The Do-Re-Mi of Treasury Notes

Posted on December 16, 2022 by MN Gordon

This week brought forth new data points for two of the world’s greatest economic contrivances.

These data points are important not so much because they provide a truthful depiction of reality.  But rather, because in today’s centrally planned economy they can be big movers and shakers for the stock and bond market.

On Tuesday, the Bureau of Labor Statistics released the latest inflation data.  According to the government’s aggregate data fabricators, consumer prices, as measured by the consumer price index (CPI), increased at an annual rate in November of 7.1 percent.

After peaking in June at 9.1 percent, the CPI has steadily declined.  Wall Street was initially delighted on the news.  The S&P 500 quickly jumped 155 points to an interim high of 4,145.  From there it slid over 122 points to close the day at 4,022.

Investors, for their part, thought they’d spotted a clue in the CPI report.  The whole herd of them knew just what the Federal Reserve would do on Wednesday at the conclusion of the December Federal Open Market Committee (FOMC) meeting.  That is, the Fed would increase the federal funds rate by 50-basis points (i.e., 0.5 percent). Continue reading →

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Will Your State Reject the Fed’s Digital Dollar?

Posted on December 2, 2022 by MN Gordon

Personal and political freedoms are inseparable from economic freedom.  To this end, economic freedom is contingent upon an economy that transacts using honest money that’s free from coercion.

Volumes have been written on America’s experience with money of varying veracity.  Here we’ll touch on a few key events.

Article I, Section 8, of the U.S. Constitution empowers Congress to coin money and regulate its value thereof.  Article I, Section 10, specifies that no state shall make anything but gold and silver coin a tender in payments of debts.

The Federal Reserve Act of 1913, passed by the 63rd Congress and signed into law by President Woodrow Wilson on December 23, 1913, established the Federal Reserve System, the central bank of the United States.  The Federal Reserve Act also delegated the right to issue money from Congress to the Federal Reserve.

In this regard, the current U.S. dollar, a Federal Reserve Note, is illegal money.  It is issued by the Federal Reserve – not Congress – in direct violation of the U.S. Constitution.  Moreover, when states collect tax dollars that are devoid of gold or silver coin, they violate the Constitution. Continue reading →

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Gold Shines Bright

Posted on November 25, 2022 by MN Gordon

The mighty U.S. dollar spent a good part of the year beating up on other currencies.  From January to mid-October, the dollar rose 13 percent against the euro, 22 percent against the Japanese yen, and 6 percent against emerging market currencies.

And while the dollar rose less against emerging market currencies than against Europe and Japan, the thrashing was particularly brutal.  Many emerging economies – like Sri Lanka, Zambia, Pakistan, Argentina, Turkey, and others – that borrow in dollars, are now on the hook to repay those loans using their local currencies of diminishing relative value.

Perhaps the worst of the dollar’s rapid rise is over.  We don’t know.  But over the last month the dollar has rolled over from the 20-year high attained on the dollar index.

Specifically, the dollar index is up over 10 percent year-to-date.  Over the last 30-days, however, it has fallen more than 3 percent.

After slipping below 96 cents in September, the euro has risen to nearly $1.04.  The British pound has also bounced from its September all-time low.  The Japanese yen has slightly rebounded from a brutal skid to a 32-year low against the dollar. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 15 Comments