There’s a Serious Flaw to the Team Powell-Yellen Inflation Scheme

Posted on March 26, 2021 by MN Gordon

If you’re a wage earner, retiree, or a lowly saver, your wealth is in imminent danger.

A lifetime of schlepping and saving could be rapidly vaporized over the next several years.  In fact, the forces towards this end have already been set in motion.

Indeed, there are many forces at work.  But at the moment, the force above all forces is the extreme levels of money printing being jointly carried out by the Federal Reserve and the U.S. Treasury.

Fed Chairman Jay Powell and Treasury Secretary Janet Yellen have linked arms to crank up the printing presses in tandem.

This is what’s driving markets to price things – from copper to digital NFT art – in strange and shocking ways.  But what’s behind the money printing?

Surely it’s more than progressive politics – under the guise of virus recovery – run amok.

Where to begin?

The U.S. national debt is a good place to start.  And the U.S. national debt is now over $28 trillion.  Is that a big number? Continue reading →

Posted in Government Debt, MN Gordon | Tagged , , , , | 1 Comment

The Great Donkification

Posted on March 19, 2021 by MN Gordon

“Right here, boys!  Right here!  Get your cake, pie, dill pickles, and ice cream!  Eat all you can!  Be a glutton!  Stuff yourselves!  It’s all free, boys!  It’s all free!  Hurry, hurry, hurry, hurry!”
– Pleasure Island voiceover, Walt Disney’s Pinocchio (1940)

Welcome To Pleasure Island!

Did you get your stimmy check, yet?  If so, what are you going to do with it?

Are you going to park it in your savings account, pay down debt, and pay off a few bills?  Are you going to buy Chinese ‘stonks’, cryptocurrencies, and digital NFT art?

What about a new iPhone, fancy dinners, or a plane ticket to Cabo?  How about a new living room rug, a wood pellet grill, or a 75-inch flat screen TV with a sound bar?

The collective answer to these questions is the difference between deflation, asset price inflation, and consumer price inflation.

Billionaire folk hero Warren Buffett says you should use your stimmy check to “pay off credit card debt.”  His rationale is sound enough: Continue reading →

Posted in Government Debt, MN Gordon | Tagged , , , , , | 5 Comments

Fifty Basis Points To Disaster

Posted on March 12, 2021 by MN Gordon

Fiscal stimulus, including the latest $1.9 trillion American Rescue Plan Act, is a terrible joke.  And the means for financing it is a terrible fraud.  A massive deficit, piled upon a mammoth debt, made possible by dollar debasement.

Extreme credit market intervention by the Federal Reserve is a prerequisite.  So, too, is the utter denial of price inflation by the Bureau of Labor Statistics.  This week’s consumer price index (CPI) propaganda reported the all items index increased 0.4 percent in February and 1.7 percent over the last 12 months.

The combination of extreme credit market intervention and bogus inflation reporting is making a mockery of credit markets.  Where to begin?

When you purchase a Treasury note you are lending money to the government for a specified period of time (i.e. 30 days to 30 years) at a fixed rate of interest or yield.  The risk of default on Treasuries has generally been considered nonexistent.

The federal government, with assistance from the Federal Reserve, can always print money to pay its debts.  But this isn’t without risks. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 52 Comments

Betting The Farm On Moonshots

Posted on March 5, 2021 by MN Gordon

Ashley Revell of London had a mad itch he needed to scratch.

The year was 2004.  The initial tickle came from a casual drinking conversation with a friend.  Revell couldn’t let it go.

The idea, in short, required Revell to liquidate all his possessions, travel to Las Vegas, and ‘bet it all’ on one spin of the roulette wheel.  The idea was sheer lunacy.  Yet Revell was just crazy enough to go through with it.

Revell sold off all his possessions over a six month period and traveled to the Plaza Hotel and Casino in Las Vegas.  Then, one Sunday morning in April 2004, with his mom and dad standing behind him, along with a film crew, Revell placed $135,300 on red.

What happened next?  Here’s Revell’s account:

“That spin was the most amazing moment of my life.  It is a cliché but time did stand still.  It was just complete calm because I had done all the hard work.

“Everything had all been sold.  I had no possessions.  I had decided whether to go red or black.  There were no more decisions to make – it was a complete feeling of freedom.

“The ball sort of bobbled around and then landed in what I thought was red but it disappeared slightly from view.  I looked around and, as the wheel spun back into view, there it was resting in number seven.  Red. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | 23 Comments