Federal Reserve President Kashkari’s Masterful Distractions

Posted on October 6, 2017 by MN Gordon

How is it that seemingly intelligent people, of apparent sound mind and rational thought, can stray so far off the beam?  How come there are certain professions that reward their practitioners for their failures?

The central banking and monetary policy vocation rings the bell on both accounts.  Today we offer a brief case study in this regard.

Minneapolis Federal Reserve President Neel Kashkari is a man with strong convictions.  He’s what the late Eric Hoffer would’ve classified as “the true believer.”  According to Hoffer:

“It is the true believer’s ability to ‘shut his eyes and stop his ears’ to facts that do not deserve to be either seen or heard which is the source of his unequaled fortitude and constancy.  He cannot be frightened by danger nor disheartened by obstacle nor baffled by contradictions because he denies their existence.”

For starters, Kashkari believes the Federal Reserve, an unelected board of appointments, can crunch economic data into pie graphs and bar charts and draw conclusion as to what they should fix the price of credit at. Continue reading →

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Fed Quack Treatments are Causing the Stagnation

Posted on September 29, 2017 by MN Gordon

There’s something alluring about cure-alls and quick fixes.  Who doesn’t want a magic panacea to make every illness or discomfort disappear?  Such a yearning once compelled the best and the brightest minds to believe the impossible for over two thousand years.

For example, from antiquity until the late-19th century, bloodletting was used to treat nearly every disease.  Reputable medical references recommended bloodletting as a cure for acne, asthma, cancer, epilepsy, gout, indigestion, insanity, leprosy, pneumonia, scurvy, tuberculosis, and everything in between.  Bloodletting was even used to treat hemorrhaging.

The practice was simple enough.  A surgeon, often a barber, would open a vein and drain blood from the patient.  Somehow, this was supposed to cure them of disease.

The fundamental idea was that a sick person could be bled to health.  Induced fainting, via bloodletting, was even considered beneficial.  However, the results were often fatal. Continue reading →

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Janet Yellen’s 78-Month Plan for the National Monetary Policy of the United States

Posted on September 22, 2017 by MN Gordon

Adventures in depravity are nearly always confronted with the unpleasant reality that stopping the degeneracy is much more difficult than starting it.  This realization, and the unsettling feeling that comes with it, usually surfaces just after passing the point of no return.  That’s when the cucumber has pickled over and the prospect of turning back is no longer an option.

In late November 2008, Federal Reserve Chairman Ben Bernanke committed a fait accompli.  But he didn’t recognize it at the time.  For he was blinded by his myopic prejudices.

Bernanke, a self-fancied Great Depression history buff with the highest academic credentials, gazed back 80-years, observed several credit market parallels, and then made a preconceived diagnosis.  After that, he picked up his desktop copy of A Monetary History of the United States, by Milton Friedman and Anna Schwartz, turned to the chapter on the Great Depression, and got to work expanding the Fed’s balance sheet.

Bernanke’s dirty deed commenced with the purchase of $600 billion in mortgage-backed securities, using digital monetary credits conjured up from thin air. Continue reading →

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

To Hell In A Bucket

Posted on September 15, 2017 by MN Gordon

“No one really cares about the U.S. federal debt,” remarked a colleague and Economic Prism reader earlier in the week.  “You keep writing about it as if anyone gives a lick.”

We could tell he was just warming up.  So, we settled back into our chair and made ourselves comfortable.

“The voters certainly don’t care about the federal debt,” he continued.  “They keep electing the same spendthrifts to office.

“And the politicians know the voters don’t care.  They also know that making more and more promises is the formula for getting reelected.

“Deep down, the aging masses know they need massive amounts of government debt to pay their social security, medicare, and disability checks.  On top of that, many of the so-called gainfully employed are really on corporate welfare; they hang their hats on government contracts to fund their paychecks.

“You know as well I do how this crazy debt based fiat money system works.  The debt must perpetually increase or the whole financial system breaks down.  Continue reading →

Posted in Government Debt, MN Gordon | Tagged , , , , , | 15 Comments