Welcome to Energy and Capital's new weekend review. Each week we'll take a look at the week that was and what's ahead, along with what you may have missed from our free sister sites, Wealth Daily, Gold World, and our free blogs. Enjoy.

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Speaker of the House Nancy Pelosi sent the following letter to Vice President Dick Cheney:

"The price of a barrel of oil has surged to new historic highs each day, even when adjusted for inflation, and the price at the gas pump is projected to do the same in the coming months. Light sweet crude oil surpassed $110 a barrel today, a 407 percent increase since President Bush took office. Gas prices have reached record levels of $3.27 a gallon and the oil imported from foreign countries has grown to 60 percent of our total since President Bush took office. These prices and our growing dependence on foreign oil have caused great hardship for American families and businesses struggling to make ends meet in this economic downturn.

 

"The landmark Energy Independence and Security Act of 2007, passed with strong bipartisan support in Congress last December, took strong steps toward reducing oil consumption. Now, your upcoming trip to the Middle East provides an opportunity for you, on behalf of the Bush Administration, to call upon your considerable influence with OPEC nations to encourage oil producing countries to increase their oil production. President Bush has endorsed the idea of an American President ‘jawboning' oil producing states to expand production when rising prices jeopardized economic stability. This must be another critical step as part of a comprehensive plan here at home to lower energy costs for the American consumer, increase energy independence, and enhance our national security.

"In addition to diplomatic efforts during your trip, the Administration should also support efforts pending in Congress to promote energy independence and save consumers money:

"In a strong bipartisan vote last May, the House passed legislation to crack down on price fixing by authorizing legal action against oil cartels that conspire to inflate prices. That bill, H.R. 2264, is now pending in the Senate. Unfortunately, the Bush Administration has announced its opposition to this bill which would benefit millions of American consumers. Instead of issuing veto threats, the President should support this legislation to give the Administration a vital tool to fight price-fixing by OPEC cartel entities.

"The House of Representatives has again passed legislation to significantly expand our renewable American energy industry in a fiscally responsible way, paid for by ending taxpayer subsidies to the five largest oil companies which are earning record profits. This legislation is pending in the Senate. These subsidies cannot be condoned at today's historically high oil prices. When oil was just $55 a barrel--half the current price--the President said that such subsidies could no longer be justified. We agree and hope he will actively support this legislation to direct our energy dollars from subsidies for oil companies to development of alternatives to increase our energy independence and improve our national security.

"While the 110th Congress has great differences with you and President Bush on your energy policies over the last seven years, I sincerely hope your visit to Saudi Arabia brings relief to the American people that could have ripple effects across our economy. I also hope your mission advances the cause of peace throughout the region."

Unfortunately, Cheney may have the same luck with OPEC that President Bush has had.

When Cheney flies out to the Middle East Sunday he'll raise the issue of record high oil prices. But it may not do any good. The argument that an economic melee could drive down demand for oil has been heard and rejected by OPEC over the last six months.

They're not budging. It's not as if Venezuela or Iran is going to move on oil prices. And the Saudis aren't going to change their opinion without consulting OPEC members who are sure to reject the idea . . . again.

Blaming OPEC isn't going to get us anywhere. The problem is that there's no shortage of global oil consumption. OPEC, it seems, is already stretched by big increases in demand out of China, India, and Middle East countries.

According to Arab News, "OPEC strongly believes oil prices will stay at current high levels for the rest of this year due to speculation and geopolitical tensions and not because of lack of crude in the market. The oil cartel is convinced, in view of the ground realities, that it can't do much to rein in the bulls. But despite the pressure even from the top and all the talks, oil producers have so far stuck to their guns.

"What magic wand Cheney holds that will make his trip to the region more successful than others is difficult to know. At a time when some OPEC producers are skeptical of the US role in the region (not to mention its problems with OPEC member Venezuela) it is unclear what enticements Cheney might have to offer."

What makes it worse is that summer driving season isn't even here yet and we're already at $3.27. Four dollars at the pump isn't far-fetched. Just ask residents of Maui and a few stations in California where $4 is reality.

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For the week of March 10, 2008, here's what we covered in Energy and Capital and elsewhere.

Energy Storage Stocks: The Lucrative Play No One's Talking About
A UK-based company is placing its bet on the storage of energy in hydrogen. It is developing an electrolyzer that uses solar or wind power to split water into hydrogen and oxygen. The hydrogen is then pressurized and stored for use in electricity production or for powering cars.

Rising Oil Prices: How Can You Protect Your Investments from Surging Oil Prices?
Remember when people felt oil was too expensive at $60 a barrel? How about when it reached $80 a barrel? Now ask yourself, "How will I feel about $109.72 per barrel when prices hit $120 a barrel this summer?"

Libyan Oil: One Country's $109 Profit on $110 Oil
In February, $85 to $90 sounded like an agreeable oil price to Shokri Ghanem. Then in early March the head of Libya's national oil company declared that his country had "no complaint" with $100 per barrel. Now we're pushing $110, and Libya's big-mouth momentum is building with each dollar.

$1,000 Gold: Gold Hits $1,000 an Ounce
At last look, gold for April delivery spiked to an all-time nominal high of $1000.80 an ounce. The precious yellow metal has gained about 18% so far this year after tacking on nearly 32% during 2007, says Luke Burgess.

 

Ben Bernanke to the Rescue: Homebuilders Bounce . . . for Now
Ben Bernanke strikes again. And for the homebuilders, his $200 billion injection into the financial markets was the equivalent of manna from heaven: more money thrown at a mortgage market in crisis. All of them rallied sharply in the wake of the latest cash dump courtesy of the Federal Reserve. But that deluge of dollars managed to completely overshadow more troublesome news from the downtrodden industry.

Health Sector Stocks: Anavex: Under-the-Radar Stock up 39%
It was November 30, 2007, when Brian Hicks introduced you to Anavex (AVXL:OTCBB) as it traded at a paltry $3.75. "If it is able to execute its business plan, even a small investment in this stock is going to be an absolute home run," said Brian. "Seven of their drug discoveries are currently working their way through the approval process after very promising early trials."

American Express Stock: Only the Naive Are Investing Long on American Express
The Bernanke Fed move is a temporary band-aid. It turned a 24-hour lending window into a 28-day lending window. That $200 billion banking blood transfusion was placed to ensure that your checks clear. That's how bad the banking world is. You don't want to hold the American Express, Bear Stearns, Citigroup, or even Bank of America.

The Chinese Market Bubble: What a Chinese Death Cross Means for Your Portfolio
It's known to technicians everywhere as a death cross, and it is happening on the Shanghai Composite Index. That's the index that has jumped by over 450% during the last two years--a sure sign of a speculative bubble. A death cross is formed when the 50-day moving average of a stock falls below (crosses) the 200-day moving average. It indicates that there are currently more people selling than buying the stock. It is as bearish as it gets.

105% gains in 16 trading days: Take It.
While we remain bullish on natural gas and our United States Natural Gas (UNG) stock, we're recommending that you exit the second half of the UNG April 2008 43 calls (UNGDQ). In no way does this move reflect bearishness on our part . . .

The Credit Crisis Is Nearing An End (We Think): Unfortunately, They're Wrong . . .
"Standard & Poor's Ratings Services believes that the bulk of the write-downs of subprime securities may be behind the banks and brokers that have already announced their results for full-year 2007. There may be some additional marks to market as market indicators have shown deterioration in the first quarter. However, when we dissect the percentage of write-downs taken against various types of exposures, in our opinion the magnitude of some write-downs is greater than any reasonable estimate of ultimate losses . . ."

Bear Stearns pulls a "Countrywide"?: Too Bad the Rumors were True...
It was 2007 when Countrywide Financial (CFC) had us believing that it had ample capital and liquidity to stay in business. They disclosed $35.4 billion in reliable liquidity. And they disclosed "sufficient liquidity available to meet projected operating and growth needs and significant accumulated contingent liquidity in response to evolving market conditions."

Oil Will Pay for the Iraq War?: Where $52 Billion Worth of Oil Is Disappearing Per Year
Last year alone, says Bryce, the American forces in Iraq burned through more than 1.1 billion gallons of fuel.

That's it for this week. For more, visit your free EnergyandCapital.com, GoldWorld.com, and WealthDaily.com.

Have a great weekend,

Ian L. Cooper

"Energy stocks... The only way a human is going to make any money."

-- Matt Simmons, Peak Oil's first and most vocal proponent,
and founder of the country's last pure play energy investment banking firm.

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When, Ian? What was the date of this letter from state enemy Pelosi to state enemy Cheney?

Great article. Bush and Cheny keep whizzing into the wind, and it keeps blowing back in their faces!

I don't like to read a story, such as the one about Dick Chaney (new information) and have it chopped up with plugs for other services & publications, which are already at my attention from the Energy & Capital e-letter. Put 'em all together, but don't break up a good article for advertising sake.

All we keep hearing about is the hourly price increase of oil. Yes, some countries, companies and CEOs are lining their pockets. What we have not heard is what is causing this major price increase. Has anyone ever bothered to realize that this economic crunch that is beginning to paralize the US is a form of terrorism? Terrorism doesn't have to be bombing, shooting, etc. Terrorism is very prevelant in the US in the form of economic strangulation. Why can't the powers that be realize that and accept it? Look at the amount of cash being generated in the Middle East while those of us in America are feeling the pinch at the gas pumps, at the supermarket, increasing taxes and for everything the consumer might need.

It is about time the US looked beyond the oil companies and really focus on alternative fuels as well as build more oil refineries. There will be an influx of oil from the Canadian tar sands but it needs to be refined. We need to begin working on that now - not five years down the road.

We need to be proactive - we can't sit around and wait for something else to happen and we are in more of an emergency situation. We need to act now!

Pelosi’s letter demands that Cheney uses his considerable influence with OPEC nations to encourage oil producing countries to increase their oil production. This, says Pelosi, should be another critical step as part of a comprehensive plan there at home to lower energy costs for the American consumer.

Meanwhile, Venezuela is requiring payment in euros for some fuel exports, an industry source told Reuters on Thursday, a sign the OPEC nation may be easing away from the plummeting dollar. (1)

This Reuters article contains also the following lines:
“The euro hit an all-time high against the dollar above $1.56 in late trading on Thursday, according to Reuters data.
Analysts are increasingly attributing record-high oil prices above $110 a barrel to a steadily weakening dollar, which has plummeted due to the slumping U.S. economy and large interest rate cuts.”

The pricing of oil in honest money would thus automatically bring down the price of oil without it being required that OPEC increases its oil production.

If Pelosi is really interested in lower energy costs for the American consumers, she should ask Cheney that he uses his considerable influence with OPEC nations to encourage oil producing countries to price oil in honest money.

But of course, it is easier to bomb Iran which is issuing invoices in dollars for its oil and agreeing with clients that the l/cs [letters of credit] and other means of payment will have a non-dollar basis. (2)

Is the acceptance of the U.S. dollar as the oil currency a religious belief?

The question of the dollar as oil currency is related to the question of the pegging of the Gulf currencies to the dollar.

As to the pegging-question, on March 23-24, 2008, there is a Bahrain Conference on inflation where Gulf Arab policymakers and chambers of commerce officials will unpeg their currencies from the dollar. (3)

Jordan is therefore trimming the amount of dollars in its foreign reserves. (4)

Still, I found on Thursday a report saying that the Kingdom of Saudi Arabia has no plans to start selling oil in euros. (5)

The emergency bail-out for investment bank Bear Stearns on Friday was the final nail in the coffin of the dollar-regime.
The news sent the dollar to record lows against major currencies. (6)

An Op-ed in The Guardian by Richard Adams says that it is too soon to say how Friday’s dramatic events will play out. However, it continues, the probable destruction of one of Wall Street’s better-known brands in the case of Bear Stearns, along with a series of emergency interventions by the U.S. Federal Reserve rarely seen since the Great Depression of the 1930s, will echo around the world’s financial markets for some time. (7)

If it is too soon to say how Friday’s dramatic events will play out,
perhaps it is now time to analyze what led to Friday’s dramatic events.

Perhaps, the dollar and its regime are dead and this is what led to Friday’s dramatic events.

Perhaps the attention of the sheeple should be drawn to the Freegold-concept, a free floating price of gold, as an alternative to the dollar-regime.

This Freegold-concept makes gold the natural vehicle to temporarily or eternally store one’s wealth in, in order to be able to later convert it into tangible wealth.
Freegold in the central banks’ strong-rooms has the same role to fulfill as the Mona Lisa in the Louvre-museum in Paris.

A wealth reserve which would be in the strong room (the Louvre) of a monetary union.

And yes, gold crossed the $1,000-mark on Friday.

Ivo Cerckel
ivocerckel AT siquijor DOT ws


ENDNOTES

(1)
UPDATE 2-Venezuela wants euros for some fuel exports: source
Thu Mar 13, 2008 5:58pm EDT
http://www.reuters.com/article/companyNewsAndPR/idUSN1334066020080313?sp=true
By Brian Ellsworth
SNIP
CARACAS, March 13 (Reuters) - Venezuela is requiring payment in euros for some fuel exports, an industry source told Reuters on Thursday, a sign the OPEC nation may be easing away from the plummeting dollar.

(2)
Iranian official reports record oil revenues
By Najmeh Bozorgmehr in Tehran
Financial Times, February 28 2008 16:15 http://www.ft.com/cms/s/0/88af02e2-e579-11dc-9334-0 000779fd2ac.html
SNIP
Mr Ghanimifard told the FT a quarter of export transactions had been conducted in the Japanese yen and the rest in euros during the past three months, while dollar transactions had been “almost totally deleted”.
“We issue invoices in dollars and agree with clients that the l/cs [letters of credit] and other means of payment will have a non-dollar basis,” he said.
Ali Shams-Ardakani, head of the energy committee of Iran’s Chamber of Commerce, said the move away from the dollar was “absolutely right” and was economically justifiable on the grounds that it helped prevent losses due to the fall in the value of the US currency. “It should have happened much earlier,” he said.
Mr Ghanimifard did not deny some problems with letters of credit but declined to say which banks were refusing to issue them, or whether they included Chinese banks which, along with UAE banks, have provided the greatest assistance to Iran in getting around sanctions.
“Iran uses many other normal means”, he said, adding that this did not include front companies as guarantors instead of banks, but instruments like promissory notes, drafts,

(3)
Gulf chambers plan conference on inflation
By Agencies on Sunday, March 9 , 2008
http://www.business24-7.ae/cs/articl...eadlineID=3538
SNIPS
Gulf Arab policymakers and chambers of commerce officials will meet in Bahrain on March 23-24 to discuss how to tackle inflation at near-record peaks, including hearing International Monetary Fund recommendations.
+
The conference, entitled "The phenomenon of price rises in Gulf states: causes and future directions", will include speakers from the IMF and European Union, according to the conference agenda, which did not name the officials.
+
Dollar pegs in all Gulf Arab oil producers but Kuwait restrict their ability to fight inflation by forcing them to shadow US monetary policy when the Federal Reserve is cutting rates to ward off recession.
+
Gulf Arab inflation rates would fall "significantly" were the oil producers to sever their links to the dollar and allow their currencies to float freely, former Fed Chairman Alan Greenspan said during a regional visit last month.

(4)
Jordan cuts US dollar reserves
Jordan: Thursday, March 13 - 2008 at 09:30
http://www.ameinfo.com/149869.html
The Central Bank of Jordan is trimming the amount of dollars in its foreign reserves because of the falling value of the U.S. currency and the need to service debt, reported Bloomberg citing an interview with Deputy Governor Faris Sharaf. The central bank official would not provide a break down of the bank's reserves, totaling around $7bn. The Jordanian dinar has been pegged to the dollar since October 1995 at an average price of 0.709 fils.

(5)
Saudi says dollar is 'good buy'
Saudi Arabia: Thursday, March 13 - 2008 at 09:46
http://www.ameinfo.com/149873.html
The governor of the Saudi Arabian Monetary Authority said the US dollar, which has fallen to a record low against the euro, is undervalued and a 'good buy', reported Bloomberg. He also said there are 'no impediments' to the use of the euro as a reserve currency and it will become more attractive as it increases in liquidity. But the kingdom has no plans to start selling oil in euros and any such decision would be made by the oil ministry, he added.

(6)
Another stunner from Wall Street on Friday sent the dollar to record lows against major currencies as U.S. banker Bear Stearns Cos. acknowledged it was in dire financial straits.
Dollar Drops on Trouble at Bear Stearns
(The Seatlle Times
Friday, March 14, 2008 - Page updated at 05:20 PM
http://seattletimes.nwsource.com/html/businesstechnology/2004279632_apdollar.html

(7)
Bear Stearns demise bad news for U.S. economy
(Op-ed) Richard Adams - The Guardian Friday 14th March, 2008
http://feeds.bignewsnetwork.com/?sid=337634
SNIP
It is too soon to say how Friday’s dramatic events will play out. However the probable destruction of one of Wall Street’s better-known brands in the case of Bear Stearns, along with a series of emergency interventions by the U.S. Federal Reserve rarely seen since the Great Depression of the 1930s, will echo around the world’s financial markets for some time.