convinced that, over time, to drill a hole in the ground in the Middle East or in other emerging economies and then bringing that oil through a pipeline onto a ship into the countries that consume oil is not an elegant solution to the energy problem.

I think eventually this will go away. But in the meantime, alternative sources of energy are extremely expensive. Unless the oil price collapses to like $50, most alternative sources of energy will not be profitable.

If someone says to me, we need alternative sources of energy for security reasons, yes, I agree. But for profitability I doubt it.

OilPrice.com: As an investor then, are there any renewable sectors you’re bullish on? Or would you stay away from the space entirely?

Marc Faber: I would stay away from it.

OilPrice.com: Following the Fukushima disaster Japan has now shut down 54 nuclear power plants. The population’s trust in nuclear energy has been shattered – but do you think this is only temporary and how would Japan make up the energy shortfall – as before Fukushima Japan met around a third of its energy demand with nuclear?

Marc Faber: Well, I guess they’ll lean towards more natural gas and more oil so they can offset this shortfall of nuclear energy. Now I don’t think that this will change the nuclear energy prospects long term in the world, because other countries like India and China will build their numerous nuclear energy plants. In the case of Japan, I think the power plants which had the problems were antiquated. In other words, they were not up to modern standards.

OilPrice.com: Iran has finally offered to resume talks about its nuclear program and has agreed to allow UN inspectors from the International Atomic Energy Agency to visit its Parchin military complex where a nuclear weapons program is suspected of be being developed.

How do you see events developing here and how can investors protect themselves from an escalation in this region?

Marc Faber: Well, if there are escalations, then obviously you have to be long, oil and gold. My sense is that the Iranians are playing the same game the Japanese played in the ’70s and ’80s. They always negotiated but never did anything about the changing balances – they just want to delay the hour of truth. Every day, I think the Iranians are getting closer to having nuclear weapons. I can understand why. The whole world is hostile towards Iran, and they are encircled.

In the west, France has nuclear weapons and Britain and the U.S., and their neighbor Israel, towards the west. Then in the east, India and Pakistan and of course China. So why shouldn’t they have nuclear weapons?

Mind you, either there is all around abandonment of nuclear weapons by all the powers, or every country should be allowed to have them. We in the Western World, we have the misguided belief that we are there to judge which countries may have and which countries should not have nuclear weapons.

But maybe our view is wrong. My view is that if I were looking after Iran, for sure I would want to have nuclear weapons. For sure!

OilPrice.com: Okay. So on to investments – you’ve mentioned oil and gold, but which other sectors are you bullish on, and what would you advise investors to avoid?

Marc Faber: Basically, since March 2009, equities have doubled in value by and large. Some have gone up more than 100%, some a little bit less, we’ve had a huge bull market. Last year, almost a year ago on May 2nd, the S&P reached a high of 1,370. Then we dropped into August and into October, and we bottomed out on the S&P at 1,074 on October 4th. Since then, we have a 25% rally. The mood in October and November of last year was extremely negative.

I think this is the time to be rather cautious. Personally, if I had heavy exposure to equities, I would take some money off the table.

OilPrice.com: Where do you see the best opportunities for investors in Asia at present?

Marc Faber: Right now, for the next one or two months, I don’t think that stocks will go up a lot. I personally think they will correct.

But long term, I still like Asia. My concern is if the Chinese economy slows down meaningfully that we could have economic weakness spreading around Asia as well, as well as in countries that supply commodities to China, like Australia, Brazil, Argentina, and so forth.

Right now, say for the next two months, I’m very cautious.

OilPrice.com: I was looking through some of your previous interviews as well, and in one of them, you mentioned Barack Obama. You said he was by far one of the worst presidents that the U.S. has had, and that you still believe he’ll be re- elected. In what ways do you think he is unsuitable as a president? I mean, are you fundamentally against his ideas and position on certain topics?

Marc Faber: I don’t want to get into an overly political discussion, but I think that first of all, we have in the U.S. and elsewhere highly expansionary fiscal and monetary policies, but we have restrictive regulatory policies. In other words, Obamacare is a big problem for many medium sized and even large companies, because they don’t know exactly how much it will cost them. That has retarded hirings of people.

Mr. Obama has intervened into the economy massively, left, right, and center. Every government intervention has consequences. Just to give you an example, the U.S. government debt – I’m only speaking about the government debt, not the prime debt – has gone from essentially zero 200 years ago, to a trillion dollars in 1980.

By the year 2000, we were roughly at $5 trillion. Now in 12 years, we’ve gone to close to $16 trillion. That excludes the unfounded liabilities. Under Mr. Obama, the fiscal deficit has exploded.

The big question is: Will we ever, in the U.S., have a fiscal deficit of less than $1 trillion or $1.5 trillion? I don’t see it.
Under Mr. Obama, spending has gone up and tax revenue has gone down. Change, if there was any change under Mr. Obama, it was for the worse. In my view, he’s a very disappointing president.

OilPrice.com: Marc, thank you for taking the time to speak with us. It’s been a pleasure speaking with you.

Marc Faber: It was my pleasure.

Interview originally published at: Oil, Alternatives, and Nuclear Weapons – An Interview with Marc Faber

Interviewer: James Stafford, Editor Oilprice.com

There you have it. The economy, especially under the current administration is doing some pretty reckless things with the national budget and debt. I think one of the biggest problems we see and as Dr Faber pointed out, is will we ever get our debt under control. We will not go much into the future with a promising outlook if we don’t eventually reign in spending.

Canada’s natural resources minister told delegates at the International Energy Forum in Kuwait that his country was on the cusp of becoming an “energy superpower.” Canada ranks No. 6 in terms of global oil production, but much of its crude exists in the form of oil sands. European leaders are considering a measure that would classify oil sands as an environmental issue, prompting Canada to threaten to take the issue to the World Trade Organization. With the U.S. political system in a deadlock over Canadian crude, the Ottawa government is now working to convince the international community that the global market is in jeopardy if polices “discriminate against oil sands.”

Drill-happy critics of the Obama administration are painting the Keystone XL oil pipeline planned from Alberta as a panacea to U.S. economic woes. Because of debates over the planned route through Nebraska, however, the White House has pushed the issue aside for now. The pipeline company behind the project, TransCanada, has opted for a smaller leg in the United States while the Canadian government has thrown its support behind the Northern Gateway pipeline meant for Asian exports.

Canadian Natural Resources Minister Joe Oliver said his presence at the IEF summit in Kuwait proved his country was “an emerging energy superpower.” Canada has around 175 billion barrels of proven oil reserves, which means it’s the only non-OPEC member in the global top five, just behind Saudi Arabia and Venezuela.

European leaders in March were unable to reach a decision on whether or not to characterize oil sands as an environmental issue. Critics of oil sands note that its production releases much more CO2 into the atmosphere compared with regular crude oil and its tendency to sink in water makes it a particular concern if spilled. Some critics have dubbed it the dirtiest form of oil on earth and advocate an outright ban. The European government is set to consider the issue by June.

Oliver, however, complained to IEF delegates that any policy that would discriminate against oil sands would be harmful to the global market and overall energy security. Last year, the global economy was threatened by a loss of crude oil from war-torn Libya, OPEC’s No. 7, so sidelining oil sands from Canada could be much more severe.

“Our government believes that the free market is the most efficient and cost-effective means to ensure the proper allocation of resources for the development and supply of energy,” said Oliver.

Just as Obama said there’s no “silver bullet” that can magically push U.S. gasoline prices to something American consumers consider fair, there’s nothing in a global market that’s easily replaced. Singling out Canadian oil means potentially sidelining an oil supply larger than Iran’s, something a depressed European economy could hardly stomach. But as with Iranian crude, if the Europeans don’t want it, they don’t have to buy it. While that’s an oversimplification of the issue, the world still needs as much oil as it can get. Europe is embracing a greener economy. But until global economic engines run on something other than petroleum products, when Canadian crude oil is at stake, it’s time to just let it flow.

Source: http://oilprice.com/Energy/Crude-Oil/Is-it-Time-to-Abandon-the-Oil-Sands-Debate.html

By. Daniel J. Graeber of Oilprice.com

Yes, we should work towards a cleaner planet and environment, but we are locked into crude oil being the fuel that powers the engine of commerce in the world today and we need energy and answers today, not 10 or 20 years from now.

An equitable division of the Caspian’s offshore resources have bedeviled the region since the December 1991 implosion of the USSR, putting the Soviet Union’s previous cozy arrangements with the Shah’s Iran “into the dustbin of history,” to quote Leon Trotsky.

Before the collapse of the USSR, the Soviet Union and Iran effectively divided the inland sea amongst themselves, according to the terms of the 1940 Soviet-Iranian treaty, which replaced the 1921 Treaty of Friendship between the two countries, which awarded each signatory an “exclusive right of fishing in its coastal waters up to a limit of 10 nautical miles.” The treaty further declared that the “parties hold the Caspian to belong to Iran and to the Soviet Union.”

Since 1991 three new nations have arisen in the Caspian basin to contest this bilateral arrangement – Azerbaijan, Turkmenistan and Kazakhstan. For the past two decades the five nations have wrangled about how to divide the Caspian offshore waters, and little has been achieved.

Amidst the disagreements Azerbaijan, Turkmenistan and Kazakhstan have tentatively moved cautiously to develop their offshore reserves in sectors that they believe would be indisputably within their future assignations under an eventual five-state agreement.

Even within these cautious offshore margins, Azerbaijan and Kazakhstan have increased their output in the last 15 years by 70 percent.

But at issue are the diametrically opposed positions of Iran and the Russian Federation about how to develop an international Caspian consensus beyond the now moribund 1921 and 1940 treaties. Iran insists that all Caspian nations should receive an equitable 20 percent of the Caspian, while the Russia Federation has consistently maintained that the five Caspian riverine nations should receive their portion based on the length of their coastline. Under the Russian formula, Iran’s sector would consist of 12 percent to 14 percent of the Caspian’s waters and seabed.

The stakes are high – in 2009 the U.S. government’s Energy Information Administration estimated that the Caspian could contain as much as 250 billion barrels of recoverable oil along with an additional 200 billion barrels of potential reserves, in addition to up to 9.2 trillion cubic meters of recoverable natural gas.

Accordingly, all five Caspian nations have been delicately developing their offshore Caspian reserves in areas that will undoubtedly remain theirs whatever eventual agreement is hammered out between Azerbaijan, Iran, Kazakhstan, the Russian Federation and Turkmenistan. The Russian Federation and Iran are the last two nations to move “offshore.”

Alekperov said, “Five hundred billion rubles ($16 billion) will be invested in development. This huge amount will provide an opportunity for sustainable development in the region.”

Astrakhan Region Governor Aleksandr Zhilkin waxed lyrical on the importance of the agreement for the long-term development of Astrakhan’s shipbuilding industry, situated on the lower Volga, the Russian Federation’s major river emptying into the Caspian. Zhilkin commented, “All shipyards in Astrakhan Region will have work for the next ten years. Vagit Yusufovich (Alekperov) mentioned that Lukoil is investing more than 500 billion rubles ($16 billion) over the decade.

Zhilkin’s remarks to reporters are hardly an idle boast, as he stated that Lukoil had paid more than $16.1 million in taxes last year to Astrakhan’s regional budget.

So, the Russian Federation, like its four Caspian neighbors, is now beginning to tiptoe into its offshore waters, all the while insisting that its vision of divvying the inland sea prevails.

The last two decades have seen an apparent pragmatism slowly evolve over the Caspian offshore resources, first in Baku, followed by Astana, Ashgabat and more recently and reluctantly, Tehran and Moscow. While the issue of a final disposition of the Caspian’s offshore waters remains significant if for no other reason than the various proposed undersea pipelines such as Turkmenistan-Baku, which could be an influential element in the European Union’s projected $15 billion Nabucco natural gas pipeline reverie, all five nations seem to be moving cautiously towards planting their offshore flags in areas unlikely to arouse their neighbors.

It will be interesting to see if they meet in the middle.

Source: http://oilprice.com/Geo-Politics/International/Tensions-Increasing-Over-Caspian-Energy-Riches.html

By. John C. K. Daly of http://oilprice.com

The $99.36 to $99.99 combination should act as a pivot zone, controlling the market’s short-term direction. Since the steep Gann angle moves up at a rate of $4.00 per week. This market is going to have to close above $103.36 on a weekly basis in order for it to maintain its torrid upward pace.

Bullish traders will want to see the market continue to hold $99.36 this week. Since last week’s close was at $98.99, the market will have some catching up to do early in the trading session. A failure to regain the steep uptrending angle will be another sign that buyers are lightening up their positions and that sentiment may be shifting to the downside.

It sounds complicated, but it’s not. This market is being driven by momentum at this time. A slowdown in momentum will show up on the charts and will be the first indication that an overdue correction is about to begin. Traders have to watch for this momentum shift because the market is vulnerable to a correction of its rally. The first downside target is a 50% price level at $87.28.

Fundamentally crude oil is being driven higher by a combination of economic and external events. From an economic standpoint, the market was boosted by a weaker U.S. Dollar and a slight easing in the uncertainty over conditions in the Euro Zone. Political changes in Greece and Italy helped fuel a shift in sentiment late in the week, driving up demand for risky assets.

Earlier in the week crude oil’s link to the Euro was demonstrated after the yield on Italian 10-year government bonds surged to a new lifetime high of 7.48%. Crude oil prices plunged sharply lower on Wednesday, but this loss was regained after Italy’s Parliament on Friday approved an amendment to the country’s 2012 budget regarding new austerity measures. This then allowed for the resignation of Prime Minister Berlusconi without having to go through a long, drawn out process.

Political and economic conditions also improved in Greece after new Prime Minister Papademos approved the country’s latest austerity plan and accepted the terms of the Euro Zone’s 130 billion Euro bailout proposal. This action helped turnaround the Euro late in the week, giving traders the confidence to buy riskier assets like equities and commodities.

A couple of U.S. economic events also helped boost energy prices. On Friday, preliminary data showed that U.S. consumer sentiment rose to its highest level in five months in November. A drop in U.S. jobless claims also helped contribute to demand for higher-yielding assets. It appears that the U.S. economy is holding steady just waiting for the situation to improve in Europe.

Last Wednesday, the U.S. Energy Information Administration reported that U.S. crude oil inventories fell by 1.4 million barrels the week before to 338.1 million barrels. This came as a surprise since analysts were looking for an increase of about 0.5 million barrels. A report that China imported 29.6% more crude oil in October than last year was also a sign of an improving global economy.

Finally, early last week the U.N. reported that Iran was producing weapons grade Uranium like for its military operations. This fueled talk of an impending embargo of Iranian crude oil. Any disruptions in the supply chain will be bullish for crude oil prices, given the tight supply/demand situation.

All of the key fundamentals support higher prices, but traders will have to deal with the reality that many of these factors have already been priced into the market. The key to higher prices will be whether shorts will continue to be pushed out of the market and if buyers will continue to demand crude oil at such lofty price levels.

The fundamentals say yes, but the charts say the market is vulnerable to a near-term correction because of overbought conditions. Bullish traders should approach the market with caution as it approaches the psychologically important $100 per barrel level.

Factors Affecting Crude Oil This Week:

Supply and Demand:  With economic conditions improving in the U.S. and conditions getting better in Europe, demand for crude oil is expected to increase. This is likely to show up as a drawdown in U.S. inventory this week. Weekly inventories are going to have to continue to decrease to support $100 crude oil.

European Sovereign Debt:  Conditions seem to be improving in the Euro Zone because Italy and Greece have agreed to play by the rules. This will allow the European Union finance ministers to work on raising the money it needs to fund any future bailouts. The unknowns remain Spain, Portugal and Ireland. Will problems arise in these countries which trigger another setback?

U.S. Economy:  This week’s key reports include consumer inflation, producer inflation and retail sales. All are major reports tied to the strength of the U.S. economy. Traders will be watching for growth since this will be linked to any future decisions by the U.S. Fed to implement additional quantitative measures.

Source: http://oilprice.com/Energy/Oil-Prices/Crude-Oil-Analysis-for-the-Week-of-November-14-2011.html

By. FX Empire

Used with permission.

While it will cheer nuclear advocates, overall the report makes for grim reading.

Pulling no punches, the report states at the outset, “There are few signs that the urgently needed change in direction in global energy trends is underway.”

Stripped of its cautious language, the IEA report essentially noted that should present trends continue, the world’s governments through a lack of progressive initiative embracing alternative energy sources would continue to rely on ‘tried and true” fossil fuels, resulting in increased pollution, more fossil-fuel dependency and increasingly upward energy prices.

For environmentalists, this is all good news, but the report contained a caveat virtually anathema to all green movements, that accordingly, governments should reconsider their reluctance to embrace nuclear power, as it does not generate greenhouse gases.

Like many discussions in Western economies since 2008, when the global recession first began to draw blood, the issue of reliable energy production ultimately devolves down to dollars and cents issues.

The grim reality for environmentalists is that no single renewable energy resource, from wind power to solar energy through biofuels, has remotely become competitive with kilowatt hours of electrical energy generated by coal or oil-fired power plants. The debate pits those opposed to a transition to greener technologies to those considering the bottom line, despite greenhouse gas emissions.

Even worse for the environmentalists, the IEA report advocates that as a short-term solution, governments ought to reconsider nuclear power, as it produces zero CO2 emissions. Projecting into the future the report notes, “A low-nuclear future would also boost demand for fossil fuels: the increase in global coal demand is equal to twice the level of Australia’s current steam coal exports and the rise in gas demand is equivalent to two-thirds of Russia’s current natural gas exports. The net result would be to put additional upward pressure on energy prices, raise additional concerns about energy security and make it harder and more expensive to combat climate change. The consequences would be particularly severe for those countries with limited indigenous energy resources which have been planning to rely relatively heavily on nuclear power”

But while sketching out a bleak scenario should governments remain largely disengaged to the larger issues involved in energy production, the IEA report nevertheless ends on a cautiously optimistic note, with its authors concluding, “International concern about the issue of energy access is growing. The United Nations has declared 2012 to be the ‘International Year of Sustainable Energy for All’ and the Rio+20 Summit represents an important opportunity for action. More finance, from many sources and in many forms, is needed to provide modern energy for all, with solutions matched to the particular challenges, risks and returns of each category of project. Private sector investment needs to grow the most, but this will not happen unless national governments adopt strong governance and regulatory frameworks and invest in capacity building. The public sector, including donors, needs to use its tools to leverage greater private sector investment where the commercial case would otherwise be marginal. Universal access by 2030 would increase global demand for fossil fuels and related CO2 emissions by less than 1%, a trivial amount in relation to the contribution made to human development and welfare.”

Accordingly, what is most notable about the IEA report is two things.

First, energy options beyond dependence on traditional fossil fuels such as coal and oil not only exist, but are available in significant amounts to make a serious contribution.

Secondly, as Germany’s experience in weaning itself off nuclear energy is showing, the alternatives are more expensive than current power production modes.

According to the IEA’s scenarios then, the issue of global power production over the next two-three decades devolves upon two major issues.

The first is cost, which will undoubtedly be an uphill struggle for many governments seeking to meet the population’s rising energy demands, who will be loathe to endure increasing energy bills.

The second consideration is the contentious issue of global warming, and the impact of traditional fossil fuel-fired power plants belching vast amounts of CO2 into the atmosphere.

While even the most diehard proponents of traditional power plant electrical generation to not deny that their facilities emit significant amounts of carbon dioxide, they denigrate the concerns of environmentalists as ‘fuzzy science.”

So, at the end of the day, the two fundamental issues facing the world’s nations seeking to satiate their population’s demand for reliable and inexpensive power devolve down to cost and scientific projections. We’ll leave the final word to the IEA, which laid out three scenarios, ranging from best- to worst-case – “The wide difference in outcomes between these three scenarios underlines the critical role of governments to define the objectives and implement the policies necessary to shape our energy future.” Accordingly, the major question is whether global governments will have both the cash and political will “to shape our energy future” to the best possible ends

Source: http://oilprice.com/Energy/Energy-General/IEA-Report-Calls-for-Governments-to-Embrace-Nuclear-Power.html

By. John C.K. Daly of http://oilprice.com

Government should protect us from evildoers who would rip us off and engage in immoral and illegal activity, but to take money that does not belong to them and purport to act benevolently as the creator of prosperity is nothing but delusion. One wonders if this is purposefully created delusion intended simply to control the masses or if government officials actually believe in their self created fantasy. Taking money out of my pocket on a regular basis to give to someone so they can go buy groceries, does neither of us any good in the long run. For myself, I receive no benefit for that money taken and the recipient ultimately learns dependency. Extrapolate that out to a few million people and see what you get. The only one that really benefits is the politicians stealing the money from you and I end up getting votes from the people they give the money to.

It is interesting to note that even before the President’s speech he is calling for Congress to to pass his jobs bill and do it quickly, for the benefit of the country of course. In other words, Obama is saying, don’t really take a look at what I’m doing or the actual details of this plan, just pass it because I know what is best. We are also being told by the President’s press secretary Jay Carney that the things the President is proposing will bring unemployment down to below 9%. Let’s not forget that we were also told that the President’s $787 billion stimulus would not let unemployment get beyond 8%. If you are counting, we are currently at 9.1%.

And we’re supposed to believe that someone who has never hired a single employee, but has organized plenty of mobs to protest evil, greedy corporate America, is going to tell small businesses and big businesses how they ought hire people. Oh, the President can tell businesses how they should hire more people and put America back to work, but can he do a simple ROI calculation on investment and revenue from real sales of real products or services and see if there is actually a profit after all the government intervention and red tape. I think not.

Apparently that math escapes the President as he likes to showcase businesses that receive government stimulus and hire 150 people at a cost of $2 million per job. Or he likes to push the green job thing on us and these businesses fail to live up to their promised hype or they just simply go out of business as did Evergreen Solar. Never mind that this proves what reckless spending government stimulus really is, instead of admitting that fact, we’ll just blame those rascal Germans on this gargantuan failure because we cant quite fit Bush into this one.

The most productive thing our current President does these days is give speeches and so we will be treated to yet another one come September 8th. This will be somewhere between the 4th and 10th time Obama will state that he has a plan to create jobs and this, finally, will be his main focus, at least until another vacation or round of golf.

“Republicans in Congress are insisting on a different approach — a cuts-only approach -– an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all.  And because nothing is asked of those at the top of the income scale…”

My emphasis added.

Really Mr. President, wealthy Americans are not contributing anything at all to this orgy of government spending? And exactly nothing is being asked of them, as if it is their responsibility to cover for you and your wife’s over-the-top-jet-set-vacations, endless golf outings and trips around the world as your contribution to the crisis we are now facing? This kind of rhetoric from the Propagandist in Chief who acts more like a king than a president, is designed to do nothing more than incite people into thinking that not only do the rich benefit from the poor, but in the process they also contribute nothing. As a supposed leader, the President is insinuating that the rich don’t pay any taxes.

The only thing further from the truth than the statement in quotes above, is that the person who now resides in the White House is actually qualified to be President.

Of course the rich are contributing to the revenue base that runs this country, they are contributing greatly. For example, a person who earns $100,000 per year pays approximately $22,000 per year in taxes, while someone who earns $1,000,000 a year will be paying $320,000 per year in taxes. So, a person who makes 10 times what a $100,000 per year earner makes, will pay 14.5 times the amount of taxes than the lesser earner does. I guess the government parasites are right, the rich don’t pay their fair share, they pay way, way too much.

Another way to look at this is to ask if the person making $1,000,000 a year actually uses $320,000 worth of government services in that year. Does the fact that they make that much money create such a burden on the system that they need to pay all that extra money? What about the money a top earner spends, does that contribute to the economic system that runs the wheels of commerce or should we just tax them more? Let’s have a look at that.

Not only does the high income earner spend lots of money, many times they also pay a premium for services that the rest of us never really see and all the money they spend obviously goes into someone else’s pocket whether that be profits for a business, wages to employees of those businesses or directly to individuals for goods and services. Let’s say a $1 million a year earner buys a $100,000 automobile, that money gets divided up amongst the:

Salesperson
Sales manager
Dealership owner
Receptionist that greets customers
Service advisers
Mechanics that service the car
Administrators that service warranty claims
Janitor that sweeps the dealership floor
Auto detailers
Auto shipper

And then we move on to the manufacturing process. These people also get a cut:

Auto assemblers
Assembly floor manager
Quality inspectors
Auto designers
Engineers
Parts fabricators
Tool makers
Inventory and stock personnel
Parts buyers
Parts expeditors
Parts suppliers
Material suppliers
Parts designers
Raw material suppliers
Parts shipping and transportation
Process engineers
Procedure writers
Assembly trainers
Facilities maintenance personnel

And then there’s the cut the government gets in:

Waste disposal fees
OSHA inspectors
Tire taxes
Battery taxes
Hazardous waste certifications
Emissions inspections and taxes
Permits
More permits
Environmental impact fees
Possible gas guzzler taxes

All that and more is paid by the rich person who injects their wealth into the economy of just buying an expensive automobile. Yes, wealthy people buy luxury items, but someone has to make and then sell those items and as you can see from the list above there are a lot of people along the process to getting an automobile to market and then to the consumer.

Beyond just purchasing transportation, rich people also buy the same things you and I buy. And then there are those extra premium fees mentioned earlier. We recently went to Ft Lauderdale and although I love this part of South Florida it can be very expensive to live there. Almost everywhere you turn you have to pay for items and services that the rest of us rarely see. Yes, we had to pay for those services while we were in Ft Lauderdale, but the people who live there pay for them every day. Some of those fees include parking at hotels and on the street. It costs a minimum of $20 a day to park at any of the hotels in town or on the strip or $6 for 2 hours while you go eat breakfast at a hotel. If you want to go downtown and shop add $6 to $12 on top of your purchases for the privilege of parking near shopping.

Property taxes are also much higher in areas like Ft Lauderdale. On top of the cost of your dwelling and property taxes, there are then either condo association and maintenance fees or home owner association fees that pay for people to keep the outside of you building from crumbling or the common areas of your neighborhood mowed and tidy looking. Gee, those silly maintenance and lawn workers, they have to eat too you know.

No, we’re not done quite yet. If you have a lot of money and can afford to stay in Ft Lauderdale in the more exclusive hotels, beyond the cost of either paying for parking at the hotel or renting a car that puts money into the local economy there is that rip-off hotel tax we have in Florida. All Florida hotels have the tax, but when you stay in an expensive hotel, such as in Ft Lauderdale, you obviously pay more for that. For instance, if you were to stay at the W on Ft Lauderdale Beach for 3 nights at a cost of $400 a night (a cheap rate by the way), your 3 day stay will cost you $1,200 plus $72 state sales tax, plus $78 Florida State Hotel Rip-Off tax because apparently the money tourists are bringing into the state by vacationing here, just isn’t quite enough. Did you get that? Someone who stays at the W in Ft Lauderdale Beach for 3 nights pays an extra $78, on top of all the other fees and taxes, just because the state of Florida demands it.

It is obvious that people who have money, spend money, and that money doesn’t just go into a black hole, it goes to pay the salaries of people who provide the goods and service that cater to people with wealth. It keeps the economy humming along at a pretty good pace but, according to our President and many members of Congress who continue to beat the class warfare drum, what the wealthy are doing to contribute to the economy is absolutely nothing.

Government acts as if the money they spend belongs to them, when in fact, it doesn’t. The height of absurdity and propaganda comes from this White House infographic where it is shown how much the policies of George W Bush added to the national debt vs what Barack Hussein Obama policies added to the debt. The evidence that this group of thieves who are now running the show thinks that government money actually belongs to them is at the bottom of the infographic where the Bush tax cuts are being blamed for adding $3 trillion to the debt. That’s like me going over to my neighbors house and stealing $100 and then claiming that it cost me money when I decide to return $50 to him out of the goodness of my heart. It wasn’t my money to begin with and it costs me nothing to return any or all of the money to him.

The bottom line is that the rich do pay their fair share as do the rest of us. We give enough money to the parasites in Washington, they don’t need any more money. The real question is, when is the government going to stop creating more social programs, more bureaucracies, more government Czars and more inventive ways to spend our hard earn money and start reigning in the orgy of spending?

We are waiting…