The Temporary Madness of an Ugly Mathematics World

Posted on November 13, 2012 by MN Gordon

There are obvious contradictions in government finance that are both shocking and absurd.  There are opposing forces colliding before us with consequences hardly a soul can escape.  To sum up the plot, there’s the soft delusion of prosperity through public spending running up against the hard reality of arithmetic.

The climax, and its brutal impartiality, is still a scene or two away.  But once the inflection point is reached chaos and disorder will follow.  This is the unfavorable place inhabitants of western nations find themselves these days.

“Beauty is the first test: there is no permanent place in this world for ugly mathematics,” wrote British number theorist Godfrey Hardy in 1941.  When making this observation, Hardy didn’t likely have a fiat money world in mind…where the government borrows money created by the central bank to pay for things the economy can’t afford.

If Hardy could’ve taken a gander at the mammoth gap between government revenues and obligations, circa 2012, we guess he’d have concluded the Treasury is engaged in a serious case of ugly mathematics. Continue reading →

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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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