Energy & The Wealth Of Nations
- By The Notorious CFP®
The Roof Is On Fire
It's been a wild couple of years for climate alarmism. It started in 2021 with a CNN director confessing that climate change is a hoax on par with Trump's Russian Collusion and the COVID vaccines. Midyear 2022 was marred by protesting Dutch farmers upset about the government scheme to reduce nitrogen in fertilizer that would cost 30% of the country's farmers their dreams and financial livelihood (i.e. "learn to code") and be forced to sell their land to the government. Now it's ending with New Zealand's implementation of a program to tax cow and sheep burps.
I had no idea there was so much support behind paying double for protein, my costs are already quite high. But then again, I work 70-hour weeks in a private sector job that requires ALL of the macronutrients, in order to support retirees and people who choose not to work, so I assume I simply burn more calories. I can understand how those that live off of other people's labor (through taxes) might be less enthusiastic about meat. Now that ensuring adequate food for the populace has fallen out of favor with Western politicians - an odd platform to defend - cows globally are running scared. Well, running may be a bit of an exaggeration. But you know what I mean.
Just a year prior, AOC wanted to tax cow farts, so now these poor bovine are literally being attacked "coming and going." Clearly, they should have hired lobbyists if they had a beef with these government 'solutions.'
Ok, I'm done..
One of the signs I know I'm out of my league with these leaders is that if I was running the country as theocratic dictator, I would wake up every morning and ask myself, "What could I do today to piss off our foreign enemies that would love to see us in decline?" And then I simply would pursue just those exact things. Everyday. That might seem a reasonable strategy, but it seems to me that like the current policies and rhetoric of our President and Congress (i.e. dismantling domestic energy, local law enforcement, financial austerity, physical well-being, race and sex-relations, nuclear two-parent families, social cohesion, history, patriotism, hard work, etc.) are just the opposite?
Until I can become educated enough to reach their level of intelligence, I guess I'll just keep writing obscure, kooky blog posts marginally related to finance that no one reads... while our leaders continue literally writing and directing a screenplay about how to destroy a country.
Because of current energy policy, our entire oil and gas infrastructure (and more importantly, the rest of the Western world, specifically Europe) was unprepared for the US government's efforts to remove Russian energy from the world market earlier this year. As a result, energy investors and industry CEOs have understandably been a wee bit hesitant to simply start committing billions of dollars of their own cash and credit limits into capex (capital expenditure, i.e. budgets) now.
This may also be why President Biden is begging other countries to give us more oil, presumably because their pollution isn't as bad for the planet as our pollution. The most powerful country in human history is also begging for baby formula, but that's another story... (Or is the same story? Talk amongst yourselves..)
I always enjoy how people who don't even have six figures saved in cash in their checking accounts will be the first to complain about Exxon's reticence to commit billions (with a B) of dollars to an industry the government is actively trying to destroy, just not for another 6-12 months?
These people really have never worked an honest day's work a day in their lives. Even their own media is calling them out.
Prostituting himself out to a country that President Biden labeled "a pariah" earlier this year is truly remarkable, and hardly a great look for our President or the country. So which is it? Either the House of Saud is a strategic ally or the worst human rights violator of the century, I feel like you have to pick a side. Groveling for roughly the same oil that I have under my house right now makes America look weak, and serves as yet another humiliation for an embattled administration that cannot get out of its own way and seems intent on self-destruction.
The incoming leadership famously knew from CIA "intelligence" that Russian aggression into Ukraine was imminent. They certainly understood the massive disruption that their own Russian sanctions would cause in the global energy markets. Yet, at the same time the administration was scheming to dismantle US oil and gas production (and our energy and military independence in the process), it surely also knew that a coordinated and purposeful crippling of the average American household budget would unleash unpredictable and unnecessary human suffering, as well as catastrophe for the country, the mid-terms and their legitimacy to rule.
This isn't a political statement, it simply makes no sense. How do these people have jobs? It leaves only two possible conclusions: a.) Susan Rice and her team running the country truly doesn't care about the near-term impacts of increased energy costs (that will no doubt rise exponentially after the midterms and then again after the SPR is drained dry), or b.) they really are that incompetent. Like most Americans, I go back and forth.
Bill Clinton's brilliant strategist, James Carville, said it best exactly twenty years ago, "It's the economy, stupid." Even if Rice & Co. do eventually throw Biden under the bus (my prediction, probably after the midterms and certainly no later than 2023), the damage to the country and the Democratic party will already be done. It's not like these people are new to politics- Biden has been around long enough to have witnessed the discovery of oil (he was a truck driver back then) and you don't represent 'the banker's state' without learning how the game is played.
By now, it's fairly well understood that the Biden cabinet is fully in charge (similar to Reagan's second term and George Bush Jr.'s entire career) and most likely taking orders from someone outside the administration. This is the point in the article where I usually link to the last thirteen instances of President Biden's historical Dubya-beating levels of incompetence, it's becoming a daily occurrence. There is zero chance that Biden makes any decisions past noon each day. Except possibly more pudding.
Let's be honest, if you still cling to the belief that he can still wipe his own (nose), then I can't help you and you can't help me- we operate on two separate planets. On the other hand, if you're a serious and honest person, I suspect the only difference between us is whether mental disability is more of a threat than solipsism.
So who is running the country? And what does that mean for the economy? And your wealth (i.e years of stored labor?)
Many speculate it's President Obama or her husband, former President Barak. If you're in your third Presidential term, you've clearly become quite deft in the political arena. The District of Columbia is full of political animals- power is the coin of the realm- and most of it's residents are literally unemployable anywhere in America outside of large coastal cities. Regardless of your ideology or what's perception vs. reality, few could deny that the current administration is heading into almost certain political disaster, the only questions being a.) how soon and b.) whether they will beat the Republicans in fracturing or even dissolving first.
My money is on a tie. Two drunk brawlers in the ring, leaning up against each other for support, sharing nothing more than a random jab or hook when the other provides an opening. It's not the people that are the primary source of rot, it's the system that attracts them. So until we have term limits (or genuine fear in their hearts), the insanity of the past few years is likely to continue to attract more and greater sociopaths to the swamp, in the same way that prisons attract criminals.
As we've seen, destructive fantastical delusions like police reform, increased welfare or dismantling domestic energy (i.e. liberty) is a lot of fun to contemplate and promote when your base is unaffected. But reality- and the consequences of a universe that doesn't care about how loud your fringe degenerate base yells- tends to exert itself PDQ, and usually no longer than a couple years. We're all seeing this lunacy implode on the streets of large coastal cities, college campuses and the gas pumps. As mob madness ebbs and flows, once-staunch
sycophants supporters are suddenly awfully quiet. Weird...
I'm old enough to remember two years ago when literally every politician in the country was either promoting police reform or remaining silent. The founder of Chick-Fil-A - a man despised by the left for being a Christian - was even bowing on one knee and washing the tennis shoes of a rapper. I'm not making this up, that actually happened. It was surreal then and still to this day that any man - a CEO of a large company- would bow to another man- a thug.. Besides, how do you even clean tennis shoes? I'm so rich, I just throw mine in the trash when they get dirty. Anyways, That lunacy lasted about 15 minutes and now it's been scrubbed from their script as progressives run damage control and begin to distance themselves from BLM.
‘We as Caucasians… we’re shameful’ - Dan Cathy, Founder of Chick-Fil-A
Similarly, I'm old enough to remember 2019 when climate change alarmism was the thing for a while, until gas rose over $7 on the West Coast and Land Rovers cost $90 to fill up. Now, even Greta has fallen silent when she isn't promoting nuclear power.
In addition, "moar stimulus" seemed like such an obvious solution to our problems in 2020-2021. Who doesn't like when free cash is printed up and wired into our bank accounts? Suddenly, F150 trucks now cost $80K and mortgages will be at 10% by spring, crippling real estate and household wealth and making home ownership a pipe dream for any Zoomer without rich parents to cover the down payment. I'm genuinely curious about how popular money printing and 'secret-stimulus' like billion-dollar Ukraine aid packages, inflation relief checks (whatever the hell that is..) and student loan forgiveness will be during their 2023-2024 seasons, when you literally won't be able to buy a home or vehicle at any price.
Our unemployment rate will rise in the next 12 months and our leaders are printing and contributing more money to Ukraine than the rest of the planet combined. This will be more hyper-inflationary than student loan forgiveness, but you should be fine as long as you are not receiving any paychecks or pension checks from the government.
Going For the Jugular
To be honest, I feel most sorry for our leaders. When this is all over, these folks won't even be able to find work on K Street. I come from a very long and proud line of Blue Dogs Democrats, but Kennedy would take a flame-thrower to this party (not that he nor MLK would still be allowed in it.) That's unfortunate, because America needs strong political parties, with both willing and able to cut off the cancerous 25% of fringe degenerates on their edges, like crusts on PB&J.
The right would regain their position as the party of fiscal responsibility and common self-sufficiency again while the left would return to its pre-Southern Strategy roots of tolerance and compassion. Explicitly and brazenly cramming inflation, interest rates, a dysfunctional education system, > $5 fuel and a broken supply chain up the (ear) of the middle and lower class is not compassion.
This grotesque facsimile of Camelot more closely resembles Alice in Wonderland, a true Mad Tea Party. At this pace, I sincerely doubt either party survives in their current incarnation much past 2024. I think we can all agree that Biden vs. Trump Part II would usher in the end of the republic. Could Joe Biden really survive the after-effects of the same 'drug cocktail' regimen that he consumed through 2020? It's clearly beginning to have an effect, like Mickey Rourke from The Wrestler. We all lived with or know people that took drugs during the 70-80s and have seen their impacts on those people today, their bodies and their minds. Would the consequences of this kind of consistent drug use be even worse than the conditions that Biden's team is attempting to address?
It won't matter how many apparatchiks we pump out of the university system or how many unskilled migrants we dump into the heartland (I've got clients living across the street from a prominent INS bus stop in South Texas, and unless you've seen that bus unload in front of your home with your own eyes, you know nothing about what's going on with the immigration problem, and should comment on the topic accordingly) Neither demographic will be enough to overcome the economic masochism currently being unleashed on our country. Applying more stupid to a problem has never been a viable solution anywhere but Jonestown.
Now Back To The Energy Crisis
If you consider yourself "green," then where was the benevolent and skilled invisible hand of government intervention between 2004 and President Biden's 2021 inauguration when the XOM stock price (i.e. greedy shareholder profits) went exactly nowhere FOR SEVENTEEN YEARS? (While the S&P 500 rose 5X)?... I'm old enough to remember when XOM stock lost more than two-thirds of it's value in just five years leading up to COVID? And now their executives are being painted as greedy, as Green New Deal policy has doubled their stock price in less than a year? If enriching oil and gas executives helps reduce our carbon footprint, then no thank you.
When Exxon lost $20 Billion (with a B) in 2020 (under a Republican administration), I do not remember many howls about price gouging and demands for price caps then. So what's changed?
What's changed is the media is running out of white men to vilify. They're desperate, we ALWAYS have white men to blame for our problems. But following each cancelling, the pool of candidates shrinks. Either that, or even their audience is beginning to experience lying fatigue.
President Biden, the most powerful man in the free world just got humiliated by the House of Saud AND taken to the woodshed publicly by one of America's top CEOs all in the same week. This was in response to his surreal letter (clearly written by someone who has never prepared a P&L statement in their life) that singled the company out for price gouging, when any rational person knows that this is his mistake alone. It's my conviction that the time has come for us as a country to a.) step back and re-evaluate whether our leadership would be better situated in a nursing home or halfway house (can I still use that term in 2022?) and b.) for smart investors to rewire our brains to begin looking for investment opportunities to specifically exploit stupid.
In other words, it's time to start looking at our elected leaders (and their constituents) like the credit card companies, banks and Wall Street view us. And go for the (investment) jugular by gladly taking advantage of their missteps and investor's responses (selling off), so as to bring the price of WTI back down to it's rightful 2020 range of $40-60/barrel and make some profit in the process.
Call me, I'll explain how.