As the Madness Turns

Posted on April 5, 2019 by MN Gordon

The first quarter of 2019 is over and done.  But before we say good riddance.  Some reflection is in order.  To this we offer two discrete metrics.  Gross domestic product and government debt.

GDP for the quarter, as estimated by the March 29 update to the New York Fed’s GDP Nowcast, grew at an annualized rate of 1.3 percent.  For perspective, annualized GDP growth of 1.3 percent is akin to getting a 1.3 percent annual raise.  Ask any working stiff, and they’ll tell you…a 1.3 percent raise is effectively nothing.

By comparison, the U.S. budget deficit for fiscal year 2019 is estimated to hit roughly $1.1 trillion.  This amounts to an approximate 5 percent increase of the current $22.2 trillion national debt.  In other words, government debt is increasing about 3.85 times faster than nominal GDP, which is about $21 trillion.

These two metrics offer a rough perspective on the state of the economy.  Deficit spending is grossly outpacing economic growth.  Heavy treatments of fiscal stimulus are being applied.  Yet the economy’s practically running in place.  In short, the state of the economy is not well. Continue reading →

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How to Escape Like Willie Boy

Posted on March 29, 2019 by MN Gordon

The America we thought we knew – the country we learned about in grade school – vanished long ago.  In truth, it was gone well before we stepped foot in our first classroom.  But America’s myths and legends remain.

The myth that America makes the world safe for democracy.  The legend that the role of free press in America is to hold government accountable.  The myth that the U.S. Constitution is the supreme law of the land.  The legend that the Fed maintains stable prices.  And on and on…

Preserving America’s myths and legends has become risky business in the 21st century.  Risky in the sense that it propels America towards a great geopolitical conflict.  So, too, it puts hardworking Americans – and an army of shirkers – in the crosshairs of an epic financial crackup.

How to save and invest for a tomorrow that’s far different from today is an extraordinary challenge.  We can’t say for certain.  But we venture a guess that buying and holding an S&P 500 index fund over the next 30 years won’t cut it. Continue reading →

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Is Inflation Beginning? Are You Ready?

Posted on March 22, 2019 by MN Gordon

“Those who cannot remember the past are condemned to repeat it,” remarked George Santayana over 100 years ago.  These words, as strung together in this sequence, certainly sound good.  But how to render them to actionable advice is less certain.

Aren’t some facets of the past – like the floppy disk – not worth remembering?  And aren’t others – like a first taste of romance – worth repeating…if only it were possible?

Where investing’s concerned, remembering the past – and discerning what to make of it – can actually be a handicap.  Where does the past begin?  How does it influence the future?  How does one invest their capital accordingly?

These are today’s questions.  What follows, with purpose and intent, is an attempt to scratch out an answer.  Where to begin?

Many investment gurus in the early 1980s were predicting the future while projecting the past.  After a decade of raging price inflation, the popular dogma was to pack one’s portfolio with gold coins, fine art, and antiques.  This was the proven, surefire way to preserve one’s hard earned wealth. Continue reading →

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Why Government Control Is Overrated

Posted on March 15, 2019 by MN Gordon

There is much confusion from Republicans and Democrats about what’s torturing the American landscape.  Middle American red state towns have slipped into a self-induced opioid coma.  Wealthy blue state cities along the east and west coasts are rotting from the inside out.

Both parties, nonetheless, are committed to big government, and big deficit spending, to bring about the new paradise.  But do the President and Congress believe that more of the problem – big government – is somehow the solution to the nation’s ails?

As far as we can tell, this is the wrong question to ask.  The real question is a question of control.  That is the government’s desire to attain complete control over people, places, and things.  To have complete control over your life, your property, your wealth, and your future earnings.  That’s what they’re after; much more than MAGA.  Their track record proves it. Continue reading →

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