Dear Wealth Daily reader:
Today crude-oil prices flew by its recent highs, past $65 and past $66, touching an all time high of $67.10 per barrel.
The latest U.S. refinery reports sparked fears throughout the trading community that gasoline supplies in the US would struggle to meet rising demand.
Gasoline demand is currently at its peak in the U.S. summer driving season.
On Wednesday The U.S. Energy Department said that gasoline inventories fell 2.1 million barrels to 203.1 million barrels last week, down 1.4% from last year.
The threat of hurricanes in the Gulf of Mexico and concerns over Iran’s decision to commence its nuclear activities also weighed on the markets, pushing prices skyward.
Tropical Storm Irene is expected to intensify today and possibly reach hurricane strength as it approached the U.S. East Coast.
According to the Hurricane Center in Miami, Irene’s potential threat to land was still uncertain as its path had shifted east.
Forecasters say that the storm could strike the coast anywhere from South Carolina to New Jersey.
All of this, coupled with new reports of refinery outages this week have pushed oil price to current levels.
Oil prices are 46 percent higher than a year ago, but they would need to surpass $90 a barrel to exceed the inflation-adjusted peak set in 1980.
But I think that it is only a matter of time.
The Coming Conflict with Iran
A few weeks ago in Wealth Daily I predicted that the US was going to war with Iran.
Well we haven’t sent the troops packing just yet (because quite frankly we have no extra troops to send). But a war with Iran seems ever closer.
The major media forums have recently featured several claims from members of terrorist organizations, like the Mujahedin Klaq, telling us that Iran is secretively developing nuclear arms under the guise of an energy initiative.
The Iran nuclear debate is something that is constantly being argued around my circle of friends. One particular friend, let’s call him ‘Lefty’, and I, have recently been getting into shouting matches over this issue.
Lefty believes that Iran should be allowed to pursue nuclear research under the supervision of the UN, since there would be no debate over any US ally developing nuclear power. And of course I retort that President Mohammad Khatami is a terrorist himself and that we should stop this at any cost.
However there is one thing we do agree on. It’s that Iran’s oil and natural gas reserves are beginning to play a major geopolitical role in the region.
When I first wrote about of the possibly of war with Iran in Wealth Daily I received an email from a reader that explained how the US public simply can’t stomach another war right now. I took this opinion into serious consideration. But it seems that popular opinion doesn’t matter when it comes to going to war.
Besides, popularity doesn’t matter to Bush now anyway. This is his last term.
I sat down with Brian Hicks this morning and we discussed the economic implications of a war with Iran. I asked him how another war would impact his New America Investor portfolio. He didn’t answer. Rather he simply pointed his forefinger to the ceiling. That was enough.
My brother is a medic in the Air Force. And as you can imagine, war is a popular topic of conversation during family gatherings. It was one day this week when we all went out to eat crabs (by the way, if you’ve never had a blue crab in Baltimore, you don’t know what you’re missing.)
So we were out, sitting around a table covered with brown-colored paper, talking about the possibility or probably of a war with Iran.
Understandably, my mother is always on edge about her youngest going to war. So I asked my brother, because I’m always thinking of the investment implications of any situation, what kind of things the US military would need in the event of another war.
Of course they’re going to need more weapons and body armor… all the things Brian’s New American Investor covers. That’s a given.
"But," he said, "you know one thing we end up wasting a lot of?……….Medical supplies."
I asked him what he meant. He told me that every solider, including himself, must undergo a physical before going anywhere. Even if they just received one. So that means needles, bandages, rubber gloves, and other supplies will have to be purchased by the military.
Companies like Johnson and Johnson (NYSE:JNJ), Merck (NYSE:MRK), Sanofi-Aventis (NYSE:SNY), and Retractable Technologies (AMEX:RVP), who manufactures safety syringes, stand to deliver a massive amount of medical supplies if Iran doesn’t stand-down.
My brother also told me what happens when the medics get bored. They wrap themselves in bandages and play mummy or squirt each other with syringes.
So while these clowns throw tax dollars away, there’s plenty of room for profit in the military medical field.
The Future Classroom
If you can remember a few years ago, when we still carried pagers, kids in school were not allowed to carry a beeper. The school system claimed that it was because beepers would promote drug activity.
In fact one of my younger cousins was expelled from high school because she was "in possession of a portable communications device." But now that doesn’t seem to matter.
That’s because, as with everything else, schools are changing.
I believe that there is going to be a technological revolution in the school system unlike anything we’ve ever seen.
In the future classroom I see laptops on every school desk. I see digital chalkboards and books. I see interactive and hands-on learning where information can be sent and receive instantly.
The public school system, especially Baltimore City’s, has been notorious for budget problems. So I don’t see laptops in Baltimore’s schools just yet.
However, right now there are many initiatives, home and abroad, that are pushing to supply each teacher with a free laptop. These projects are funded directly by computer manufactures as to "facilitate the community."
This tech revolution will certainly start in the more advantaged schools. Most likely in the private schools. And eventually there’ll be a push to have all student opportunities on par. So like every other government project, it’ll be "spend whatever it takes."
I personally know quite a few teachers. They’ve told me that they’ve been at schools where classrooms had laptop connections and the whole school was WIFI ready.
It’ll only be a matter of time until the school system as a whole become more and more technological advanced.
– Luke Burgess