Panic is not a strategy. Now is the time for those sitting on the sidelines to get into the market.
The recent volatility in the market will pass. Energy prices are falling, Cushing, OK is operating at full capacity (that is the location where most of the energy in the country passes through) and Saudi Arabia is flooding the world with oil. As energy prices fall, economies around the world will prosper. If there is a sudden disruption in the world’s supply of petroleum, that is the time to get scared. Many of the speculators who drove the price of oil up in recent months have been driven out of the market.
It is my opinion that the Middle East will continue flood the world with oil in an effort to stabilize our economy so that they can keep the current administration in place. They view the current administration as sympathetic to their world view. If our economy doesn’t recover soon, there is little hope of a 2nd term for President Obama.
The tax issue is of little merit, we had higher taxes during the Clinton administration and a prospering economy, but seemingly few remember how low gas prices were during that same time. Fuel prices affect every good and service that we enjoy. Higher taxes do hinder business, spending too much money has its own dire consequences as well, but high energy prices crushes the life out of an economy! Fewer still remember that the first president Bush paved the way for lower energy prices by kicking Iraq out of Kuwait. President Clinton rode on a wave of popularity that was the result of prosperity caused his predecessors – Reagan with tax policy as well as deregulation and energy policy under Bush.
Standard and Poor’s recent downgrade of the United States long term debt is of little merit as well. Those selling out of stocks in the market are frantically buying US Treasuries which disproves the downgrade in fact, not theory! Though I don’t have a clear understanding of why, I feel that it is obvious that Standard and Poor’s has an agenda in this action. Whether they seek to influence policy or if they are just trying to set themselves apart from other rating agencies, I don’t have an opinion at this point.
Due to the controversial nature of this action, I believe that S&P has over stepped its boundaries. I have therefore canceled my research subscription that I have with them.
Unless this country develops an effective long-term energy policy that goes beyond politics, paybacks and retribution, I believe we will repeat previous mistakes. In the meantime, the words “Drill Baby Drill” couldn’t be more appropriate. The main stream media does not widely publish the fact that countries such as China are drilling oil wells in the Gulf of Mexico (in international waters of course) while our “Chief Executive” has placed a moratorium upon drilling there.
Recent developments in technology have enabled exploration and production companies to find and economically access oil, natural gas and natural gas liquids that were previously inaccessible. It is reported that our country ALREADY has enough “proven reserves” of natural gas to provide for the energy needs of our country for over 100 years and more is being discovered regularly.
If this country develops an effective long-term energy policy that frees us from dependence upon foreign sources, we will experience and era of unprecedented growth and prosperity.
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