Richard Young, EditorIntelligence Report
Gasoline prices have gone up an average of 20 cents per gallon nationwide in the past two weeks. Okay, I guess that is supposed to be surprising considering the easing of prices at the pump over the last several months. But it doesn’t surprise me in the least.
You’ve probably heard it said that the world is running out of oil and that’s why it’s costing more. That’s just balderdash!
The world is swimming in oil and reserves are expanding. But still, prices are up from about $20 a barrel on 9/11 to around $60 a barrel today. Why? Because oil has become the ultimate weapon of Havenot revenge.
You see, there was a fundamental shift that occurred on 9/11—and it signaled the start of World War III. Since that day, we have lived and invested in a completely new environment. With a new set of rules. And a stark new reality. It’s the Haves versus the Havenots.
And oil is the dirty bomb of this new conflict.
Conventional wisdom sees oil—and commodities in general—as a simple see-saw of supply and demand. Tighten supply and prices rise to a point where demand slackens and prices drop and equilibrium is restored.
Any time a fundamental shift occurs, the biggest money is made by the earliest movers. And the biggest money lost is by those who stubbornly ignore the shift.
The appearance of the VW beetle in the early 1960s was a warning that Detroit ignored. Indeed, their ’60s models were bigger and bigger—even as their sales got smaller and smaller.
Look around. Fast food, the PC, the cell phone, next-day delivery of a new mattress, suburbia, low-commission stock trading—big or small, fundamental shifts create fortunes for those smart enough to get in early.
And they kill those who ignore or deny change.
The fundamental shift that occurred on 9/11 signaled the start of World War III.
Since that day, we have lived and invested in a completely new environment. With a new set of rules. And a stark new reality. It’s the Haves versus the Havenots.
Oil is the dirty bomb of this new conflict.
You’ve heard it said that the world is running out of oil and that’s why it’s costing more. This is balderdash.
What You Haven’t Been Told
The world is swimming in oil and reserves are expanding. The Saudis are bringing an extra two million barrels a day online next year and refining capacity is more than ample. Usage is down—people are cutting back.
But still, prices are up from about $20 a barrel on 9/11 to around $60 a barrel today. So: why? Because oil has become the ultimate weapon of Havenot revenge.
If you want to see this dirty bomb used at its cruelest, consider what “Father Joseph” Putin did in February 2004. He simply cut off the gas pipelines to Belarus. It was exactly what it appeared to be—an act of terrorism—a guerrilla maneuver in the greater World War III action.
The Gates of Hell—Not Supply and Demand
Conventional wisdom sees oil—and commodities in general—as a simple see-saw of supply and demand. Tighten supply and prices rise to a point where demand slackens and prices drop and equilibrium is restored.
Nice concept. But let’s look at reality.
Saddam Hussein’s dream of domination over the entire Middle East was based on taking control of nearly 40% of the world’s energy supplies. As mad as his plot was, the use of oil as blackmail now extends from Putin in Russia to Chavez in Venezuela, Morales in Bolivia, tribal chieftains in Nigeria and Ayatollah Khamenei in Iran.
In short, the rational era of supply and demand vanished on 9/11. The new, insanely vengeful era we now live in uses oil as the weapon of first resort.
Oil Stocks: A Slow Swim across a Shark Tank
As investors, then, we need to be very careful about using oil in our program to make a million dollars. We must not make the mistake of buying it “because we’re running out” or “because it’s going up.”
We’re not running out any time soon—and it isn’t even going up, not in a straight line, anyway. Oil’s price, as we’ve seen, is almost purely a reflection of how it is being used as a weapon. After all, Saudi oil costs just $3 a barrel. Call the other $50 or so the fear premium.
Safe. Fast. In That Order
For our purposes, this makes overseas oil exploration companies a very high risk. It also makes global and foreign oil stocks in general speculative.
No thanks. Here at Young’s Intelligence Report we’ve played oil the safe way. So let’s stay home and make 20% and a 6.5% annual yield in a U.S. pipeline company. Let’s stay home and ALSO make 247% in a Canadian tar sand stock. That’s what we’ve been doing. It’s time you did likewise.
Join Canada’s Oil Rush
Canada’s oil sands hold 175 billion barrels of oil—a treasure trove that rivals Saudi Arabia. The fact that the region is friendly to U.S. interests makes it even more valuable.
It costs about $20 a barrel to boil these tar sands down to sweet crude. The math, when oil is trading above $60, is compelling.
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