That’s a smidgeon more than the proven reserves of only three Middle Eastern countries, Saudi Arabia (260 billion barrels), Iraq (115 billion barrels) and Iran (105 billion barrels).
At about 36 times its 1970 price, oil has outstripped the value created by a full working generation of Americans in a period of dramatic technological change and innovation. During the same time, the value of American business shares, as measured by the S&P 500 index, has risen to only 15 times its 1970 level.
A chart at Burns’ website shows much our economy has shrunk, vis-à-vis oil, since 1970, before the first oil embargo:
| The Value of America, in Barrels | |||
| This table takes the net worth of American households and nonprofit organizations as measured by the Federal Reserve and divides by the price of oil to find how many barrels of oil it would take to buy the country. | |||
| Year | Household Net Worth (in billions) | Price of Oil | Barrels to Buy America (in billions) |
| 1970 | $3,418.5 | $ 3.18 | 1,075.0 |
| 1975 | $5,141.5 | $7.67 | 670.3 |
| 1980 | $9,468.6 | $21.59 | 438.6 |
| 1985 | $14,206.6 | $24.09 | 589.7 |
| 1990 | $20.249.9 | $20.03 | 1,112.0 |
| 1995 | $27,732.4 | $14.62 | 1,896.9 |
| 1998 | $37,369.7 | $11.18 | 3,342.6 |
| 2004 | $48,092.8 | $42.00 | 1,145.1 |
| 2007 | $57,718.0 | $120.00 | 481.0 |
| Sources: Federal Reserve, Bloomberg | |||
“Either oil is too expensive or America is too cheap,” Burns concludes.
But Burns is a better financial analyst columnist than that.
He didn’t offer Option No. 3:
The stock called America, Inc. has been overpriced for years, and now investors are driving it down.
Maybe George Soros will even make a run on the dollar, like on Asian currencies in 1998.
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