Janet Yellen’s Unwise and Inhumane Policies

Posted on July 1, 2014 by MN Gordon

Federal Reserve Chair Janet Yellen says the 0.4 percent May CPI increase is noise.  Perhaps she is right and it is noise.  But just what type of noise is it?

Is it the type of noise to ignore…like a street vagrant’s mutterings of gibberish?  Or is it the type of noise, like a fire alarm, telling us to get out because our home is about to go up in smoke?  The difference is stark.

Though Yellen didn’t elaborate, we assume she means the CPI noise is something to ignore.  That price inflation isn’t a real concern.  Here at the Economic Prism we think otherwise.

Regardless of whether it shows up in the CPI, the price of just about everything that’s needed to live is going up.  In fact, according to MarketWatch, the price of health-care, gas, housing, pork, beef, chicken, orange juice, milk, and coffee, are all going up.  Who cares if you can get a really good laptop for $500 when pork prices have risen over 50 percent in the past year and beef prices are up 74 percent since 2009? Continue reading →

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I Owe My Soul

Posted on June 27, 2014 by MN Gordon

I Owe My Soul
By Jeff Thomas, International Man

In 1946, an American singer, Merle Travis, recorded a song called “Sixteen Tons.”  The song told the story of a poor coal miner in Kentucky, who lived in a small coal mining town.  The town’s economy revolved entirely around the mine.

The mining company owned a “company store,” which had a monopoly on the sale of provisions.  It charged rates that were designed to use up the weekly paycheque of the miner, so that the miner, in effect, was a slave to the mining company.  As the song states…

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don’t you call me ‘cause I can’t go
I owe my soul to the company store Continue reading →

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The Paradox of Fed Credit

Posted on June 24, 2014 by MN Gordon

Last Tuesday the Bureau of Labor Statistics reported the Consumer Price Index increased 0.4 percent in May and 2.1 percent over the last 12 months.  That means if you didn’t get a 2 percent raise this year you’re doing worse – not better – than last year.  But not to worry…

The following day, Federal Reserve Chair Janet Yellon dismissed the CPI report…calling the data “noisy.”  Obviously, she missed the announcement from In-N-Out – the iconic California hamburger stand – that they’re raising prices because of the soaring cost of dairy and beef.  Is this noise too?

Perhaps in Yellon’s world – a place where the polar vortex is the root cause of lethargic GDP – it is.  For the rising cost of dairy and beef is due to the epic California drought.  Somehow, according to the top Fed head, these price hikes are all just noise.

We don’t quite comprehend how the Fed figures what’s noise or not.  In our world, higher prices are higher prices.  As for the California drought, we took a drive through ground zero on Sunday. Continue reading →

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Plume Economics

Posted on June 20, 2014 by MN Gordon

Central banking, dishonest money, and big bank bailouts.  Earlier this week we referred to these as a trifecta of depravity.  We also noted how through the Fed’s mechanism of mass money creation financial assets – overwhelmingly owned by the wealthy – are floated up on a sea of debt.

The general public has been well aware for some time now that the Federal Reserve borrows money into existence and loans it to the Treasury.  That secret’s been out of the bag for a while.  What’s more, it’s espoused as an integral monetary policy.  Manipulating interest rates down is supposed to stimulate demand and boost the economy…its actual effect has been to boost asset prices.

But if you were still under the supposition that the stock market is a last bastion of free market capitalism, unhindered and unfettered by central bank intervention, we must apologize.  For we must forever end your bliss.  You see, central banks the world over are creating money from nothing and using it to buy stocks. Continue reading →

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