As America’s population expansion accelerates at a greater rate than originally expected, the already precarious employment balance faces the risk of further out-of-kilter imbalance.

Unlike America’s European cousins, and Japan, suffering from population retraction due to shrinking family size, the U.S. people expansion is well ahead of expectations, projected at the turn of the millennium,16 years ago. This is due to stepped up immigration, both legal and undocumented. Already third in the world, with a total U.S. population numbering 325 million, the 350 million mark is assured well ahead of mid-century, with 400 million a distinct possibility in the third quarter of the 21st century.

While a swelling population, accompanied by a breakthrough technology, militates against employment absorption, such state-wide and federal regulations, such as calling for a minimum of $15 per hour for entry level employees, plus those that fill part-time jobs, or the hundreds of thousands of supplemental positions that exist in the ever widening retail sector, further complicate employment absorption.

The Environmental Protection Agency, fresh from its victory over coal production, as well as coal’s export opportunities, is now training its job-cutting abilities on natural gas and adequate water supplies, banking on renewables to close the gap.

Even the most ardent advocates of renewables don’t expect solar, geothermal, wind, and bio-related power providers to contribute more than four to five percent of total power generation required for the growing needs of electric utility expansion.

While the interminable path to the political super bowl of the presidential election approaches, it’s questionable whether the incoming national leadership will understand the critical confrontation that is mounting between comprehensive regulatory control legislation and job creation.

Currently, judging from the lack of emphasis on employment resolution by political candidates, it’s a practical given that those U.S. inhabitants on the dole will outnumber those additional fully or partially employed in the years ahead.

Q: Will US population growth complicate employment?

Is Increased Politicization an Economic Stumbling Block? Sun. 6/12

As the U.S. political season heats up to a climax of potential presidential party nominees and the forthcoming election Super Bowl on November 8, the major two party platforms are loaded with vote-getting rhetoric.

In the case of the GOP, the following promises are not only nonsensical, but militate against good economic judgment:

  1. Major tariffs against foreign imports, especially from China and Mexico, with whom trade balances with the U.S. are out of whack. This is primarily due to U.S. conglomerates having established low-cost manufacturing bases in these countries.
  2. Mass deportation of 11 million “illegal aliens” that have infiltrated over the years. This is not only impractical, but would play havoc with the already shaky employment situation, much of which is dependent on many of these undocumented refugees, especially in the retail sector of small business.
  3. Manufacturing job return. Bringing back tens of thousands of jobs that have been transferred to low cost production centers abroad, depriving the U.S. of manufacturing employment. This is now down to less than 10% of those fully employed in the U.S. overall employment segment, the lowest percentage since the mid-20th century. Much of this is also due to increased technology that is equally “guilty” in reducing hands-on jobs.

In the case of the Democrats, its platform recommendations are equally absurd:

  1. Free college tuition, and universal healthcare, as espoused by Senator Bernie Sanders (I-VT), are non-starters, especially with a runaway U.S. national debt approaching $20 trillion.
  2. Legitimization of sanctuary cities is not only un-American constitutionally, but invites a future “fifth column,” that could wreck this nation’s political/economic stability.
  3. A $15 or higher federal minimum wage. This could severely impact many small, independent businesses and instigate a new wave of unemployment.
  4. The practical elimination of fossil fuels (coal, oil, and natural gas) has already succeeded in killing off much of Appalachia, but is now in the process of shrinking oil and natural gas production, with the unproven theory that renewables (solar, wind, geodesic) can become a viable substitute.
  5. Giving a further free hand to the Environmental Protection Agency, whose regulations have already caused inestimable damage to employment and fossil fuel excavation, under the guise of “climatological stability.”
  6. While both major political parties maximize those issues, most likely to instigate their electorate, their platforms, if eventually actuated, would prove deleterious to their electorate, the business sector, large and small, and the future of the U.S. as the leading, most respected global nation ever.

    Q: Is increased politicization an economic stumbling block?

With President Barack Obama committing himself to the use of executive orders as a means of implementing his major priorities into law, is he thereby attempting to undermine the U.S. balance of power precedent, based on the triad of the Executive, Legislative, and Judicial sectors to form the unique basis of American democracy?

 

This historically unique, and sovereign role of 13 states, becoming a unified nation late in the 18th century, was based on the unequaled success of a nation, whose political, economic, and technological leadership covering the world’s few thousand years of civilization has become the historical paragon of greatness, looked up to by the rest of the civilized world.

 

It’s a matter of historical fact that the dire horrors of the Twentieth Century’s two world wars could have led to a destruction of Western civilization, had it not been for the founding fathers of 13 separate, and often cantankerous states, with a total population of three million sovereign citizens, declaring their independence and forming the embryo of today’s greatest nation, 238 years ago.

 

Remarkably, and uniquely, the American form of government has produced today’s most powerful nation— envied and respected (and feared by its enemies) by the rest of the world; with a citizenry of 320 million of the earth’s population of over seven billion.

 

The forty-three Presidents who have been honored with the leadership of this heavenly-blessed nation, have all respected the testament of our American forefathers.  Even President Abraham Lincoln, confronting and successfully averting the separation of North and South, only used emergency methods to save the United States, but respected the Constitution.  A similar emergency was confronted by President Franklin Delano Roosevelt, to stop the worst attempt in history to destroy modern civilization.

 

But no President, prior to the current incumbent, has openly challenged the American Constitution, by empowering his own personal list of priorities, by flaunting his disdain for the co-equal legislative and judicial branches of government.

 

How this unfortunate travesty plays out in the next two years may pose the greatest danger to the survival of the American way of life, and all it stands for in the eyes of the rest of the world.

Tuesday, 31 December 2013 12:52

Oil Will Dominate Global Geopolitical Future

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While the geopolitical stress on international oil prices may have softened due to the temporary lull occasioned by a “six month” delay on confrontation with the inevitable Iranian nuclear capability, expectations of lower oil prices are both presumptuous and premature. Even though severe sanctions against Iran have taken 1.5 million daily oil barrels off the world market, this has been evened out by OPEC’s swing producer Saudi Arabia. At the oil monopoly’s latest meeting in Vienna, it was decided to maintain the current equilibrium, which comprises one-third of the 90 million daily barrels required by the demand of the consummate oil-using world. 

While most energy analysts look at global oil usage retrospectively, there seems to be a void in anticipating the dramatic supply/demand changes that are now in process. While the U.S. and Europe totally dominated the globe’s 25 million barrels per day demand less than 50 years ago, the Western World, dominated by the modern industrial world powers, soaked up the lions’ share of this total. Today, almost 60 million barrels per day are accounted for by the developing world, as it evolves into modernization. In effect, two-thirds of all oil usage and its derivatives have evolved from an insignificant status to two-thirds of global availability. At this rate, spare capacity is barely keeping up as Southeast Asia, South America, and even Central and Southern Africa accelerate their civilizations into a rapid catch-up, with the once dominant world of Euro/U.S.A. The latter has barely increased its demand due to greater efficiency in transportation, plus domestic and industrial usage. And by practically all projected estimates, today’s balance of 90 million barrels of supply/demand will have increased by 50% by the current century’s mid-point. 

With China, India, and the bulk of the ASEAN countries creating such demand, the ability to control and generate this huge additional supply will create a new geopolitical confrontation that will match and even eclipse the amount now controlled by the Islamic Mideast. Ironically, this will likely create a new standoff between the last century’s cold warriors. This new attempt at geopolitical superiority will put the natural resources of oil and natural gas, the mainstay of Vladimir Putin’s Russia, allied with China, against the U.S. now bursting forth as the world’s potential number one provider of fossil fuels (coal, oil, natural gas) through the revolutionary shale drilling process. 

If such a geological standoff develops, much of the developing world, and the partisanship of Europe may be the high stakes poker game for which Russia and the U.S. will be vying. Russia, which has little else to offer, Moscow has the advantage of pipelines that they are holding over the heads of most of Eastern and Central Europe, and will attempt to use its natural resources as a pressure point. 

But the U.S. will counter with the upcoming unlimited volumes of liquid natural gas, coal, and oil that will checkmate the leverage that Putin & Company now hold. That is why both higher development costs and technological metamorphosis will make these fossil fuels the dominant energy control source, which will determine global influence dominance. As the late great energy pioneer, Michael J. Economides predicted, renewable energy (solar, wind and geothermal) will never be of more than supplemental importance.

This little known declarative statement by the unpretentious 30th U.S. President in the midst of the Roaring Twenties has never made the nation’s history books, but rightfully focuses on the globally unmatched drive that has made the U.S.A. the unparalleled world economic and technological leader that will retain its growth supremacy into the undetermined future. 

The main reason for the veracity of this belief is “entrepreneurialism.”  That French word loosely translated would indicate “inventive and innovative” capability. The proof of America’s superior growth during its periods of presidential leadership that understood America’s uniqueness in commitment to entrepreneurialism is a matter of record. It further dramatizes its backsliding at time when “incompetence and inexperience” was voted into the White House by an electoral majority that did not comprehend that professional and economic leadership experience was increasingly imperative. 

It’s not accidental that the entrepreneurial drive propelling the U.S. at the peak of global progress is primarily the result of the hundreds of thousands of independent businesses, headed up by owners and/or general managers that are also the decision makers and nurturers of progress that instigate continuous growth. 

That is also why a recognition of entrepreneurial leadership has made the U.S.A. the leader in such leaps forward as hydraulic fracturing of oil and natural gas, medical breakthroughs, revolutionary communication techniques, and the arenas of entertainment and transportation. These have invariably emanated from the independent leadership of professional, productive, and marketing businesses that have set the future road map for the rest of the world. 

Unfortunately, this success formula has not penetrated the major components of the current political arena. This has placed ultimate national leadership into the hands of money-powered lobbyists and political wheeler-dealers, dedicated to imposing foreign ideologies and misguided economic systems. They are committed to divert the successful future with which America has been blessed since our brilliant forefathers hammered out a Constitution that no other of this world’s nations has ever matched. 

The current presidency and its misguided “Affordable Care,” activated during the worst economic crisis since the Great Depression, is proof-positive that incompetent and/or misguided leadership direction is proving the belief that America’s Healthcare perversion and foreign policy crises have been nurtured by a total rejection of the entrepreneurial pro-American ideologies that have made the U.S. the greatest nation on earth.

When assessing the major housing recovery occurring in 2013, some analysts believe that the homeowning of yesteryear is back on the comeback trail.

Nothing could be further from reality. Although overall percentages of mortgage-based ownership as opposed to rentals is as yet not clear-cut, it’s estimated that residential new construction includes a significant, and growing percentage of new building that is dedicated to rentals, or long-term leasing. Also becoming more significant is the purchasing of “homes for rentals” by foreign investors. A glaring example is a Southern California general contractor building a group of 1500 new homes in the Palm Springs area, with a waiting list double that number waiting for a second stage. He indicated that foreign investors are a major factor in this unexpected enterprise. 

There are two major reasons as to why this impetus toward a housing comeback will accelerate into 2014 and beyond: 

1) With the U.S. population on track to reach the 400 million mark during this century, a combination of new generations and a fear of getting stuck with substantial mortgages  during another housing recession, rather than “flipping” at higher prices, makes major additional “temporary shelter” in upcoming years almost inevitable. 

2) With high unemployment an unpleasant economic factor as far as the “eye can see,” this makes instant “mobility” in filling job openings in various parts of the country a mandatory necessity. Such a situation guarantees rental residential homes and apartment buildings as the dynamic behind America’s future residential construction. 

In summation, “housing construction,” and all the amenities that accompany residences of today and tomorrow will continue to be the keystone that will keep general contractors, construction workers and a variety of subcontractors busy well into the rest of this decade.

In a startling announcement foretelling the coming end of U.S. Treasury bond purchases, the Chinese Central Bank declared “no more accumulation of foreign exchange reserves.” 

At the end of the third quarter 2013, China’s foreign exchange reserves were valued at approximately $3.66 trillion, the biggest chunk of which was made up of U.S. dollars. China had been accumulating dollars for years to strengthen the dollar and keep its “yuan” currency down, to give its huge export sector a competitive advantage over an import world, primarily based on the American currency. 

But with a distinct switch toward accelerated domestic growth, it’s in Beijing’s best interests to let the value of its yuan creep up, as its acquisition of oil, coal, natural gas, and agricultural products have taken top rung. Although the abandonment of U.S. Treasury debt auction participation may not be turned off precipitously, it is likely that this will diminish in the foreseeable future. 

As China’s top-heavy purchases of U.S. Treasury debt ease off, this will also have the adverse effect of making the myriad of goods and services emanating from China increasingly more expensive. This will not only affect the direct cost of Chinese goods, but also the untold number of goods emanating from American-owned factories and subsidiaries transferred to the Chinese mainland. This is due to the major cost advantage this has provided to some of America’s largest corporations, allowing “made in U.S.A.” to be squeezed out. 

The scope of this advantage has also been diminished by China’s unprecedented wage and salary increases for its tens of millions of workers, as well as managers. Also closing the cost advantage gap has been the higher prices over the lengthy transportation routes to the U.S. 

In manipulating currency changes to its advantage, China is attempting to replace the dollar exchange with its indigenous currency in world trade and swaps. This would carry the double negative of bringing down the dollar’s value, as well as elevating its yuan to the top rung of world currencies. In doing do, China would achieve the dual purpose of creating domestic value as well as weakening the world’s dollar position, thereby eventually achieving its long-term advantage in becoming the world’s number one economy by mid-century.

If history proves to be a reliable guide, the Obama Administration’s popularity travail may act as a stimulant to 2014's still questionable U.S. economic growth. 

“Climatological purity” has been enunciated by President Obama as a signature objective of his second term, with the Environmental Protection Agency acting as a spearhead to accelerate the squeeze on electrical utilities and other energy progenitors of CO² and greenhouse gases to force U.S. industry to cut back its almost unattainable mandated effluences. This would put a severe curb on energy development, the major industry segment that encompasses the best chance for America’s economic health to be improved, well over 2013's humdrum results. 

With the Obamacare fiasco driving President Obama’s plus ratings below 40% for the first time, a repeat of his first term’s “cap and trade,” stopped only by the GOP taking over the House in the November 2010 election, the threat of the Senate falling to the Republicans in the mid-terms will likely impose a restraint on the Administration’s heavy push on energy production restraint. 

It follows that Democratic Senators, up for election and reelection, will put their political weight behind a respectable 2014 economic improvement, and vote with Republicans to curb the more severe regulatory fiscal and environmental restraints that the White House is attempting to impose on business and industry at large. 

The shadow of overemphasis on Obamacare, while infrastructural improvement could have generated employment benefits and production growth, is hanging heavily over an economy that is now suffering the consequences of a major misplaced economic priority, the reverse of which could have put today’s U.S. economic well-being on a far stronger footing. 

It’s unfortunate that the communications media are loath to comment on the Administration’s fiddling with an increasingly rejected European style healthcare fiasco, while fiscal balance, aggressive employment initiatives, and a muddled foreign trade inaction hold back potential opportunities.

Thursday, 19 December 2013 11:18

Coal Remains Alive and Well—Internationally!

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Although the combination of the Administration, the EPA, and populist anti-fossil fuel groups such as the Sierra Club, have been waging all-out war against coal use, the news of its ultimate extinction is misleading and entirely premature. 

The latest attempt to demonize coal has been the introduction of heavy-handed environmental regulation intended to force the early retirement of more than 303 coal-fired power plants, representing more than 45,000 megawatts of power. 

Even so, coal still accounts for the largest share of the nation’s electricity generation (37.2%).  Although natural gas has taken over much of coal’s previous power generation, its displacement of coal entirely will take decades to play out, particularly as international shipments and prices of liquid natural gas will likely increase substantially as worldwide usage of American-based LNG reaches maximum momentum. 

Also maintaining the viability of coal, of which the U.S. represents the world’s largest reserves, will be its record international usage, which generated an all-time high export of 124 million tons of thermal and metallurgical coal (used in steel production) last year. Most of this export bulk went to the huge emerging markets, such as China and India, which predominate in the use of coal power.  This will grow as these populations’ domestic demand and power usage will far exceed current usage in the upcoming years. 

According to the International Energy Agency, coal currently accounts for 41% of global power needs and will overtake oil as the world’s top energy source by 2017.  In the past year, coal already established itself as the leader of all fossil fuels (coal, oil, natural gas) in terms of total global consumption.  Also relevant is the increasing emphasis on metallurgical coal, which is used for steel conversion and, therefore, less exposed to the competition from natural gas prices. 

Although bankruptcy of coal mining, as well as domestic coal power for steel conversion usage remains the Environmental Protection Agency’s goal, the push-back from America’s major coal mining states (West Virginia, Ohio, Kentucky and Pennsylvania) is already manifest.  Therefore, the anti-coal crowd will not likely succeed in putting coal mining out of business, as the United Mine Workers still represent a powerful political block.  

Also, lingering U.S. unemployment, and the lost multi-billions of revenues reflected in America’s largest mass of world coal reserves will forestall the final coup de grace, that EPA and its varied lobbying groups associations have planned for coal. 

With the Obama Administration beset by its highest unfavorability rate, even the Democrat Party will also do its part in preventing the final death blow that the anti-coal activists have planned to execute.

While the U.S. Labor Department has come under increasing fire for minimizing monthly unemployment figures, Administration-initiated policies increasingly restrain “small business” hiring practices. 

Since such privately-held companies employ more than two-thirds of the nation’s job seekers, such federal government priorities make future full employment practically impossible.  While the employment-reduction impact of Obamacare gets most of the headlines, the overall approach of the Environmental Protection Agency, and the strangulating federal financial regulations are making future employment opportunities even more remote. 

These government policies are particularly tragic, since energy development, infrastructural construction and repair, plus natural resource development of federal lands (two-thirds of U.S. acreage) are out of bounds for tapping the resource riches that exist underneath.  On top of all this is the accelerating impact of the technological evolution, which decreases the need for “hands on” workers on the shop floor, warehouses or businesses’ back offices. 

While current Obama Administration policies stay in place and are constantly expanded, the specter of unemployment will overhang what could easily enhance the greatest spurt of employment improvement since the heady days of the mid and late 20th century.  These eras saw actual unemployment drop to near 4%, which demographic experts consider “full employment” due to geographics and changes in job openings, which are continually evolving. 

It is the ultimate irony that a nation blessed with the greatest natural resource reserves ever, a vibrant technology, record exports, and the need for national upgrading keeps running head-on into misdirected government policies.  These face the U.S.A. with even worse unemployment in the months to come, as the impact of the ill-conceived “Affordable Care” insurance directives force millions of “small” business employees to find themselves on the part-time worker employment line, while businesses strip their full-time work force down to the bare essentials.

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