But that isn’t the case anymore. Americans are finally starting to ditch their SUVs and — miracle of miracles — even pay more attention to things like cheaper transportation and mass transit. Those who decided to live 50 miles from work to save $30K on the mortgage payment are rethinking their options.

Political will is building to do something about the intense pain of high oil prices — and not just band-aid solutions, either. The naysayers and the Pollyannas have finally been forced to wake up and smell the petrol.

This is all good stuff… and it all represents how change is supposed to happen in a free market system. The unofficial motto of capitalism — and mother nature, too, for that matter — could be “If it ain’t broke, don’t fix it.”

For the longest time, America felt rising energy costs were a pain in the butt, perhaps, but really no big deal at the end of the day… and so not much changed. This was only rational, because changes on a huge scale, changes involving a nation’s way of life, are never easy to bring about. It often takes a frying pan to the face to bring about that kind of change.

Opportunity Unleashed

For investors, the really good news about $127 oil is the massive wave of investment opportunity that is about to be unleashed.

Wall Street, as you hopefully know by now, is a deeply psychological beast. The markets are ruled by fear and greed, and thus so is capital flow. Money is supposed to rationally flow to where it can earn the highest return, but sentiment and emotion play a big role, too.

For the past few years, there has been an undercurrent of complacency… a sense that, yeah, oil prices may be high now, but they’ll fall back again. Things will be the same… maybe a few things will be different, but nothing will really change.

That complacency is falling away now. Every morning that oil continues to trade at $100 a barrel, it gives Wall Street another chance to sit up, rub its eyes, and collectively say, “Holy @#$#@! Oil is above $100 a barrel! And that probably isn’t going to change!”

This means very big things for alternative energy technologies — not the crackpot ones, but the ones that are already viable (and in some cases already profitable). We’re seeing clear example of this as Silicon Valley venture capitalists pour hundreds of billions of dollars into “cleantech,” and as serious — and seriously wealthy — entrepreneurs fund more and more ambitious projects.

We’re seeing major investment opportunities pop up all up and down the scale — from companies with radical new solutions, to companies with old as the hill solutions that just make a heck of a lot of sense, to companies that will profit from this sea change in ways most people never even thought of.

So don’t fret too much when President Bush comes on TV and makes apologies for the Saudis, or when crude laughs in the face of band-aid production commitments like an extra 300K barrels a day.

The pain of high-priced oil is here, no doubt, and that pain is real, and is only likely to get worse. But that’s how massive scale change is created, and that’s how massive investment opportunity is created, too.

Warm Regards,

JL

Source: The Good News About $127 Oil

Pages: 1 2

Pages: 1 2