Real High Crimes and Misdemeanors

Posted on December 20, 2019 by MN Gordon

Christmas is no time to be given the old heave-ho.  This is a time of celebration, redemption, and excess libation.  A time to shop ‘til you drop; the economy depends on it.

Don’t get us wrong.  There really is no best time to receive the dreaded pink slip.  But Christmas is the absolute worst.  Has this ever happened to you?

Well, believe it or not, this is precisely what House Speaker Nancy Pelosi and her Democrat degenerates in the House did this week with their partisan impeachment of President Trump.  Not even Ebenezer Scrooge had a cold enough heart to fire Bob Cratchit on Christmas.  In fact, Scrooge gave Cratchit Christmas day off – with pay.

For the record, Trump is a repulsive fellow.  He chows Big Macs in bed and bloviates sulfurous gas back at the boob tube.  After that, he feeds his resentments over a phone call with Sean Hannity.  Then he uncorks on twitter.  The sequence repeats every night and rolls into the morning like clockwork.

Perhaps this sort of behavior is beneath the stature of an esteemable President.  But so what?  It’s remarkably entertaining. Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , | 5 Comments

Banana Republic Money Debasement In America

Posted on December 13, 2019 by MN Gordon

There are many falsehoods being perpetuated these days when it comes to money, financial markets, and the economy.  But when you cut the chaff, three related facts remain: Uncle Sam needs your money.  He needs a lot of your money.  And he needs it bad!

According to the Congressional Budget Office, the federal budget deficit for the first two months of fiscal year 2020 is $342 billion.  This amounts to $36 billion more than the deficit recorded during the same period last year.  At this rate, Washington’s going to add over $1 trillion to the national debt in FY 2020.

Still, the figures from the CBO aren’t all bad.  Revenues in October and November of 2019 were 3 percent higher than they were in October and November of 2018.  Regrettably, outlays for these two months were 6 percent higher in 2019 than they were in 2018.

Jacks and Jennets both know from experience that taking three steps forward and six steps back is an inefficient way to lose ground.  They also know that the longer this goes on the more ground you lose.  So, too, they know that the more ground you lose the harder it is to make up. Continue reading →

Posted in Inflation, MN Gordon | Tagged , , , , | 11 Comments

Every Bubble Eventually Finds its Pin

Posted on December 6, 2019 by MN Gordon

The transfer of wealth from workers and savers to governments and big banks continued this week with Swiss-like precision.  The process is both mechanical and subtle.  Here in the USA the automated elegance of this ongoing operation receives little attention.

NFL football.  EBT card acceptance at Del Taco.  Adam Schiff’s impeachment extravaganza.  You name it.  Bread and circuses like these – and many others – offer the American populace countless opportunities for chasing the wild goose.

All the while, and with little fanfare, debts pile up like deadwood in Sequoia National Forest.  These debts, both public and private, stand little chance of ever being honestly repaid.  According to the IMF, global debt –  both public and private – has reached an all-time high of $188 trillion.  That comes to about 230 percent of world output.

Certainly, some of the private debt will be defaulted on during the next credit crisis and depression.  But when it comes to the public debt, governments do everything they can to prevent an outright default.  Central banks crank up the printing press and attempt to inflate it away. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | 17 Comments

The Fed’s Answer to the Ghastly Monster of its Creation

Posted on November 29, 2019 by MN Gordon

The launch angle of the U.S. stock market over the past decade has been steep and relentless.  The S&P 500, after bottoming out at 666 on March 6, 2009, has rocketed up over 370 percent.  New highs continue to be reached practically every day.

Over this stretch, many investors have been conditioned to believe the stock market only goes up.  That blindly pumping money into an S&P 500 ETF is the key to investment riches.  In good time, this conditioning will be recalibrated with a rude awakening.  You can count on it.

In the interim, the bull market may continue a bit longer…or it may not.  But, to be clear, after a 370 percent run-up, buying the S&P 500 represents a speculation on price.  A gamble that the launch angle furthers its steep trajectory.  Here’s why…

Over the past decade, the U.S. economy, as measured by nominal gross domestic product (GDP), has increased about 50 percent.  This plots a GDP launch angle that is underwhelming when compared to the S&P 500.  Corporate earnings have fallen far short of share prices. Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , | 14 Comments