Central Bankers Unite

Posted on December 2, 2014 by MN Gordon

Government planners float the economy up on a sea of credit.  Financial markets rest on an eroding base of wet sandy debt.  With all the funny money sloshing around…no solid footings remain.

Here at the Economic Prism we long for a concrete foundation we can stub our toe on.  The resulting pain would be comforting.  For it would provide confirmation that consequences still exist.  Thus we’ll begin today’s supposition with some perspective…

“Credit expansion can bring about a temporary boom.  But such a fictitious prosperity must end in a general depression of trade, a slump,” noted 20th century economist Ludwig von Mises.

But what happens if a credit expansion is followed with an additional expansion of credit?  Does the debt ever have to be repaid?  With enough credit based money, can’t the economic depression be postponed ad infinitum? Continue reading →

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Somewhere Between Heaven and Hell

Posted on November 28, 2014 by MN Gordon

Looking for ordinary ideals of Americana is like searching for consistencies in the Affordable Care Act statute.  They simply don’t exist.  The valued conviction of one American vastly differs from that of another.

One may celebrate adventures in mysticisms.  Another may find inspiration sitting in a NASCAR grandstand.  While a third struggles to free himself of the orthodox hobgoblins that suffocate his soul.

In the more respectable newspapers, the story of the national struggle is told with delicate regularity.  The news is professed from the locus of the two party political system…any diverging views are carefully sifted out.  What’s reported is only what the story editors allow to pass through their single micron particulate filters.

We’re told a never ending Marxian tale of the evil rich exploiting the noble poor.  Even worse, we’re led to believe that clowns like John F. Kerry know exactly what the heck they’re doing.  Plus we’re led to believe that what they are doing is in our best interest. Continue reading →

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What You Must Know About Global Currency Debasement

Posted on November 25, 2014 by MN Gordon

After six years of heavy handed market intervention the financial system has been pushed to the extremes.  Scientific management of the economy has twisted and contorted it in ways that would’ve otherwise been impossible.  Rather than moderating the business cycle it has exacerbated it…the booms are bigger, the busts are more pronounced.

What we mean is the yin and the yang of inflation and deflation have never pulled harder.  Stock prices rise to record highs yet real wages decline.  Obviously, this doesn’t compute.  Something has got to give.

Like the subduction zone where the Pacific Plate pushes underneath the North American Plate, the pressure builds.  No outward instability is apparent on the surface for years…or even decades.  In fact, the peace and tranquility extends for so long people forget the hidden danger.  They build houses directly on top of the fault.

But this doesn’t mean something big isn’t coming.  There’s no if to the matter, just when.  Moreover, when the San Andreas Fault ruptures, structure foundations will rapidly crack and cave across the Golden State. Continue reading →

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Here Comes the Flood

Posted on November 21, 2014 by MN Gordon

The United States’ economy is flying high.  In fact, when compared to Japan and Europe, the state of the union is strong and prosperous.  What’s more, it’s only getting better.

The unemployment rate continues its slow soft slide downward.  It was at just 5.8 percent the last we checked.  Meanwhile, consumer prices are rising at a benign 1.7 percent.  At the same time, annual GDP is increasing at a healthy 3.5 percent clip.  On top of that, the stock market continues to make everyone rich.

There are occasional moments of idyllic perfection where one must pinch themselves to know if they are really happening.  These are the green flash instances…like when Teddy Kennedy up and died.  Out of nowhere the stars align and the good spirits reign.

Sometimes these moments are compelled by careful planning and exacting fortitude.  Other times their harmonic convergence is the result of sheer dumb luck.  We don’t make too much of the how or why…we’ll take what we can get.

At the end of the day it really doesn’t matter what the triggers were. Continue reading →

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