First, considering the debacle in the United States credit markets, why I might ask, is Treasury Secretary Paulson expounding on the oil crisis?
No quick fix ...
According to the Associated Press...
"US Treasury Secretary Henry Paulson says he sees 'no quick fix' to high oil prices"
"U.S. Treasury Secretary Henry Paulson said Sunday that there was no quick fix to high oil prices, which he called an issue of supply and demand."
Because he does not appear to know what he is doing ...
Numerous sources have shown that the spike in oil prices cannot be explained solely by supply and demand issues. While the currently weak dollar forces oil exporting nations and others to raise their oil price to achieve a set value, others are claiming that the real rise in oil prices is due to the rampant speculation in oil futures by global money managers who are looking for a higher rate of return on their money since they have apparently lost a great deal of money in the U.S. credit markets.
"Paulson said inflation in the Gulf is 'significant' but suggested that Gulf countries pegging their currencies to the weak dollar was not the only reason for it. He said it was a 'sovereign decision' by each country whether it wants to de-peg its currency from the dollar."
"Speaking to reporters in the tiny Gulf nation of Qatar, Paulson also acknowledged the U.S. economy was experiencing a 'downturn' and reiterated that a strong dollar was in the U.S. interest."
Does this signify a turnaround in U.S. monetary policy from the position that a weak dollar was fueling the U.S. exports which have kept us out of a recession?
What is Paulson really saying?
"The Treasury chief was in the Mideast to deliver a message to officials of Saudi Arabia and other oil-producing nations that soaring oil prices are putting a burden on the global economy. He is urging the countries to open up their oil markets to investment that can boost yields, exploration and production."
Like all retired or faded Wall Street Wizards, it appears that Paulson is, once again, as if he had ever stopped, doing Wall Street's bidding by asking the sovereign oil-producing nations to allow Wall Street to design investments pegged to their oil production. A sure-fire derrivatives play with the paper instruments using oil as collateral.
Unfortunately, we already have such a system built-in to the commodities market. Therefore, what I personally believe Paulson is trying to achieve, is to switch investors out of the commodities market and into longer-term derivatives which may, and here I am speculating, have a smoothing effect on oil prices.
We have met the enemy and it is us!
"With oil at record-high prices, Paulson said there is 'no quick fix' because it is an issue of supply and demand. Global demand remains strong while "production capacity has not seen new development," Paulson said."
This is ludicrous in terms of the United States market. No new refineries are being built and refining capacity has very little headroom for expansion. In addition to issues of refining capacity are the conditions imposed by the environmental agencies which mandate seasonal and regional blends of gasoline. Thus an oversupply of gasoline in the New Mexico market cannot be shipped to California for use in Air Quality Management Districts which demand seasonal blending.
Bottom line: the United States Congress has blocked oil exploration and drilling in our own territory, often citing environmental concerns which do not even take into account new drilling technologies. With the result of pushing us to rely on foreign oil to a greater and greater extent.
One leftist liberal, in particular, annoys me. Senator Chuck Schumer who characterizes drilling in the Arctic National Wildlife Refuge (ANWR) area as both useless and foolhardy -- although it would take approximately 2-3 years to generate the same amount of oil per day (one million barrels per day) that we get from the world's number one oil producer, Saudi Arabia. And had we done this when it was first proposed, we would not be pleading with Saudi Arabia's King. Perhaps we should decide, once and for all, if the the major environmentalists have an anti-American agenda, are crazy by believing that the planet takes precedence over people or that our government has been bought by big oil and those that profit from controlled energy prices.
"He said he would like to see 'increased investment throughout the world in oil and gas and alternative sources of energy.'"
Investment throughout the world only benefits the big energy players and Wall Street, it does nothing to help the United States end its dependence on foreign oil. If Paulson wanted to actually do something important before he leaves office in January, perhaps he should stick to cleaning up the financial mess made by his Wall Street cohorts. Like asking the SEC to regulate the hedge funds which are acting like unregulated investment bankers, control the ability of large fund managers to drive stock prices downward with a simultaneous put and short sale strategy, restore the short sale "uptick" rule, regulate derivatives and a host of other things in his purview. If he wants to help solve the energy crisis, advocate for domestic drilling in now protected areas and for the use of clean nuclear energy.
"On Wednesday, David McCormick, Treasury's undersecretary for international affairs, said that Paulson will not make any specific request for nations to boost their production."
Of course not. If they didn't do it for the President after talking with the King of Saudia Arabia, they certainly won't do it for a cabinet-level officer.
"On a trip to the Middle East earlier this month, U.S. President George W. Bush failed to win the help he sought from Saudi Arabia to relieve skyrocketing gas prices. Saudi officials said they already were meeting the needs of their customers worldwide and there was no need to pump more."
Just as I said!
Feathering his nest?
"Paulson met with the top political and finance officials in Qatar, a day after he visited Saudi Arabia."
Perhaps this is the real reason for the trip. To renew contacts and seek influence for a time when he will no longer be speaking for the Administration. One can see Paulson returning to Wall Street as a power broker, putting forth the positions of Halliburton, the Carlyle Group and other industrial and capital interests.
A chance to warn Iran...
"Iran was also a focus of Paulson's meetings in the Gulf. He said the U.S. was making it more difficult for terrorists to move money around."
"'What we found is that Iranian banks have been aggressive and disruptive in moving money through financial systems,' he said."
"He warned Iran that it is isolating itself from financial sectors and investment banks that they would like to do business with."
There is "plenty of evidence to indicate that many banks are not willing to do business with Iran," Paulson said.
"That sends a message to Iran. If you want to be a rogue state, carry on the way you are. If you want to be part of (the) legitimate financial system and global community, then don't isolate yourself with your actions."
Unfortunately, there are many banks, especially in the Middle East which would gladly assist Iran in disguising and laundering their money.
Needed: Honest politicians who place the United States over personal power, prestige, philosophy and profits.
Perhaps Secretary Paulson should use his remaining time in office to do what he can to solve present problems and leave the others to his predecessor.
What can YOU do?
Consider the quality of our government's leadership and vote accordingly.
Do not necessarily rely on what is said in an elected official's speech because it may be slanted toward a particular audience to convey a policy message or promote a particular position. Likewise talks by members of the Administration who are likewise sending a "themed" message to promote the Administration's policies.
We need to de-elect far left liberals such as Chuck Schumer and his bought-and-paid-for cohorts in the democrat party and return the United States to a position of strength, power and economic growth.
Do not vote for any candidate or current politician who is willing to subvert the safety, security, sovereignty and economic strength of the United States or limit an individual's right of self-defense for their personal philosophy, power, prestige or profits.
Quote of the day: "
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“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS "The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius “A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell “Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar “Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS
“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius
“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell
“Fere libenter homines id quod volunt credunt." (The people gladly believe what they wish to.) ~Julius Caesar
“Describing the problem is quite different from knowing the solution. Except in politics." ~ OCS