| | | Friday, February 27, 2015 | Issue #2489 | |
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How to make the Fed "pay"
The U.S. Federal Reserve now sits atop $3.09 trillion in assets. It uses that money to control interest rates, Wall Street and our very economy. What you might not know is this... Every 30 days, a handful of lucky Americans are allowed to "raid" the Fed, legally. In January 2014, they walked away with more than $3 billion. Former Wall Street power broker Chris Matthai has uncovered a simple way to siphon some of these billions into your bank account next month. Go here for details.
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President Obama:
A Real Keystone Cop David Fessler, Energy and Infrastructure Strategist, The Oxford Club
Editorial Note: While we generally avoid politics - over the long term, what happens in Washington rarely impacts the markets - the news this week about the Keystone XL is impossible to ignore. We asked our Energy and Infrastructure Strategist to give his thoughts on the president's veto and what readers should expect next. If you have an opinion on this story, we hope you'll share your thoughts in the form of a comment on our site.
 For those too young to remember, the Keystone Cops were a squad of fictional, incompetent policemen. They appeared in silent film comedies in the early 20th century.
And today they have a new addition...
Yes, that's President Obama seated at the desk in the picture below, presumably on the phone with Congress.
What's he telling them? He's telling them to think again on the Keystone XL pipeline.
That's right. This past Tuesday, Obama got out his veto pen for only the third time in his presidency. He used it to veto bipartisan legislation that would authorize building the northern section of the Keystone XL pipeline. (And in the process he became a literal Keystone Cop.)
The president claimed the bill was attempting to "circumvent" the existing review process.
You've got to be kidding me. This pipeline application has been "under review" for more than 2,300 days.
In terms of pipeline approvals, the Keystone XL delay has been the longest by far. Approving pipelines is generally a quick, routine process.
What's so different about the Keystone XL? In a word, nothing.
The Alberta Clipper - a similar pipeline project - was approved swiftly and quietly back in 2009 by this very same president.
Not surprisingly, Obama's comments on the Keystone XL and his veto are angering more than a few of his key constituents. Terry O'Sullivan, president of The Laborers' International Union of North America, called the whole thing "disgustingly predictable."
Make no mistake; right now Obama is kowtowing to a few special interest groups. The goal is to turn the Keystone XL into a national debate on climate change.
Never mind the fact that the U.S. State Department, in its Final Supplemental Environmental Impact Statement, said the Keystone XL pipeline wouldn't have a "significant" effect on greenhouse gas emissions. (This was in January 2014 - yes, more than a year ago.)
How can that be? Because, as the State Department argues, the oil produced and transported by the Keystone XL will find its way to customers anyway. There are other pipelines, and plenty of railcars.
But wait a minute...
Putting 25 Million Americans at Risk
Isn't oil transport by rail a little iffy? Didn't a massive CSX oil train just derail in Mount Carbon, West Virginia?
Or what about the one that derailed in Lac-Mégantic, Quebec? That one killed 47 people and destroyed 32 buildings (most of the town's center).
On Monday - the day before Obama vetoed the Keystone XL - the Department of Transportation (DOT) projected that trains hauling oil or ethanol will derail, on average, 10 times a year over the next two decades.
Even worse, as many as 25 million Americans currently live within the one-mile evacuation zone recommended by the DOT in the event of an oil train derailment.
The report went on to say that derailments that occur near a populated area could cause $6 billion in damage and potentially kill up to 200 people.
Oil trains pass through major cities every day, especially in the northeast. My wife and I stopped for a 75-car oil train on Tuesday. They pass through the city of Allentown, Pennsylvania, several times a day.
So why isn't the president up in arms about oil train derailments? Instead of vetoing the Keystone XL, perhaps he should be considering a moratorium on crude by rail.
The bottom line is that pipelines, whether they carry crude oil or natural gas, are far safer than trains carrying carloads of either.
And just where is the proposed Keystone XL pipeline going to be anyway?
The 1,179-mile pipeline was first proposed way back in 2008 by TransCanada Corporation (NYSE: TRP). Its purpose is to carry heavy oil from the Alberta Tar Sands to an existing pipeline in Steele City, Nebraska (see map below).
As you can see on the above map, other parts of the Keystone pipeline already exist. However, the new Keystone XL section requires State Department and ultimately U.S. presidential approval because it crosses an international border.
Will the Keystone XL Ever Get Built?
You bet it will. It may not happen during Obama's remaining days, but it will happen. Why?
As I mentioned above, it's far safer than rail. And frankly, it's just another pipeline. One that will create jobs for Americans and Canadians, keep us in good stead with Canada and further increase U.S. energy security.
And speaking of pipeline safety, don't forget that there are already hundreds of thousands of miles of crude and natural gas pipelines crisscrossing the U.S. For the most part, they operate safely every day.
I take issue with the Obama administration's two-faced stance on energy. In one breath, the president says he doesn't think the Keystone XL "is in the best interest of the American people."
In another, he happily takes credit for America's abundance of oil and gas - as if he actually had something to do with creating it.
Maybe he did... after all, Al Gore created the Internet, right?
Good investing,
Dave Fessler
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Breaking Information on Stock Exchange Bylaw "Section 703"
Thanks in part to a little-known stock exchange rule, some pre-retirees and retirees are now collecting six to 21 times more income, over time, than the average investor. It's called Regulation "Section 703," and we estimate not one in 1,000 Americans has heard of it. But you can get all the details on this little-known, portfolio-juicing plan right here. | |
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Successful investors aren't spooked by vetoes and price volatility. Which is why readers of Investment U Plus are learning today about a midstream MLP with steady cash flows and a sizable distribution yield. To find out how you can get all the details, click here. | |
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While most energy markets remain unhealthy, uranium appears to be coming back from the dead. Here are three forces pushing it higher... Read On... | |
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In the fight between Putin and world financial markets, this is where you should put your money. Read On... | |
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