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Frank Holmes
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Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., a boutique investment advisory firm based in San Antonio that manages domestic and offshore funds specializing in the natural resources and emerging markets sectors. The company’s no-load mutual funds include the... More
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  • Capturing The Making Of A Bridge 1 comment
    Jul 26, 2012 10:52 AM

    The bridge at Hoover Dam is a fantastic example of breathtaking infrastructure built in the U.S. Linking Phoenix and Las Vegas, a 2,000 foot long bridge now arches over the Colorado River, shaving as much as two hours off a driver's commute between the cities.

    Nearly halfway completed in this photo, it's the first concrete-steel composite arch bridge built in the U.S., named after decorated Korean War veteran and governor of Nevada Mike O'Callaghan, and Pat Tillman, who gave up a multi-million dollar football career to enlist in the U.S. Army and fight in Afghanistan where he was killed by friendly fire.

    Construction for the $114 million arch began in 2005 as part of the Hoover Dam Bypass Project and was open for traffic on October 19, 2010. The photographer of the image is Jamey Stillings from Santa Fe, who was in between assignments when he took a road trip to capture Lake Mead's mineral deposits. Heading home, Hoover Dam's infrastructure caught his eye and compelled him to return to the area by helicopter and car to photograph the infrastructure and surrounding area. The New York Times Magazine featured an incredible slideshow showing the tremendous scale of Stillings' project.

    See the Slideshow.

    According to an article in The New York Times about Stillings, his passion was fueled by "the wider historical significance of the construction. The Empire State Building, the Eiffel Tower, the Hoover Dam-the imagery their births created is burned into the collective memory."

    We believe the bridge underscores the ongoing need for natural resources. You'll find more awe-inspiring stories like this one in the latest Shareholder Report, as we cover what you need, what you want and how much it will cost.

    Click on the link below to see the online version now. If you'd like to read it in print, call us at 1-800-873-8637 or email at

    Download the Report

    All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

    By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

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  • Mike Holt
    , contributor
    Comments (1869) | Send Message
    Frank, these are spectacular photos. Its amazing what mankind can accomplish in this day and age when we pool our resources. Although I get your point about the impact that infrastructure projects such as this will have on the prices for the natural resources needed to complete projects such as this, I'd also like to add that this is an example of when government spending makes sense. In conceptual terms, the capital expenditure is generally too large to be undertaken by a private sector enterprise, and even if a capital expenditure of this magnitude could be financed by a private sector enterprise, its questionable whether a private sector enterprise would make such a large outlay because it would be difficult to fully capture the benefit, especially within the maximum 5-year breakeven period that most investors would demand. However, reducing the time to travel between Phoenix and Las Vegas by as much as two hours clearly does provide a meaningful benefit to society and the US economy at large.


    As Felix Rohatyn points out in his book titled, "Bold Endeavors" other examples of expenditures that are better left to the public sector rather than the private sector are the Erie Canal, the Panama Canal, the Transcontinental Railroad, and the Interstate Highway System. These massive government spending projects clearly led to huge leaps forward in the American economy.


    However, the dual criteria that validates government spending on projects that are too large for the private sector and that also provide benefits too broad to be fully captured by the private sector is too often misinterpreted to validate, in the eyes of some politicians, government spending on projects that the private sector would not undertake because they simply don't make economic sense under any timeframe -- other than to the small constituency that a particular politician depends upon for votes. Valid government-financed projects such as this can also be referenced by politicians in an erroneous attempt to validate the merit of increased government spending in general. This leads to "bridges to nowhere" and government spending that simply adds to our debt, thus weakening the US and making us less competitive in increasingly competitive global markets. As a result, ANY mention of situations in which government spending can make sense are quickly shot down on the assumption that the person calling attention to this is one of those loony left wing liberals.


    I have been concerned about increasing levels of US debt for decades, and strongly believe that the nature and size of our government needs to be rationalized for all the reasons with which most readers of Seeking Alpha are likely famliar. But, I am also concerned about the competitive threat posed by China, whose government plays a much stronger role in the economy than ours. How can non-Chinese private enterprises compete with Chinese SOE's and/or Chinese state champions if they don't similarly enjoy government support?


    Is it a fallacy to believe that such government involvement would be beneficial in the first place? For example, some argue that China has grown so rapidly because everything they have thrown at the wall will stick at this stage of their economic development, so even if the Chinese government grossly misallocates capital it will still lead to impressive rates of economic development. However, if that was truly the case, I don't think you would be as sanguine about the prospects for the Chinese economy as you seem to be judging from your investor newsletters and the many presentations featured on your website. As the Chinese Communist Party directly and indrectly locks-down the resources that they will require to perpetuate the continued rapid economic growth that they are striving for, and supports those industries that they believe to be of strategic importance, e.g., alternative energy, are they simply paying too much for resources and misallocating capital as goverments seem inclined to do? Or are they just earlier in recognizing the implications that growing demand by a 7 billion plus global population will have on energy and natural resources of all kinds, and more adept than governments in the US and other developed countries at deploying government funds to capitalize upon these developments?


    If the latter, do you have any suggestions as to how the US in particular can adapt to this competitive threat without raising concerns about inappropriate levels of government intervention in the economy and in our lives? So far, efforts by the Obama administration to support alternative energy have been heavily criticized as "picking winners." If those criticisms are valid, how should the US government be going about encouraging the growth of strategically important industries?
    6 Aug 2012, 03:55 PM Reply Like
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