Anyone who was a member of Congress 30 years ago should be thoroughly questioned by the media and the public. Why? We need to know who voted against oil exploration, development of nuclear power plants, and gas exploration. Now I know the environmentalists among you are experiencing internal temperature increases, however, look at where we are now – unable to maintain enough oil supply for the increasing demand, and we don’t yet have sufficient alternative energy resources to replace them – the most likely result will be – recession. (Note: Boone Pickins was on CNBC this morning further talking about Wind and Natural Gas Solutions to our energy problems – Click HERE for story and LINK to Video)
CASE IN POINT
Recently, Bloomberg reported that Pemex, the Mexican national oil company announced that their crude oil production fell 13% in April:
Crude oil production fell 13 percent to 2.767 million barrels a day in April, Mexico City-based Pemex, as the company is known, said today on its Web site. Output a year earlier was 3.182 million barrels a day. The decline was the largest since October 1995, when output fell 29 percent. This should be no surprise to my readers – I recently railed against “national” oil companies and the inept political leaders who manipulate them and particularly pointed out Venezuela and MEXICO in my RECENT article SOCIALISM IS FOR LOSERS.
The article further points out that problem is, again, the Mexican government plunders the company to pay for its social programs and the “dependification” of its people leaving little to nothing for investment. So what you will have is a moderately happy, dependent population now, and in the future, a rioting unhappy population when the oil (AND THE MONEY) runs out – it’s just a matter of time. They are only moderately happy now, because, just as with little children, when you give them handouts, they only want more and are often NEVER satisfied with what they have.
Bring this back to the US – how would Exxon run if our politicians ran the company? If you guessed into the ground, then you can really empathize with the situation in Mexico and Venezuela. Our politicians would use ALL of Exxon’s cash flow to pay for ridiculous programs (bridge to nowhere, invading other countries, 5 years of unemployment benefits, dinners at DC steakhouses) and Exxon would be depleted fully in 20 years.
If on the other hand you answered “they’d do a pretty good job,” then I would assume your only exposure to anything financial is balancing your checkbook – which, I stand corrected, actually is good training because Mexico’s problem comes down to this – if you don’t reinvest, the checkbook (oil money) will go empty. But the challenge is, you promised so many payments to other people that the checkbook is empty each month. Soon, the legbreakers will come for their money…
Chris Grande
7.8.08
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