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Disasters Can Happen

Why the Fed Destroyed the Market Economy

coins-912718_960_720Why the Fed Destroyed the Market Economy

by MN Gordon

Economic Prism

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 judgement upon.  They don’t give a rip about questions of small government or big government.  Nor do they have any druthers about the welfare or warfare state.

In effect, they really don’t care.  What’s important to the swing voter is much simpler.  In fact, it can be boiled down to the following essential question.  What have you done for me lately?

The answer to this question, of course, comes back to money.  As far as the swing voter’s concerned, if their brokerage account’s growing they vote the incumbent (Read More....)

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Hanjin Marooning in San Pedro Bay

ocean_liners_1473810175-250x250Hanjin Marooning in San Pedro Bay

by MN Gordon

Economic Prism

Global Trade Reversal

Expansions and contractions in global trade have played out over long secular trends for thousands of years.  The Silk Road, for example, was established by the Han Dynasty of China in 130 BC, and allowed for continuous trade between east and west for nearly 1,600 years.  In addition to economic trade, the Silk Road was also a conduit for culture and knowledge among its network of civilizations.

However, this trade route eventually came to an end.  When the Byzantine (Read More....)

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Shrewd Financial Analysis in the Year 2016

financial_1473809905-250x250Shrewd Financial Analysis in the Year 2016

by MN Gordon

Economic Prism

How to Decipher the News

“Markets make opinions,” says the old Wall Street adage.  Perhaps what this means is that when stocks are going up, many consider the economy to be going great.  Conversely, when stocks tank it must be because the economic sky is falling.

For both scenarios the opinions range far and wide.  A rising NASDAQ may compel a tech aficionado to proclaim we’re on the cusp of a new digital revolution.  Falling manufacturing stocks may compel a protectionist to proclaim it (Read More....)

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Should we buy an extra bag of rice and an additional roll of toilet paper to stock in the pantry?

Emergency FoodYarns, Mysteries, and the CPI

by MN Gordon

Economic Prism

No CPI Change

Several ill-defined economic waypoints were unveiled this week.  Namely, the Labor Department’s July consumer price index report.  According to the government data, on (Read More....)

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The Number One Factor Influencing Fed Monetary Policy

by MN Gordon

Economic Prism

Things Ain’t Right

A brief scan of the financial and economic landscape – both in the U.S. and abroad – offers ample confirmation that we are in the midst of a great reset.  From a feint tickle at the turn of the new millennium to a persistent itch a decade ago, the preponderance of evidence in this regard is now much too painful to ignore.  There’s no denying that things ain’t right.

Debt is increasing while GDP’s stagnating.  Stocks are rising while earnings are declining.  Incomes are flat-lining for the majority of workers while growing by leaps and bounds for the 1 percent.  Plus there’s over $13 trillion of negative-yielding debt.

With all this going on, what’s become lucidly clear is the frank understanding that there’s nothing that can really be done to reverse it.  No executive order.  No monetary (Read More....)

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The Great Stock Market Swindle

by MN Gordon

Economic Prism

Short Circuited Feedback Loops

Finding and filling gaps in the market is one avenue for entrepreneurial success.  Obviously, the first to tap into an unmet consumer demand can unlock massive profits.  But unless there’s some comparative advantage, competition will quickly commoditize the market and profit margins will decline to just above breakeven.

Unfortunately, finding and filling gaps in the market is much easier said than done.  Even the most successful serial entrepreneurs fail more than they succeed.  What’s more, success in one endeavor doesn’t guarantee success in another.

Anyone who has ever developed and marketed a new product from concept through sale knows how difficult it is to achieve profitability.  For every good idea there must be a hundred bad ones.  Yet the only way to really know the (Read More....)

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The Next President’s Debt Burden

by MN Gordon

Economic Prism

The Next President’s Debt Burden

According to the Department of Commerce, U.S. gross domestic product increased at an annual rate of 1.2 percent in the second quarter of 2016.  This, unfortunately, isn’t indicative of the sort of robust economic activity that will grow the economy out of debt.  In fact, as growth is stagnating, deficits are increasing.

The U.S. fiscal year 2015 budget deficit was about $439 billion.  For fiscal year 2016, the federal government is projected to run a deficit of $616 billion.  The upsurge, of roughly $177 billion, amounts to about a 40 percent deficit increase from 2015 to 2016.

Presently, the federal debt is well over 100 percent of GDP.  Obviously, 1.2 percent GDP growth is wholly inadequate to shrink the debt.  To the contrary, 1.2 percent GDP growth in the face of a (Read More....)

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