Hard Landing Ahead

Posted on August 16, 2024 by MN Gordon

When Glenn Burke and Dusty Baker invented the high five on October 2, 1977, it was a moment of pure spontaneity.

Baker had hit a ding dong off Houston Astros pitcher J.R. Richard.  Burke stuck his hand up.  Baker hit it.  Journalist Jon Mooallem recounts the story:

“Burke, waiting on deck, thrust his hand enthusiastically over his head to greet his friend at the plate.  Baker, not knowing what to do, smacked it.  ‘His hand was up in the air, and he was arching way back.  So, I reached up and hit his hand.  It seemed like the thing to do.’

“Burke then stepped up and launched his first major league home run.  And as he returned to the dugout, Baker high-fived him.  From there, the story goes, the high five went ricocheting around the world.”

The high five, however, wasn’t the only thing ricocheting around the world in the autumn of 1977.  Consumer price inflation was also running hot.  Guns and butter spending over the prior decade had taken a match to the paper dollar. Continue reading →

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How to Catch a Falling Knife

Posted on August 9, 2024 by MN Gordon

“On two occasions I have been asked [by members of Parliament], ‘Pray, Mr. Babbage, if you put into the machine the wrong figures, will the right answers come out?’  I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question.”

– Charles Babbage, Passages from the Life of a Philosopher (1864)

Just Press the AI Button

Do you add glue to your pizza to keep the cheese from slipping off?

This was the pizza making instruction provided by Google’s AI Overview tool.

When making a pizza: “You can also add about 1/8 cup of non-toxic glue to the sauce to give it more tackiness.”

The genesis of the artificial ‘intelligence’ was an 11-year-old Reddit comment from a joker with a username that’s too vulgar to reveal in these pages.  Hint: it starts with the letter F.

Readers who’ve endeavored to learn a new language as an adult know that slang and humor are often the most difficult aspects to pick up and make sense of.  AI tools appear to struggle with this too. Continue reading →

Posted in Business, MN Gordon | Tagged , , , , , , | 2 Comments

Dollar Debasement Ad Infinitum

Posted on August 2, 2024 by MN Gordon

If there’s one thing to understand about what’s going on in the political economy today, it is the fundamentals of debt.  You do not need to be a bean counter or get too deep into the weeds to get a handle on things.

What you must understand is this.  Debt – public and private – has grown to such massive extremes that it will never be repaid.

But it will be settled one way or another.  Through default or inflation, or a combination thereof.  Moreover, the impending debt reconciliation will be legendary.

In the meantime, as debt has grown, it has distorted prices.  This is the reason why housing prices and stock prices make little sense.  And this is also the reason why consumer prices continue to rise.

Federal debt recently eclipsed $35 trillion.  In practice, the Treasury is responsible for the abundance of debt that has been issued.  However, the Treasury is merely funding the deficits dictated by politicians in Washington who are beholden to the vast cadre of special interests. Continue reading →

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Why Radical Spending Cuts Are Needed

Posted on July 26, 2024 by MN Gordon

The International Monetary Fund, a creature birthed at the Bretton Woods Conference in July 1944, turned 80 years old this week.  Its bureaucrats are worried.

The title of the IMF’s recently published World Economic Outlook is titled, The Global Economy in a Sticky Spot.  The source of the stickiness, per the WEO, is services inflation.  Namely, nominal wage growth, especially in the U.S., is increasing above goods price inflation.

Working stiffs haven’t received a real, inflation adjusted, raise in four decades.  Shouldn’t a slight increase in nominal wages above goods price inflation be a welcomed occurrence?

Not for the IMF and its banker buddies.  From their perspective, services inflation is inhibiting the ability for central banks like the Federal Reserve to cut interest rates.  They want lower interest rates to help soften the fallout of all the bad loans made during the coronavirus madness.  The Treasury also wants lower interest rates so it can finance its massive pile of government debt. Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , | 3 Comments