Why Invest in Oil & Gas Wells?

Dear Investor, we've recently been made aware of the troubles of Countrywide, and Bear Sterns, and probably soon, many other financial institutions, and banks will have serious debt problems directly because of their clever and unregulated trading or betting practices. We are suffering because of the habits of large financial institutions, and their practice of engaging in some very bad policies which have become routine. The end result has been the federal government is having trouble figuring-out what to do while it recently bailed-out at least one brokerage/financial houses or Bear Sterns to the tune of 12 billion dollars. There will likely be more. The problem is all about playing betting games with paper rather than basing loans on hard assets which are adequately insured.

According to a former head of the 'commodities futures trading commission' (CFTC), big financial institutions have caused the major problems we face now as the direct result of betting on price movement, and losing on trades by these financial institutions when they are on the wrong side of a losing trade. The homeowner defaults are only a symptom of another far greater problem.

The problem we see now is the direct result of the use of betting systems involving trading strategies based on 'derivative financing' schemes, and as the result of the sale of mortgage backed securities in the secondary markets. Banks for example, often sell their mortgages on the secondary market. They pay themselves commissions, points, and other fees, and then unload the mortgage backed securities in the secondary market. They basically release themselves of any obligation to collect on these loans. Often foreign governments invest in these notes. But worse, the financial banking houses have not hedged their bets while they bet on the movement of securities, or for example on the rise of interest rates, or fall, and this is the 'shadow market place', which is completely unregulated by the government, or anyone else. The losing trades become a debt the American tax-payers who end-up paying, because the federal government has to bail these money people out when they bet wrong. In this case de-regulation caused the problem.

The paper trades, and sales involve betting by the banks, investment banks, brokerage houses, and other financial institutions is all about 'greed'; and all this is happening while we as consumers who are expected to rely on them for truth in lending, integrity, and honesty are getting screwed. These same institutions avoid the requirement to provide insurance, or hedging of their bets, by never calling the practices they engage-in as insurance backed activities. Because if they did, they would be regulated by the insurance commissioner. It's insidious, and its all about greed, and you the American tax payer are going to be required via the federal government to bail-out the greedy megalomaniacs who make money by stealing-it while using a method only they understand...

One alternative solution for you the investor is to bet on something that pays you cash, or dividends regularly, and is based on actual assets, and honest labor, but not on paper. Brick n' mortar ownership in defensive industries is one way to go, while investing in products, raw materials, and bartering are other ways. This may come to pass in the near future, while we see inflation, and real incomes, and buying power go down. Oil & gas is here to stay for quite awhile, and regardless of whether people want to accept this truth or not. We rely on this energy source for a majority of the products, and services we need.

Green is great, but it doesn't pay the bills. It costs a lot of money to meet clean air emissions standards, let alone finding alternative energy sources rivaling oil for energy, and replacing oil & gas as the primary source. Investors trying to make a return on new energy sources are going to be looking so far in the future it will take the government and taxes to get the job done. Dennis