All the Makings of a Major Economic Fiasco

Posted on July 27, 2018 by MN Gordon

About 6,940 miles west of Washington DC, and at roughly the same latitude, sits Beijing.  Within China’s massive capital city, sits the Country’s paramount leader, Xi Jinping.  According to Forbes, Xi is currently the most powerful and influential person in the world.

Xi, no doubt, is one savvy fellow.  He always knows the right things to say.  He offers his nation’s citizens the “Chinese Dream.”  They consume it like boysenberry funnel cakes at the county fair.

So, too, Xi always knows the right things to do.  He elaborates his vision for securing world dominance through something called the Belt and Road Initiative.  His people get behind it without question.

But all is not bliss for Xi…

After decades of hard work, dedication, and loyalty to the Communist Party of China, Xi finally rose to the top of the trash heap in 2016.  That’s when the party gave him the elite title of core leader.  What a disappointment it must have been to first look out across the geopolitical landscape and see a boorish New York blowhard like President Trump snarling back at him. Continue reading →

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Are You Prepared for the End of Fake Money?

Posted on July 20, 2018 by MN Gordon

Today we begin with a fundamental question: What is money?

This, no doubt, is an important question.  And we ask it with clear intent and purpose.  Namely, we want to better understand how it’s possible for America to rack up such a massive trade deficit with China.

America’s trade deficit with China, in 2017 alone, was $375 billion.  That’s a gap of over $31 billion a month – or $1 billion a day.  We believe having a better grasp on what money is will bring clarity to the nasty trade deficit that’s motivating today’s burgeoning trade war.

With respect to our initial inquiry we turn to Victorian economist William Stanley Jevons for edification.  In his 1875 work, Money and the Mechanism of Exchange, Jevons stated that money has four functions.  It’s a medium of exchange, a common measure of value, a standard of value, and a store of value.

Many deficiencies with today’s renditions of money, including the dollar, appear when applying these functions to the present system of floating exchange rates. Continue reading →

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The True Sport of MAGA

Posted on July 13, 2018 by MN Gordon

One of the more extraordinary things that investors have seen in living memory is unfolding at this precise moment.  This goes for business leaders, money managers, veteran Wall Streeters, value investors, 401(k) holders, momentum traders, FX guys, gold bugs, technical gurus, chartists, pork belly speculators, quants, astrologists, Larry Summers, put option sellers, dweebs and geeks, millennial index fund enthusiasts, and everyone in between.

They’re all craning their necks in unison.  They can hardly believe their eyes.  Up on the world stage, and on a daily basis, President Donald Trump chest bumps international leaders with wanton abandon.

Donald Tusk, Justin Trudeau, Xi Jinping, Angela Merkel, and even the new leftist Mexican victor, Juan Trump, have President Trump posturing towards them as if they’re facing off at a weigh in for a heavyweight fight.  The sight is absolutely ludicrous, if one is in the mood for a reality TV show – or a practical joke. Continue reading →

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Trouble in Paradise

Posted on July 6, 2018 by MN Gordon

Uncompromising independence, rugged individualism, and limitless personal freedom were once essential to the American character.  According to popular American folklore, they still are.  We have some reservations.

The principles that gave rise to the American character died long ago.  Freedom.  Liberty.  Independence.  Limited representative government.  Sound money.  Private property rights.  A humble and esteemable populace.  Avoidance of foreign entanglements.  Rafting down the Mississippi River.  Trim waist lines.

These concepts, in reality, faded away from daily life over the last century like stars in the morning light.  Nonetheless, a merry mob reaches for their lost American character as they head to the shore each July 4th to celebrate Independence.  These freedom lovers – descendants of none less than Davy Crockett, and users of gender neutral bathrooms – eat hotdogs and revel in their ideals of an America that no longer exists.  Their zeal is impressive. Continue reading →

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