Play Uncle Sam’s Energy Stupidity to Your Advantage

President Obama is actually blaming energy companies and speculators for sky high gas prices. After all, he got elected after quietly acknowledging that energy prices would rise under his policies. He must think we are all pretty brain-dead. And the problem is apparently enough of us are.
Department of Energy using Horses
But you don’t have to be a chump along with the gullible masses when it comes to the hash official Washington has made of our energy future. There are ways to come out ahead and we’ll show you how.
Since the founding of the Energy Department during the Carter Administration, political forces have increasingly constrained America’s most practical energy options. To the point that our dependence on foreign oil has soared from a mere 28% when
the DOE was founded to make us more “more energy
independent,” to a level of about 75% today.

Access to Plentiful Energy is Over;
the Time to Deal With This is Now

This is a growing nightmare for struggling middle class families, but a dream come true for investors who correctly interpret unintended consequences and act on them decisively.
Imagine the chaos if the government were to shut down the entire U.S. aircraft transportation system every time a fatal plane crash occurs. Well, this is essentially what Uncle Sam did in the wake of the BP oil spill in the Gulf of Mexico. For many this development is an eyebrow raiser, when, in fact, such government over-reactions against the politically incorrect fossil fuel industry are par for the course – and have been for decades.

Sorry, There is No Method to Uncle Sam’s
Energy Madness, Just Madness

A generation of insane political meddling in the development of energy supplies and infrastructure is now translating into far higher costs for agriculture, manufacturing, and resource development. A few recent examples of official Washington’s long-standing and suicidal wealth-destroying mentality:
  • Federal officials have made quite of show of issuing new Gulf of Mexico drilling permits, but this a mere talking point for the White House and its bureaucratic stakeholders to placate voters on high fuel prices. “A defacto moratorium remains in the form of a snail’s-pace permitting process,” warns Investor’s Business Daily.
  • The Obama Administration is also taking an investment-chilling “fresh look” at regulating massive new shale oil finds in Colorado, Utah, and Wyoming.
  • Regulators are jumping all over the process of “fracking,” the pumping of water and chemicals into the ground to force out huge quantities of natural gas capable of meeting much of America’s energy needs for decades.

Don’t Get Mad, Get Rich – Here’s How to Approach It

Politically imposed constraints on development of traditional energy sources – combined with government stimulus of alternative energy development – are bad policy for our country, but they offer opportunities for investors as well. Here’s how:
  • The federal government is showering the alternative energy industry with grants, tax credits, and cost depreciation advantages. All this anointing makes it difficult for you as an investor to pick and choose such opportunities on their merits. Since central planning, crony capitalism and the systematic constraint of more practical energy options are the true fundamentals driving this sector, political ass-kissing is becoming more central to success than running a good business.
  • What we do know is that alternative energy – be it solar or wind power or lithium-ion batteries for hybrid cars – is fundamentally dependent upon strategic metals, including rare earth elements, 95%+ of which are currently produced by China.
So if you want to play the alternative energy boondoggle, or cash in on government-mandated “green” vehicles (by owning the essential raw material components needed for all those technologies), and you don’t want to own companies that tend to kiss up to political schmucks, your best bet is to look at the sub-beneficiaries of Uncle Sam’s blunderbuss directives.