Bidenvilles for Christmas

Posted on October 29, 2021 by MN Gordon

“I used to be a conspiracy theorist.  But then all the conspiracies I followed turned out to be true.”

The remark was made by a friend and Wealth Prism Letter subscriber over a recent phone conversation.  We’ll have more on this in just a moment.  But first, some of what prompted the comment…

Here in the land of fruits and nuts things have always been a little whacky and wild.  The people and the politics in the state’s urban centers have the uncanny ability to bring out the worst in each other.  The coronavirus travesty has only magnified these character failings.

For example, all the stimmy checks, generous unemployment payments, and eviction moratoriums have had a predictable outcome.  They’ve created a burgeoning class of people who would rather loaf and invite their soul over plying their time and talents toward something gainful.

At 7.5 percent, California’s tied with Nevada for the highest unemployment rate in the country.  For perspective, the U.S. unemployment rate in September was 4.8 percent. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 35 Comments

Walking the Path of Self Destruction

Posted on October 22, 2021 by MN Gordon

Central planners have destroyed the future.  Today we walk the path of their self-destruction…

If you recall, fiscal and monetary policies employed to counter the effects of government mandated lockdowns were supposed to stimulate a self-sustaining economic boom.  Instead, these policies of extreme intervention have stimulated chaos and destruction.

The official inflation rate, as measured by the government’s consumer price index (CPI), is rising at an annualized clip of 5.4 percent.  But that’s nothing.  Alternative inflation rates, which better reflect what consumers are actually experiencing, are double and triple the official CPI.

At the same time, the economy appears to be slowing down…

According to the Atlanta Fed’s GDPNow forecasting model, as of October 19, real gross domestic product (GDP) growth in the third quarter of 2021 is estimated to be just 0.5 percent.  This is down from 1.2 percent on October 15, 6 percent in late August, and 14 percent in May. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 17 Comments

Are You Prepared for the Mass Repricing of Goods and Services?

Posted on October 15, 2021 by MN Gordon

Rising consumer price inflation is not going away.  This, of course, is counter to the “transitory” argument made by Federal Reserve Chairman Jerome Powell earlier this year.

Powell’s cohort, Atlanta Fed President Raphael Bostic, recently admitted inflation is not transitory.  This admission comes with assurances the Fed will properly manage it.  We have some reservations.

The effects of rising consumer prices range far and wide.  For one, the pinch rising prices put on consumers is extraordinarily disruptive.  It acts like a hefty tax…eroding family budgets that are already stretched.  In this ongoing staglation, personal income gains lag far behind rising consumer prices.

Industrial materials and consumer goods companies also feel the pinch.  They can pass on some rising prices to consumers.  They can also absorb through lower profit margins some short term price increases.  But there are natural limits to what price increases can be absorbed and passed along. Continue reading →

Posted in Inflation, MN Gordon | Tagged , , , , | 36 Comments

How to Fight the Investment Enemies Now Mobilizing

Posted on October 8, 2021 by MN Gordon

Default averted!

That was the dispatch made by the popular press on Thursday following word there would be a short-term debt limit extension.  But was a default really averted?

Was a default averted when Nixon closed the gold window and put the world on an irredeemable paper standard?

Naturally, Wall Street didn’t bother considering the long-term effects of Washington’s policies of infinite debt – or the soft inflationary default Congress is engineering.  Instead, Wall Street did what it loves to do most; it bid up the major stock market indexes.

What a difference a week makes.  September may have been painful for stocks.  But the first week of October has been all pleasure.

Once again, Washington has a plan to keep the money spigots flowing.  It’s roughly the same plan that’s been in operation for the last 50 years.  The playbook is real simple: kick the can down the road.

Wall Street generally favors this plan.  More debt, both public and private, has loosely translated to higher stock market indexes.  And higher stock prices make everyone believe they’re getting rich. Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , | 1 Comment