Here we go, the polispeak is in full force. Senator Obama has suddenly realized that Iran affects the price of oil. In fact he has been advised, recently one would assume, of the following:



Now let’s ignore the fact that both the Democrats and Republicans share equally in the lack of alternative energy sources for America in the past 40 years. Neither side can point a finger as ultimately both sides failed the American people on this issue, multiple times.

Rather I want to focus on a scenario.

Senator Obama has made it clear time and again that he wants to speak with Iran. Let’s say he is President (which is not all bad) and he does speak with Iran. Say the meeting goes ok, or so we are lead to believe. They promise not to create any (more) nuclear weapons. And then they go out and “shut down the Straight of Hormus”.

What does President Obama do? Speak with them more? What argument or negotiation can he make that is better than the, at least, $300 a barrel price of oil in the mere first minutes of the blockade? What would be better than the probable $500 a barrel price that would come easily in the first day?

Considering that Senator Obama has repeatedly stated that a strong offense, ie military, is not the means he would use first – and/or possibly ever – what recourse does he have?

Well Democrats have said that higher oil and gasoline prices are good. Because they will force America off of oil. That we need to use alternative energy. So the thought of $12 a gallon for gasoline must be thrilling to them.

Of course if this is true then you have to wonder if President Obama would say anything to Iran. Or if he could say anything that he felt was better than having higher oil prices.

At the same time remember this. If oil suddenly went to $300, heating oil 3x overnight. Gasoline goes to $12 and people will horde it in a manner that would make the 1970 look like a vacation. Millions would not be able to heat or cool their homes. Tens of thousands of businesses would close overnight. Unemployment would rocket past the levels last seen during the President Carter Administration. The cost of every good in America, or sold overseas, would be so high that a gallon of milk would cost like buying printer ink cartridges today.

So while Senator Obama is trying to use Iran as a scare, and a source of blame only on Republicans, remember the facts.

Democrats are as much to blame as anyone. Democrats want oil prices higher. Obama wants to talk to Iran. Obama does not like to use the military (even in the case of a 9/11 type of incident).



Diplomacy while businesses shut down, cost of everything skyrockets, and people freeze. That’s a really great plan. And every American will he stateside to experience every second of it.

Labels: Democratic Party, energy alternatives, Iran, oil per barrel, oil prices, Senator Barack Obama

So gold continues to rise. And as this incredible run continues, the call for it to end abruptly increase. Many have stated that they see this as an aberration. That none of the factors in the market support such a strong and steady rise. Fear is moving along with the price, as often occurs when dramatic changes happen.

But there are a few that feel this rise is not only justified it’s completely logical. Those events such as the mortgage crisis, weak Dollar, Fed rate cuts, oil per barrel prices and other factors have to equate to a move in gold spot prices. This says nothing of the increase in demand coming from China and India.

In one particular case we see that Chip Hanlon on TheStreet.com has made a case for 9 gold stocks that can benefit from the continuing interest in gold. One of those stocks you may recall from a recent post here, which has made new 52 week highs recently. That stock is Newmont Mining and in the number 1 position on the list.

“…an unhedged giant that produces gold in many corners of the world, from North America to South America to Asia. Gold bugs, who tend to dislike companies that hedge their production for any reason, tend to favor this stock as a leading large-cap choice.”

In the number 2 position is another popular and oft mentioned Goldcorp.

"Record gold production for the company in 2007 is expected to be followed by another record in 2008, and the company just announced its first monthly dividend a few days ago."

Perhaps one of the more interesting items on the list is the number 10 pick. The Silver ETF is the last choice on that list. It would seem that silver is a contra-indicator. By that I mean, once silver begins to have its run, gold tends to end its run. Since silver has not been influenced yet, it would indicate that gold has more room to go.

“…silver tends to rally most strongly at the end of major gold moves (as do the most junior, speculative mining shares). The fact that silver has not yet blown off suggests to me that more upside remains.”

The entire concept is interesting since this article looks at riding the run of gold and working on the ultimate question in all stock purchases – timing. Not only has he picked 9 gold stocks to ride the bull, he has also looked at riding the one position that may indicate the end of the run and the growth of perhaps a gold bear.

Never doubt that the people over at TheStreet.com are on the ball.

Labels: Chip Hanlon, Fed rate cuts, gold spot prices, Goldcorp, mortgage crisis, Newmont Mining, oil per barrel, Silver ETF, TheStreet.com, weak Dollar