Millionaires Thank Krugman, Yellen, Obama, and the Democratic Party

As the Dow Jones industrial average nears its all-time high, those who are rich need to take a moment to praise the Democratic party and its supporters.  It is advantageous to have clever advocates, and who can be a better advocate for millionaires than those who claim that they dislike them?

The elite Democrats of academia, those who advocate taxes out of one side of their mouths and monetary expansion out of the other, are  the millionaire's best friend.  The Republicans aren't because they claim to favor the wealthy and those who work, and the public and many of the wealthy have yet to understand that the wealthy are not so because they work; they are wealthy because they own.

When Janet Yellen and the Fed reduce interest rates, the value of assets is increased, and the rich become richer.  What else can matter to the wealthy? Do gay rights, global warming, great  causes, gross income inequality, or a stagnant real wage matter?

All are distractions to the one issue that matters, the one issue about which the news will ever remain silent: the expansion of the money supply, the reduction of interest rates, the inflation of asset values, the suppression of  real wages, and the increment to the  portfolio.

On behalf of the world's millionaires, I thank Paul Krugman; I praise Janet Yellen; I sing hallelujah to Barack Obama.

Donald Trump Says "Yes" to the Second Amendment

New York is too far gone for it to matter much, but it's nice to hear Mr. Donald Trump tell New York's politicians that they're bad guys and to tell Andy Cuomo, "You're fired!"  H/t Mert Melfa.

The Science Is Settled: What's Interesting about the American Media Is What It Doesn't Talk About

I was privileged this past Saturday to join Lincoln Eagle publisher Mike Marnell on Scott Harrington's Speak Out show on WKNY, Kingston, NY.  We discussed education and politics; I posted the interview here.  WKNY is a great local music station that plays close-to-nonstop soft rock.  Since they had me on the air, I've been listening to their programming. The soft-classic rock format is great, but the station is an affiliate of ABC News.  As a result, I've inadvertently heard a few of the ABC newscasts, which breaks one of my personal moral rules: Do not listen to the media.  Most of what ABC discusses is irrelevant.  What caught my attention was their blaring claim: "The debate is settled: There is global warming." Well, that's all well and good because there has been a global warming for the past 10,000 years, since the last Ice Age, as the chart below shows.

As I mentioned on the radio show, the useful information to be gained from listening to the media is to learn what it doesn't talk about.

Technology Heals All Wounds

Dr. Bruce Cordell writes an excellent overview of space exploration and technological trends in 2014. Dr. Cordell makes a number of wonderful observations and predictions about space exploration in terms of what he calls the Maslow window, the appearance out of every five or six decades of an optimistic, technologically expansive one that appears because of exuberant public opinion.

From a policy standpoint, the gist of Dr. Cordell's essay is that the force of technology is so substantial that it can even overcome government's restriction, suppression, and misallocation of economic resources. I don't tend to be so optimistic, but Dr. Cordell may have a point.

As an investor in natural gas pipelines and infrastructure (in firms and Master Limited Partnerships like Chicago Bridge and Iron, Kinder Morgan, Vanguard Natural Resources, Oneok, and Dominion Resources) I am betting on a natural gas boom.  The implications of America as an energy exporter are that the costs of misallocation of resources through regulation, monetary expansion, a subsidized banking system, and government mismanagement can be overcome by significant energy revenues that  open up because of shale oil,  fracking, and other new energy technologies.

Back in 2009, when I last taught an evening course at NYU's Stern School of Business, I got into a friendly argument with a student who was obtaining his MBA to further his career as an energy trader.  The student insisted that, based on Matthew Simmons's thesis in his Twilight in the Desert, oil production had peaked.   I countered that rising prices will stimulate new technologies.

At the time, I knew of a firm that had invented technology to extract the remaining oil in existing oil wells. The current technology depends on water, but that fails to get at the large amount of oil still in depleted wells. Since then, fracking and shale oil technologies have exploded the potential for energy production in the US.  Investors in energy stocks are speculating that America will become the Saudi Arabia of natural gas.  If so, the American economy may turn out to be resilient despite Washington's insane economic policies.