Social Insecurity and the Fate of All Ponzi Schemes

Posted on March 7, 2025 by MN Gordon

Elon Musk – the richest man in the world – is doing a fine job shaking up Washington’s political establishment. He recently took to the Joe Rogan podcast where he said, “Social Security is the biggest Ponzi scheme of all time.”

This small dose of reality was enough to elicit excitement from big government statists. Rex Huppke, in an opinion piece in USA Today, provided the following counterpoint:

“Social Security is one of the country’s most popular and successful federal programs, and its pay-as-you-go arrangement is not a deceptive scam – it’s how the system was built to work.”

Without question Social Security is a popular program. Who doesn’t relish the prospect of getting something for nothing? But that doesn’t mean it isn’t a Ponzi scheme.

Charles Ponzi, if you didn’t know, gained notoriety in 1920 offering a tempting investment ploy. He promised a 50 percent return on investment in 45 days and a 100 percent return in 90 days. Trusting investors, dizzy with visions of easy riches, painfully discovered the returns were paid by the money of subsequent investors. Continue reading →

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Federal Workers Sing the Blues

Posted on February 28, 2025 by MN Gordon

No little boy or girl says they want to be a stiff at a government agency when they grow up.

Suppose you were an average student in high school without any real academic focus. Your guidance counselor told you that college graduates earn more over their working lives than their peers who only graduated high school.

So, you took the logical step and enrolled at your local state university. There you majored in history, or sociology, or psychology and social behavior.

You didn’t really know what you wanted to do with your life. But your uncle told you that government jobs are more stable than the private sector, and that they have better benefits and guaranteed retirement plans.

Upon graduation you went to work for the Bureau of Land Management, the Department of Education, the Internal Revenue Service, the Environmental Protection Agency, or some other federal agency that administers some obscure law that was passed over 60 years ago. You learned the ropes and it felt good to have a purpose and to be part of something bigger than yourself. Continue reading →

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Death of the Penny and What this Means for Gold

Posted on February 21, 2025 by MN Gordon

“All the Perplexities, Confusions and Distresses in America arise not from defects in their Constitutions or Confederation, not from a want of Honour or Virtue, So much as from downright Ignorance of the Nature of Coin, Credit and Circulation.”

– Letter from John Adams to Thomas Jefferson, August 25, 1787

Illegal Money

“Let’s rip the waste out of our great nations budget, even if it’s a penny at a time,” wrote President Trump on February 9. This remark followed his instruction to the Secretary of the Treasury to stop minting pennies.

Trump’s rationale is that it costs more to mint a penny than a penny is worth. In fact, it costs the U.S. Mint nearly four cents to produce one penny.

This reality offers a deep insight into what the federal government has done to our money since the Federal Reserve Act was signed into law by President Woodrow Wilson on December 23, 1913. In short, the federal government, working hand in glove with the Fed, has destroyed the value of money. This includes the money you’ve worked for, saved, and invested, over your entire lifetime.

How bad has the money destruction been? Using the Bureau of Labor Statistics own inflation calculator, the value of a U.S. dollar has decreased 97 percent since 1913. The dollar, in other words, has been devalued to roughly $0.03. Continue reading →

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How To Cash In On Golden Lottery Tickets

Posted on February 14, 2025 by MN Gordon

Economic Prism Articles | Insights on Gold, Stocks, Inflation & FOMCGold continues its push towards $3,000 per ounce. Has it risen too far, too fast?

One year ago, an ounce of gold could be bought for about $2,000 per ounce. Since then, the price of an ounce of gold has increased about 46 percent.

But is gold really 46 percent more valuable than it was just one year ago?

Gold’s price increase, in dollar terms, is more of an indication of the dollar’s loss of value than some newly discovered worth in the utility of gold.

Remember, the dollar has been used and abused by the U.S. government for many decades. It has been continuously overissued in the form of credit. Now claims on future productivity have piled up in the form of a $36.4 trillion national debt.

As a practical matter, there’s no way the U.S. government – and the American taxpayer – can ever pay back all the debt that is owed. The only two ways to renege on these obligations are by an overt default on debt payments or by the continued devaluation of the dollar. Continue reading →

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