Are You Prepared for $200 per Barrel Oil?

Posted on February 4, 2022 by MN Gordon

Most days unfold with expected familiarity.  The sun rises.  The sun sets.  The hours in between flow from one routine to the next.

There are subtle, yet predictable changes.  The days are longer in the summer and shorter in the winter.  Apples are more abundant in fall than in spring.

But, for the most part, today is much like yesterday.  And tomorrow will generally be like today.  No better.  No worse.  In short, your morning cup of coffee will taste just as bold or bitter tomorrow as it did yesterday.

Yet every now and again we’re greeted with an astonishing surprise.  Something seemingly impossible happens.  There are days, no doubt, when the sky’s falling.

For example, the sky was falling on September 16, 2008, when Lehman Brothers vanished from the face of the earth.  That was the day black swans descended upon credit markets like common ravens upon fresh Southern California road kill.

Money market shares of the Reserve Primary Fund did the impossible.  They broke the buck.  Net asset value (NAV) fell to $0.97 cents a share.  Who anticipated that? Continue reading →

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Los Angeles Tackles Zombies Ahead of Super Bowl

Posted on January 28, 2022 by MN Gordon

“What the hell is going on?” California Governor, Gavin Newsom

Gender X?

The sun always shines bright over the Golden State.  Even in January.  But, beneath the sunshine, darkness rages in the land of fruits and nuts.

For example, State Senator Scott Wiener – a monster – recently introduced a bill that would permit children 12 and older to be vaccinated against COVID-19 without their parent’s knowledge or consent.  According to Wiener, this bill is consistent with current state law that allows teens to have abortions and obtain birth control without telling their parents.

Yet Wiener’s bill may be finished.  Because his cohort, State Senator Dick Pan, has introduced a bill that would require all children to be vaccinated against COVID-19 to attend K-12 schools regardless of personal beliefs.  Not vaccination?  Then no school.

Perhaps, this is for the best.  Getting kicked out of school at this late stage in the decline and fall of western civilization is a major blessing.  What kid deserves an institutional education from freaks and rejects? Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , , | 29 Comments

The Greatest Crackup the World’s Ever Known

Posted on January 21, 2022 by MN Gordon

By now, anyone with half an inkling of curiosity about why prices and values don’t add up has traced the divide back to the money itself.  It’s not hard to see.

Asset prices, like houses and the major stock market indexes, have lost all visible connection with the underlying economy.  However, wage growth has stagnated; over the last 40 years low level wages have only increased by $0.32 per hour in real inflation adjusted terms.  Stocks and residential real estate, at the same time, have gone to the moon.

Even with the NASDAQ’s 11.2 percent decline from its all-time closing high set on November 19, the index is still up over 110 percent from its March 2020 low.  What will it take for the NASDAQ to crash back to earth?

Something else that has gone to the moon is government debt.  In 1980, the national debt was $908 billion.  Today it’s over $29.8 trillion.  That’s an increase of over 3,181 percent.  Over this time, however, gross domestic product (GDP) has only increased 632 percent – from $2.86 trillion to $20.94 trillion. Continue reading →

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

How Central Planners Corrupted the World

Posted on January 14, 2022 by MN Gordon

The impossible happened in the late-1970s.  Inflation and unemployment simultaneously went vertical.  Leading economists were baffled.  This contradicted their academic training.

The Phillips curve said there’s an inverse relationship between inflation and unemployment.  When unemployment goes down, inflation goes up.  Conversely, when unemployment goes up, inflation goes down.

Economist William Phillips first sketched his curve using wage rates and unemployment data in the UK in the years 1861 to 1957.  The depiction of explicable order was impressive.  And it provided an economic model central planners could use to somehow optimize inflation and unemployment rates through economic intervention.

How could it be, in the late-1970s, that both inflation and unemployment went up in tandem?  According to the Phillips curve they were mutually exclusive.

In reality, the Phillips curve was elegant nonsense.  Like most elegant nonsense, it was right until the precise moment it was wrong. Continue reading →

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