Meet Your New Stimulus Allocation Czar

Posted on October 14, 2016 by MN Gordon

The march towards midnight is both stirring and foreboding.  Like a death row inmate sitting down to savor his last meal, a grim excitement greets the reality of impending doom.  Thoughts of imminent mortality haunt each bite.

As far as the economy’s concerned, there’s no stopping its march towards midnight.  The witching hour’s rapidly approaching.  We intend to savor each moment and make the best of it.

We also watch and listen for signs and clues of what will happen next.  One such inkling came recently from Bank of America-Merrill Lynch head of U.S. equity and quantitative strategy Savita Subramanian:

‘“We are seven years into a full-fledged, all out, central bankers doing everything they can to stimulate demand.

‘“We looked at all of these indicators that have been pretty good at forecasting recessions and we extrapolated that if they follow the current trends they’re on, we’re going to hit a recession sometime in the second half of next year.’” Continue reading →

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Doomed for Failure

Posted on October 7, 2016 by MN Gordon

We’ve been waiting for the U.S. economy to reach escape velocity for the last six years. What we mean is we’ve been waiting for the economy to finally becomes self-stimulating and no longer require monetary or fiscal stimulus to keep it from stalling out.  Unfortunately, this may not be possible the way things are going.

In short, the U.S. economy may never reach escape velocity unless it is first allowed to crash.  It has been too larded up and larded over with debt for any real sustainable growth to take root.  More evidence, to this effect, was revealed this week.

For example, the International Monetary Fund (IMF) anticipates the U.S. economy will expand by just 1.6 percent this year.  That’s about one percent less than last year’s estimated growth.  In other words, the rate of economic growth in the United States isn’t increasing; rather, it’s decreasing.

According to the IMF, “the slower-than-expected activity comes out of the ongoing oil industry slump, depressed business investment and a persistent surplus in business inventories.”  Could this be the twilight of the weakest economic recovery in the post-World War II era?  Only time will tell, for sure. Continue reading →

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Mass Money Debauchery

Posted on September 30, 2016 by MN Gordon

The present day offers the opportunity for many incredible experiences.  Perhaps one of the most rewarding of all is bearing witness to the final days before the greatest economic crackup the world’s ever known.  Not since Nero clipped coins in 64 A.D. and fiddled as Rome burned has there been such an intolerable collection of dingleberries in imperial office.

John Maynard Keynes, the godfather of modern day economic planning, in his 1919 work, The Economic Consequences of the Peace, wrote: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.”

Incidentally, Keynes attributed this acute insight to another innovative central planner, one Vladimir Lenin.  Regrettably, these two visionaries predicted today’s present state of affairs with remarkable foresight.

Here we are, nearly 100 years later, and the currency has been near fully debauched.  What’s more, the basis of society has been completely overturned.  Gawping at the Presidential debate earlier this week made this all too apparent. Continue reading →

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Harvard Report Whiffs on Fed Price Fixing Scheme

Posted on September 23, 2016 by MN Gordon

This month the bright fellows at Harvard Business School came out with a new report.  A lot of work went into its preparation.  In fact, the report contains the culmination of five years of in-depth analysis of U.S. competitiveness and surveys of global business leaders and the general public.

“Problems Unsolved and a Nation Divided,” is the title.  What these two independent clauses have to do with one another is unclear.  But the way they are strung together it appears the authors believe they are somehow correlated.

Perhaps problems are unsolved because the nation’s divided.  Or maybe the nation’s divided because problems are unsolved.  Here we turn to the report’s executive summary for explanation…

“Overall, we believe that dysfunction in America’s political system is now the single most important challenge to U.S. economic progress.  Many Americans are keenly aware that the system is broken, but are unsure why it is broken or how to fix it.

“While there is rising frustration with politics, there is, as yet, no framework for understanding the reasons for today’s poor performance and proposing effective solutions. Continue reading →

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