Putin Is the New Global Shah of Oil

Posted on November 2, 2012 by MN Gordon

Putin Is the New Global Shah of Oil
By Marin Katusa, Casey Research

Exxon Mobil is no longer the world’s number-one oil producer.  As of October 25th, that title belongs to Putin Oil Corp – oh, whoops.  I mean the title belongs to Rosneft, Russia’s state-controlled oil company.

Rosneft is buying TNK-BP, which is a vertically integrated oil company co-owned by British oil firm BP and a group of Russian billionaires known as AAR.  One of the top-ten privately owned oil producers in the world, in 2010 TNK-BP churned out 1.74 million barrels of oil equivalent per day from its assets in Russia and Ukraine and processed almost half that amount through its refineries.

With TNK-BP in its hands, Rosneft will be in charge of more than 4 million barrels of oil production a day.  And who is in charge of Rosneft?  None other than Vladimir Putin, Russia’s resource-full president.

TNK-BP has been an economic dream, producing many billions in dividend payments for its owners – but it has been a relations nightmare. Continue reading →

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How to Fix America’s Debt

Posted on October 30, 2012 by MN Gordon

Third quarter Gross Domestic Product increased at a 2 percent annual rate, reported the Commerce Department last Friday.  That’s up from the second quarter’s 1.3 percent growth rate.  But don’t get too excited…

According to Lucia Mutikani at Reuters, the economy needs to have sustained growth above 2.5 percent over several quarters to make any real progress cutting the jobless rate.  Moreover, the growth isn’t attributed to real wealth creation…like the kind that comes from savings and investment.  Rather it’s the kind of phony growth that shows up in the GDP numbers when capital is drawn down and wealth is burned up.  Here’s what we mean…

Consumer spending, which makes up about 70 percent of the U.S. economy, increased by 2 percent during the third quarter.  Yet, over this same time, incomes rose just 0.8 percent.  The 1.2 percent difference wasn’t likely made up with savings.

Remember, 40 percent of Americans have $500 or less in savings.  What’s more, 28 percent of Americans have no savings at all.  This means the difference between the 2 percent increase in consumer spending and the 0.8 percent increase in incomes was made up with new debt…it was borrowed from the future. Continue reading →

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Deceptive Schemes to Bailout Unfunded Public Pensions

Posted on October 26, 2012 by MN Gordon

To sharpen the mind and invigorate the spirit we begin with the following riddle…

What does man love more than life;
Fear more than death or mortal strife;
What the poor have, the rich require;
And what contented men desire,
What the miser spends and the spendthrift saves
And all men carry to their graves?

Hint: The answer is not something.

That’s right.  The answer is “nothing.”

Recounting this riddle reminds us that sometimes nothing is something.  So, too, sometimes, for individuals, it’s possible to get something for nothing.  Yet, on the whole, it’s not possible for everyone to get something for nothing.

Nonetheless, there are gobs of people counting on getting exactly that – something for nothing. Continue reading →

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In Mob We Trust

Posted on October 23, 2012 by MN Gordon

“Democracy is a pathetic belief in the collective wisdom of individual ignorance,” – H.L. Mencken

Democratic Collectivism

With the possible exceptions of love and war – or a residential real estate bubble – there’s nothing like the promise of election year populism to infect a man’s brain with notions that are absurd.  The popular delusion of voters these days is that through the ballot box they can get something for nothing.  The effect this has is that the wickedest rascals get elected to office again and again.

Ideas of independence, liberty, and freedom presently exist as mere platitudes.  People like to pretend they still believe in them…but they really don’t.  When it comes down to it, they want bailouts, safety nets, and free drugs from the government.  That’s why the restraint and discipline of a representative constitutional republic was given up long ago for the false security of democratic collectivism.

“Where all think alike, no one thinks very much,” once observed 20th century political commentator Walter Lippmann. Continue reading →

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