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Disasters Can Happen

Prepare for the Unthinkable

by MN Gordon

Economic Prism

Red Ink

Growth and profits mask a variety of problems.  They hide business inefficiencies and the money suck of corporate administrivia.  They also conceal unproductive staff.

But most of all growth and profits obscure the extreme value subtracting forces of bloated management teams.  During good times it is unclear what these smug fellows do.  During bad times it is lucidly clear that most of them ain’t worth a darn.

When the profits inevitably recede, the senior executives, with their silly 24 point project reviews and cumbersome project execution requirements, appear lost.  They’re left exposed, with their pants down, and without a clue in the world as to what business it is they’re actually in.  What the heck have they been doing all this time?

Where does the money come from?  How is it spent?  Over (Read More....)

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Meet Your New Stimulus Allocation Czar

department_of_treasury_seal_2895964373by MN Gordon

Economic Prism

March Towards Midnight

The march towards (Read More....)

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Mass Money Debauchery

by MN Gordon

Economic Prism

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 collection of dingleberries in imperial office.

John Maynard Keynes, the godfather of modern day economic planning, in his 1919 work, The Economic Consequences of the Peace, wrote: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.”

Incidentally, Keynes attributed this acute insight to another innovative central planner, one Vladimir Lenin.  Regrettably, these two visionaries predicted today’s present state of affairs with remarkable (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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Guided By Nonsense

Crisisby MN Gordon

Economic Prism

“Read the directions and directly you will be directed in the right direction.” — Lewis Carroll

Seven Year Achievement

U.S. consumers are at it again.  After a seven year hiatus they’re once again doing what they do best.  They’re buying stuff.

According to the Commerce Department, personal (Read More....)

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China’s $6.6 Trillion Toxic Loan Problem

Chinaby MN Gordon

Economic Prism

Rotting Vegetables

“As long as you’re green, you’re growing.  As soon as you’re ripe, you start to rot,” once remarked Ray Kroc, mastermind of the McDonald’s franchise empire.

At the moment, no truer words can be spoken for China’s ripe economy.  The Middle Kingdom’s 30-year economic boom is being overcome with the unpleasant odor that befalls rotting vegetables.  What’s more, there’s no way to reverse it.

The state of economic activity in China is stalling out.  All of the sudden, the mistakes that were hidden by a growing economy are surfacing en masse.  Excess capacity is turning up in all corners of the economy and no one knows what to do about (Read More....)

. . . → Read More: China’s $6.6 Trillion Toxic Loan Problem

Earthquake Economics

United-States-Helpby MN Gordon

Economic Prism

“The United States of America, right now, has the strongest, most durable economy in the world,” said President Obama, in his State of the Union address, on Tuesday night.  What performance metrics he based his assertion on is unclear.  But we’ll give him the benefit of the doubt.

Maybe this is so…right now.  But it isn’t eternal.  For at grade, hidden in plain sight, a braid of positive and negative surface flowers indicate an economic strike-slip fault extends below.  What’s more, the economy’s foundation dangerously straddles across it.

Something must slip.  A massive vertical rupture is coming that will collapse everything within a wide-ranging (Read More....)

. . . → Read More: Earthquake Economics

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