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Thursday, February 24, 2011

Libya is not the country you should be most concerned with in the middle east crisis.

As Libya trumps the news broadcasts from CNN to Fox, there is another country that is more vital to western interests. It is strategic for a number of reasons, not the least of which, is the potential for a shift in the balance of power itself in the middle east.

Bahrain is a buffer between Iranian and Saudi power in the middle east. It's future may affect a U.S. withdrawal from Iraq. The United States 5th Fleet has a base in Bahrain. The withdrawal from Iraq, and U.S influence could well be affected by whoever reigns over Bahrain in the immediate future.
Saudi Arabia has a large Shiite minority that could begin protests in that country. Depending on how politics play out in Bahrain, the Iranian-Saudi balance in the region would favour Iran.  Iran, who supported the Shite minority in Iraq, and still does, will not stop at that border. Their support of a Shite protest, or uprising in Saudi Arabia could well be the straw that breaks the camels back, so to speak.

The oil tankers that pass through the very narrow Strait of Hormuz make up 40% of worlds seabourne oil. Iran owns one side of the straight, however consider events unfolding if it in fact, controlled "both" sides of the Straight of Hormuz.  A disruption in the flow of tankers through the straight would virtually paralyze oil supply in some parts of the world.  Now, do you think the leaders of Iran might just play that card once it is in their hands?


 As oil spikes on the Nymex over $101 PBL today, and Brent Crude reaches $115 PBL at this writing, we may be in only the first inning of this perilous game which plays out in this hotbed region every decade or so. However, depending on certain outcomes, this could be the truly big game that changes the dynamic, maybe forever.  Now I know that this sounds appocolyptic, but the appocolypse is not what I am referring to.  It is the world energy supply, and the rapid changes that are occuring in the minds of many producers and investors alike.

 As an investor in both oil and alternative energy sources I believe that these events are the tipping point toward these investments. The world can no longer leave its energy supply so affected by the whims of autrocratic and barbaric Kings, Princes, dictators and cracdkpots like Gadafhi in Libya, or Amadinijad of Iran. It may well be that the long suffering people of the Middle East may one day enjoy freedom and democracy, but in the meantime, the world needs to protect its economies from such calamity.

 These troubles in the middle east are the catalyst that will drive investors to natural gas investments in the USA as well as investments in Wind, Solar, Nuclear, fuel cells, electric vehicles and Lithium.

Consider this a buying opportunity for those stocks.

Herès to your Retirefund.
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