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The Daily Reckoning | Saturday, June 23, 2012 Byron King on peak oil, rare earths and what politics has to do with it all, Readers weigh in on housing’s nascent recovery and Norway’s riches, Plus, all this week’s reckonings archived for your non-violent reading... --------------------------------------------------------------- Europe is the last place your attention should be right now... When Greece’s debt crisis first shook the world in 2010, people were so preoccupied by headlines about Europe many of them missed out on the big early gains being generated by America’s explosive shale boom... Now that same distraction could cause them to miss out on an even bigger moneymaking opportunity. Forget about France, Germany, Greece and Spain for a moment — something far more unexpected, important and life changing is about take place right here at home... Click here now to see what it is. Joel Bowman, safely back at sea level in Stavanger, Norway... Joel Bowman “If you get the chance, take a trip out to the fjords,” advised one Fellow Reckoner, seeing the timestamp of some of our ramblings from during the week. “You won’t regret it!” Thanks for the tip! On Wednesday we took our kind reader’s advice and did just that. This oil rich country certainly is blessed when it comes to natural endowments. Not only does she enjoy enormous (though steadily declining) riches from her oil and gas claims under the North Sea, and not only does her unique environment allow her to derive 99% of domestic energy needs from entirely renewable hydropower...but she also boasts some of the most magnificent scenery in the world.  We’ve included a happy snap below. But first, more important news on the energy front... As you may have seen, Energy & Scarcity Investor’s Byron King appeared on RT’s Capital Account with Lauren Lyster recently to discuss a variety of resource-related topics. As per usual, he had a plethora of insightful things to say about everything from peak oil to rare earths. But what he said about the political aspects of oil production was pretty incredible.  His insights serve as this weekend’s “feature video.” Please enjoy...  Editor’s Note: With myriad contributing factors to fluctuations in energy prices, it can be difficult to decipher where things are headed. That’s why we constantly find ourselves checking in with Byron King’s Energy and Scarcity Investor. Over the years his unique insight has proven invaluable to his loyal following of readers. And his latest report is no exception... In this incredibly timely presentation, Bryon explains why, on June 25th, 2012, “your expectations for America — and our future — may change in a way you never thought possible.” We urge you to check out this crucial new report as soon as you can. Click here to access it now.  The “Lost” Gold Bible Congress Never Wanted Anyone To See “Locked away” for almost 3 decades. Kept virtually secret...until now. You’ll soon discover why all the secrecy surrounds this book...and why it would be to your great benefit to read this book now. You’ll also see why I’m doing everything in my power to get this book into your hands for FREE by following one simple step Click here to read more. ALSO THIS WEEK in The Daily Reckoning... The Lesson of the Cheesehead Jennifer Fry Once upon a time in America, the free market determined which products and services reached consumers. Aspiring entrepreneurs could test out new ideas to see whether consumer interest justified their production. “Good ideas” — i.e. for things people were willing to pay for — could flourish and evolve while “bad ideas” — i.e. for things no one wanted — could die quietly and unobtrusively. On the Trail of the Housing Recovery Chris Mayer  One crisp fall Sunday afternoon under bright blue skies, my wife and I visited five homes up for sale. We remembered them by their street names: Big Acre, Blue Silo, Pontiac, Prairie Rose and Lamont. The lineup has a poetic ring to it, but the real music is the potential rates of return from owning them and renting them out. The Government’s Plan to Steal Your Money Simon Black There are consequences to being flat broke. There are consequences to investing any level of confidence in a financial system underpinned by debt and the creation of paper currency. There are consequences for ignoring reality and pretending that everything is normal.  The View From Atop the Junk Bond Bubble Douglas French If you’re like most investors, you may not know where to turn right now. Worrying about the collapse of Europe and what that might do to your portfolio before the opening bell might have you opting for sleep, instead of speculation. Added up, that’s why money has been rushing out of the stock market and into junk bond funds at a record pace. If that sounds like you, I urge you to reconsider the “junky stuff.” More on that in a moment. First, let’s look at the numbers... The One Retirement Plan Obama Can’t Touch If you’ve already retired, or want to retire soon, I urge you to watch this video presentation before we have to pull it down. This “Secret $200 Retirement Blueprint” shows you step-by-step how to grow a monster-sized nest egg with a little time and a tiny grubstake. Click here to watch this video presentation now. The Weekly Endnote... And now, it’s over to a few readers for some thoughts, ideas and rumors... First up, Reckoner Nordic Exile, writes in response to The Benefits of a Bountiful Oil Supply... Interesting article. I wonder if the writer had a chance to speak to the “average” Norwegian outside of Oslo. Where we live there is a lot of concern about the future of the county and the number of people dependent on the welfare system. Talk to people in Sunnmore and you will get a very different perspective of how the country is being run. If you think Americans are hostile toward the “leaders” in Washington, try asking a Norwegian what they think about Oslo. DR: Indeed, we did have a chance to chat to some folk outside the capital and, as you said, there is more hostility toward the government...though not as much as we’d obviously like to see. We’ll have more on the home of the world’s largest sovereign wealth fund next week... Next, Reckoner Gerry C., a certified petroleum geologist, writes...  I’ll bet the shortest way to start a fist fight is to remind the Norsemen that they rest on discoveries by a free enterprise, risk taking oil company — Phillips. Bruno Hansen, ex-president of the American Asso. of Petroleum Geologists, went back to his roots and came home mad as hell. He had broached a wildcat idea to his fellow Norsemen, and they offered terms that amounted to highway robbery. DR: We tried not to get in too many fistfights here... And finally, on another topic entirely, Reckoner Keith O. writes... I am responding to Chris Mayer’s observations on a nascent housing recovery in the slow making. We are seeing the same thing in our neighborhood in the South Denver metroplex. Where there were once many houses for sale and vacant that were in foreclosure and many are getting snapped up via short sales and we are starting to see that what is left is the worst of the worst. Many of the homes that have already been snatched up are in some mode of rehabilitation and well on their way to becoming desirable properties.  The result is that my appraisal value actually rose over the last year by about 3.7% when I refinanced below 4% and I suspect that prices will not only firm up but start to slowly rise. Why? One thing that everyone fails to comment on is the cost of actually building or repairing a house. The cost of new construction is about 20% higher than the cost to rehabilitate an older home but that doesn’t change the fact that a house has a base-line cost associated with it and for prices to fall much below this base-line is a real opportunity.  At this point in time I would estimate that the cost of housing in our neighborhood is about 0-10% above the cost/SF and that presents a potential for profit opportunity going forward if this trend continues to go up. None-the-less, there are still many properties out there in other neighborhoods that need to be snatched up before things are truly ‘recovered’. Our neighborhood benefits from being in one of the better school districts in Colorado and so I suspect that is why we are seeing this change quicker in our neighborhood. I have to agree with Chis’ observations as my wife and I are starting to sense the same thing here.  Disclosure: I already own a rental and we are looking for another......patiently. --- As always, we welcome your thoughts. Email them to the address below and... ..enjoy your weekend. Cheers, Joel Bowman Managing Editor The Daily Reckoning P.S. As promised above, we include a photo from our trip through one of Norway’s magnificent fjords. This one, from Preikestolen (The Pulpit), shows your acrophobic editor confronting an old fear...on his stomach. ---------------------------------------------------------------- Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor atjoel@dailyreckoning.com