Why America’s Money Supply Would Vanish Without Debt

Posted on November 6, 2026 by MN Gordon

“Gold is money. Everything else is credit.”

– J.P. Morgan, U.S. Congressional Testimony (1912)

Floating on Borrowed Time

These days the engine room of a bank no longer has a heavily fortified underground vault full of gleaming gold bullion. Instead, there’s merely a brightly lit open-office floor where loan officers electronically sign digital approval forms.

Imagine opening your mobile banking app tomorrow morning, entering your face ID or password, and finding every single account balance set to exactly zero dollars. You check again, assuming it must be a technical glitch, but the result remains unchanged.

No checking balance available to pay rent. No savings cushion reserved for a rainy day. And no retirement funds left for your golden years.

To make matters worse, there isn’t a single paper bill sitting in your drawer, nor a single copper penny rolling around under your car seat.This hypothetical scenario, while highly unlikely, is mentioned with purpose and intent. You see, according to the tenets of modern fiat money, if every American citizen, private business, and government entity paid off every dime they owed tomorrow, that extreme consequence would be a mathematical certainty. The world’s active money supply would completely vanish from the face of the earth. Continue reading →

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The Hidden Engine of Booms and Busts

Posted on October 30, 2026 by MN Gordon

“Commercial banks—that is, fractional reserve banks—create money out of thin air. Essentially they do it in the same way as counterfeiters.”

– Murry Rothbard, The Mystery of Banking (1983)

Honest Banking

Imagine walking up to a bank counter, handing over a heavy leather pouch of fine silver coins, and receiving a simple piece of paper in return. That paper isn’t a promise that the bank hopes to honor if nobody panics. It isn’t tied to a liability for a complex loan scheme. It is a 100 percent backed warehouse receipt.

If you want your exact silver back tomorrow, or ten years later, it’s waiting for you, in custody, in a vault.

That was the everyday reality at the Bank of Hamburg, which was founded in 1619. For over two centuries, this legendary institution operated on a principle so straightforward it sounds almost alien to modern ears: 100 percent reserve banking.

When Napoleon Bonaparte marched into Hamburg in 1813 and seized the bank’s vault, his troops audited the books. The liabilities stood at 7,489,343 marks. The physical silver sitting in the vault? 7,506,956 marks. The bank actually held 17,613 more marks in silver than it owed to its depositors. Continue reading →

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How Surging Borrowing Costs Are Consuming the U.S. Budget

Posted on October 23, 2026 by MN Gordon

The U.S. government just closed the books on Fiscal Year 2026. The final budget report card, to be perfectly frank, is the stuff of banana republics.

The deficit for the year came in at $1.992 trillion. This gap between government revenue and government spending was made up with debt.

Moreover, this $1.992 trillion in new debt was racked and stacked on top of the gross national debt. Several months ago, the national debt blew past $40 trillion. The last we checked it was clocked at a crisp $40.38 trillion.

Does anyone care? The economy keeps churning. Washington keeps spending. And stocks continue to maintain their sky-high valuations.

Yet, while everyone was marveling at the promise of AI and complaining about the price of ground beef, the underlying mechanics of America’s debt machine fundamentally shifted. At the start of the decade, we were still in an era of near-zero interest rates. Borrowing trillions was practically free.

Now, in late-2026, the low-rate era is officially dead. What’s more, the bill for decades of living on credit has finally come due. Continue reading →

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Big Tech’s Great Financial Gamble

Posted on October 16, 2026 by MN Gordon

“A lot of investors have no clue what they are investing in.”

– Hock Tan, CEO Broadcom

Off-Balance-Sheet Alchemy

Where is the AI boom going? Is it taking us to a place of economic and financial nirvana? Or are we on the road to catastrophe?

These are the type of important, fundamental questions the rapid AI buildout can provoke. The answers, however, can only be known after the fact.

In the meantime, what is known is that building, training, and deploying AI models requires physical infrastructure at a massive scale. Hyperscale data center campuses spanning thousands of acres, massive power interconnection agreements capable of pulling gigawatts from local electrical grids, and colossal amounts of specialized silicon chips like Nvidia’s high-performance graphics processing units (GPUs) and custom tensor processing units (TPUs).

To compete in this high-stakes arms race, technology companies and AI labs are rapidly burning through insane amounts of cash. Analysts estimate that global capital expenditures tied to AI infrastructure could reach several trillion dollars before the decade is out. Continue reading →

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