The New York Times had an interesting article about this topic.

The author, N. Gregory Mankiw, analyzed Senator McCain and Senator Obama’s political positions from the viewpoint that economists are a very small percentage of the electorate and “expect to be largely ignored.”

But what if the candidates suddenly developed an interest in courting economists?

Here is an eight plank platform that Mankiw feels would attract a majority of economists, and one of the things he attempted in the article was to analyze how well the candidates fit this mold. (Please check the Times article for more detail.)

1. Support Free Trade-This one goes to McCain.

2. Oppose Farm Subsidies-McCain

3. Leave Oil Companies and Speculators Alone-Draw

4. Tax the Use of Energy-Obama

5. Raise the Retirement Age (Social Security has Problems)-Draw?

6. Invite More Skilled Immigrants-?

7. Liberalize Drug Policy-?

8. Raise Funds for Economic Research-?

I’m slowly coming around to the idea of raising taxes on energy products, but it hasn’t been as easy conversion.

Does anyone have any thoughts either for or against these positions?

First, the good news. I got out of UltraShort Financials Proshares (SKF) on 07-11-08 at $172.42. This handed me a profit of almost 60% in about six weeks. That’s better than I’ve ever done in any one stock.

On the other hand, everything else in my portfolio has just been getting hammered.

I got back into SKF on 07-18-08 at $136.96 and it closed Friday at $118.81. OUCH! Hopefully this one will turn around for me but if it does, this will be bad news for the financial sector.

I don’t have huge holdings in gold and silver, but I picked up more IShares Silver Trust (SLV) and SPDR Gold Trust (GLD) on Thursday for $14.15 and $79.69 respectively. I thought that gold would find good support at $800 and that silver would also find support. Oops. SLV closed Friday at $12.70 and GLD closed at $77.63.

Is anyone else just getting killed in commodities?

How much longer will this free fall last?

Disclosure: Aaron owns shares of Agnico-Eagle Mines (AEM), Broadwind Energy (BWEN), IShares Silver Trust (SLV), SPDR Gold Trust (GLD), Merck (MRK), Prudent Global Income Fund (PSAFX), and UltraShort Financials ProShares (SKF),

As oil threatened to break through $150 a barrel a few weeks ago, many people worried that oil would keep going and soon hit $200.

Back then, Matthew Simmons was at the forefront in predicting spiraling oil prices with no end in sight.

According to financialsense.com, Mr. Simmons “has been an investment banker for 40 years. He is the founder and chairman of the world’s largest investment banking company, Simmons & Co. International. In 2005, he published ‘Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy,’ a book that has galvanized the peak oil debate.”

In a July, 2008 appearance on CNBC’s Fast Money, Simmons predicted that at some point in our future, we could see gas shortages which would lead to “runs on banks.” He said that ultimately we could run out of usable diesel and gasoline, then within a week we would have food supply problems.

How did Simmons arrive at such a dire scenario? Simmons believes that world oil production likely peaked in May, 2005 while oil demand hasn’t. This is obviously a formula for some serious problems. But is he right?

Oil is now officially in correction territory. If you watch this Youtube video, Simmons seems to poo-poo the notion that high oil prices could be a bubble; yet now it seems that a bubble is indeed bursting. Does this mean peak oil theory is full of holes, or that Simmons is simply wrong short-term?

If Simmons is wrong and oil prices fall and stay down for awhile, my fear is that the American public and politicians will lose sight of our need for alternative energy and once again, nothing will be done even though everyone knows the dangers of dependence on foreign oil.

And who would argue that burning fossil fuels until they run out is a good idea?

Speaking of “fossil fuels,” I’m considering a future post on abiotic oil theory. This is the theory that oil is produced through natural processes in the earth, and is not the by-product of long dead organic material. (Yeah, sounds far out to me, but I’d like to take a look at it.)

Additional Resources:

Wikipedia.org (Peak Oil)

Wikipedia.org (Hubbert Peak Theory)

lifeaftertheoilcrash.net (Website that promotes peak oil theory and predicts horrible consequences)

If I was writing the news, the title of this blog would be a headline story.

My dad told me he was watching Glenn Beck on CNN the other night when former presidential candidate Ron Paul appeared.

Dad said that Dr. Paul was approached by a member of the U.S. Banking Committee who apparently didn’t know that the U.S. dollar is no longer backed by the gold standard and hasn’t been since 1933. I was dumbfounded and had to see for myself. Luckily, someone posted the clip on Youtube.com.

The entire interview with Paul is a great overview of the risks we face and how most politicians seem to either have little understanding of how serious our current financial problems are, or don’t care.

If you want to skip to the part in the interview where Paul tells the story about the banking committee member, please see the 7:20 mark in Part 1 of the interview.

I believe that the sub-prime mortgage crisis and subsequent government bailouts of the affected institutions could be the tipping point that contributes to massive inflation and economic hardships for millions of Americans. Paul seems to be about the only politician willing to speak honestly about it.

In part 1 of the interview at the 7:03 mark, you will hear Mr. Beck mention Germany’s inflation and “buying bread with a wheelbarrow” (full of currency).

Beck is referring to hyperinflation in the Weimar Republic that took place from 1921 to 1923.

If you click on the previous link, please note the picture of the woman burning German marks instead of firewood, because the currency burned longer than the amount of wood you could buy.

Currently, Zimbabwe is experiencing hyperinflation on a scale of “1 million percent per year. It takes a 50 billion Zimbabwe dollar note just to buy a loaf of bread,” according to an article by John Quinn in the August 4th, 2008 Rapid City Business Journal.

Would it be impossible for a situation similar to the above examples to develop here? It is that sort of attitude that makes such an outcome more likely because if our politicians aren’t pressured by the people to do things differently, they won’t.

Quote of the day: “When a government does something not to the liking of the market, nobody sits down and says, ‘You shouldn’t do this.’ A monetary crisis simply manifests in that currency.” Bernard Lietaer.

Ron Paul on Glenn Beck 07/30/2008 Part 1

Ron Paul on Glenn Beck 07/30/08 Part 2