Author Archives: MN Gordon

     

 

 

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 applicable to interventionism in general; the so-called “unintended consequences” of interventions almost always turn out to be their main feature and defining characteristic.

 

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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

 

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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 what those we criticize have published. In the first German edition of the book, Keynes freely admitted that his policy recommendations were probably more useful for a totalitarian State than a free society (i.e., it would be easier to implement them, because of their coercive nature). The biggest problem is though that most of the book is a rehash of hoary inflationist ideas that were already long refuted by the time of its publication. The handful of original ideas Keynes contributed didn’t constitute good economic theory either. Moreover, the book is riddled with contradictions and is an extremely tedious read to boot. At best we can recommend it as symptomatic treatment for insomnia. However, it did provide the State with a pseudo-scientific fig leaf for central planning and interventionism, which in turn provides thousands of mediocre economists with an income. This is the reason why it was and continues to be praised to the rafters by assorted etatistes. It is at this point that we are often reminded by people (who usually haven’t read it) that “not all the ideas in the book are bad”. Well, you don’t have to take our word for it. If you don’t want to go through the painful effort of reading it, you might want to look at Henry Hazlitt’s detailed critique instead, which is available for free here: The Failure of the “New” Economics (pdf). It is the only way to have fun reading Keynes’ book. Hazlitt is taking it apart mercilessly with impeccable logic. In addition, he provides the reader with a few enlightening excursions, such as e.g. a disquisition on mathematical economics that is one of the best take-downs of this barren, physics envy-driven, pseudo-intellectual wanking we have ever seen.

 

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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 sector of the economy – which proves how deeply ingrained mercantilist fallacies are. Ironically, even these beneficiaries only ever see a temporary bump in their income and as a rule tend to suffer great harm in the long term. Just ponder US car companies in this context. Over many decades, no other sector has been whining more persistently about the allegedly unfair weakening of the yen by Japan’s government. The reality is this: in 1965, the yen stood at nearly 360 to the dollar. 30 years later, it had risen to 80, a gain of 350% – or putting it differently, the dollar declined by 78% against the yen in three decades. Have US car companies conquered the world as a result? Have Japan’s car makers lost market share in the US or elsewhere? The exact opposite has in fact happened (two of the US “big three” even went bankrupt and had to be bailed out). Ultimately, the magic elixir of currency debasement achieves none of the results promised by its promoters – click to enlarge.

 

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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

 

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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

 

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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

 

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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

 

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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.

 

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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?

 

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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!

 

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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.

 

jumpGood-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 spread-eagle position will typically reach terminal velocity after about 12 seconds, traversing a distance of 1,483 feet). Jumping without a parachute may provide an especially pronounced adrenaline high, but is generally not advisable; more often than not it will be a one-off experience.

 

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