The United States has tens of trillions of dollars of mineral wealth (oil, natural gas, tungsten, gold, silver, copper, molly, palladium, rhodium, scandium, yttrium, bastnaesite, etc...) trapped in the ground by a gordion knot of government regulations and bureaucracy.
By fully exploiting this mineral wealth, the US could not only pay off its entire national debt, but also generate trillions of dollars of surplus tax revenue, pay for universal health care, cut taxes, eliminate the federal income tax, and create tens of millions of American jobs.
Interesting Fact: The United States has more oil and natural gas than any other country in the entire world, including Saudi Arabia. These are the official findings of the United States Senate, page 23: http://j.mp/3HIfQi
We could more than offset our trade deficit with China by feeding their voracious appetite for natural resources.
Another interesting fact: if Nevada were a country, it would be the world's 4th largest producer of Gold.
On a per-capita basis, the United States is sitting on a mind numbingly huge resource of untapped mineral wealth.
The United States has more oil and natural gas than any other country in the entire world, including Saudi Arabia.
Incorrect. We have more fossil fuel in units equivalent to barrels of oil, if you include coal. Without, we have about 1/5th as much oil and gas in proven reserves, but about 50% more than Saudi Arabia in probably-but-so-far-undiscovered reserves. However, the cost of recovery for those estimated reserves is likely to be far, far lower in Saudi Arabia than it is here.
Of course Saudi Arabia has no coal and we have (literally) gigatons of the stuff. But it's also the dirtiest fossil fuel we have, containing more carbon than oil and about twice as much as natural gas, and that externality increases the cost. So yeah, regulations and bureaucracy are holding us back to some extent, but regulations and bureaucracy also go a considerable way to making sure you have clean air to breathe and your groundwater isn't toxic. The mineral exploitation industry has, shall we say, a decidedly mixed record on cleaning up after itself.
Or, more likely, prices would get so low every foreign corporation would buy huge amounts of mineral to stock, thus plummeting your country's economy to the ground. Demand wouldn't increase significantly, so most companies would have a hard time surviving until their stocks could give profits, likely plummeting the rest of the world's economy, and all the related miners' rage and stuff.
As capitalism self-regulates only when economical actors seek profit, you can't expect an instantaneous recovery.
Furthermore, as it is the standard of value, gold's regulation is at least reasonable. If you didn't regulate it, inflation would artificially rise worldwide.
> Or, more likely, prices would get so low every foreign corporation would buy huge amounts of mineral to stock
That didn't happen with oil production was unregulated, so why would it happen now?
> Furthermore, as it is the standard of value, gold's regulation is at least reasonable. If you didn't regulate it, inflation would artificially rise worldwide.
The above implies that gold prices are regulated. Please cite the relevant regulation. (Gold prices are regulated in some countries. If the regulated price is lower than the world price, those countries don't have any gold.)
Yes, gold production is regulated and constrained in many places, but the above claim is different.
Oh yes, the usual idiotic bullshit -- "if it wasn't those liberals with those environmental protection laws we would all be millionaires and have our own ponies."
Let me just tell you some of the more obvious ways you are wrong:
"Interesting Fact: The United States has more oil and natural gas than any other country in the entire world, including Saudi Arabia. These are the official findings of the United States Senate, page 23: http://j.mp/3HIfQi
This is simply wrong. And the very document you reference proves it wrong. If you see table 5 of the document you provided, the US is well below Saudi Arabia and many other countries in oil and natural gas. It has about 1/10 of the oil reserves of saudi arabia and about 1/6 of the natural gas of Russia. Even if you add oil and natural gas up, the US is not first -- saudi arabia and Russia both have more oil and nat gas than the US.
Now if you think the regulations are the problem, just look at Russia. Russia is notorious for having a corrupt government where environmental and other regulations are broken all the time. It also has about three times as much oil and about 6 times as much nat gas as the US. It is also less than half of the populations of the US. So, by your logic, Russia should be much richer than the US, because it has more mineral wealth and does not have the regulations that prevent its exploitation. But that is obviously not the case. The living standard of Russia is still much lower than the US.
What might have made you confused is that if you add up coal the US does become first. But of course coal has not made any country rich after the mid 20th century. It is too expensive to transport for export and it is dirt cheap because it is dirty, causes global warming and disease, and nobody wants to use it unless they have no other choice. Good luck basing our economy on coal.
The thing about Nevada may be right (I do not have time to check) but in global economic terms gold production is simply not a big deal.
Of course you face the more fundamental problem that you think somehow producing raw materials will get us out of a global recession. The problem with global recessions is that demand for everything tanks and that includes raw materials. The so called "voracious appetite" of China is only voracious because they use it to feed the voracious appetite of America for consumer goods. If Americans keep getting poorer that appetite of China will no longer be voracious and raw materials prices will keep falling.
Raw materials only drive economies when they are relatively small economies that can hitch themselves on larger consumer spending economies that are booming. Thus, for example, Russia was able to improve their economy by selling raw materials to booming US, Europe and China. But a major economy like the US simply cannot rely on raw materials or it will quickly become a minor economy.
The claim that Nevada is the world's fourth largest gold producer is accurate. It goes China, South Africa, Australia, Nevada, as states go.
It is also the world's low cost gold producer, at an average of $260 an ounce.
The part about mining being pain because of regulations is also as accurate as a subjective claim can be. My father works with Phelps Dodge, and they recently opened the first copper mine to be opened in the States in 20-odd years. I'd have to ask him for the details. Comparatively speaking, in Chile the pollution due to mining isn't awful, especially considering a lot of it occurs in places where it only rains every 400 years. It is not really corrupt, at least not much more so than the States, and there are straightforward laws that govern how you deal with the environment. If you want to dispose of mercury, for example, you have to solidify it with special salts before you bury it in a predetermined way. You don't have to destroy the environment.
Having said that, I doubt the US would be incredibly richer by exploiting these natural resources. But I believe it would be substantially richer; opening this up would increase the GDP by an extra 5% for maybe 5 years in a row. That order of magnitude.
"Reserves of Fossil Fuels Plus Technically Recoverable Undiscovered Oil and Natural Gas:"
---
Russia: 293.7
---
Saudi Arabia Estimated Undiscovered Oil and Gas: 231.3
---
United States Undiscovered Oil and Gas: 351.5
---
351.5 > 293.7 > 231.3
Regardless, I'm putting my life where my mouth is. I started my own oil and natural gas exploration and production company in Denver.
I've also spun off a second company, a mineral royalties company, that is focused on the acquisition and divestiture of North American mineral rights in producing open-pit mines.
And finally, I've started a third US natural resources company, SonicFrac, to develop a solid-state fracturing device for optimizing the production of US Shale gas wells.
I also invest every last penny that I take home back into US mineral rights, US oil and gas prospects, and US minining royalties.
I own stock in dozens of publicly traded oil, gas, mining, and resource development companies.
Natural resources are the first thing I think about when I wakeup in the morning, and the last thing I think about when I go to bed at night.
I'm 26.
Perhaps I'm irrationally optimistic about US resource wealth...
I don't believe that I am.
But, you _need_ to be irrationally passionate about what you do. Whatever it is.
If you're running a consumer internet company, and are not irrationally passionate about its future, I doubt you could persevere through the trials and tribulations of being an entrepreneur.
I am a US natural resources entrepreneur. And I am zealous about what I do. You should be, too.
Undiscovered oil and gas means (logically enough) oil and gas that has not been discovered yet. The existence of this stuff is a mere guess. Not only that but different people are making estimates for different countries using different methodologies, and different countries have different incentives for under or over estimating.
You cannot say that the US has more oil and gas based on estimates or guesses as to the undiscovered oil.
But wait. Lets assume that you are right. Lets assume that these undiscovered oil and gas estimates are perfect and all of the estimated undiscovered oil and gas actually exists. Well then if you try adding up these undiscovered estimates of table 6 to the proven oil and gas reserves of table 5 you will still find that russia and saudi arabia have far more oil and gas than the US. So your initial statement is still incorrect.
Well congratulations on being an entrepreneur and good luck. I hope you get some of that undiscovered oil. But you should not let your enthusiasm nudge you into massaging the facts.
"Raw materials only drive economies when they are relatively small economies that can hitch themselves on larger consumer spending economies that are booming"
The United States' consumer-led economy isn't "booming".
"The problem with global recessions is that demand for everything tanks and that includes raw materials."
Have you checked the price of gold and oil recently? Those definitely _are_ booming :-)
"The so called "voracious appetite" of China is only voracious because they use it to feed the voracious appetite of America for consumer goods. If Americans keep getting poorer that appetite of China will no longer be voracious and raw materials prices will keep falling."
China's economy is expected to grow 8.3% this year, and raw materials prices are soaring. Believe me, I know :)
The only thing that's falling is the consumer-sector of the economy. The US economy is bifrucating between core industries and the consumer sector.
I think it's reasonable to expect that the consumer side of the US economy will contract dramatically from the 70% of economic activity that it currently represents -- it has to come more in-line with the rest of the world.
It's a fallacy to think that the consumer has to drive economic growth -- that's been a phenomenon unique to the US since WWII.
"Coal is too expensive to transport for export". Seriously?
The United States exports over 60 million tons of coal each year.
"Good luck basing our economy on coal."
China is building one new coal fired power plant each week. The OECD projects China's economy to grow 8.3% this year -- while the rest of the world is mired in a recession. China's entire economy is based on coal.
Warren buffet just bet the entire future of Berkshire Hathaway, his life's work, on coal -- BNSF is the prime mover of US coal exports to China.
China's economy is based on what they do with the coal not on exporting coal. I.e., it is based on the goods they produce from factories that run on coal.
I guess I was wrong about coal exports, the US actually does export some coal, but the US economy or economic recovery cannot be based on coal. It currently fetches about $70 per metric ton, and it is only going to go down.
Warren Buffet made a bet that as oil prices go up things more valuable than coal will start getting moved on those railroads.
Oh and if you want a coal based economy you can see some pictures of those chinese cities where you cannot see 100 feet in front of your nose. Even China is trying to get off coal as quickly as it can.
By fully exploiting this mineral wealth, the US could not only pay off its entire national debt, but also generate trillions of dollars of surplus tax revenue, pay for universal health care, cut taxes, eliminate the federal income tax, and create tens of millions of American jobs.
Interesting Fact: The United States has more oil and natural gas than any other country in the entire world, including Saudi Arabia. These are the official findings of the United States Senate, page 23: http://j.mp/3HIfQi
We could more than offset our trade deficit with China by feeding their voracious appetite for natural resources.
Another interesting fact: if Nevada were a country, it would be the world's 4th largest producer of Gold.
On a per-capita basis, the United States is sitting on a mind numbingly huge resource of untapped mineral wealth.
We could literally dig out way out of debt.