Real Wealth #054 07/03/2006
Son of Iraq
Gold continues its climb today as we approach the July 4 holiday. And while things are expected to be relatively quiet in the markets for most of this week, I want to draw your attention to two stories you may have missed this past weekend.
First up is a confirmation as to just how serious the situation with Iran really is. In a story that appeared Sunday, the New Yorker reported that top Pentagon officials have cautioned President Bush that a bombing campaign targeting Iran's nuclear facilities is unlikely to be successful.
Not only is such an attack unlikely to be successful, it's also likely to have "serious economic, political, and military consequences for the United States," according to the story.
Here's a quote...
"We built this big monster with Iraq, and there was nothing there. This is son of Iraq," he said.
"There is a war about the war going on inside the building," a Pentagon consultant said. "If we go, we have to find something."
And don't think for a minute that the potential disruption of oil supplies is not a factor. Take a look at this quote from a senior military official...
"Even if we knew where the Iranian enriched uranium was—and we don't—we don't know where world opinion would stand. The issue is whether it's a clear and present danger. If you're a military planner, you try to weigh options. What is the capability of the Iranian response, and the likelihood of a punitive response—like cutting off oil shipments? What would that cost us?"
I encourage you to read the entire story by clicking on this link...
Also worth mentioning is the controversial election in Mexico, as the next leader of that nation will inherit an immediate problem: Mexico may be facing an oil crisis.
Take a look at this quote from a story that appeared in Sunday's Dallas Morning News,
"At a recent reunion of retired Pemex executives, former chief financial officer Ernesto Marcos recalled, a colleague urged that "the next president be told as soon as possible that we may soon not have enough oil for our own requirements and none for exports."
That's an ominous forecast for Mexico's economy and for the United States, which relies on Mexico for 8 percent of its oil.
Analysts such as Mr. Marcos say Mexico is not running out of oil. Instead, Pemex lacks enough money to explore for new fields to replace depleting old ones."
To read the entire story — along with an explanation as to why Mexico's nationalistic approach to energy no longer works — click on this link...
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