Whoever thought that capital creation just meant printing more dollars? Bail out this and bail out that, promise yet another program that will mean more spending with liberty and justice and free health care for all.  The US government dollar printing press pressed the dollar to lows not seen since November and in turn added to the bullish momentum the petroleum complex was getting from OPEC and Russia on the production side.

Once again macroeconomic madness collides with the perception of reduced supply and you get the perfect concoction to create a bullish flurry. The petroleum markets knocked out some key resistance numbers and the hitting of a pile of buy stops on lousy economic news and fears what the government might do to fix it. For the dollar, traders are wondering whether the cure is worse than the disease as a horrible weekly jobless claims number makes the market question whether or not any of this stimulus stuff is working. We will need more rate cuts and magic as the US seems to be falling behind in the confidence curve that any of the steps we have taken to fix the economy has really made us any better off than some of the other major economies in the world. Oil once again is slipping back into that identity crisis wondering if it should sell-off because global demand is free falling or should rally because the dollar might not be worth the paper it is printed on. Add strong talk from the Saudis and the Russians on production cuts and bang, we are off to the races.

Yet with sign that the auto bail out has failed in the senate, is it possible that maybe, just maybe, the dollar can find some new life? Maybe so because someone in the Senate has the ability to say no once in awhile, might be just what the market needs to hear to get a sense that there is at least some restraint in this orgy of stimulation and bailouts. And in the midst of all of this economic uncertainty oil sinks into a super contango as it tries to find security against the storm. Of course what is the contango trying to tell us about this crazy world that we live in? Well perhaps a lot of things. For example if you are an optimist it could be telling us that even though demand is lousy now, the market expects the economy to recover and demand will rebound in the future so the market wants to pay to put away oil for a rainy day. Perhaps the era of low oil prices will create a new round of strong economic growth in the future similar to what happened in the late nineties. If you are a pessimist you could say that the market is paying us to put oil away because the economy is so bad and credit so tight that many oil production projects will be canceled leading to tight supply in the future. Or that in the future the dollar will be so worthless that it will take so many more dollars to by that same barrel of oil. Or that China’s economy will explode leading the world back to the brink of "peak oil” leading to the era of the next super spike and we will need that cushion of supply.

But whatever the contango is trying to tell us, let me tell you what it is telling me. It tells me that the futures markets are working to make certain of the availability of supply to everyone who may want oil in the future. It tells me that the futures markets are already working to heal this broken economy. It is working not only by making it profitable to store supply but by keeping some long term oil development projects viable. The contango is already working to make sure that the next “super spike" in price will not be that super and allow the price to rise in an orderly fashion when strong demand reappears. Imagine how much worse this recession could have been had it not been for the high price of oil that kept the bubble from a growing at an even more alarming pace. The free markets work again and they always do.

I guess I can no longer be silent. Since the recent revelations about the Governor of my home state, Illinois Governor Rod Blagojevich, I have received a ton of emails and phone calls basically asking me what the heck goes on in that state of yours. Well, probably the best way to explain it is by telling a typical political Chicago story. It was a beautiful day in Chicago so Illinois Governor Blagojevich, Chicago Mayor Daley and President elect Obama decided to take a row boat far out into Lake Michigan for a pleasure ride. Then all of a sudden, out of nowhere!, a terrible storm stirred up, thrashing the boat from side to side. Things got so bad that the three politicians got scared and started to look for their life jackets. Much to their horror they found there was only one life jacket in the boat so the three started arguing about who should be the one to get it. Finally they decided that the only fair way to decide who should get the life saving vest would be to vote on it. Daley won three to two.

When in comes to The Energy Report remember the Chicago tradition, “Vote early and Vote often” and when it come to the Fox Business Network “Watch early and Watch often" and you can see me there everyday! Call me for the latest trade updates and to get on my daily email blast and who, knows, maybe just maybe, you could make enough money to buy your own Senate seat on eBay!!! Yes sir Senator! ! A great time to put on options and day trades!! My number is 800-935-6487 or you can email me at pflynn@alaron.com to open your account.