What a Bull-Runner Can Teach Us About the AI Bubble

Posted on August 22, 2025 by MN Gordon

Bill Hillmann is an expert bull runner. He’s also a writer. He married his two passions in a book he co-authored in 2014. The book is titled, “Fiesta: How to Survive the Bulls of Pamplona.” It is a guide for anyone foolish enough to run with the bulls in the legendary San Fermín festival.

One month after his book was published, Hillmann put his findings to the acid test. During a run in July 2014, something unexpected happened. A bull named Bravito decided to give him a personal lesson in survival.

Hillmann was gored twice in his right thigh. The horn missed a major artery by a hair. A detail he later said saved his life. He was rushed to the hospital for surgery, but the damage was done.

After Hillmann was gored, his co-author told The New York Times, “We will probably need to update the book.”

You might think that would be the end of Hillmann’s bull-running days. But you would be wrong. The very next year he was back in Pamplona running with the bulls once again.

Hillmann was later gored a second time in the 2017 running of the bulls at Pamplona. True to his book title, he survived. Continue reading →

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A World Of Fiat

Posted on August 15, 2025 by MN Gordon

“Gold is money. Everything else is credit.”

– J.P. Morgan, testimony before Congress in 1912

Impossible Imbalances

There has been a lot of discussion lately about America’s massive trade deficit and how President Trump’s tariff policies are intended to shrink it down while returning manufacturing to the USA. What isn’t often mentioned is how this massive trade deficit ever came about to the extent that it has to begin with. If the world still operated on a gold standard these mega imbalances would have been impossible.

Consider a world where every dollar, yen, or euro was backed by a real, physical piece of gold in a vault. That’s the gold standard. In this system, if the U.S. wanted to buy more goods from other countries than it was selling, it would have to pay in gold. That means gold would be flowing out of the U.S. and into the hands of its trading partners.

As the U.S. gold reserves dwindled, the amount of dollars in circulation would shrink, making dollars more valuable. At the same time, the countries receiving all that gold would see their money supply grow, making their currencies less valuable.

This process would naturally correct the trade imbalance. U.S. goods would become cheaper for foreigners, and their goods would become more expensive for Americans. This would encourage a natural shift back towards balance. A massive, long-term trade deficit would be impossible because a country would eventually run out of gold. Continue reading →

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How Fed Dependence on Bogus Data Invites Disaster

Posted on August 8, 2025 by MN Gordon

Numbers may seem like hard facts. But they are rigorously flexible in the right hands. The game often involves framing. Politicians and bureaucrats are masters of it.

Here’s a typical example: “Our no child goes to sleep hungry program has reduced hunger by 10 percent.”

Sounds great, right? But what if hunger was at an all-time high just before the policy was enacted? A 10 percent drop from a massive peak might still mean hunger is higher than it was five years ago.

This is called “cherry-picking” the timeline. By choosing a specific start date, they can paint a rosier picture than reality. As an aside, the charts and figures included in mutual fund brochures cherry-pick timelines to perfection.

Another favorite trick is using different metrics. A politician might boast about “record-low unemployment.” But what if that’s because many people have simply given up looking for work and are no longer counted in the official numbers?

They’re technically not “unemployed,” but they’re also not working. The statistic is technically correct. Yet it hides a more complex, less favorable story about the economy. Continue reading →

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Powell Holds the Line

Posted on August 1, 2025 by MN Gordon

The high stakes standoff between Fed Chair Jerome Powell and President Donald Trump is exhilarating.

Trump wants Powell to cut interest rates so the U.S. government can save money on its debt financing costs. Powell wants to wait and see how tariff policies impact consumer prices before cutting – or raising – rates.

Between July and September, the U.S. Treasury intends to borrow over $1 trillion in privately-held net marketable debt. Between October and December, the Treasury plans to borrow another $590 billion. Lower interest rates would certainly help Uncle Sam finance all this new debt. But it may also bring unpleasant consequences.

Lower interest rates, for example, encourage more borrowing. With a national debt of $37 trillion, which is projected to skyrocket to $60 trillion or more well before the middle of the century, borrowing more money is the last thing the U.S. government should be doing.

If Congress really cared about the future of America, and the younger citizens whose futures are being crippled by all this debt, it would balance the budget or even run a surplus to pay down the debt. Instead, Congress is stepping on the gas as it speeds towards the fiscal cliff. Continue reading →

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