Brazil, Soros, Get Billions

Brazil, Soros, Get Billions

Sharp eyed news fans might have noticed that the Obama administration today gave Petrobras, the Brazil petroleum company and the worlds eleventh highest valued company, a commitment for two billion dollars to drill in deep water offshore from that country's coast. Even sharper eyes might have noticed that George Soros owns about one billion dollars of stock in Petrobras. Even more curious eyes would have noticed that, just days before Obama invested in the company, Soros announced that he had reduced his stake in Petrobras. But financially savvy readers might note that this was a move from common shares to preferred shares, which pay dividends. Thus George Soros upped the ante by putting himself in the revenue stream mere days before his good buddy Obama paved the way for much higher earnings.

I suppose it would be out of line for me to wonder why Obama would reverse course on his disdain for petroleum and support drilling, when he claims to want to stop using petroleum altogether. I guess that only wild eyed conservative wackos will draw any conclusions about possible collusion between the Obama administration and their benefactor, the principal funder of moveon.org. I must be stupid and evil to see any connection between these events. Not the first time, not the last.

Geithner Attacks America

Geithner Attacks America

It didn't take long for the tax cheat Treasury Sectretary to attack the very core of our domestic energy industry. Evidently they are very bad for America, since we might have a problem with the climate some day, and it is possible that they may have provided some of the stuff that could possible have caused it. So what do we do? Destroy them. But maybe this is not baby Geithner's fault. After all, his boss is not interested in appointing his staff, since it is so unimportant. This is getting serious.

Oil Prices Are Variable

Oil Prices Are Variable

While we suffer through oil prices that are historically higher than ever, we tend to forget some basic principles. Zero Base Thinkers never forget that the common knowledge is always wrong, but we are in the minority. Pundits have taken to declaring that "gas prices will never get back to where they were," but this flies in the face of proven reality.

Petroleum, as indeed all commodity prices, have historically followed a boom and bust cycle. Historically petroleum prices tend to cluster around about twenty dollars per barrel, or a half a buck a gallon, as can be seen here. These prices vary upward during extraordinary periods of history, especially geo-political events concerning the Middle East, where much of the world's oil is produced. That describes the recent times pretty well, but is not a prediction for the future. With the prospect of a deal between Syria and Israel becoming more real by the day, that pressure on oil prices might just be moving further away. If only some resolution of the Iran situation could be found, there would be no reason that we might not see twenty dollar oil again.

It is hard to go up against such clear thinkers as Michael Medved, but believing that oil prices will never go down would make us marks ready to buy stock in the Brooklyn Bridge. Others say that oil prices might go down to $80, but that might well be not ambitious enough. History should reassert itself, as Frank Fukuyama found, to his dismay. Before you buy yourself a hybrid car or a subcompact, prudence dictates waiting for events to unfold.