Get Me Out

Posted on November 9, 2012 by MN Gordon

Following Tuesday’s election we offer one word of advice: Panic!

Not just because Obama was reelected – that’s just one reason.  But because, as John Embry, chief investment strategist at Sprott Asset Management notes, 2013 could be “one of the ugliest years on record.”

“I think we will see the first manifestations of the negative aspect (of money printing in 2013),” says Embry.  “To date, money velocity has been falling because even though all of this high powered money is being stuffed into the market by these central banks, the banks and the public really can’t seem to get the lending mechanism working.

“The banks are afraid, and the public is over-indebted.  But I think that will just make them push QE even harder, and at some point there will be a collective realization from all these people that are holding bonds and cash, etc., that ‘My God, the money is being destroyed.  Get me out.’

“That’s what will get the velocity to change direction, and then you will see mounting inflation very quickly.” Continue reading →

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Economic Dependency and Looming Disaster

Posted on November 6, 2012 by MN Gordon

By the end of the day we should all know the winner of the 2012 Presidential Election.  Of course, there’s always the possibility that it’s too close to call.  Perhaps a recount of dangling, hanging, dimpled, and pregnant chads will be needed to determine the outcome.  This sort of thing has happened before, you know.

Nevertheless, according to Bond King Bill Gross the outcome of the election will make no difference…

“Obama/Romney, Romney/Obama – the most important election of our lifetime?  Fact is they’re all the same – bought and paid for with the same money.  Ours is a country of the SuperPAC, by the SuperPAC, and for the SuperPAC.  The ‘people’ are merely election-day pawns, pulling a Democratic or Republican lever that will deliver the same results every four years.”

Gross may have a point…  But, election-day pawn or not, we still vote for who we want to win.  Quite frankly, we’re tired of President Obama. Continue reading →

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Putin Is the New Global Shah of Oil

Posted on November 2, 2012 by MN Gordon

Putin Is the New Global Shah of Oil
By Marin Katusa, Casey Research

Exxon Mobil is no longer the world’s number-one oil producer.  As of October 25th, that title belongs to Putin Oil Corp – oh, whoops.  I mean the title belongs to Rosneft, Russia’s state-controlled oil company.

Rosneft is buying TNK-BP, which is a vertically integrated oil company co-owned by British oil firm BP and a group of Russian billionaires known as AAR.  One of the top-ten privately owned oil producers in the world, in 2010 TNK-BP churned out 1.74 million barrels of oil equivalent per day from its assets in Russia and Ukraine and processed almost half that amount through its refineries.

With TNK-BP in its hands, Rosneft will be in charge of more than 4 million barrels of oil production a day.  And who is in charge of Rosneft?  None other than Vladimir Putin, Russia’s resource-full president.

TNK-BP has been an economic dream, producing many billions in dividend payments for its owners – but it has been a relations nightmare. Continue reading →

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How to Fix America’s Debt

Posted on October 30, 2012 by MN Gordon

Third quarter Gross Domestic Product increased at a 2 percent annual rate, reported the Commerce Department last Friday.  That’s up from the second quarter’s 1.3 percent growth rate.  But don’t get too excited…

According to Lucia Mutikani at Reuters, the economy needs to have sustained growth above 2.5 percent over several quarters to make any real progress cutting the jobless rate.  Moreover, the growth isn’t attributed to real wealth creation…like the kind that comes from savings and investment.  Rather it’s the kind of phony growth that shows up in the GDP numbers when capital is drawn down and wealth is burned up.  Here’s what we mean…

Consumer spending, which makes up about 70 percent of the U.S. economy, increased by 2 percent during the third quarter.  Yet, over this same time, incomes rose just 0.8 percent.  The 1.2 percent difference wasn’t likely made up with savings.

Remember, 40 percent of Americans have $500 or less in savings.  What’s more, 28 percent of Americans have no savings at all.  This means the difference between the 2 percent increase in consumer spending and the 0.8 percent increase in incomes was made up with new debt…it was borrowed from the future. Continue reading →

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