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The number is thankfully in decline, but as of 2010 over 2 billion of the worlds inhabitants had never flipped on a light switch. In the U.S. we understandably hurt for hurricane-ravaged Puerto Ricans who may go without electricity for months, but our compassion is magnified by the happy truth that most of us have never lived without it ourselves.
In India, nearly half of its citizens dont have access to toilets. This is particularly difficult for the countrys women who seek secluded outdoor areas to relieve themselves in groups as a way of avoiding male assault. India is a…

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Commerce Secretary Wilbur Ross recent proposal to make NAFTA subject to a five-year sunset clause would be like turning home ownership into a leasing arrangement. That would undercut one of the biggest advantages of ownership the long-term incentive for investing in improvements. Imposing an automatic five-year termination clause on NAFTA would have the same impact on cross-border investment discouraging it, cutting off supply chains, and foregoing the efficiencies that are gained from buying and selling in a bigger market.
The best argument for NAFTA is that it helps make access…

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Protectionists and neo-luddites invariably claim that compassion demands we protect and preserve jobs, regardless of how economically inefficient they may be, lest many are left out of the economy. But assuming that many cannot perform tasks that a productive economy requires is not showing compassion. It is demonstrating condescension. It is assuming that human potential is limited, rather than boundless.
When politicians and others complain that good jobs are disappearing, they actually mean semi-skill jobs traditionally well-paying jobs one can be hired for straight out of high…

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“‘A bull market is like sex. It feels best just before it ends.’”- Warren Buffett
Excuse me for being redundant, but the following Jim Rogers quote that I posted yesterday underscores Mark Twain’s famous quote that “history doesn’t repeat itself, but it often rhymes”:
“When things are going right, we all need a 26-year-old. There’s nothing better than a 26-year-old in a great bull market especially in a bubble. They’re fearless. They don’t know. It will never end. They will tell you why it will never end. They know that it cannot end and will never end. So in the bull market, you’ve got to…

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My own interest in the monetary system began in earnest about twenty years ago. I remember clearly reading through JP Morgans 1997 Annual Report and being teased into pulling on a loose thread. Of course, the bank was known then as Chase Manhattan, and my interest in it was at first researching its stock. I expected to find a bank, to be perfectly honest. Maybe that was just naivet on my part, because what was in that book (they were printed back then) didnt seem to qualify as one; at least not in full.
The audited financial statements were familiar enough, though there were…

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Not for nothing is the OECD known as the rich mans club. It includes the developed countries and many leading developing ones. It is a club virtually every country would love to join. One fact about the OECD will surprise mercantilists who see trade as a win-lose game: The majority of OECD countries otherwise known as the rich countries recorded trade deficits last year. Trade deficits do not indicate a sick economy they are also incurred by healthy ones. We import because we can afford to, and because it benefits us.
When you look at the trade balances of countries in…

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Back in 2008, and in the aftermath of the troubles within the financial sector, a popular theme emerged about banks privatizing profits while socializing risk. To believe their critics then and now, banks swing for the proverbial fences on the way to major profits and bonuses when theyre correct, but if their intrepid ways lead to insolvency, their errors are cushioned by taxpayer bailouts. It was and is a neat theory, but not a very realistic one.
Back to reality, banks have shareholders who would prefer to not see the value of their investments crash. Because they would,…

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As a Minnesota Vikings fan, I was glad to see the Atlanta Falcons knock off the Green Bay Packers on Sunday night, September 17, by a score of 34-23. The Falcons also opened their impressive new stadium Mercedes-Benz Stadium that night.
In fact, 2017 is the year for new stadiums in the Atlanta area. At the start of the baseball season, the Braves also moved out of Turner Field in the city and into a new ballpark SunTrust Park in Cobb County.
The sports fan in me is intrigued by new stadiums. But both taxpayer and economist in me are simply disgusted. After all, theres no…

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As an early-stage investor in technology companies, Im used to many kinds of risk. Does the new technology actually work? Is there a market for the new product, the new device, the new drug, the new process? Is there a business model to get a return on the investment needed to bring the product to market? Is there an entrepreneur and a team in place that can actually make the business plan happen?
To those four tough questions every investor might ask, Congress has added a fifth: will the good new idea be able to get and use a patent before its competitors, or worse, financial speculators,…

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Canadian Prime Minister Justin Trudeau appears to be having an identity crisis. He seems to think he is Prime Minister of the Montreal-based transportation giant Bombardier. At least in the minds of Canadian governments, the link between Canada and Bombardier has become so tight as to make them indivisible. But are the interests of a country and a company ever truly identical?
Channeling his inner Donald Trump, Trudeau on Monday threatened the Canadian government would not contract to Boeing as long as it pursues a trade dispute with Bombardier, saying: We wont do business with a…

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With the emergence of the Graham-Cassidy bill to repeal Obamacare, I’ve been getting questions about what it means for portfolios. Some have said that the bill is likely to pass and that its passage makes tax reform before the end of the year more likely. The implicit assumption is that the passage of tax reform will impact markets as higher growth is factored in. I really don’t have any insight into the various bills the Senate is considering but for investors that matters less than one might think. The key word in the previous sentence is “investors”. Shifting your portfolio in anticipation…

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You deserve all the finest things in the world, a young Homer Simpson once wrote to his beloved Marge, and although I can give them to you, they will be repossessed. Senator Bernie Sanders Medicare for All Act of 2017 (MFA) makes similarly sweeping promises while relegating financing to a Post-It note, affixed to our national refrigerator: To do: design and implement the single largest tax increase in human history.
To his credit, Homer Simpson understood where his generosity would lead.
MFA promises doctor visits, hospitalizations, drugs, home visits, mental-health care,…

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Perhaps the most important factor driving forward a countrys ability to create wealth is not its advantages, but its disadvantages. Its not the cards youre dealt, its how you play em. Economic disadvantages can force a country to play its cards well.
The United States has enormous natural advantages, including the second-largest bounty of natural resources in the world. But it has become wealthy to some extent because of its disadvantages. To settle a large interior, Americans had to build the worlds most extensive railroad system, encourage labor mobility, and generally…

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It is widely accepted that America is more divided than ever – economically, culturally, and politically. What is less well-understood is what is driving our growing disunity. Is the rising wage gap between the college-educated and everyone else to blame? Are the “coastal liberal elites” and residents of the “heartland” living in increasingly isolated social media bubbles? Is the divisive rhetoric of our nation’s political leaders rubbing off on the electorate? All of these are likely contributors, but one explanation that has received notable empirical attention recently is the…

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The middle class is back or so it seems.
Thats the message from the Census Bureaus latest report on Income and Poverty in the United States. The news is mostly good. The income of the median household (the one exactly in the middle) rose to a record $59,039; the two-year increase was a strong 8.5 percent. Meanwhile, 2.5million fewer Americans were living beneath the governments poverty line ($24,563 for a family of four). The poverty rate fell from 13.5 percent of the population in 2015 to 12.7 percent in 2016.
The Census Bureau report reinforces Gallup polls …

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