Why the U.S. Government Should End the 40-Year Crude Oil Export Ban

Posted on September 9, 2014 by MN Gordon

An abundance of oil hides a lot of mistakes.  Just think of Saudi Arabia.  Oil accounts for 95 percent of their exports and contributes 70 percent of government revenue.

Unfortunately, the royal family’s taken this cash cow and squandered it.  After years and years of pumping and selling this precious resource they’ve been unable to empower their people to stand on their own feet.  Instead, their economy remains dependent on mass oil exports.

Oil contributes 45 percent of Saudi Arabia’s gross domestic product.  When oil prices significantly declined in the 1990’s, per capita income fell from a high of $11,700 in 1981 to $6,300 in 1998.  Conversely, when oil prices rose in the 2000s, per capita income rose to $15,000.

High oil prices, rather than helping Saudi Arabia, handicapped it.  The revenue boost it provided masked over the economy’s limitations.  Rather than diversifying its economy, Saudi Arabia continued to rely on its one great resource.

Now, Saudi Arabia and other oil export economies, face a great challenge. Continue reading →

Posted in Government Debt, MN Gordon | Tagged , , , , , | Leave a comment

I Didn’t Believe the IRS Anyway

Posted on September 5, 2014 by MN Gordon

I Didn’t Believe the IRS Anyway
By Dennis Miller, Miller’s Money Forever

Lois Lerner’s emails are back from the dead—sort of.  The former IRS official’s BlackBerry, however, is still long gone.  The IRS intentionally destroyed it in June 2012 (after congressional staffers interviewed Lerner about the IRS targeting conservative groups) as the Deputy Assistant Chief Counsel acknowledged in a recent sworn declaration.

We’ve all met someone we just don’t trust but don’t know why.  There’s often a pretty good reason to feel that way.

Has someone ever made an insincere attempt to flatter you?  Their words might be complimentary, but their body language, tone, and/or context let you know the compliment is phony.  Does this guy really think I’m that stupid?

So, up goes your trust wall.  If he’ll lie about this, he’ll lie about anything.

The IRS debacle is a prime example of why we build trust walls.  The emails Congress requested had (supposedly) been deleted when several hard drives crashed. Continue reading →

Posted in Dennis Miller, Politics | Tagged , , , , | Leave a comment

Musical Chairs Investing

Posted on September 2, 2014 by MN Gordon

Markets were closed yesterday in observance of Labor Day.  But here at the Economic Prism we labored on.  There’s always something to contemplate.  Where to begin?

One place, obviously, is this crazy stock market.  Day after day, week after week, month after month, year after year…the broad barometer of man’s hopes and dreams keeps going up.  Apparently, August was the S&P 500’s best month since February.

“The S&P 500 gained 3.8 percent for the month,” reported MarketWatch, “representing the bench mark’s best August performance since 2000.  The S&P also achieved its largest monthly percentage jump since February, when it rose 4.3 percent.”

Something remarkable is going on here, for sure.  After bottoming out at 666 on March 6, 2009, the S&P 500 is up over 300 percent.  Simply for buying and holding an index of the stock market’s largest 500 companies, investors have tripled their money.

How much longer will this go on?  No one really knows.  That it has gone on this long is bewildering.  Unfortunately, the next five years will not likely be as prosperous as the last five has been for stock market investors. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | Leave a comment

Morons At Large

Posted on August 29, 2014 by MN Gordon

Up here, near the face of Tahquitz Peak, the summer twilight lingers a little longer.  The evening sunshine bends through the tall shady pines and sweet smelling cedars, basking on Idyllwild…the splendor mile high Southern California mountain village.  We breathe deeply and exhale gradually.  Time slows to the soft rhythm of Strawberry Creek as it meanders through town.

The kids return to school next week.  Back to crowded classrooms and common core curriculum.  What could possibly be worse?  But, at the moment, we’re not ready for them to close the door on summer just yet.

You’re only a kid once.  Why not stretch the summer break out to the last moment possible?  Plus, the outdoor classroom on Ernie Maxwell Scenic Trail provides far more instruction than a classroom ever could.  Time, gravity, hydrology, ecology, limitations, consequences…you name it, it’s all right here.

Obviously, there are certain rote learning fundamentals that are best suited to the classroom.  Like reading, writing, and arithmetic.  There are no shortcuts to the practice and repetition required to master these skills. Continue reading →

Posted in Government Debt, MN Gordon | Tagged , , , , | Leave a comment