Independent Ideas on the Economy, Financial Markets, and Investing

Everything that’s Wrong with Everything

Posted on March 2, 2012 by MN Gordon

Is the economy improving or stagnating? Are businesses hiring or firing? Is the stock market a buy or a sell? Will monetary inflation prevail over debt deflation?

Quite honestly, we don’t know the answers to these questions. Nonetheless, we have some ideas on what we think the answers should be. More important than what we think, however, is what’s going on…and how it’s making thoughtful ruminations on markets and political economies such a muddled mess…

“We have Monetary Anarchy running riot, where the elastic band between the real economy and the current liquidity-fuelled markets is stretched further and further beyond credulity,” noted Bob Janjuah, head of tactical asset allocation at Nomura, earlier this week.

No doubt, things are going haywire. Just look around. Bubbles are inflating nearly everywhere. Stocks, oil, food, copper…you name it, all are going up. In fact, two days ago we paid $4.27 per gallon for gas. Yet, at the same time, the actual economy’s hardly improving. Continue reading →

Posted in Inflation, MN Gordon | Tagged ben bernanke, bubble, currency, debt, DOW, euro, federal reserve, monetizing debt | 1 Comment

Reckoning Time and Money

Posted on February 28, 2012 by MN Gordon

It all seems so systematic, arranged, and orderly. Sixty seconds make a minute, 60 minutes make an hour, 24 hours make a day, and one day equals one complete rotation of the planet earth.

About every 30 days the moon orbits the earth – which is one month. And every 12 months the earth orbits the sun – which is one year.

So far so good…right?

But here’s where the nice and neat order of it all breaks down. Because if you try to measure one of earth’s orbits of the sun in days, it’s not so divinely tidy. For it takes 365 days plus an inconvenient 6 hours.

Nonetheless, we don’t let these inconvenient 6 hours hamper our perfection. We’re humans. We innovate, invent, and make the world in our image. And when the numbers don’t jive, we do what must be done – we fudge them.

We create an off balance account, we concoct a new theory, we contrive a negative amortization loan, we trade our autonomy to the dominion of central bankers…and we invent leap year. Continue reading →

Posted in Inflation, MN Gordon | Tagged currency, debt, default, dollar, gold, liberty, saving | Leave a comment

Obama’s Budget is Every Investor’s Worst Nightmare

Posted on February 24, 2012 by MN Gordon

Obama’s Budget is Every Investor’s Worst Nightmare
By Louis Basenese, Wall Street Daily

It doesn’t matter what political party you pledge your allegiance to.

If you’re a dividend investor – heck, if you’re an investor of any sort – you need to adamantly oppose President Obama’s proposed 2013 budget.

Again, this isn’t about politics. It’s about investing. Read on to find out why… and then, speak up!

Higher Taxes and Lower Yields, Here We Come!

Earlier this week [last week], President Obama unveiled his proposed budget for the 2013 fiscal year. It includes roughly $2 trillion in new taxes and fees. And the bulls-eye is squarely positioned on investors, particularly dividend investors.

Specifically, the budget calls for increasing the top tax rate on qualified dividends to 39.6 percent, up from 15 percent. If we factor in the surcharge included in the healthcare reform package, the top dividend tax rate jumps to 43.4 percent.

At face value, you already know that the impact on after-tax yields would be significant. Continue reading →

Posted in Louis Basenese, Stock Market | Tagged dividends, government meddling, obama, taxes | Leave a comment

The Hell of Technocratic Prevarication

Posted on February 21, 2012 by MN Gordon

“…and the will of Zeus was moving toward its end.”
– Homer, The Iliad

Athens’ Burning

The burden of being on top ultimately weighs a civilization down. Success is overreached. Advancement becomes unsustainable. Then, when everyone least expects it, something slips…and the seemingly impossible happens. The money, the military, and the people’s dignity collapse and fold in short order.

Take Athens, for instance. It lost its edge over 2,400 years ago. When the Peloponnesian War began, in 431 BC, Athens was the strongest city-state in Greece. By the time the war was over, just 27 years later, it was reduced to a state of complete devastation.

Moreover, the close of the Peloponnesian War marked the ignoble end to the golden age of Greece. Athens was never able to re-gain its pre-war prosperity or preeminence and the populations psyche was forever shattered. To this day the people of Athens still carry a chip on their shoulder over it.

For example, last week protestors lit buildings in central Athens on fire. Continue reading →