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MN Gordon

MN Gordon

MN Gordon is President and Founder of Direct Expressions LLC, an independent publishing company. He’s the Editorial Director and Publisher of the Economic Prism – an E-Newsletter that brings clarity to the muddy waters of economic policy and targets investment opportunities for acquiring considerable wealth. The Economic Prism is written peering through a prism of free market principles, limited government, and individual liberty.

Articles by MN Gordon

Simple Math of Bank Horse-Puckey

3 days ago

The Raw Deal
We stepped out on our front stoop Wednesday morning and paused to take it all in.  The sky was at its darkest hour just before dawn.  The air was crisp.  There was a soft coastal fog.  The faint light of several stars that likely burned out millennia ago danced just above the glow of the street lights.
 
And this is what they saw watching the sky from Mt. Wilson that night…
 

After a brief moment, we locked the door behind us and got into our car.  Springtime southern California mornings are exquisitely pleasant.  The early morning drive to downtown Los Angeles, on the other hand, is exquisitely painful.
Nonetheless, we make the best of it like we make the best of a trip to the dentist – or a visit with our accountant.  If anything, it affords us the opportunity to do

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Hell To Pay

7 days ago

Behind the Curve
Economic nonsense comes a dime a dozen.  For example, Federal Reserve Chair Janet Yellen “think(s) we have a healthy economy now.”  She even told the University of Michigan’s Ford School of Public Policy so earlier this week.  Does she know what she’s talking about?
 
Somehow, this cartoon never gets old…
 

If you go by a partial subset of the ‘official’ government statistics, perhaps, it appears she does.  The unemployment rate is at 4.5 percent, which is considered full employment.  What’s more, inflation is ‘reasonably close’ to the Fed’s 2-percent inflation target.  But what does this mean, really?
According to Fed Chair Yellen, it means that now’s the time to tighten up the nation’s monetary policy.
 
Behold this display of awesomeness, citizen. Doesn’t it prove

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Credit Contraction Episodes

16 days ago

Approaching a Tipping Point
Taking the path of least resistance doesn’t always lead to places worth going.  In fact, it often leads to places that are better to avoid.  Repeatedly skipping work to sleep in and living off credit cards will eventually lead to the poorhouse.
 
Sometimes the path of least resistance turns out to be problematic
 

The same holds true for monetary policy.  In particular, cheap credit policies that favor short-term expediency have the effect of layering society up with an abundance of long-term mistakes.  Artificially suppressed interest rates via central bank asset purchase schemes are not without consequences.
What’s more, once set in motion these consequences don’t stop until they’ve fully run their course.  The booms of plentiful credit must always be

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Failure to Launch

24 days ago

Identified Flying Objects
The future is here and it’s not all it was cracked up to be.  For example, one of the great disappointments of the 21st century, thus far, is the lack of flying cars.  Wasn’t this supposed to be the signature achievement of Tomorrowland?
 
The Terrafugia flying car – this one was actually said to be in development a little while ago with the maiden flight of the prototype scheduled for 2018. Is the Age of the Jetsons finally beginning? One thing is clear: once this car becomes widely available, we can finally go about abolishing the State. The question “Who will build the roads?” will once and for all be laid to rest!
Image credit: Terrafugia
 

The frustration was aptly expressed by PayPal co-founder and early Facebook investor Peter Thiel when he said, “We

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March to Default

March 24, 2017

Style Over Substance
“May you live in interesting times,” says the ancient Chinese curse.  No doubt about it, we live in interesting times.  Hardly a day goes by that we’re not aghast and astounded by a series of grotesque caricatures of the world as at devolves towards vulgarity. Just this week, for instance, U.S. Representative Maxine Waters tweeted, “Get ready for impeachment.”
 

Well, Maxine Waters is obviously right – impeaching the president is an urgent task of the utmost importance. As everybody knows, he is best friends with Vladimir Putin, the shirtless barbarian who rules the Evil Russian Empire (they were seen drinking kompromat together in Moscow, a vile Russian liquor that reportedly tastes a bit like urine. Senator McCain has the details on that story). And as Maxine

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The Long Run Economics of Debt Based Stimulus

March 18, 2017

Onward vs. Upward
Something both unwanted and unexpected has tormented western economies in the 21st century.  Gross domestic product (GDP) has moderated onward while government debt has spiked upward.  Orthodox economists continue to be flummoxed by what has transpired.
 
What happened to the miracle? The Keynesian wet dream of an unfettered fiat debt money system has been realized, and debt has been duly expanded at every opportunity.  Although the fat lady has so far only cleared her throat (if quite audibly, in 2008) and hasn’t really sung yet, it is already clear that calling this system careening toward a catastrophic failure.
 

Here is the United States, since the turn of the new millennium (starting January 1, 2001) real GDP has increased from roughly $10.5 trillion to $18.6

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Off the Beaten Path in Mesoamerica

March 10, 2017

Greeted by Rooster
There’s an endearing quality to a steadfast rooster call at the crack of dawn when overheard from a warm country farmhouse.  There’s a reassuring charm that comes with the committed gallinaceous greeting of daybreak that’s particularly suited to a rural ambiance.  The allure of a morning cock-a-doodle-doo somehow falls flat in all other settings.
 
Good morning everyone! Before meteorological forecasts were available on TV and smart phones, people had to rely on the wisdom of rugged outdoorsmen to get their weather-related updates. In this context we would like to let you in on this valuable old piece of Mexican country lore: “When from the compose pile you hear the rooster declaim, the weather will change – or it will stay the same”. OK, we actually made that up, but

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A Mess 30 Years in the Making

March 4, 2017

Promises of Slop
 
“We have assembled a best-in-class team of policy advisors to drive President Trump’s bold plan for job creation and economic growth.”
– Gary Cohn, Chief Economic Advisor to President Trump

 
The art and science of spending other people’s money is not an occupation suited to just anyone.  Rather, it’s a skill reserved for the professional world-improver.  To be successful, one must act with a zealous devotion to uplifting the down and out, no matter the cost.
 
Donald Trump’s chief economic advisor Gary Cohn – as some observers have noted, he represents one of the factions in the wider circle of economic advisors (there are many advisors who are not members of an official body such as the Council of Economic Advisors, but reportedly have the president’s ear). This is

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The Dow Speaks: “In Trump We Trust”

February 24, 2017

The Worst Job in the World
The rewards of being the President, these days, are few and far between.  Just ask President Trump.  The work hours are terrible, the pay is far less than that of a corporate CEO, and you’re endlessly surrounded by shabby politicians.  What’s more, the  hand towels  aboard Air Force One have the shoddy over washed roughness of those at a turnpike Motel 6.  But that’s not the worst of it.
 
While we’re at it, let us introduce you to the runner-up, i.e., the second-worst job in the world. We are not sure what job title this poor man actually has (elephant rectum administrator? Pachyderm intestinal inspection officer?), but we sure hope he’s at least getting paid well.
Photo via Top Media Trends
 

Any and all efforts to remake foreign policy to address the

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The Art and Pseudoscience of Monetary Policy

February 17, 2017

Definitely Maybe
Everyone’s got a plan for sale these days.  In fact, there are so many plans out there we cannot keep up with them all.  Eat celery sticks and lose weight.  Think and grow rich.  Stocks for the long run.  Naturally, plans like these run a dime a dozen.
 
All social engineers who get to impose their harebrained schemes on the rest of the world through the coercive powers of the State, as well as all armchair planners regaling us with their allegedly “better plans”, should have this highly perceptive quote by Robert Burns tattooed on their foreheads. In case you’re wondering, “gang aft a-gley” is slightly old English for “usually turn out to be total crap”. The second part that points out that as a rule, we get nothing but grief and pain instead of promised joy, is

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When Trumponomics Meets Abenomics

February 11, 2017

Thirty Year Retread
What will President Trump and Japanese Prime Minister Shinzo Abe talk about when they meet later today? Will they gab about what fishing holes the big belly bass are biting at? Will they share insider secrets on what watering holes are serving up the stiffest drinks? [ed. note: when we edited this article for Acting Man, the meeting was already underway]
 

Japan’s prime minister Shinzo Abe, a dyed-in-the-wool Keynesian and militarist, meets America’s new CiC in the somewhat ostentatiously appointed Trump Tower. They look happy.
Photo credit: Reuters
 

Indeed, these topics are unlikely. Rather, what they’ll be discussing is cooperative trade, growth, and employment policies between their respective national economies. They’ll also talk about currency debasement

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Don’t Blame Trump When the World Ends

February 4, 2017

Alien Economics
There was, indeed, a time when clear thinking and lucid communication via the written word were held in high regard. As far as we can tell, this wonderful epoch concluded in 1936. Everything since has been tortured with varying degrees of gobbledygook.
 
One should probably not be overly surprised that the abominable statist rag Time Magazine is fulsomely praising Keynes’ nigh unreadable tome. We too suspect that this book has actually lowered the planet-wide IQ – in fact, similar to Marx’ Das Kapital, it has done permanent damage. We have to admit that we have read it ourselves (and what a slog it was!) – contrary to Keynes himself, who once published a scathing critique of Mises’ Theory of Money and Credit without reading even one word of it, we prefer to actually read

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Adventures in Currency Debasement

January 30, 2017

Rekindling the Dollar Debasement Strategy
The U.S. dollar, as measured by the dollar index, has generally gone up since mid-2014. The dollar index goes up when the U.S. dollar gains strength (value) against a basket of currencies, including the euro, yen, pound, and several others. Conversely, the dollar index goes down when the U.S. dollar loses value.
 
The US dollar has been quite strong since retesting its previous lows in 2011 (note that it has been even stronger against many currencies not included in DXY). Politicians and central bankers never seem to be content with a strong currency. This is quite bizarre, as a strong currency greatly benefits consumers, i.e., everyone. Politicians seem to believe it is better to create currency-related benefits for what is really only a small

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The Right Stuff

January 20, 2017
The Right Stuff

Pledges for Trump
 
“You boys know what makes this bird go up?  Funding makes this bird go up.  That’s right.  No bucks, no Buck Rogers.”
– Gordon Cooper and Gus Grissom, The Right Stuff (film)

 
Things are looking up for the United States economy in 2017.  You can just feel it.  Something great is about to happen.
 
Sam Sheppard in “The Right Stuff” –  a 1983 docudrama about the Mercury 7 program and “the seats-of-the-pants approach of the people involved in the space program” (according to IMDB).
Photo credit: Ladd Company
 

Earlier this week, for example, after meeting with the incoming President, Bayer and Monsanto announced they will spend at least half of their agriculture research and development budget – approximately $8 billion – in the U.S. over the next six years.  It’s

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Trump’s Plan to Close the Trade Deficit with China

January 14, 2017
Trump’s Plan to Close the Trade Deficit with China

Rags to Riches

Jack Ma is an amiable fellow.  Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl.  At a moment of peak inspiration, he executed his first search engine request by typing in the word beer.
 
Jack Ma, founder and CEO of Alibaba, China’s largest e-commerce firm. Once he was a school teacher, but it turned out that he had enormous entrepreneurial talent and that the world of wheelers, dealers, movers and shakers was more his speed. Today he is one of the world’s small number of genuine self-made multi-billionaires.
Photo credit: DFIC
 

The search results had such a profound impact on Ma that he returned home to China and immediately started his first internet business.  After several tries he hit it big with Alibaba.  So

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The Great El Monte Public Pension Swindle

January 7, 2017
The Great El Monte Public Pension Swindle

Nowhere City California
There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years.  There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island.  El Monte, California, is one of those places.
 
Advice dispensed on Interstate 10. We agree with it. Better don’t.
Photo credit: Rob Hann
 

How El Monte came to be is a story shared with many of its adjoining San Gabriel Valley cities.  Boom, bust, and rapid transformation from an agricultural area to working class artery of a burgeoning megalopolis, vomited out a multitude of enduring mistakes.

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Global Recession and Other Visions for 2017

December 31, 2016
Global Recession and Other Visions for 2017

Conjuring Up Visions
Today’s a day for considering new hopes, new dreams, and new hallucinations.  The New Year is here, after all.  Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad.  But what else will happen?
 
Image of a recently discarded vision…
Image by Michael Del Mundo
 

Here we begin by closing our eyes and slowing our breath.  We let our mind role back into the gray matter of our brain.  We wait patiently for new neurological connections to open up.  Then, ever so subtly, visions of the year ahead come into focus.
Will stocks go up or down?  What about gold and Treasury bonds?  Will the economy expand or contract?  Are we fated for World War III?  Who will win the Super Bowl?

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Wreck the Halls

December 24, 2016
Wreck the Halls

Arrested Development
Despite the best efforts of the bulls to make history happen, they’ve been unable to ‘git-r-done.’  At the time of this writing, the Dow is facing another bout of arrested development; it has yet to notch 20,000 for the very first time.
 
The venerable Industrial Average has finally bubbled its way close to 20,000. No-one know as yet from whence the transition from comedy & farce to total horror-show will occur, but the eventual denouement of the post-GFC echo bubble promises to be quite a riveting experience as well – perhaps even more so than last time – click to enlarge.
 

What a feat it will be when this remarkable, but trivial, event comes to pass.  After a near eight year run, the Dow will likely eclipse this exquisitely round numeric threshold in the very

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Has the Fed Turned “Hawkish?”

December 17, 2016
Has the Fed Turned “Hawkish?”

Juiced
Stimulus, in a general sense, is something that causes an action or response.  A ringing alarm clock may prompt someone to exit their slumber.  Or a fist to the gut may force someone to gasp for breath.
 
A classic case of gut-punch stimulus application. Now, all you have to do is imagine that the big person being stimulated is the economy. What should be your next question? Right! Will it achieve escape velocity?
 

Stimulus can come in many forms and varieties.  It can come in the form of a stick; do this and you won’t get whacked over the head.  So, too, it can come in the form of a carrot; do that and you’ll get a reward.
Other forms of stimulus can produce a short, burst like, reaction.  The caffeine in a cup of coffee, for instance, will temporarily reduce drowsiness.  Yet

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Smart Programs of Capital Destruction

December 10, 2016
Smart Programs of Capital Destruction

Too Smart to Think
These days everything must be smart.  There are smart cities, smart grids, smart policies, smart TVs, smart cars, smart phones, smart watches, smart shoes, and smart glasses.  There’s even something called smart underwear.
 
Modern-day wedgie-proof thinking drawers. How was life even possible before them? An area of the body not usually known for its thinking prowess is suddenly smarting up!
 

Before long everything around us will be so smart we’ll no longer have to do one critically important thing.  We’ll no longer have to think; smart algorithms will think for us.  What’s more, the possibilities for not thinking are seemingly limitless.
Just this week, for instance, in an effort to sound smart, Chicago Fed President Charles Evans indirectly advised President elect

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Attaining Self-Destruct Velocity

December 2, 2016
Attaining Self-Destruct Velocity

Bad Monday
Some Monday mornings are better than others.  Others are worse than some.  For one Amazon employee, this past Monday morning was particularly bad.
No doubt, the poor fellow would have been better off he’d called in sick to work.  Such a simple decision would have saved him from extreme agony.  But, unfortunately, he showed up at Amazon’s Seattle headquarters and put on a public and painful display of madness.
 
Good-bye cruel world! On this our planet, ignoring air friction, wind and other buoyancy-enhancing obstacles for the sake of this example, someone jumping off a building that is high enough will eventually attain a terminal velocity of 122 miles per hour. The acceleration is 32.2 feet per second², which is why one has to start from an appropriate height (a skydiver in a

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Sinners and Saints

November 24, 2016
Sinners and Saints

Somewhere Between Heaven and Hell
Ordinary ideals of Americana range as far and wide as the North American continent.  The valued conviction of one American vastly differs from that of another.  Joe from Santa Fe may have little connection with Joe in South Bend or Joe in South Boston.
 
Heaven and Hell
Illustration credit: Black Sabbath
 

One may celebrate adventures in mysticism.  Another may find inspiration sitting in a college football grandstand.  While a third struggles to free himself of the orthodox hobgoblins that suffocate his soul.
Until Donald Trump came along, the story of the national struggle, as outlined by the discredited mainstream media, had been told with delicate regularity.  The news was professed from the locus of the two party political system… any diverging

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Putting an End to the Regulatory Industry

November 18, 2016
Putting an End to the Regulatory Industry

Gross Regulatory Overburden
Corporate life in America these days is fraught with tedium.  First the MBAs imposed their silly six sigma processes and reduced workers to mere widgets. Then the regulators went through and squashed out any fun that remained.
Gone are the days when shrewd eccentrics could get rich using techno-babble to hawk the Turbo Encabulator.  Alas, there are rules and regulations stymieing all creativity.  In fact, as a matter of law, such restrictions are shoved in the workers’ face each morning as they fill up their morning cup of coffee.
 

Bud Haggert presents the ground-breaking Turbo Encabulator! This thing has practically everything. Unilateral phase detractors! Automatically synchronized cardinal grammeters! Need farescent skor motion? No problem! Now you can

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The One Thing that Will Change Everything

November 5, 2016

Ticking Time Bomb
 
“There are more things in heaven and Earth, Horatio, than are dreamt of in your philosophy.”
– William Shakespeare, Hamlet

 
The American populace counts down to Election Day with impatient intent.  Will their party man occupy the White House come January 21, 2017?  Or will their party woman occupy a federal prison cell?
 
Don “Groper” Trump and Hillary “Private Position” Lincoln.
 

These are questions that only the good wisdom of time can answer.  Here at the Economic Prism we watch with indifferent curiosity.  We don’t think either candidate’s worthy of high office.  But we’re eager to know the election outcome, nevertheless.
The real noteworthy thing taking place today, that will have a real impact on your life, has nothing to do with who will be the next

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Prepare for the Unthinkable

October 22, 2016

  Red Ink Growth and profits mask a variety of problems.  They hide business inefficiencies and the money suck of corporate adminis-trivia.  They also conceal unproductive staff.   The final career leap   But most of all growth and profits obscure the extreme value subtracting forces of bloated management teams.  During good times it is …

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Meet Your New Stimulus Allocation Czar

October 14, 2016

  March Towards Midnight The march towards midnight is both stirring and foreboding.  Like a death row inmate sitting down to savor his last meal, a grim excitement greets the reality of impending doom.  Thoughts of imminent mortality haunt each bite.   Tic-toc, tic-toc…   As far as the economy’s concerned, there’s no stopping its march towards midnight.  The …

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Doomed to Failure

October 7, 2016

  Larded Up and Larded Over We’ve been waiting for the U.S. economy to reach escape velocity for the last six years.  What we mean is we’ve been waiting for the economy to finally become self-stimulating and no longer require monetary or fiscal stimulus to keep it from stalling out.  Unfortunately, this may not be …

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Mass Money Debauchery

October 3, 2016

  Debauchery The present day offers the opportunity for many incredible experiences.  Perhaps one of the most rewarding of all is bearing witness to the final days before the greatest economic crackup the world’s ever known.  Not since Nero clipped coins in 64 A.D. and fiddled as Rome burned has there been such an intolerable …

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Harvard Report Whiffs on Fed Price Fixing Scheme

September 23, 2016

  A Crucial Priority This month the bright fellows at Harvard Business School came out with a new report.  A lot of work went into its preparation.  In fact, the report contains the culmination of five years of in-depth analysis of U.S. competitiveness and surveys of global business leaders and the general public.   Harvard Business …

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Why the Fed Destroyed the Market Economy

September 16, 2016

  What Have You Done for Me Lately? Swing voters are a fickle bunch.  One election they vote Democrat.  The next they vote Republican. For they have no particular ideology or political philosophy to base their judgment upon.   The primacy of the wallet.   They don’t give a rip about questions of small government …

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