Lets stop with the political hot potato concerning oil.

There has been a lot of talk of late centering around President Obama and the gas price hike we have seen in the US. Many people blame his policies, pushing alternative green energy over conventional energy (like Nat gas, coal and Crude). There has been people in the administration that have actually gone on record admitting as much. Dr Stephen Chu actually said in an interview with the Wall Street Journal in late 2008 (before he became part of the cabinet):

"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,"

According to the WSJ, Dr Chu would do this by quote: "raising gasoline taxes gradually over 15 years to coax consumers into buying fuel-efficient cars and discouraging sprawl".

Now, we haven't seen that happen as of yet. We already have seen however that the Administration does play favorites when it comes to the agenda or promotions of industries they see fit. We have seen that with Solyndra and GM. While that does point to an obvious flaw or at least a blurred line in the relationship between private industry and the state; it is something that isn't unique to the Obama Administration alone. It is also not he reason gas prices have gone up either these last few years.

Just like playing favorites when it comes to energy sources, the Obama Administration is guilty of a double standard in handling or at least blaming the source for fluctuations in gasoline prices. This was a stump speech in Indiana from 2008, one in which President elect Obama was campaigning on the high oil prices pushing blame on the Bush Administration and the oil companies, staying true to his populist ideals:

There have been examples of President Obama deflecting when it comes to what is happening with the price of gas, blaming everyone from speculators to people driving SUV's. So its pretty clear, the Obama Administration has favored alternative energy over conventional and he has also used double standard logic to defend the rise in oil prices.

Again, these are not reasons why gas prices have went up. As i pointed out earlier this year, we here in the US are now actually a net exporter of fuel for the first time since the 1940's, yet prices in gasoline have only went up. The reason is very simple. Its a global economy and oil is the heart of the global economy, there is very little one country can do to offset the global price that is measured in US inflationary dollars. 

Now, with that said, the biggest reasons we are seeing rises in fuel prices specifically at the pump is also simplistic. The world is consuming more oil, the supply has remain unchanged, thus the law of supply and demand have driven the price up. Just look at the demand.

 As we can see the emerging markets and growing economies are consuming more and more oil and we are consuming less. We are seeing now the fruits of their labor that comes from producing our cheap goods. The emerging economies are showing the world what it means when people say "a rising tide lifts all boats". And to the contrary, ours are staying stagnate or sinking. That's just cause and effect. Now what about supply?

 oilprice.com

As we can see here and pointed out by Gail Tverberg:

"Since 2005, world crude oil supply has bumped up against what seems to be a limit of 75 million barrels of oil a day. No matter how hard companies try to extract more crude oil, and no matter how high world oil prices rise, they seem unable to extract more than 75 million barrels a day (MBD)."

So again, supply has stayed level, while demand has risen and while some look at the price of gas and the recession and rise in prices during the recession as proof of something to use as an excuse for blaming the administration its clearly not based on fact. Here is the graph that really tells what is happening.

Chart courtesy of Gecko Software
As you can see above, the demand in oil has increased with the price, nothing fishy or speculative about that. Its just simple mathematics. What we seen in the march from 2002-2008 is what we are seeing now. 2008 wasn't some anomaly; it is reality. That is where the economic equilibrium now lies, but the more reckless spending and the more we rely on credit that dilute savings; the equilibrium will only rise in terms of dollars.

This idea that we can spend and borrow our way to prosperity is going to have some consequences; cheap oil is one of them. And when you factor in the emerging economies, it only speeds the rise in prices that much quicker. Call it cause and effect, call it 2+2= 4.... whatever you do call it, just call it what it really is, not what you want it to be. Stop pretending this is some partisan issue when clearly, this long term, cannot be a political football. Now if you want talk about getting Nat-Gas powered cars... that's a different issue. Natural gas is really where our ultimate prize lies.

Get your Burl "silver" Ives on.

Everyone remembers the movie “Indecent proposal”. The movie where Robert Redford offered Woody Harrelson's character 1 Million dollars for one night with his wife, who was played by Demi Moore. The movie gave a complex view of how people value themselves in relation to money and it probably made a lot of people play the “what if” game because of it. I remember being a teenager playing the “what if” game myself. More often than not, it was centered on money as well. For example: 

How much would it take for you, to let Michael Jackson fondle you?
If reincarnation allowed you to come back as someone, who would it be?
If you won a million dollars, what would you do with it?
  
The first scenario was when MJ was in his heyday of molestation, so it was relevant then – not proud of it, but true nonetheless. That last scenario was the one I would think about often to myself.  Being that i was young, the answers were predictable for a kid who just wanted to play sports and nothing else. Those fantasy dollars were chasing imaginary possessions like: cars, houses and basketball court's in my backyard(s). You get the idea. As I got older, the view became more conservative, one built on investing and preserving that wealth. I’ll get back to that later. 

Up until recently I haven’t given the “what if” game much thought. That is until I seen this story of a woman in Michigan, who won a lottery worth: 1 million dollars. 

Amanda Clayton, a 24 year old unemployed female, won the "Make Me Rich!" lottery earlier this month as reported on by everyone in the national media. The overview is simple. Mrs Clayton took a lump-sum payment of 500K after taxes and bought two houses and a car. Or exactly what I would have done…20 years ago. 

The rub is that Mrs Clayton also collected $200 in food stamps monthly even after she had won. Now any reasonable person would understand or sense an obligation to end his or her case and stop receiving the foodstamps but Mrs Clayton does have a point. She went on record stating that:

“I thought, maybe, it was OK because I'm not working. It's hard. I am struggling."

You see she is struggling, she doesn’t have a job and if that wasn’t hard enough, maybe you will tear up when you know that she quote:

“I have no income and I have bills to pay. I have two houses."

How is someone able to hit the lottery for seven figures and still legally be eligible for food stamps? Because, according to federal guidelines; gambling and lottery winnings are considered liquid assets and don't count as gross income. Therefore, one could hit the Mega-Millions 350 Million dollar Jackpot and still collect their foodstamps. So technically speaking, she wasn’t breaking any laws. Technically is one thing, morally or ethically is another.

Now, you are probably asking yourself… what does that have to do with you and the “what if” game and Mrs Clayton striking it rich then still collecting foodstamps? It’s obvious that what Mrs Clayton did was unethical and really a microcosm for many in society, who feel they are entitled to benefits. Many times, those benefits are goodwill or tax dollars from others used to give the less fortunate a hand; to only be stolen and pillaged by people that could otherwise do for themselves but would rather go this route because it easier.

Now, when I played the “what if” game as I got older I would always say I would invest the money in a CD or save it in a Money Market or just conventional savings account. Back when I was doing my dreaming (in the mid-90’s) a Jumbo CD yield was anywhere from 4-6%. Obviously I would have taken out multiple CD’s because of the limitations of the FDIC, but that is really all you would have to do to live off the interest. Pretty simple, no money manager needed. Sure it’s not exotic but its conservative and simplistic. What about now? 

 Graph from: Bankrate.com

In the 90’s we could live off of 35-40K a year, the yield we could expect from a million dollar investment. I assume that would be sufficient for Mrs Clayton (she may only be able to own one house thou) and I know it would be for me. Now with that said, let’s play the “what if” game in today’s environment. 


For anyone of us that frequent a bank and see the rates on the wall, we know the return isn’t worth them holding our cash. As you can see from the link below, a jumbo today would yield you at the most 1.15% with most of the interest rates being below 1%. Using today’s interest rates, it would have us collecting anywhere from $7,500-$13,000 off of 1 Million dollars in Jumbo CD’s. That is not livable by most standards.

 http://www.bankrate.com/funnel/cd-investments/cd-investment-results.aspx?prods=15,24

What this says is what we already know: fiat money, fractional reserve banking and our entire monetary policy/system is starting to eat itself. The debt driven - black hole gathers strength. It’s hurting the poor and those people who rely on cash of course but like we see here, it hurts the savers (where true capital comes from) and instead, favors the wealthiest and credit whores. As I pointed out with pending interest rate tsunami that is coming when/if the FED raises interest rates and the fact that the American consumer is tapped out and saturated in debt, our demise is only a mater of time. Today, the “what if” game for me and hopefully anyone else (including you too Amanda) only consists of silver and gold… and some guns.  

The pigs are at the Sanford trough

There has been a media firestorm surrounding the death of Trayvon Martin, the 17 year old tragically killed in Florida last month. Martin, who was unarmed and black, was returning home from a 7-Eleven when he was gunned down by George Zimmerman, a neighborhood watchman, who is half Spanish and half white, had a permit to carry a concealed weapon. 

Photo from: AP

  

The tragic death of Martin is undeniable. A young man cut down before even reaching the age of adulthood by the hand of an adult, is a tragedy that has a unique sting to it. Anytime a child or teenager is raped or murdered by an adult; it always cuts deeper and this is no exception.  

Now, much of this case is still pending but it appears this was a murder and if it was race motivated or not, is anyone’s guess at this point. The only person that could answer that for certain is Zimmerman and Zimmerman only. If it is in fact a hate crime, then Zimmerman wouldn’t be the first or the last white man to kill a black male. Just as there will be black males who kill white males. 

The motives for individuals involving any violent act have to be taken at a case by case basis. There is crime and murder everyday involving all races in a variety of ways and this will continue happening everyday, until the day every man exists this earth. In fact, the more the population grows, the more tragedies there will be, it's just simple math.

What is interesting to this author, is the relevance of this situation in terms of race and the charge of racism. How often do we look and say that these events that take place so often daily are racially motivated? And if they were, then it would be a racist committing a murder. There is nothing you can do to stop these events from happening; it’s up to each of us individually to do so. 

Racism and terrorism is the necessary evils of a free and open society, it's consequences we have to live with. We don’t have to like it, but it's individual responsibility that will keep them at a minimum, not exclusion and division; they only fuel the fires of the very same things they are against.

However, don’t tell that to those people who make a living off division, collectivism and race baiting that bit; it wouldn’t fit their agenda. And wouldn’t you know it, as soon as this tragedy started to simmer towards a boiling point across the country, the usual suspects had arrived (well at least half anyway) all feasting on this tragedy like pigs at a trough. Under a guise of racial justice, you can’t help but notice the stench of wicked self promotion, racism and cynicism trailing their every move, like freshly flattened skunk; beneath a tire on the road to collectivism.

Al Sharpton and Jesse Jackson Sr have become synonymous, if not the face of every national crime, injustice, slandering etc etc involving a black victim and a white perpetrator or instigator, for the last forty years. Both of their entire careers and livelihood, have been made possible by racism, and the dividing of people based on race and creed. But above all, the creation of national headlines based on isolated incidents, is where their pockets get lined in emerald.

I could understand the national outcry if we were seeing an influx of murders like this happening everywhere but that isn't the case. We live in a country of 300+ million; it’s statistically unavoidable to not have incidents like this happen. Even if this case was involving the grand wizard/master of the KKK, it’s still an isolated incident. One person killing another person isn’t indicative of anything broad or sweeping.

In this case, we have a potential racist who uses self defense and felt his life was in danger even though the kid was unarmed while Zimmerman was. Zimmerman felt fear for his life even as he was following the young man. Pretty damning to me and he should be tried and/or punished accordingly. You also have the police department who didn’t arrest Zimmerman or at the very least detain him for questioning. This is also worth an investigation from local or state authorities. But how this is a national story is beyond me.

Even our own President’s Press Secretary,  Carney said as much earlier this week:

“Our thoughts and prayers go out to Trayvon Martin’s family but obviously, we’re not going to wade into a local law-enforcement matter.”

But that didn’t last long, as we all know by now. The president, true to his populist DNA, flipped the script and appeased to those calling for justice when the media began to run with this story. By doing so he did the exact opposite of what he said (and it was the right thing to do then and now) just days earlier, he waded into it. And why wouldn’t he? A populist running for re-election following the breeze of the assembling masses? Surprise…surprise. Titus Livius said it best:

The populace is like the sea motionless in itself, but stirred by every wind, even the lightest breeze.

Mr. Livius, I would like you to meet our President of the United States, Barack Obama; he is the Pacific Ocean in terms of populace seas. Our President however isn’t a race baiter, he isn’t out to divide anyone more so than any politician is by political nature. Al Sharpton however does not share that trait with our President. These were his quotes this week concerning this tragedy speaking at a rally in Sanford, Florida. Notice the vast amounts of pronouns and the context and which how they are used.

 

“Violence is killing Tray Martin, on’t act like we are the ones [who are] violent. We didn’t shoot nobody.”

“I want our people to understand that how you behave is going to be a reflection on this case”

“[No matter] how angry we get, don’t let them make you act in a way that they will say, ‘see, that’s what to think with Trayvon.’”

“We are going to act intelligent, we going to act dignified. And, we’re going to be determined. We may be angry, but we’re not mad dogs. We’re too smart to fall for [that].”

This is deliberate, divisive language. This is man who’s made a career of divisiveness. Outside of working as James Brown’s manager (that must have been pretty cool to be honest) for a brief stint, what has he done to create anything or provide a service before getting his own show on MSNBC? He’s been a preacher at some point just like Jesse Jackson was and just like Jesse Jackson, he has only made a living creating movements and rallying around isolated incidents to gain national exposure for his own personal gains.

Al Sharpton has appeared on numerous television shows, has tax fines from the IRS and leans, been fined by the FEC for breaking campaign finance rules – the man is opportunist, and a hot mess of greed, corruption and exploitation. I would call him the biggest leech and scourge on the black community but that distinction belongs to Jesse Jackson. Jesse Jackson hasn’t made the trip to Florida from what I have heard as of yet, but he did offer up this tidbit:

"Blacks are under attack." 

From whom you might ask? “Big Business” is according to Jackson. 

Blacks are under attack, indeed. But the attacks are coming from within, under a masquerade of outrage while concealing the truth that is self promotion via division and sensationalism. After all, if we eliminate racism what would that do in terms of job security for these two? Jesse's on a roll, apparently it is big business that is responsible. Exploitation is big business (just ask MSNBC and Al Sharpton) because it's always turning profits; to bad that there is a victim and family in mourning to make this happen.