"You never need an argument against the use of violence, you need an argument for it." - Noam Chomsky
Think about this: Would you invest in a small petroleum E & P company given what just happened to B.P.'s valuation? Exxon et al are, for the most part, no longer in the exploration business, and will be less so from this point forward. Big Oil are really just large, publicly traded investment banks/private equity funds. They are in the business of ACQUIRING production and reserves.
But from who? Where is the capital going to come from to form these new, smaller E & P outfits?
The U.S. consumes roughly 19 million barrels per day of liquid fuels. Politically destroying domestic production, intended or not, WILL have consequences for our economy and national security to say nothing of our internal politics.
I do not suggest wild changes in policy, only a full disclosure to the American people and a sales campaign by TPTB exhorting us to accept the inevitable and to encourage people to find their way - but I have a better shot at a Pulitzer as a blogger.
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Last week I posted that the Mad Scientist and I had gone net short in the U.S. equity markets, even going so far as closing most of our energy equity positions. The world's political leaders are now, finally, getting some religion in fiscal realities. If so, I would expect a nasty repricing of "risk" and fat whiff of deflation (but I reserve the right to change my mind if the data changes).
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Less than 270 days until California needs a Federal bailout.
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I love Noam Chomsky (see quote above). Not that I agree with some of his politics (what the hell is a "socialist-libertarian") but it is hard to look past some of his brilliant thoughts.
This morning I woke early as usual on the farm to get a start on the chores before the heat of the day. I came into a breakfast of eggs, sausage, potatoes and corn bread with preserves - all grown on the farm. Yes there was coffee and butter and honey (the butter and honey come from a guy I trade eggs for)... and these were not produced on the farm... but in the end this is just me expressing my politics - and there is simply no better way to express oneself than to sustain one's belief system by sustaining oneself... go that? I cannot say if I will always live like this, but it will be one hell of an adjustment if I had to give it up.