Scott Barbee on future oil consumption

Generally, oil demand has been dominated overwhelmingly by long term consumption growth trends in Asia, as China, India and other developing countries relentlessly increase their per capita oil consumption.  Such trends are also quite likely to continue well into the future, despite the multitude of political narratives de rigueur against fossil fuels, as 7 billion people on earth who consume an average of 3 bbls/yr desire to live like the other 1 billion who consume an average of 16 bbls/year.  Increased use of low-cost, fossil fuel energy remains critical to the alleviation of poverty and a more inclusive global economic development, with fossil fuel energy demand unlikely to easily or inexpensively be supplanted by alternatives through government fiat.  Goldman Sachs' commodities analyst Jeff Currie recently pointed out that $3.8 trillion in investment in renewables has been spent over the last 10 years.  These expenditures have been financed to a large extent from taxpayer handouts and through other government market distortions.  However, despite all these costly expenditures over the last 10-years, the share of total global energy consumption met by fossil fuels has only dropped by one percent, from 82 percent to 81 percent.

~ Scott L. Barbee, portfolio manager, Aegis Value Fund, "Aegis Value Fund H1 2023 Portfolio Manager's Letter," Seeking Alpha, December 13, 2023

James Bovard on the federal surveillance state

The federal surveillance net has vastly increased since the 1970s.  Nowadays, the feds are flagging people who purchase Bibles and “other media containing extremist views,” according to a report by the House Judiciary Committee. 

Technology is propelling new threats to freedom.  A March 2024 report by the House Judiciary Committee noted that “the decline of cash and the rise of digital payments and e-commerce platforms….  As a result, these financial institutions often act as arms of federal law enforcement as they work in coordination with federal law enforcement to identify what transactions and other information is ‘suspicious’ enough to be reported.”  Greater computer resources make it vastly cheaper to store dirt on practically any private citizen.

~ James Bovard, "Buy a Bible, Become a Terror Suspect," The Future of Freedom Foundation, August 16, 2024

The Brownstone Institute on the World Federation of Advertisers (WFA)

The most powerful companies in the world have united against free speech, and they’ve deployed your tax dollars to fund their mission. 

Last week, the House Judiciary Committee released a report on the little-known Global Alliance for Responsible Media (GARM) and its pernicious promotion of censorship.  GARM is a branch of the World Federation of Advertisers (WFA), a global association representing over 150 of the world’s biggest brands, including Adidas, British Petroleum, Nike, Mastercard, McDonald’s, Walmart, and Visa. 

The WFA represents 90% of global advertising spending, accounting for almost $1 trillion per year.  But instead of helping its clients reach the broadest market share possible, the WFA has appointed itself a supranational force for censorship.

~ Brownstown Institute, "Censorship and the Corruption of Advertising," July 18, 2024

Jacob Hornberger on the military industrial complex

Today, people continue to hew to the quaint notion that the vast military-intelligence establishment still falls within the executive branch.  Pure nonsense.  Since the very beginning of the conversion, the other three branches — the executive, legislative, and judicial — understood that things had changed dramatically in America and that the national-security establishment had, as a practical matter, become a separate branch of government— and the most powerful branch, one that the other three branches would end up deferring to and supporting. 

~ Jacob G. Hornberger, "Israel and the Nullification of the Constitution," The Future of Freedom Foundation, August 10, 2024

George Gilder on the buildout of internet infrastructure (2000)

ASAP: Why is it important we build an all-optical network? 

Gilder: Optical networks are vital to the fulfillment of the business plans of the Internet economy and the future of world peace and prosperity.  We already have an all-optical network in the critical paths of large portions of the infrastructure--chiefly the passive parts.  It will rapidly spread over the next five years to reach into campuses, enterprises, and cities. 

ASAP: So I take it you don't think the promises surrounding this all-optical network have been overstated?

Gilder: They have been drastically understated by companies that want to retrofit optics into the old system rather than create a new network that fulfills the intrinsic promise of a worldwide web of glass and light. 

~ George Gilder, "Gilder On Optics," by Eric W. Pfeiffer, Forbes ASAP, August 21, 2000

(Quote provided by Fred Hickey in a July 15, 2024 tweet.)

Mark Thornton reviews 'A Tale of Four Cities'

Book reviews typically don't fit nicely into the mission of this podcast, which is to bring current issues under the microscope of Austrian economics.  We also bring attention to issues that are not in the mainstream media or academia that Austrian economists consider important.  However, today I'm going to review a new book.  It's a book that's almost entirely about history.  However, the book's purpose and message, as I see it, is about addressing an unraveling the burning issues of today.  And moreover, it addresses them with powerful insights based in part on Austrian economics.  I am sure that my audience will appreciate reading the commentary quoted from various Austrian economists, Old Right writers and the sage advice of history concerning important issues, instead of just various minions of the state.

The book is titled, A Tale of Four Cities: From Invisible Hand to Cancel Culture.  The author is Philip Duffy.  I'm going to avoid telling the author's story, but just for your curiosity, the four cities from the title are Paris, London, Rome and Munich, in that historical order, and that provides some clues.

~ Mark Thornton, "Minor Issues: A Tale of Four Cities," Mises.org, August 3, 2024

Kevin Duffy on investing during the Magnificent 7 bubble

We’re in a strange time because we’re in this Magnificent 7 bubble (witness the move in NVDA last week).  We’re also dealing with a lot of economic problems in the U.S. which are yet to be resolved, imo.  On top of that, retail investors are excited and margin debt is at precarious levels.  That tells me the opportunity set is likely to get a lot better sometime in the near future, i.e., I want to hold some cash and/or portfolio insurance so that I’m prepared (both financially and emotionally). 

At the same time, the opportunity set outside the Mag 7 bubble is exceptional.  This is typical of bubbles: they create anti-bubbles.  Stocks in China, Asia and emerging markets are a great example.  As bullish as retail investors are in the U.S., they’re just as bearish in China.  It’s practically a mirror image.  So I think it’s time to get aggressive in those areas.  I’d also add gold mining stocks (cheap!), energy/commodity stocks and a lot of small cap stocks in the U.S.  That’s the balancing act we’re trying to pull off as investors. 

On the one hand, investing is easy: just look for the best businesses at the best prices.  Don’t try to time the market, don’t hold too much cash.  Sell stocks when the crowd falls in love with them.  On the other hand, it’s a bit like 3-D chess.  Keep one eye on the retail investor.  If he’s all-in and excited, don’t be surprised if he gets disappointed at some point and panics.  Likewise, keep another eye on the economic picture.  That might be the catalyst that scares the retail investor.

~ Kevin Duffy, "Mailbag," The Coffee Can Portfolio, April 15, 2024

J.P. Morgan on the fear of missing out

Nothing so undermines your financial judgment as the sight or your neighbor getting rich.

~ J.P. Morgan, following the Panic of 1907