Honest Work for Dishonest Pay

Over the past decade, in the wake of the 2008-09 debt crisis, the impossible has happened.  The sickness of too much debt has been seemingly cured with massive dosages of even more debt.  This, no doubt, is evidence that there are wonders and miracles above and beyond 24-hour home deliveries of Taco Bell via DoorDash.

But how can dosages of more debt be the cure for too much debt?  Can more Cutty Sark be the cure for a dipsomaniac?  Certainly, in both instances, and after some interim relief, the cure always proves to be much worse than the disease.

Without question, a moment of clarity is approaching that will bisect the world of today from the world of tomorrow, like the Patriot Act bisects the present world from its prior state of bliss.  Thus, what follows is a rudimentary preview of what’s in store.  But first, some context is in order…

The fake money system – a system centered on debt based legal tender and centrally fabricated interest rates – produces booms and busts of greater extremes with each progression of the business cycle. Continue reading

Posted in Inflation, MN Gordon | Tagged , , , , | Leave a comment

Thirteen Reckonings Hanging in the Balance

The NASDAQ slipped below 8,000 this week.  But you can table your reservations.  The record bull market in U.S. stocks is still on.

With a little imagination, and the assistance of crude chart projections, DOW 40,000 could be eclipsed by the end of the decade.  Remember, anything and everything’s possible with enough fake money.

Still, we consider DOW 40,000 to be about as probable as having a dinosaur step on our car as we drive to work today.  More than likely, a return to DOW 10,000 will first grace the front page of the Wall Street Journal.

In the interim, while still in the delight of this “permanently high plateau,” we’ll turn our attention to another equally suspect record that’s presently unfolding with imperfect precision.  If you haven’t noticed, the current economic expansion’s approaching its own record duration.  At 111 months and counting, this economic expansion is closing in on the post-World War II record of 120 consecutive months of growth that occurred between March 1991 and March 2001. Continue reading

Posted in Economy, MN Gordon | Tagged , , , , , | 1 Comment

The Degrading Facts of a Fake Money Hole in the Head

Today we begin with the facts.  But not just the facts; the facts of the facts.  We want to better understand just what it is that’s provoking today’s ludicrous world.

To clarify, we’re not after the cold hard facts; those with no opinions, like the commutative property of addition.  Rather, we’re after the warm squishy facts; the type of facts that depend on what the meaning of the word ‘is’ is.

The facts, as far as we can tell, are that we’re presently living in a land of extreme confusion.  The genesis of this extreme confusion is today’s fake money system.  And the destructive effects of this fake money system have spread out like a virus into nearly all aspects of daily life.

Plain and simple, central bank fiat money creation, multiplied by commercial banks through fractional-reserve banking, propagates financial and economic chaos.  The experience of long periods of money supply expansion punctuated by abrupt, episodic contractions, has the effect of whipsawing the working stiff’s labors to get ahead.  This trifecta of offenses has debased the rewards of hard work, saving money, and paying one’s way. Continue reading

Posted in Economy, MN Gordon | Tagged , , , , , | 1 Comment

As the Credit Cycle Turns

A rising stock market has the illusory effect of masking the economy’s warts and blemishes.  Who cares if incomes are stagnant when everyone’s getting rich off stocks?  Certainly, winning wealth via the stock market beats working for it.

Without question, the pleasure that comes when opening an inflated quarterly brokerage statement is much more satisfying than a lackluster biweekly paycheck.  But not only does paper wealth grow when the stock market rises, implied intelligence grows too.  The quarterly statements, with growth lines moving up and to the right, prove it.

Why grumble over a labor participation rate that’s at a 40 year low when Netflix is up over 6,000 percent?  The abundance of cheap, frivolous, and on demand content, more than makes up for the lack of well-paying jobs.  Indeed, there’s never been a better time in the history of the world to be a couch potato – particularly when 75 inch flat screen televisions can be bought on credit. Continue reading

Posted in Government Debt, MN Gordon | Tagged , , , , | 1 Comment