Sell the Rally

Posted on May 8, 2015 by MN Gordon

Do you have the feeling something just ain’t right?  If so, we suggest trusting your gut on this one.  The financial system’s running head long for a bleak implosion…followed by years of economic hardship.

Certainly, this is only our opinion.  One we’ve advanced over years of self-edification.  But what do we know?  We could be wrong…again.

We thought the DOW had peaked at about 13,000 and that the declining labor participation rate was indicative of a weakening economy…not a strengthening one.  Thus far these notions haven’t played out as we’d anticipated.  Perhaps we’ve been missing something all along.

Somehow, we can’t get past the fact that the economy’s flat yet stocks have gone vertical.  Nor can we comprehend the fiscal and monetary gimmicks that have been issued to make this happen.  TARP, CPFF, MMIFF, TALF, QE, QE2, QE3, ZIRP, and others.

These phony money mechanisms have propped up asset prices and splattered the financial landscape with unrendered pig lard. Continue reading →

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Prove You’re Not a Terrorist

Posted on May 5, 2015 by MN Gordon

Prove You’re Not a Terrorist
By Jeff Thomas, International Man

Recently, France decided to crack down on those people who make cash payments and withdrawals and who hold small bank accounts.  The reason given was, not surprisingly, to “fight terrorism,” the handy catchall justification for any new restriction governments wish to impose on their citizens.  French Finance Minister Michel Sapin stated at the time, “[T]errorism feeds on fraud, money laundering, and petty trafficking.”

And so, in the future, people in France will not be allowed to make cash payments exceeding €1,000 (down from €3,000).  Additionally, cash deposits and withdrawals totaling more than €10,000 per month will be reported to Tracfin—an anti-fraud and money laundering agency.

Currency exchange will also be further restricted.  Anyone changing over €1,000 to another currency (down from €8,000) will be required to show an identity card.

Do you need to make a deposit on a car?  That might be suspect.  Did you just deposit a dividend you received?  Continue reading →

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Connecting the Dots on Employment and Inflation

Posted on May 1, 2015 by MN Gordon

One principal conundrum of the extreme monetary policies of the last eight years is on the subject of consumer price inflation.  Expansion of the money supply is, by definition, inflation.  Yet how come, following a quadrupling of the monetary base, consumer prices are flat?

The last we checked the CPI weighed in at just 0.2 percent in March.  This certainly doesn’t seem like the great currency devaluation is under weigh.  In fact, the dollar index is up 20 percent over the last year.

Obviously, there’s been massive asset price inflation.  Since the market bottom on March 9, 2009, the S&P 500 is up over 217 percent.  In other words, the market price of the primary index costs more than triple what it did just 6-years ago.

Similarly, treasury yields stumble along at historic lows.  The 10 year note’s yielding just 2 percent.  The risk premium for dollar based government debt’s practically nonexistent.

Anecdotally, certain prices are off the charts.  College tuition’s become a disgraceful rip off.  Hotel rooms in San Francisco are very steep. Continue reading →

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How to Safely Double Your Money in No Time at All

Posted on April 28, 2015 by MN Gordon

Ashley Revell of London had a mad itch he needed to scratch.  The year was 2004.  The hankering stemmed from a casual drinking conversation with a friend.  Revell couldn’t let it go.

The idea, in short, required Revell to liquidate all his possessions, travel to Las Vegas, and ‘bet it all’ on one spin of the roulette wheel.  Naturally, this idea was sheer lunacy…don’t do this.  But it is exactly what he did.

Revell sold off all his possessions over a six month period and traveled to the Plaza Hotel and Casino in Las Vegas.  Then, with his mom and dad standing behind him, and a film crew in place, Revell placed $135,300 on red at the roulette wheel one Sunday morning in April 2004.

“That spin was the most amazing moment of my life,” said Revell several years back.  “It is a cliché but time did stand still.  It was just complete calm because I had done all the hard work. Continue reading →

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