Independent Ideas on the Economy, Financial Markets, and Investing

Full Faith and Credit in Counterfeit Money

Posted on May 4, 2018 by MN Gordon

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 counterfeit money, freedom, full faith and credit, richard nixon, us treasury | 22 Comments

The Oil Curse Comes to Washington

Posted on April 27, 2018 by MN Gordon

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 oil curse, opec, russia, shale oil, washington | 14 Comments

From Fake Boom to Real Bust

Posted on April 20, 2018 by MN Gordon

More is revealed with each passing day. You can count on it. But what exactly the ‘more is of’ requires careful discrimination. Is the ‘more’ merely more noise? Or is it something of actual substance? Today we endeavor to pass judgement, on your behalf.

For example, here in the land of fruits and nuts, things are whacky, things are zany. Last month, State Senator, Dick Pan, introduced Senate Bill (SB) 1424, which would require California based websites to utilize fact checkers to verify news stories prior to publishing them. Who exactly these fact checkers would be – the moral servants that would save the world from the ills of fake news – was conveniently missing from the bill.

Ironically, the control freaks in California state government can’t control themselves; they want to muck around with people’s lives unconditionally. Nonetheless, screwball proposals like this out of Sacramento fall into the mere noise category – for now. We estimate it will take another Presidential election cycle, or two, before such nonsense is taken seriously by the majority of state lawmakers. Continue reading →

Posted in Economy, MN Gordon | Tagged boom, bust, california, collapse, homeless, los angeles | Leave a comment

Rise of the Japanese Androids

Posted on April 13, 2018 by MN Gordon

One of the unspoken delights in life is the rich satisfaction that comes with bearing witness to the spectacular failure of an offensive and unjust system. This week served up a lavish plate of delicious appetizers with both a style and refinement that’s ordinarily reserved for a competitive speed eating contest. What a remarkable time to be alive.

Many thrilling stories of doom and gloom were published across the tops of the finest digital news sites. The main object of our satisfaction, however, was buried further down the pages, well below the latest Trump tweets and relentless reports on the global war buildup. Nonetheless, our focus is not without merit.

Today’s foil is played by Bank of Japan (BoJ) Governor, Haruhiko Kuroda. If you’re ignorant of Mr. Kuroda, we apologize. What follows shall forever end your bliss.

You see, Kuroda and his cohorts at the BoJ have been surfing the razor’s edge, executing policies of mass money debasement, for several decades. In fact, their forward thinking ways – and good intentions – have become a source of national pride. There’s not a deranged monetary policy idea the Japanese brain trust hasn’t pioneered in the name of saving the nation from itself. Continue reading →