Personal Economics 101

If you think the world is coming to an end, think again: people are living longer, healthier, freer, and happier lives, and while our problems are formidable, the solutions lie in the Enlightenment ideal of using reason and science. Is the world really falling apart? Is the ideal of progress obsolete? In this elegant assessment of the human condition in the third millennium, cognitive scientist and public intellectual Steven Pinker urges us to step back from the gory headlines and prophecies of doom, which play to our psychological biases. Instead, follow the data: In seventy-five jaw-dropping graphs, Pinker shows that life, health, prosperity, safety, peace, knowledge, and happiness are on the rise, not just in the West, but worldwide. This progress is not the result of some cosmic force. It is a gift of the Enlightenment: the conviction that reason and science can enhance human flourishing. Far from being a naïve hope, the Enlightenment, we now know, has worked. But more than ever, i...

As shown by the chart below, the Biden administration is selling off US Strategic Petroleum Reserves (SPR) at the fastest pace on record. As of today, we are now at the lowest levels since 1985. Here is where things get concerning: despite the biggest decline ever in the SPR, total US oil inventories (outside of the government’s emergency SPR) have barely budged off their lows. Let me repeat that. The biggest release of oil ever in the US has barely increased our total domestic inventories. Low supplies can only mean higher prices (oil was at $97 today, July 15, down from its peak of $130 in March 2022) in the future, if demand remains the same -- or increases. you cannot have economic growth without energy to power that growth, and we will continue to see a humanitarian crisis until governments all over the world work to increase natural gas, nuclear energy, and oil production. If they don’t, shortages, cost-of-living spikes, and disruptions to our food and energy systems are likely t...

The untold story about “green energy” is that it can’t possibly be scaled up to provide anywhere near the energy to replace fossil fuels. (Unless we are headed back to the stone age – which is what some of the “de-growth” advocates favor). A new  World Bank Group report  finds that the production of minerals, such as graphite, lithium and cobalt, could increase by nearly 500% by 2050, to meet the growing demand for clean energy technologies. It estimates that over 3 billion tons of minerals and metals will be needed to deploy wind, solar and geothermal power, as well as energy storage, required for achieving a below 2°C future.  Recently, even some environmentalists are pointing to a the World Bank report showing that moving toward 100% solar, wind, and electric battery energy would be “just as destructive to the planet as fossil fuels.” This was the conclusion of a story in Foreign Policy magazine in 2019, The Limits of Clean Energy . A low-carbon future will be very min...

The stock market scored an amazing comeback this week, initially selling off on the deteriorating Russia-Ukraine situation, then rallying on optimism that the conflict could have only a minimal impact on the U.S. economy.  The S&P 500 closed the week with a 0.8% gain after falling as much as 5.5%, the Nasdaq Composite increased 1.1% after plunging as much as 7%, the Dow Jones nearly broke even after losing 5.3% midweek, and U.S. West Texas crude oil pulled back after briefly topping $100 per barrel.  The turnaround came after President Biden issued targeted sanctions Thursday afternoon that did not affect Russia's oil and gas exports or block Russia's access to the SWIFT financial system, sparking the rebound that continued into Friday.  At the same time, the shock and uncertainty of a war in Europe could discourage the Federal Reserve from being aggressive about hiking interest rates, which had been weighing on stocks before Russia's invasion. Outlook : Western intel...

U.S. equities finished lower (see below), with the S&P 500 venturing further into correction territory for the first time since mid-2020, as the markets continued to fret over events in Ukraine.  After the movement of Russian troops into some of Ukraine's eastern regions, the country's Ministry of Digital Transformation said a mass cyberattack disabled bank and government websites, prompting further actions from Western governments.  President Biden cut off resources to the two regions and announced further sanctions on Russia, while meetings scheduled between the U.S. and Russia have been tabled. Moreover, Germany halted the certification of the potentially key Nord Stream 2 pipeline.  The markets also continued to grapple with elevated expectations of tighter global monetary policies, while digesting another round of earnings reports. Lowe's Companies rose following its quarterly performance and guidance, while Palo Alto Networks was higher on its report, though TJX...

This chart shows that Americans not only consume more, but we also produce more.  The bottom line is that it's good to be part of western civilization. But it's especially good to be in the United States. David Harsanyl of National Review :  More than anything, it is the ingrained American entrepreneurial spirit and work ethic that separates us from Europe and the rest of the world. ...Europe, despite its wealth, its relatively stable institutions, its giant marketplace, and its intellectual firepower, is home to only one of the top 30 global Internet companies in the world (Spotify), while the United States is home to 18 of the top 30. ...One of the most underrated traits we hold, for instance, is our relative comfort with risk — a behavior embedded in the American character. ...Americans, self-selected risk-takers, created an individual and communal independence that engendered creativity.  ...Because of a preoccupation with “inequality” — one shared by the modern Ameri...

About 18 months ago, I overloaded (30 percent) my portfolio in energy, with ETFs FENY, VDE, and IEZ, along with pipeline and delivery plays AMLP and MPLX. These are increasing in value as energy prices are on the increase and are paying decent dividends along the way. This was a contrarian play; because traditional energy was going out of favor, I felt that over the next few years, it would increase in value. I was right, and Biden's anti-oil policies have only helped me.  Energy prices continue to surge to fresh records as renewed fears stoke panic of the worst shortage in decades. India has warned it has only four days of coal reserves left, German power plants are running out of fuel and China just unloaded an Australian coal shipment despite an import ban and icy relations. Supply is just not there as economies rebound from a pandemic-induced lull, while problems like logistical logjams and transport bottlenecks are adding to the pressure. OPEC+ didn't come to the rescue ye...

By Kelly Evans The Exchange , CNBC The price of fossil fuels keeps surging. The situation in Europe is getting worse. Natural gas prices are spiking through the roof--even worse than they were   last week . Even oil is higher today as Goldman says $80 for U.S. crude could be next, up from about $70 where it's trading today. Why? Because there is "growing scarcity across physical markets," with demand for all energy except oil back at pre-pandemic levels  while "the system is becoming increasingly constrained in its ability to supply goods."    The crucial difference between the energy spike today and any prior one over the past couple decades is that this one comes as policymakers (and "ESG" investors) have  chosen to cap supply . Europe, as I've mentioned, has basically, depending on how you run the numbers to get to "net zero" emissions by 2050,  about 600 gigatons of carbon left  to produce. Even traders are taking the goal seriously t...

Between 1750 and 1820, capitalism had its start in the Western World. It would prove to bring more prosperity than had ever been known -- ever.  In 1800, 90% of the world's population lived in extreme poverty. In 2019, 10% did. During this 220 year span, 80% of the population of Earth rose out of extreme poverty. According to the World Bank, people living in poverty have access to shelter, food, clean water, and basic services provided by the government or private entities. On the other hand, people who live in  extreme  poverty are severely deprived of basic human needs and often do not have access to service aids.   Most of a country's shift out of extreme poverty coincides with its industrialization. The entire population of the U.S. has been effectively out of extreme poverty since about 1940.  Most of China's population was stuck in extreme poverty until 1976, after which, the country suddenly began advancing out of it, slowly at first, then much more quick...

This newsletter was powered by  Thinkr , a smart reading app for the busy-but-curious. For full access to hundreds of titles — including audio — go premium and download the app today. From the layman to the elite, there is widespread ignorance about global trends. Author and international health professor, Hans Rosling, calls Factfulness  “his very last battle in [his] lifelong mission to fight devastating global ignorance.” After years of trying to convince the world that all development indicators point to vast improvements on a global scale, Rosling digs deeper to explore why people systematically have a negative view of where humanity is heading. He identifies a number of deeply human tendencies that predispose us to believe the worst. For every instinct that he names, he offers some rules of thumb for replacing this overdramatic worldview with a “factful” one. In 2017, 20,000 people across fourteen countries were given a multiple-choice quiz to assess basic global literac...