Pray for Rain

Posted on February 4, 2014 by MN Gordon

Here in the Golden State everything’s brown.  The hillsides are dry and the scrubland vegetation’s a giant tinderbox.  Sierra snowpack is only 12 percent of normal…the lowest it’s ever been since California began keeping records in 1960.

The wildfires don’t ordinarily arrive until fall.  Not until summer and the dry Santa Ana winds have blown through.  Yet this year’s far from ordinary.  The fires came in January.

The San Gabriel Mountains went up in a blaze several weeks ago.  We marveled from the 21st floor of a Figueroa Street skyscraper as a thick layer of black smoke drifted across the Los Angeles basin and down to the Long Beach harbor.  An incandescent sunset over San Pedro Bay guided us as we traversed our way home in the evening.

“This could potentially be the driest water year in 500 years,” said University of California Paleoclimatologist B. Lynn Ingram.  Obviously, we weren’t around when Columbus discovered the new world.  But we can tell you, in strictly scientific terms, it’s drier than a baked prune. Continue reading →

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The Downside of the Bubble Economy

Posted on January 31, 2014 by MN Gordon

Another signal that financial reflation has pumped up more than just the stock market flashed and beeped on Tuesday.  The housing market, following an epic bust and years of extraordinary monetary measures, is once again expanding at a specious rate.  Could it be the Fed has finally succeeded in engineering a new housing bubble?

We may not know for years.  However, at the moment, we’re beginning to catch a whiff of something with an uncanny scent.  In fact, when we breathe in deeply we feel it in our pulmonary alveoli.  Do you?

“The S&P/Case-Shiller index of property prices in 20 cities climbed 13.7 percent from November 2012, the biggest 12-month gain since February 2006, after a 13.6 percent increase in the year ended in October,” reported Bloomberg.

“All 20 cities in the index showed a year-over-year gain, led by a 27.3 percent advance in Las Vegas.  Values climbed 23.2 percent in San Francisco.”

Not bad, if you’re a home owner.  Just for living in your home you experienced the added joy of ballooning wealth. Continue reading →

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A Glimpse into the Coming Collapse

Posted on January 28, 2014 by MN Gordon

A Glimpse into the Coming Collapse
By Jeff Thomas, International Man

Beginning in 1999, we predicted a systemic economic collapse that would take place in the First World and would impact all other economies.  We began to list some of the “dominoes” that would fall as the collapse evolved and described that the “Great Unravelling,” as we termed it, would take roughly ten years.  At that time, we guesstimated that the first two of the dominoes, a real estate crash and subsequent stock market crash in the US, would begin in about 2005.

We were premature in this prediction, as the first of the crashes did not occur until 2007.  And, truth be told, we have frequently been incorrect in the timing of the other dominoes.  Whilst the actual events have been predicted correctly, our timing has often been incorrect.  In every such case, the prediction has been premature.

Sadly, however, the prediction of the events of the collapse have been almost entirely correct. Continue reading →

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Debt Downgrade Retaliation

Posted on January 24, 2014 by MN Gordon

There are occurrences of rich irony that require pause and present reflection.  One such occurrence emerged from the darkness and into the spot light earlier this week.  We could hardly believe our eyes…

“A Vatican monsignor already on trial for allegedly plotting to smuggle 20 million euros ($26 million) from Switzerland to Italy was arrested Tuesday in a separate case for allegedly using his Vatican bank accounts to launder money,” reported AP.

“Financial police in the southern Italian city of Salerno said Monsignor Nunzio Scarano, dubbed ‘Monsignor 500’ for his purported favored banknotes, had transferred millions of euros in fictitious donations from offshore companies through his accounts at the Vatican’s Institute for Religious Works.”

Here at the Economic Prism we’ll chalk this up as more evidence we are living in the epoch of mammon warned of in the New Testament.  “Ye cannot serve God and mammon,” reported Matthew from the Sermon on the Mount. Continue reading →

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