Dillweed Economics

Posted on March 3, 2015 by MN Gordon

After more than a decade of studying, documenting and cautioning on the great fraud of our time we’re as shocked as we’ve ever been.  In the year 2015, the entire essence of economic and financial management the world over has been reduced to a single policy…

Thou shalt degrade money and expand debt in perpetuity.

Here in the United States, as in Europe, Japan, China, and most everywhere else, this policy is carried out with earnest zeal.  No limitations are holding back policy makers and politicians.  Consequences have disappeared from practical prudence or consideration.

New credits are borrowed into existence by the Federal Reserve and spent by the Treasury.  All the while the old debts are never paid down.  The interest is merely serviced and the old debts are rolled over by issuing new debts…which are purchased by borrowing new credits into existence.

How does this wonderful scheme continue in broad daylight?  Are people just not aware of it?  Or is the broad population completely apathetic? Continue reading →

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From Bad to Worse in a Big Way

Posted on February 27, 2015 by MN Gordon

Just when it appeared that a $50 per barrel floor had been put under the price of oil, something unexpected happened.  The price of oil dropped over 2 percent to about $48.74 a barrel.  What’s more, it could fall much, much further…

“A rally in crude-oil prices halted last week after U.S. data showed that domestic crude inventories are at their highest in about 80 years,” explained the Wall Street Journal.

In other words, not since 1935 – the middle year of the Great Depression – has there been such a glut in U.S. oil.  Moreover, a weekly report from Morgan Stanley remarked that forthcoming U.S. data on supply and drilling are “likely to appear ominous.”  From what we gather, this most likely means the supply glut will steepen.

Naturally, when there’s an oversupply of something, the price must drop to equilibrate demand.  How much further it must drop no one really knows.  But we surmise the price of oil must fall considerably further to close an 80 year inventory high.

Obviously, domestic oil producers wanted a quick price rebound in the first quarter of 2015. Continue reading →

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The End of the New Paradigm

Posted on February 24, 2015 by MN Gordon

There is a pleasant mist in the air which conceals the depths of the disorder with earnest efficiency.  Cavernous divergences exist between the financial economy and the real economy.  Yet only the crankiest will speak of them.

The union in Europe was temporarily saved last Friday.  Investors the world over cheered the relief.  The DOW and S&P 500 closed out the week at record highs.

The big news was that the Greek bailout will be extended four more months.  The fact that Greece will never pay back its creditors doesn’t matter for now.  The clever program of extend and pretend has been preserved.

This is how things work in 2015.  The world economy roles round and down with remarkable precision, borrowing massive amounts of digital monetary credits into existence and spending them.  Certainly, this can’t go on forever.

The more duct tape and safety pins that are used to hold things together…  The more money creation that occurs to temporarily paper things over…  The greater destruction the final financial blowout will ultimately be. Continue reading →

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The Sickness that Never Ends

Posted on February 20, 2015 by MN Gordon

It’s a wacky and wild world out there.  We don’t know what to make of it anymore.  The tried and true has disappeared from common circulation like pre-1965 quarter dollars.  What remains is a lot of claptrap.

For example, we’ve noticed numerous reports lately explaining why eating piles of bacon is good for us.  What’s more, just this week we came across an article telling us that putting a scoop of butter in our coffee each morning makes for a healthy breakfast.  Apparently the added oil slick fills you up so you don’t need to eat much for lunch.

Huh?  Perhaps these are healthy diet choices for those eager to have a myocardial infarction.  We’ll stick to black coffee and a granola bar.

Of course, nowhere is the prevalence of humbug greater than the world of money.  For only in the money realm do you hear things as idiotic as the popular notion that spending money – even borrowed money – makes you wealthy.  Similarly, only in the world of money would you hear highly respected individuals contend that a destructive hurricane is good for the economy. Continue reading →

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