"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Monday, February 13, 2012

Crude Oil back above $100 - Again

Crude oil simply refuses to break down and is once again trading back above the $100 mark. What is perhaps even more concerning is that gasoline prices are now trading above the $3.00 point at the wholesale futures markets, and this is during the time of year in which gasoline demand is generally quite tame compared to the onset of the busy driving season later this spring and summer.

Should gasoline bulls be able to push price through the chart levels shown, it will portend a move back to the late summer highs of last year. As said in a previous post from last week - PAIN at the gasoline pump is now unavoidable.

Gold holding at initial support thus far

Gold has dropped into the first zone of support noted on the price chart near the $1720 level and has thus far held as dip buyers surfaced. That buying was fostered by a weaker Dollar which was lower in today's session but has not broken down decisively yet below the critical 79 level.

Surging crude oil and gasoline prices did help gold today as some traders are concerned that the rise in energy costs will eventually feed through and impact the price of other goods and services  in the broader economy. Transportation costs can only be absorbed for so long.

Mining company stock owners - note well

Most of you who read this site are well aware of my political leanings - I happen to believe that the current administration is perhaps the most inept, reckless and endangering to liberty in the history of this nation and needs to be replaced at the ballot box this coming November.

Those of you who own mining company stocks should take note that as part of the budget submitted by the Obama administration, all hardrock mining companies would be required to pay  annual rents and royalty fees of no less than 5% of gross proceeds.

Currently a law that is 140 years old, exempts them from paying royalties to the US government.

Environmentalists have been after this law for years and have found their champion in the current occupant of the White House.

The rental portion of this budget would impose a fee on for both public and private lands with the funds supposedly being used to clean up abandoned mines. Coal companies are currently under a similiar plan.

Don't worry however - I am completely assured that every bit of the monies raised from this targetted plundering will be put to good use for the American citizenry  with absolutely none of it going to cronies of Obama such as Solyndra.

Were it not for the fact that most political analysts expect the Obama budget to be DOA in the Congress, the mining shares would have been sharply lower today. Those of you who own these things are well advised to pay close attention to this. Senator Harry Reid, who has long ago sold his soul to the left's agenda and who hails from a swing state, will probably be getting an earful from mining company executives with any connection to the state of Nevada. I will be surprised to see him actually coming out in support of this proposal if he wishes to run for re-election next time around. Then again, he might be ready to retire by 2016.