In Country With Uncle Vic: Oil Speculators are LAUGHING at YOU

Monday, June 16, 2008

The traders for speculators are loving every minute of the oil price surge. I hope you are too!

Some solutions that need to work out soon - (some are temporary)

1. The dollar needs to strengthen (likely painful cure - edge up interest rates. A 0.125 increase right now would be a signal.)

2. OPEC et al need to firmly commit to more production and confirm that the speculation is in part a temporary bubble.

3. Firm Energy policies need early discussion and adoption - Nuclear to feed electric cars - Solar and wind to supplement -

4. CAFE standards met for fuel consumption should reward auto manufacturers with tax incentives beyond the current survival mode.

5. Everybody needs to THINK three times before getting in a car or plane to go anyhwere.

6. China and India need to reduce fuel subsidies for gasoline (they seem to be thinking this way).

7. Encourage US oil exploration and refinement by sensible policies that reward for investment - not punish for profits.

8. Look at this picture every day and understand they are laughing AT YOU !! (oil is a better investment in a weak dollar environment).

9. Understand that the MOST effective cure for high prices is ... Higher Prices (which drive decisions above)

10.Keep taxes low or risk a really really bad economy. (lower taxes generate MORE total tax revenue - not less!!)

Populism and commentary from both Obama and McCain indicate neither has a clue how to approach the economy.

Of the two my own choice is McCain - given a better philosphical base of advisors, and more centrist politics.

The prevailing winds being what they are -- Obama is the likely winner.

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