How to Erase the Federal Debt and Other Bad Ideas

Posted on January 8, 2013 by MN Gordon

The world is rife with bad ideas.  Just open your eyes and look around.  Hardly a blink can be made without some bad idea coming into view.  What’s more, the worse the idea…the more popular it becomes.  Here’s a partial list of what we mean…

Rap music, corn ethanol, the United Nations, pop psychology, Obamacare, no doc neg am loans, efficient market hypothesis, super mega big gulps, paper money, social welfare, skinny jeans, central banking, the Hindenburg, collateralized debt obligations, negative real interest rates, red bull energy drink, legal tender laws, democratic collectivism, fractional reserve banking, the helicopter ejection seat, Al Gore, malt liquor, the office cubicle, and much more.

Obviously, we could go on and on.  The list is practically without end.  But you get the point.  Bad ideas are everywhere and they are amazingly popular.

Nonetheless, today, we take aim at one really, really bad idea.  An idea that’s so bad, it’s extremely and extraordinarily popular.  It’s been going on for a long time.  But it really kicked off in earnest about 100-years ago… Continue reading →

Posted in Government Debt, MN Gordon | Tagged , , , , , , , | Leave a comment

“We Know Better!”

Posted on January 4, 2013 by MN Gordon

"We Know Better!"Monetary intervention into credit markets is much easier to start than to stop.  In fact, once started, monetary intervention is nearly impossible to stop.  Just ask Fed Chairman, Ben Bernanke.

He’s promised to expand the Fed’s balance sheet by over $1 trillion per year until more people have jobs.  Considering the money multiplier effect and the “magic” of fractional reserve banking, at some point, each $1 trillion added to the Fed’s balance sheet could translate into $5 trillion – or more – of money flowing into the economy.

Unless you like paying $10 for a cup of coffee, let’s hope this money never gains real traction in the economy.  Given this destructive outcome, why is it that Bernanke’s creating so much prospective money?

Here, in Socratic Method, we’ll answer with a question: What would happen if Bernanke didn’t inflate the money supply?

You see, once the financial system’s become dependent on cheap credit, it cannot be taken away without an economic breakdown occurring.  Moreover, ever increasing and more frequent issuances are needed just to sustain the appearance of economic stability. Continue reading →

Posted in Inflation, MN Gordon | Tagged , , , , , , , , , | Leave a comment

Exiting the Eye of the Hurricane and Other 2013 Predictions

Posted on January 1, 2013 by MN Gordon

“It’s tough to make predictions, especially about the future.” – Yogi Berra

How to Make the Most of The Year of the Snake

Now that 2012’s been laid to rest, and the dirt’s been kicked on its face, we calibrate our sights on the year ahead…and what you can expect.  According to the Chinese Zodiac, 2013 is the Year of the Snake.  What’s more, it’s the year of the water snake.  Here’s how to make the most of it…

“This is a year of water Snake,” says one Chinese Zodiac website, “and all things will be possible.  Saving money and being thrifty should be your top priorities.  To gain the greatest benefits from this year, you must control spending and use your talents wisely.”

Certainly, this is sage guidance…no matter what year.  While the Year of the Snake doesn’t officially begin until February 10, saving money and spending it wisely are two steps to take with the start New Year – that’s today – if you’re not already doing so.  In fact, saving money and thrift are two cornerstones of wealth building.

To clarify, the two surest ways to build wealth are to (1) spend less than you make, and (2) make more than you spend. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , , , , , , | 1 Comment

Confessions of a Dream Chaser

Posted on December 28, 2012 by MN Gordon

[Editor’s note: Today’s Economic Prism is an excerpt of remarks made by Direct Expressions’ President and Founder MN Gordon at the annual company holiday party at Steak ‘n Stein.]

Has There Ever Been an Occupation More Fun?

“If you want to be happy,” once remarked Andrew Carnegie, “set a goal that commands your thoughts, liberates your energy, and inspires your hopes.”  Good advice, for sure…

Somehow, by persistence or foolishness, transforming the Economic Prism from an avocation to a vocation has become the sort of goal for us that Carnegie refers to.  This especially inspires hope when we rise long before the crack of dawn each morning to make our clients look good…whether they appreciate it or not.

Leaving our profession behind for our own newsletter publishing business continues to be a goal.  But first we must build it up to where it replaces our current income.  Until then, the happiness and hope we derive from working towards this goal is worth more than the effort we expend on it.

Each day we open our eyes, look around, and see amazing, extraordinary things.  We are captivated by the stable instability of the economy and markets. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , | Leave a comment