Tales from “The Master of Disaster”

Daylight extends a little further into the evening with each passing day.  Moods ease.  Contentment rises.  These are some of the many delights the northern hemisphere has to offer this time of year.

As summer approaches, and dispositions loosen, something less amiable is happening.  Credit markets are tightening.  The yield on the 10-Year Treasury note has exceeded 3.12 percent.

If yields continue to rise, this one thing will change everything.  To properly understand the significance of rising interest rates some context is in order.  Where to begin?

In 1981, professional skateboarder Duane Peters was busy inventing tricks like the invert revert, the acid drop, and the fakie thruster, in empty Southern California swimming pools.  As part of his creative pursuits, he refined and perfected the art of self-destruction with supreme enthusiasm.  His many broken bones, concussions, and knocked out teeth earned him the moniker, “The Master of Disaster”.

But as The Master of Disaster was risking life and limb while pioneering the loop of death, the seeds of a mega-disaster were being planted. Continue reading

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

How to Get Ahead in Today’s Economy

This week brought forward more evidence that we are living in a fabricated world.  The popular storyline presents a world of pure awesomeness.  The common experience, however, grossly falls short.

On Tuesday, for example, the Labor Department reported there were a record 6.6 million job openings in March.  Based on the Labor Department’s data, there were enough jobs available – exactly – for the 6.6 million Americans who were actively looking for a job.  What a remarkable feat!

In fact, this is the first time there’s been a job opening for every unemployed person since the Labor Department began keeping track of job openings nearly 20 years ago.  Chris Rupkey, chief financial economist at MUFG Union Bank, took one look at the jobs and labor report and exclaimed: “The labor market is literally on fire it is so hot with job openings!”

Now, obviously, not every person is qualified for every job.  A person’s skills often don’t match up with those required for a certain job.  This may be why the unemployment rate’s 3.9 percent, not 0.0 percent. Continue reading

Posted in Economy, MN Gordon | Tagged , , , , | 16 Comments

Full Faith and Credit in Counterfeit Money

There are nooks and corners in every city where talk is cheap and scandal is honorable.  The Alley, in Downtown Los Angeles, is a magical place where shrewd entrepreneurs, shameless salesmen, and downright hucksters coexist in symbiotic disharmony.  Fakes, fugazis, and knock-offs galore, pack the roll-up storefronts with sparkle and shimmer.

Several weeks ago, the LAPD seized $700,000 worth of counterfeit cosmetics from 21 different Alley businesses.  Apparently, some of the bogus makeup products – which were packaged to look like trendy brands MAC, NARS, Kyle Cosmetics, and more – were found to contain human and animal excrement.

“The best price is not always the best deal!” remarked Police Captain Marc Reina via Twitter.  Did you hear that, General Electric shareholders?

Yet the Alley, for all its dubious bustle, offers a useful public service.  It provides an efficient calibration for the greater world at large; a world that’s less upright and truthful than an honest man could ever self-prepare for.  In 30-seconds or less, the Alley will impart several essential lessons: Continue reading

Posted in MN Gordon, Politics | Tagged , , , , | 20 Comments

The Oil Curse Comes to Washington

Prices rise and prices fall.  So, too, they fall and rise.  This is how the supply and demand sweet spot is continually discovered – and rediscovered.

When supply exceeds demand for a good or service, prices fall.  Conversely, when demand exceeds supply, prices rise.  Producers use the information communicated by changing prices to make business decisions.  High demand and rising prices inform them to increase output.  Excess supply and falling prices inform them to taper back production.

This, in basic terms, is how markets work to efficiently bring products and services to market.  Five year plans, command and control pricing systems, and government price edicts cannot hold a candle to open market pricing.  But not all markets are created equal.  The market for gumballs or garbage bags, for instance, is much simpler than the market for solar panels or jet engines.

What we mean is some markets are subject to more government intervention than others; especially, if there’s a large money stream that can be extracted by government coercion.  Sometimes governments nationalize an entire market – for the good of the people, of course. Continue reading

Posted in MN Gordon, Politics | Tagged , , , , | 14 Comments