Greg's Note: Many Americans believe that our environment is in dire straits. To that end, they believe the government should start clamping down on industries and companies that pollute. But most businesses don't like government regulation. So what's their compromise? Cap and trade. It's quasi-market based, but in essence it is still the government telling businesses how to operate. And guess who's picking up the tab. Byron King explains why we've been here before and shows us the rocky road we could be headed down. What's your opinion on cap and trade standards? Let us know at greg@whiskeyandgunpowder.com. Whiskey & Gunpowder
I received an e-mail from a Washington, D.C. advocacy group urging me to urge my U.S. Senators to "support the Climate Security Act." Climate security? This is legislation to set up emissions trading or a "Cap & Trade" system for carbon-based energy supplies. Basically, the government sets up a national limit for carbon emissions. This is meant to slow the changes that are supposedly occurring to the atmosphere, and by implication threatening the long-term health of the Earth's climate systems. Under the national Cap & Trade limits, industry has to obtain rights to emit carbon dioxide (CO2) or find another source for energy. This will lead to a new market for carbon-credits and carbon-trading. Industries that hold carbon permits will be able to operate. Industries that lack carbon permits will face shutdown and probable extinction. One way or the other, the economy will immediately transform into a system where one's industrial fate is controlled by the carbon permits. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ Saudi Arabia Promises More Oil One of the largest oil producing countries in the world has promised us an increase in oil production. But can they deliver? We'll find out soon, but some people already know the answer. Saudi Arabia doesn't have the amount of oil it claims. Just how much oil is left in Saudi Arabia, and who's responsible for this hoax? Click here for answers… ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ For example, carbon permits will dramatically alter the future for coal-based electricity. If coal gets burned at all, the Cap & Trade requirement will enforce CO2 sequestration — an utterly embryonic technology of which there is not a single large-scale working example anywhere on the face of the planet. And the coal-fired electricity under Cap & Trade will be much more expensive. So non-carbon alternatives like wind, solar & geothermal will be more competitive as well. There is also a gratuitous plan to handicap the nuclear industry, despite the fact that nuclear power is essentially CO2-free. Old environmentalist habits — like hating nuclear power — die hard. But the higher energy costs of production will have to pass through to consumers. At the end of the consumption chain, people can expect to pay higher prices for most everything that contains an element or two of electricity. (Gee, what might that be?) In essence, the government will be setting up a new Federal Reserve, except instead of governing the nation's money supply and quality, this new "Cap & Trade" Fed will govern the nation's supply of energy. At the end of the day the "Carbon Fed" will control the output of the nation's energy supply. In the long run, this may be more important than controlling the supply of credit or even the gold supply. Really, without electricity gold may yet prove to be a barbarous relic. But consider how little most people knew about the original Fed when its enabling legislation was passed (in the dead of night) on Friday, December 23, 1913 — yes, almost Christmas Eve. The Panic of 1907-1908 was fresh in the minds of many observers. In that Panic, the U.S. money supply had simply dried up. The nation was broke, and even the U.S. government had to borrow money from the house of JP Morgan. So by 1913 there was a basic political consensus that the nation ought to have some sort of "elastic" element to its currency. Most economists and policy-makers agreed that there had to be a way of increasing the nominal money supply quickly, especially when economic conditions led to a "panic" that dried up the circulation of dollars. Yet few understood the nature of the powers that the Federal Reserve Act was creating and placing in the hands of a quasi-independent monetary body. And even fewer were thinking about the political difficulty of pulling back those excess dollars when the panic abated. Indeed, the U.S. Fed coexisted with a $20-gold standard for the next two decades. It was no curious coincidence that within a few short years, the U.S. was able to "afford" to participate in World War I, courtesy of the credit-creating mechanisms of the Fed. ~~~~~~~~~~~~~Special~~~~~~~~~~~~~ GOLD $2,000 "Including one hidden way to snap up gold...for less than one penny per ounce..." How can that be possible? Give me the next four minutes and I'll show you how... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Later on, when the central government needed more funds during the depths of the Great Depression, the $20 gold standard became untenable to the monetary managers. So in one of his first acts as U.S. President, Franklin Roosevelt signed an executive order that simply seized the nation's gold and consequently unleashed the flood of fiat dollars into the monetary base of the nation. The dollar has never been the same. This note is not to re-hash the history of the Fed. It is just to remind that the so-called "Climate Security Act" may claim to be all about Cap & Trade. But Cap & Trade is not just about "Climate Security." In the name of reducing the emission of CO2, the government is creating a means to control the economy down to the last electron. This is a power that not even the Fed holds. Until we meet again… P.S.: Many oil-supplying nations are simply running out of the light sweet crude oil that we need to live our lives. In it's place they're coming up with heavy, dirty, raw oil. That oil needs to be refined, and we simply don't have the refining capabilities. But that may not be a problem after all. A new breakthrough may have made oil refining a thing of the past, and given us a way to use all the world's oil immediately. Click here to find out how… |
Whiskey & Gunpowder Special Reports New "Backlash" Set to Rocket Oil Past $150...and Send Gas Soaring to Over $6 per Gallon The 10 Shocking Reasons for China's Pollution Problem Geothermal Energy: Investment in the Future Here's One Coal Stock That's Set to Skyrocket Investing in Exchange Traded Funds The Real Story Behind the True Gold Bull Market If someone forwarded you this copy, please look here to start your own subscription. Wanna let us know what you thought of today's issue? Now you can... click on this link. Whiskey & Gunpowder is a free e-mail service brought to you by a team of rebellious brigands. If you have not already done so, please click here to confirm your subscription. This will help us ensure you get every Whiskey & Gunpowder without interruption. Are you having trouble receiving your Whiskey & Gunpowder? You can ensure its arrival in your mailbox here. Please note: we sent this e-mail to lemmetry@gmail.com because you subscribed to this service. To end your Whiskey & Gunpowder e-mail subscription, click here. Nothing in this e-mail should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice.We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2008 Agora Financial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. |
