Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How Mitt Romney Might Win the U.S. Presidential Election ….

ElectionOracle / US Presidential Election 2012 Oct 23, 2012 - 07:03 AM GMT

By: Brian_Bloom

ElectionOracle

Best Financial Markets Analysis Article…..and resuscitate the US economy, and stimulate the World Economy, and also facilitate peace in the Middle East.

It seems clear that, for Governor Romney to win the US Presidential election, it will be necessary for him to win in the states of Ohio and Florida.


To achieve this he should be leveraging off his two most compelling areas of strength relative to President Obama:

  • He has unambiguously stated that wants to ensure that the US will become energy independent, which implies that the US will need to embrace natural gas with both arms. (For reasons why this latter action will be necessary, see http://www.beyondneanderthal.com/what-caused-the-global-financial-crisis/ )
  • From decades of experience in business (President Obama has zero such experience) he understands in his gut that small entrepreneurial business as a category is the most powerful (and the most sensible) engine of economic growth and jobs

If Governor Romney promises to move to enthusiastically embrace natural gas as an energy paradigm after his presidential inauguration, then significant entrepreneurial opportunities will open up.  If he does this in a way that he can show, in advance of the elections, that the states of Ohio, Florida (and Louisiana)  are likely to be the most significant beneficiaries – and he can do this in a manner that is believable  by voters – then he can win both Ohio and Florida and, hence, the presidential elections.

Here’s how he might make it all work:

If you look at the grey lines on the first map (http://www.eia.gov/todayinenergy/detail.cfm?id=4090) Ohio has the densest existing coverage of natural gas pipelines in the US, after Oklahoma and Louisiana. i.e. It is ready and waiting for the natural gas starter gun to be fired.

Map #1 – US natural gas pipeline network

map of U.S. natural gas pipeline network, November 2011, as described in the article text

To make it easier for the reader to follow the argument, the second map below shows the states by name (Source: http://maps.google.com.au/maps?hl=en&sugexp=les%3B&cp=6&gs_id=l&xhr=t&q=us+map&bav=on.2,or.r_gc.r_pw.r_qf.&bpcl=35466521&biw=1366&bih=629&wrapid=tljp1350963436516010&um=1&ie=UTF-8&sa=N&tab=wl )

Map # 2 – US with the names of states clearly identified

It can be seen from these two maps that, from a strategic perspective, Ohio is in a very advantageous location to facilitate it’s becoming a sensible home for “early adopters” of natural gas related technologies, and entrepreneurial small business suppliers thereof.

In addition, it well placed to become a gas distribution hub because it sits on a main gas pipeline that already connects it to the Gulf of Mexico. Further, if the red pipeline in Georgia were to be connected to the red pipeline in Kentucky, then Canadian and Alaskan gas could be delivered via the Trans Canada pipeline to Niagara falls and then  directly to Florida through Ohio via the Tennessee Gas Pipeline. (See map # 3 below http://www.arcticgas.gov/Moving-Alaska-gas-from-Canada-to-the-Lower-48 )

Map # 3 - Canadian Gas Pipeline Grid

Why should Ohio become the distribution hub?  Why not, say, Wisconsin?

The answer lies in map #4 (source: http://geology.com/energy/shale-gas/)

Map #4– US Shale Gas Plays

Ohio is in close proximity to the Michigan Basin and the Appalachian Basin from the perspective of shale gas plays. Therefore, shale gas from the US’s North East can also be piped to Ohio and then down to both the Gulf of Mexico and Florida.

Why should there be pipelines to both Louisiana and Florida from Ohio?

Because:

Gas piped to Louisiana can be delivered on to Mexico and further south– either by pipeline or in the form of LNG; and gas piped to Florida can be delivered as LNG to the Caribbean islands and also to some countries that surround Venezuela, thereby neutralising the political power that Mr Chavez derives from Venezuela’s oil deposits.

Importantly, the cost of Natural Gas is a fraction of the cost of oil.

As at July 2012, the export price per thousand cubic feet of natural gas was as follows (Source: http://www.eia.gov/dnav/ng/ng_sum_lsum_dcu_nus_m.htm )

  • By pipeline: $3.05
  • As LNG: $8.49

The conversion of natural gas to barrels-of-oil-equivalent (boe) is:

In gaseous form: 6,000 cubic feet per boe (Source: http://en.wikipedia.org/wiki/Barrel_of_oil_equivalent )

In LNG form: 4,865 cubic feet per boe (source: http://www.santos.com/conversion-calculator.aspx )

The following is a rough comparison of the dollar value per barrel of oil (using yesterday’s price per barrel) and the price per boe of natural gas and LNG (using July 2012 US export prices)

  • Light crude oil: $89.16
  • LNG: 4.865 X $8.49 = $41.30
  • Natural Gas: 6 X $3.05 = $18.30

Interim Conclusions

Goodbye:

  • The political and financial influence of  Mr Chavez in Venezuela, Iran’s staunch ally as a sanction buster and, therefore,
  • goodbye Iran and, therefore,
  • goodbye President Bashar al-Assad of Syria  and, therefore
  • goodbye Hezbollah, and, therefore

Hello:

  • Peace in the Middle East.
  • A buoyant US economy
  • The commencement of a world-wide economic recovery

Now, to understand the likelihood of all this from a political perspective, see the article entitled:

“Morgenthau: The Link Between Iran and Venezuela -- A Crisis in the Making?” http://www.laht.com/article.asp?ArticleId=343289&CategoryId=10718 ) and also http://en.wikipedia.org/wiki/Hezbollah_foreign_relations

To understand why/how the momentum of the US economy might be given an afterburner by what is contemplated above, one needs to understand the difference between “value add” investment and “mal-investment”.

Mal-investment is what gave rise to the $45 trillion global sovereign debt and declining real personal incomes in the industrial world. Why? Because socialist governments (President Obama’s included) believed they could stimulate their countries’ economies by stimulating consumer spending – by printing money and by enabling the commercial banks to make low interest loans. The result was widespread wealth consumption and rising debt amongst the middle class borrowers; and also obscene incomes to executives of organisations whose snouts were buried in the troughs of readily available low priced capital that they could lend at wide margins and/or invest in all sorts of wild schemes. (Are you listening, Mr Obama? The wealth you want to “redistribute” was accumulated by the rich as a consequence of socialist policies that assume that wealth can be created out of thin air by way of the printing press.)

By contrast, Value-Add investment is the type of investment that stimulates “real” (as opposed to ersatz) economic activity because it serves to address market needs. Right now, the US has a life-threatening need to reduce its dependence on imported oil. The world economy in general has a life threatening need to increase global annual output of energy per capita. By investing heavily in further natural gas infrastructure of the type discussed above, the following will be achieved:

  • The capital invested in the pipeline/s, distribution hub/s and LNG production infrastructure will create jobs in the first instance, and these jobs will facilitate spending that, via the economic multiplier, will stimulate the US economy in general and rejuvenate the Ohio and Florida (and Louisiana) economies in particular.
  • Entrepreneurial opportunities will flow from positioning Ohio to become an early adopter of natural-gas related technologies (transport is an obvious one but there will be others). Entrepreneurs will move to capitalise on these opportunities and this will create more jobs that will have a similar effect to 1 above.
  • Eventually, once the infrastructure has been built, and once the technological challenges of fracking natural gas have been addressed (to prevent methane emissions escaping into the atmosphere and fracking chemicals escaping into the waterways), gas extraction will create even more jobs, and US exports of natural gas will win market share away from oil; Venezuelan and Iranian oil in particular. US natural gas related technologies can also be exported in the form of manufactured goods and this will create even more jobs.
  • The primary beneficiaries of this jump in activity will be the owners of the natural gas fracking facilities, who should be expected to pay an “excess profits” tax to be determined on the basis of fairness, benchmarked against generous after tax returns on gross capital invested.
  • With rising tax income flowing from 1-4 above, the US economy will once again become sufficiently robust to allow the Federal Government to operate at a significant surplus and the $16 trillion of sovereign debt can begin to be repaid.
  • The economies of the US’s trading partners – in particular its EU trading partners – will begin to benefit from increased US imports.
  • Energy investment opportunities in other countries will emerge, which will have a similarly stimulative effect outside the US. (Excess profits tax should be applied here too.)
  • Global output of natural gas will increase because whilst the US will be the first major producer of fracked natural gas, it will not be the only such producer.
  • Net energy output per capita on a global basis will increase, and this will buy the world the time to move to embrace next-generation (Fast Breeder) nuclear energy by mid century.

Overall Conclusion

If Governor Romney can “sell” the relevant portions of above strategy to US voters in general and to voters in Ohio and Florida in particular, then he can win the presidential election with a slam dunk, and the entire world can start to breathe again as he moves to implement it. Finally, as an additional bonus, the balance of political power in the Middle East will shift further towards democracy as the fangs of the Middle Eastern oil-fed snake are milked of their paralysis inducing poison. Of course, all this will have negative implications for the technically overbought gold price, but that’s another story.

Brian Bloom

Author, Beyond Neanderthal and The Last Finesse

www.beyondneanderthal.com

Beyond Neanderthal and The Last Finesse are now available to purchase in e-book format, at under US$10 a copy, via almost 60 web based book retailers across the globe. In addition to Kindle, the entertaining, easy-to-read fact based adventure novels may also be downloaded on Kindle for PC, iPhone, iPod Touch, Blackberry, Nook, iPad and Adobe Digital Editions. Together, these two books offer a holistic right brain/left brain view of the current human condition, and of possibilities for a more positive future for humanity.

Copyright © 2012 Brian Bloom - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Brian Bloom Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in