“The Bank Was Saved, and the People Were Ruined”

Posted on October 19, 2012 by MN Gordon

“The Bank Was Saved, and the People Were Ruined”
By Jeff Thomas, International Man

The above quote is from William Gouge, commenting on the Panic of 1819.  The panic had been caused when the First Bank of the United States had first expanded the money supply dramatically by offering loans, then contracted the money supply by tightening its requirements for new loans, causing a crash.

This is a useful quote, as, in its simplicity, it states the very nature of crashes brought on by irresponsible banking practices.  In every case in which this occurs, it is possible through the complicity of the government of the day.

The origin of this syndrome goes back to Mayer Rothschild, a very clever fellow who, in the late 18th century, offered financial benefits to politicians in Germany in trade for political support for whatever activities his bank might practice.  Rothschild was a long-term thinker; his method involved the offering of regular emoluments to politicians without their having to provide him with anything immediately.  Then, when he needed a large favour, he would call it in. Continue reading →

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The Sick Lion

Posted on October 16, 2012 by MN Gordon

Venturing Back to the Land of Aesop

We’re running a bit short on time today.  So, in lieu of our usual economic reflections, we’ll venture back to the sixth century BC to the land of Aesop.

We’re not sure what this really has to do with anything; but it could save you a fortune…

The Sick Lion, Aesop Fables

A Lion, unable from old age and infirmities to provide himself with food by force, resolved to do so by artifice.  He returned to his den, and lying down there, pretended to be sick, taking care that his sickness could be publicly known.  The beasts expressed their sorrow, and came one by one to his den, where the Lion devoured them.  After many beasts had thus disappeared, the Fox discovered the trick and presenting himself to the Lion, stood on the outside of the cave, at a respectful distance, and asked him how he was.  “I am middling,” replied the Lion, “but why do you stand without?  Pray enter within to talk with me.”  “No, thank you,” said the Fox. Continue reading →

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Rising Food Prices are No Laughing Matter

Posted on October 12, 2012 by MN Gordon

The Commerce Department reported on Wednesday that wholesale inventories rose 0.5 percent in August.  What’s more, according to the Commerce Department sales at wholesalers rose 0.9 percent in August…the first increase since April.  What this means exactly we don’t quite know.  But the experts have some ideas…

Yelena Shulyatyeva, an economist at BMP Paribas in New York, says it’s a sign “companies want to stay cautious ahead of the Presidential election.”  Peter Newland, of Barclays, reviewed the same report and concluded it “offered an encouraging sign that demand is beginning to rebound.”

In other words, no one really knows what these numbers mean.  Yet even if they did, what good would they be?

For the life of us, we can’t comprehend what value these numbers have.  What we mean is the integrity of economic data has become as questionable as the sincerity of a John Edwards paternity admission. Continue reading →

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Mandated Scarcity in the Land of Fruits and Nuts

Posted on October 9, 2012 by MN Gordon

Last Wednesday night, following the Presidential debate, we stepped outside our back stoop and were greeted with the displeasure of a sulfurous odor.  It singed our nose hairs.  It burned our eyes.  We could practically taste it.

At first we thought it was migrational tailings of the gigantic egg President Obama had just laid in Denver wafting over the Rocky Mountains, through the inland desert states, and across the Los Angeles Basin…before settling over Long Beach and the San Pedro Bay.  But after a little reconnaissance we learned a hiccup at one of the gasoline refineries in the harbor had belched forth the foul odor.

By Thursday morning the air was fresh.  Yet on our way to work we learned that a series of hiccups at refineries across the state had resulted in rapidly escalating gas prices.  A power outage at Exxon Mobile’s Torrance refinery limited its service all week.  Plus, Chevron’s Richmond refinery has been at reduced production after an August 6 fire.

When we left work Thursday evening prices had jumped to $4.40 per gallon for regular unleaded gas. Continue reading →

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