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The Way out for America

With all the doom and gloom this is a very uplifting article from the American Thinker Blog. We have the largest oil reserves in the world’

Economic despair reigns in America, as stagnation and mounting debt make our future look hopeless. Yet America is uniquely positioned to rebound and recover our economic preeminence. All that is necessary is a political decision to reverse our energy policy and stimulate domestic production of hydrocarbons. From that would flow a true economic stimulus that would mend many of our ills.
The United States is again, for the second time in less than three years, being reminded of its absurd dependence of foreign sources of energy, most notably, oil.  The upheavals in the Middle East have driven up the cost of a barrel of oil into triple digits as it was in 2008.  The increasing demands of countries such as China and India and the deliberate devaluation of the dollar by the Federal Reserve and the Obama administration are steadily pushing up oil prices in dollars.
The country’s dependence of foreign sources has increased to 52% of the daily requirement as compared to 45% just 15 years ago. Over half of that amount comes from countries that are inherently unstable or ruled by despotic regimes whose interest it is to de-stabilize the United States.
Yet the United States is sitting on the world’s largest untapped oil reserve.  A natural resource that would not only mitigate the over $400 Billion sent overseas to other countries but could create untold millions of jobs and put the country on a sound financial footing.
The untapped reserves are estimated up to 2.3 Trillion barrels, nearly three times the reserves held by the OPEC countries and sufficient to meet 300 years of demand, at today’s levels — for auto, truck, aircraft, heating and industrial fuel, without importing a single barrel of oil.
The US could become the single largest exporter of oil and oil related products in the world, thus potentially eliminating its trade deficit, and increasing the national standard of living as well as making a massive dent in the national debt.
Here is a look at some of the largest untapped reserves:
The Bakken Fields in North and South Dakota.  New drilling and oil recovery technology is making the capture of this oil feasible and some development is now underway.  It is estimated that there is at least 200 Billion barrels of oil in this region.  At a price of $100 per barrel the value of this find is $20 Trillion.
The Outer Continental shelf.  It is estimated that around 90 billion barrels of oil sit beneath the ocean bed 50 to 100 miles off the shore of the Atlantic, Pacific and Gulf coasts.  The value: $9 Trillion.
The Alaska National Wildlife Refuge.  About 10 billion barrels are locked up here with a current value of $1 Trillion.
Tar Sands:  Around 75 Billion barrels of oil could come from these areas which are similar to the Canadian tar sand fields and which now produce about 2 million barrels per day.  The value:  $7.5 Trillion
Oil Shale.  This is the most massive area of potential oil production in the world with an estimated 1.5 Trillion barrel potential.  The technology necessary to extract this oil is now in place and being operated on a pilot project basis.  The value of this resource:  $150 Trillion
There also the very real potential that further finds will be discovered as technology continues to improve.
In total the value of the potential oil reserves of the United States listed above exceeds $187 Trillion.  The current national debt is $14.2 Trillion or less than 8%.
Despite the protestation of President Obama and the environmentalists the world and particularlythe United States is not running out of oil.  Their foolish tilting at windmills and solar will never produce energy sufficient to operate a $14Trillion and hopefully growing economy.  It will be decades if not the rest of the 21st Century before any meaningful substitute for fossil fuels will be developed and additional time and investment will then be necessary to distribute the product.
Mankind’s ingenuity has and will continue to develop technology to safely extract, process and market fossil fuels (which is a naturally occurring resource).  But the United States must begin now to open the areas for exploration, and permit the construction of refineries and pipelines.
It is beyond absurd that a country sitting on so much natural wealth refuses to exploit it for the benefit of its citizens and instead deliberately puts the nation in the position of being subjected to the whims of others and face national insolvency.  It almost appears to be deliberate.

Activist Post: Google\’s Revolution Factory; Alliance of Youth Movements: Color Revolution 2.0

This is an absolute must read!

 

Activist Post: Google\’s Revolution Factory; Alliance of Youth Movements: Color Revolution 2.0.

A Tipping Point is Nearing

From American Think Blog. VERY VERY SCARY!!

 

We are facing a tipping point.  There will soon be a crisis affecting US citizens beyond any experienced since the Great Depression.  And it may happen within the year.  This past week three awful developments put a dagger into the hope for a growth-led recovery, which held promise of possibly averting a debt and currency implosion crushing the American economy.

 

The first was a little-noticed, but tragic, series of events in the newly elected House of Representatives.  The speaker, Mr. Boehner, had given the task of fashioning the majority’s spending cut agenda to Representative Paul Ryan (R-Wisconsin), a rising conservative star representing the vocal wing of fiscal conservatives in the House. Promising to cut $100 billion of government spending, Mr. Boehner spoke before the elections of the urgency to produce immediately when Republicans took control.

 

Out of a $3.8 trillion government spending agenda, the wonkish Mr. Ryan, considered by many to be the best hope for fiscal conservatives, revealed proposed cuts of a whopping $74 billion.  After some tense meetings, (referred to as a “revolt” by some media) newly elected conservative congressmen convinced the leadership to commit to unspecified cuts of an additional $26 billion. The actual “cuts” from any such legislation will, of course, be less once the appropriate political log rolling and deal-making are done- let’s call it $50 billion (while the deficit grows by $26 billion during the week it takes to discuss it). So go the hopes for serious spending restraint from our newly elected wave of rabid, anti-big government Republicans. They may deliver cuts 1.3% of total spending that is itself approximately 90% greater than collected taxes.  Let’s mark this spending reduction effort as an epic fail, at a time when epic success is almost required for survival.

 

The second awful development to occur last week was the employment report from the Labor Department, describing employment conditions in the U.S. economy in January, 2011.  The report was packed with statistics, all pointing to anemic growth with a modest pickup in manufacturing employment.  The little-noticed (not by the bond market) aspect of the report was the “benchmark” revisions, an attempt to get the total picture more accurate each year than simply adding up all the monthly change numbers.  This year’s benchmark revisions showed two alarming things: a decline from previously reported employment in December 2010 of nearly 500,000 jobs, and a reduction in the workforce of a similar amount.

 

Coupled with insistence from the Federal Reserve Chairman Ben Bernanke that the Fed intended to continue “quantitative easing” (a euphemism for monetizing the bonded debt of the federal government), the employment data caused bond holders to assume there will be no end to the red ink.  Ten-year U.S. bonds lost a full percent of their value, declining a total of 18% since Bernanke announced the acceleration of Fed policy in August 2010. The yield on these bonds has increased from an ultra-low 2.4% in August to 3.65% today, as the Fed repeatedly describes inflation in the U.S. as too low.

 

In context, a 3.7% yield does not appear high by historical standards. In our current predicament, however, it is heading toward Armageddon.  If interest rates on our debt rise by 1% it means our interest payments rise by more than $100 billion dollars annually (not including the interest payments owed to the Social Security Trust Fund–see below).  As global liquidity and deficit spending have accelerated, food and commodity prices have skyrocketed, sending many prices up 25-50% worldwide since August.  In some countries (Tunisia and Egypt among them) rice prices and cooking oil have doubled.  Copper is up 40% in that time.  If global inflation expectations take hold with tenacity, as they have many times in past periods of “easy money” by our Fed and Congress, interest rates may easily rise to 5-6%, an event which will blow an additional $300-500 billion hole in a budget already beyond sanity.  Can our creditors give the U.S. a nod on $2 trillion of new debt each year without any plan to fix it? Remember, there is plenty of past experience with U.S. debt yielding 7-8%, a potential expenditure on our current debt of nearly 100% of tax receipts to pay interest alone should yields go there.

 

The third development of the last week which received much less press than the Egyptian crisis is the “new normal” in Social Security.  The CBO released a report disclosing that the net cash flowfor the Social Security trust fund — excluding interest received from the book entry bonds it holds in U.S. debt — will be negative $56 billion in 2011, and for every year hence even more so.  This is the train wreck that was supposed to happen in 2020. It is upon us now.  Any limp action by conservatives to bring this program into solvency can be expected only to slow the raging river of red ink this behemoth program (along with its twin Godzilla, Medicare) spills on U.S. citizens. With no political will to fix them, these “entitlements” will obligate Americans to borrow more and more money from China–to honor promises we simply refuse to admit we can’t keep.

 

So why do these developments argue for a crisis of Great Depression proportions? Because they speak unequivocally of our pathway to insolvency, and the potential of currency failure via hyperinflation, despite the hopes of conservatives and market participants to see a halt of such direction.  Housing prices, the foundation of so much of private citizen debt loads, are destined for stagnation — not inflation — as the supply of homes is far greater than the demand — 11% of the nation’s homes stand empty today.  When the world begins to recognize that there is no fix for America’s borrowings, a fast and brutal exodus from our currency and bonds can send us a shock in mere weeks or months.

 

Unlike the Great Depression, however, we will enter such a shock in a weakened state, with few producers among us and record mountains of debt.  More cataclysmic is the specter of inadequate food, as less than 4% of us farm, and those that do may cease to be as productive or may not accept devalued currency as payment, should the tipping point be crossed. Corn and wheat prices in the U.S. have nearly doubled in less than 12 months, using our rapidly evaporating currency as the medium of exchange.

 

The time for action has passed, which may only become apparent as the “aid” of easy moneybecomes seen as the harm that it is. May we all be spared the worst, but I offer no such prayers for those responsible.  The harm that comes will be swifter, and more severe, than most of them thought possible.

 

 

Must Watch Video

It’s been a while since I posted. Busy looking for a job!!

Below is a must watch video.

..Made for A Moral and Religious People

Outstanding explanation 8 minutes worth watching.

Ron Paul – On the Recent Tax Debate

George Orwell warned us about the use of “meaningless words” in politics, words that are endlessly repeated by sloganeering politicians until they have no meaning at all.  Meaningless words certainly were on display during last week’s congressional debate over the latest tax bill.

Over and over again we heard trite, empty phrases like “tax cuts for the wealthiest 2%,” “tax giveaways,” “tax earmarks,” and “borrowing money to give to millionaires.”  Time and time again the same falsehoods were presented as fact, and reported as such by a credulous media.

But all of these clichés about taxes are based on the presumption that government has a right to all of your income, and so government “gives” you something when it allows you to keep a portion of that income.  To this mindset, tax cuts represent a “cost” to government.  After all, they argue, money that really ought to go to the most noble of purposes– wealth redistribution via taxation–is being kept by greedy people and corporations who just don’t want to pay their fair share.

Far too many Americans truly believe that tax cuts represent a government giveaway, indistinguishable from an outright subsidy or entitlement payment.  To combat this mindset, we need to be clear with our language.

A subsidy, properly understood, occurs when government takes tax dollars and gives them to favored individuals, companies, or industries.  A tax cut, by contrast, simply means government takes less from an individual, company, or industry.  When government takes less from you, it has not given you anything; it merely has harmed you less.  This is the critical distinction that has been lost in the endless, tired debate about tax policy.

Of course the bill passed last week did contain some actual spending, mostly in the form of an extension of unemployment benefits for another 13 months.   The total spending in the bill amounted to about $60 billion.  But the tax savings in the bill, meaning the amount of money that will remain in the hands of taxpayers rather than being sent to Washington, is approximately $850 billion.  So while a clean tax bill certainly would have been preferable, the tax relief it contains is significant.  It means $850 billion will be spent, saved, or invested by American citizens rather than being sent into the black hole known as the federal treasury.

The media, however, dutifully reported that opposition to the bill came from concerned members of Congress who felt the $850 billion “cost” of the bill was too high, and would add too much to the deficit.  As always, they could not distinguish between government giving and government taking away.  The American people already pay plenty in federal taxes; the deficit is the result of a spending problem, not a revenue problem.

Had the bill not passed, millions of Americans would have seen their paychecks shrink in January due to increased tax withholding.  That is the plain and simple truth, and that is why I voted for the bill.

 

Arguing with a Liberal

This is good.