Category Archives: The Mint

Papa Francisco’s Populist Discourse and the meaning of Evo’s Gift

8/2/2015 Portland, Oregon – Pop in your mints…

During the month of July we found ourselves south of the equator in our second home, Bolivia.  It has been two long years since we have walked the earth there and much has changed.  The following are some observations made on our journey.

First off, it is obvious that money is everywhere.  From the construction of new apartment buildings to a new style of McMansions that are being erected by those who have benefited by the DEA’s absence in this country:  The Cholet.  The same increase in economic activity that we have noted in Portland is evident here in spades.  Everywhere you look, there is a new store, restaurant, cafe, or industrial park, all with the comforts of modern architecture with inimitable South American flair.

The first part of our visit coincided with the visit of the extremely popular Pope Francisco, or “El papa Francisco” as he is known here.  We arrived in Santa Cruz on July 6th, two days before the Holy See arrived.  On the 8th, we listened, along with all of Bolivia, the radio call of his descent and landing at the airport in El Alto.  The radio call resembled the call of a soccer game here, with the announcer screaming “Llegó” with the same passion that they yell “gol” when the home team scores.

As a follower of Jesus of Nazareth, we are ambiguous to the activities of the Pope, who to us is simply another follower of the same Jesus, with a slightly larger following.  In other words, we do not recognize or attribute any special authority nor clairvoyance to the Catholic church that is not available to all believers.

That said, it is undeniable that papa Francisco is something special to the Catholic faithful, especially here in South America, as Francisco  (or Francis, as he is known in the English speaking world), an Argentinian (though you would never know it as he does not seem to swear like a sailor) is the first Pope to hail from the continent.

Having listened to his discourses over two days, it was obvious that Francisco is well schooled in the populist platitudes that the likes of Che Guevara awakened and contemporary leaders Hugo Chavez and Evo Morales have resurrected.

True to the populist playbook, Pope Francisco derides economic inequality and envisions a society where all elements of the economy, the productive sector, distributors, and retailers, all carry out their daily chores in harmony with mother earth and one another.  Where every child can enjoy a happy childhood, every worker enjoy a dignified position, and every elderly person enjoy a dignified retirement.

Evo Morales, the Bolivian President, welcomed Pope Francisco with a unique gift, a crucifix where in the place of the cross, Jesus of Nazareth is portrayed as being crucified on a hammer and scythe, a symbol synonymous with Socialism.

Regalo de Evo a papa Francisco
Regalo de Evo a papa Francisco

Was the Pope offended?  Hardly, you see, the artistic origins of the gift lie with a popular Jesuit priest who made what to some is the obvious connection between the Gospel and Socialist doctrine.  There is more to the story behind the gift, which you can read here:

http://www.ehagendaurbana.com.ar/2015/07/el-cristo-del-martillo-y-la-hoz.htm

We bring the whole matter up to state once and for all that the Gospel and Socialism have just one common thread:  The Gospel, or the Good News, is that God forgives, and expects us to do likewise.  Nothing more, and nothing less.  It is the most important spiritual and natural event that has ever occurred, in our lives and the lives of countless others, for it is forgiveness and forgiveness alone that unleashes the supernatural and eternal presence of Yahweh in the here and now.

To the extent that Socialism demands that mankind treat one another as they would like to be treated, it is in harmony with the Gospel.  However, any attempt to enforce what should be spontaneous acts of goodwill towards one another makes a mockery of the Gospel and subjects it to the rules of men.  As we have explored in our economic treatise, Why What We use as Money Matters, rules made by men are incompatible with freedom, which is the reason for the Gospel in the first place.

This Freedom extends to the right to be Socialist, but it does not extend to the right to enforce this destructive doctrine on one’s unwilling fellow man or woman.

We admire the Pope, heck, he gave mass in La Paz with one lung and drew out millions of the faithful in South America.  If he wants to use his enormous platform and the freedom afforded to him by the forgiveness of sins through Jesus of Nazareth to expound upon an idyllic worker’s paradise. more power to him.

The Pope speaks to the Socialist Movements in Santa Cruz de la Sierra, Bolivia:

The danger in the Socialist doctrine is not evident in meaningless platitudes spewed by its proponents, nor is it evident in postulations about goals that are as unattainable as they are unmeasurable, such as universal dignity in work and retirement.  The danger of this poisonous doctrine is only evident in the blood spilled silently over the years in its name.  For when authoritarian regimes are allowed to define and enforce such concepts on a large scale, the previously unimagined economic burdens of such a program fall upon everyone, and the end result is invariably a society that lives and treats each other in a quite undignified manner.

A side note, and certainly fodder for further debate here at The Mint, our Mother-in-law posed a very interesting hypothesis about what may be wrong with Bolivian society, which seems hell bent on self destruction despite the gifts Mother Nature has seen fit to surround it with:  The poisonous union of the lie by two strata of society.

First the rich, or those who come into money, those whom we will call the upper strata of society.  This strata of society learns to lie as a means to maintain or improve their status both within their social circle, which in turn feeds a continuous chorus of lies as a group to the populations which they enslave and exploit.

Second, there are the lies of the exploited populations themselves, who learn to lie as a powerful tool of survival in a society where, to paraphrase President Snow of the Hunger Games, the odds are never in their favor.

The union of the accumulated lies tend to make any society impossible to navigate with any form of moral or ideological compass.  For to run the straight and narrow is to be stabbed in the back, and the lies create the sad and universally acknowledged truth that no one can be trusted.

Into such societies the seeds of Socialist ideology find fertile ground in which to grow and take root in the minds of the underprivileged.  They begin to grow and, like GMO crop production, look good until one realizes that the crops are only viable with a disproportionate quantity of productive inputs, and that they leave the soil and its inhabitants desolate once the massive inputs stop flowing.

It is then that the inevitable bloodshed begins, and no amount of platitudes or lofty goals, whether spoken by the Pope or the President, can stop it.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for August 2, 2015

Copper Price per Lb: $2.37
Oil Price per Barrel:  $46.77

Corn Price per Bushel:  $3.68
10 Yr US Treasury Bond:  2.20%
Bitcoin price in US:  $279.31
FED Target Rate:  0.14%
Gold Price Per Ounce:  $1,095

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.3%
Inflation Rate (CPI):   0.3%
Dow Jones Industrial Average:  17,690
M1 Monetary Base:  $2,998,600,000,000

M2 Monetary Base:  $11,991,900,000,000

Our Latest Audio Book and Why the Fed will take Baby Steps

6/6/2015 Portland, Oregon – Pop in your mints…

Bitcoins: What they are and how to use them
Bitcoins: What they are and how to use them

Recently we have been working with some wonderful producers to make many of our volumes here at The Mint available in audio format.  The experience has been great as those with talent in the voice department, such as Robert Fox, who brought our newest audio offering, Bitcoins:  What they are and how to use them, to life.

We imagine the producers get a good chuckle as they read our prose, to which Long-suffering readers of The Mint are accustomed.  We know we do!

Why the Fed will take Baby Steps when it comes to raising rates

The US Economy added 280,000 jobs in May of 2015, which was positive no matter how you slice it.  To our readers, this should come as no surprise, every one of our key indicators indicates an economy that is roaring ahead.  Take the price of oil, which continues to hover near the $60 per barrel mark.  While to some, a lower oil price may signal weakness in demand due to a slowdown in underlying activity, we see it as incredibly positive for US consumers, as oil, which translates into gasoline prices, acts as a quasi tax for many consumers whose demand is relatively inelastic.

We also see the steady prices of copper, around $2.70 per ounce, and corn, clocking in at $3.60 per bushel, as signs that the United States economy is on extremely solid footing looking ahead.  These prices tend to tank when bad omens are on the horizon.

The only negative (depending upon who you are), as reflected in the Jobs report, is that wages have not risen at a healthy pace.  This is great for employers and the Fed, who can maintain their margins on the backs of the working class, but not so good for those employed.

We sense this will change, as the productivity gains of the past several years are not likely to replicate themselves over the next several.  The economy is transitioning to the second half of the chessboard (as Thomas Friedman would say) and it will take a ton of work to get it there.  Once it is there, we will see hyperactivity in the economy, it will be a whirlwind that people will either embrace or run direct the other way from.  To an extent, humankind will benefit, but mother nature will suffer perhaps a fatal blow.

If proletariat wages remain low, then why has the stock market reacted negatively to what would otherwise be considered most excellent news?  We can only guess that equity traders, who at times are clairvoyant to their own detriment, look around at the plethora of good news and smell a Fed rate hike on the horizon.

They are correct, of course.  However, we believe that the Fed learned its lesson back in 2008.  The blind 0.25 per month basis hikes that were implemented to cool off the sizzling post 9/11 economy were blunt and oversized for the sheer breadth of the Fed’s economic sphere of influence.  It is doubtful we will see such blunt and misguided policy from the current Fed.

Instead, we see baby steps, increases of 0.01 basis points emitted over time so that the economy can absorb the shocks in a manageable way, rather than taking them square on the kisser as it did in 2008.

Will it work?  Only time will tell, but for the moment the US economy looks like it’s running full speed ahead, and nobody at the Fed is interested in being the next Ben Bernanke.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for June 6, 2015

Copper Price per Lb: $2.69
Oil Price per Barrel:  $59.13

Corn Price per Bushel:  $3.60
10 Yr US Treasury Bond:  2.40%
Bitcoin price in US:  $227.55
FED Target Rate:  0.13%
Gold Price Per Ounce:  $1,172

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.5%
Inflation Rate (CPI):   0.1%
Dow Jones Industrial Average:  17,849
M1 Monetary Base:  $3,029,600,000,000

M2 Monetary Base:  $11,853,900,000,000

The US Economy Turns Green in Time for St. Patrick’s Day

3/17/2015 Portland, Oregon – Pop in your mints…

1 oz .999 Fine Silver Round Irish Green Enamel Four-Leaf Clover With Display Box
1 oz .999 Fine Silver Round Irish Green Enamel Four-Leaf Clover With Display Box

A Happy early St. Patrick’s Day to our long-suffering readers of The Mint, who know we have an affinity for the color green, specifically the tone which can be found on the coin pictured to the left.

We have been buried deep in a classic accounting “busy season” of our own design, as, along with our regular duties, we have stumbled upon a vein persons ready to move their accounting systems into the cloud along with a cadre of brilliant entrepreneurs who need solid advice in terms of accounting and systems.  This work has gone nicely with our goal of mastering the tax trade this winter and spring.  We have also managed to produce our first audio version, What is Truth?  On the Nature of Empire (check it out here).

Together, it has made little time for reflection.  Alas,  this is the life of a farmer. When the season to work comes over us, we work day and night, knowing a season of rest waits.

Due to our numbers related tarries, the last time we took a glance at the US economy for long enough to write about it was October 3rd of last year, according to our records.

At that time, when the stated Unemployment rate was 5.9%, we sensed back then that it did not matter as the FED was set on continuing its Zero Interest Rate Policy until its member banks were safely in the clear, and that the US Labor market was getting extremely tight.

In case you are wondering, ZIRP and tight labor markets, taken together, is a recipe for explosive economic growth.  Five short months later, it appears that the feast is nearly ready, and the US economy is about to eat it.

First, let’s check in on Unemployment, which stands at 5.5%. According to the March 9th jobs report, US Job Creation has never been stronger:

US Job Creation
US Job Creation

And that momentum in the labor market is hotter than it was in 2005 – 2006:

Labor Market Momentum
Labor Market Momentum

And you have a labor market that has not been seen since the end of WWII.

But what about Wage Growth? It is tame, a 0.2% drop, in fact, if the BLS is to be believed. However, the NFIB Compensation Plans Indicator and the Employment cost Index are on the rise, meaning American workers are enjoying a rare (long overdue, we might add) post 1971 gain in real wages before the CPI, which clocked in at 0.7% (still well under the FED’s target), overtakes them.

Wage growth and Inflation
Wage growth and Inflation go hand in hand

And this chart seems to indicate that the tightening rental market may be the match that starts the Wage/Price spiral in motion:

Tight Rental Market
Tight Rental Market

We’re not sure about other metro areas, but rental and housing markets in Portland are ‘en fuego,’ with apologies to Dan Patrick.

What does it all mean? No one can be certain, but here are a couple of guesses:

1) The US Economy will once again become the envy of the world, despite itself. Yes, even with Obama care and other political and economic landmines strewn around it, the US economy is on pace to surpass the growth rates of developing nations, soon to be known as last decade’s darlings:

US to blow past emerging markets
US to blow past emerging markets

2) US Workers are likely to get healthy wages from healthy companies. Unhealthy companies will be gutted in this brain drain and fail.

3) Paradoxically, corporate profit margins will continue to increase as productivity gains continue.

4) Housing premiums, in terms of rent and home sales, are about to soar.

5) Interest rates will not go up until the markets yank them up by their shirt collar and hold them up against the wall, the FED will keep short-term rates low and allow the banks to recapitalize on the backs of the US economic miracle:

No Rate Hike coming
No Rate Hike coming

6) There will be no “Grexit” to spoil things.  Despite European claims to clairvoyance, it was the US who established the Euro zone (and its predecessor treaties) as the vital space for a revitalized German industrial base in the wake of WWII (more on this in our upcoming review of “The Global Minotaur” which was ironically written by a Greek economist).  Circa 2014, the Euro currency zone exists for the sole benefit of Germany and to an extent France.  The rest of Europe would be better off without it, which is why Germany and the pan euro banks will hold it together with an iron fist, not matter how futile the effort, or how far they have to bend the rules.

7) The Chicago River will turn green, and a record amount of beer will be sold tomorrow in honor of St. Patrick

Be safe out there as the Luck of the Irish and the ignorance of the FED paints the US Economy green for the foreseeable future!

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for March 16, 2015

Copper Price per Lb: $2.65
Oil Price per Barrel:  $43.68

Corn Price per Bushel:  $3.79
10 Yr US Treasury Bond:  2.10%
Bitcoin price in US: $289.87
FED Target Rate:  0.11%
Gold Price Per Ounce:  $1,154

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.5%
Inflation Rate (CPI):  0.7%

Dow Jones Industrial Average:  17,977
M1 Monetary Base:  $3,069,400,000,000

M2 Monetary Base:  $11,883,100,000,000

What created the Bolivian Economic Miracle?

10/27/2014 Portland, Oregon – Pop in your mints…

For those who do not follow Bolivian Politics, Evo Morales has one a third term as President of the South American nation we are happy to call our second home.

Evo Morales - President of Bolivia in Brazil 2007
Evo Morales – President of Bolivia, photo taken December 17, 2007 in Brazil by Marcello Casal Jr. of Agencia Brasil http://www.agenciabrasil.gov.br/media/imagens/2007/12/17/1840MC44.jpg

As Morales is seen as a Socialist hero, his reelection coincided with a deluge of praise for his hand in the Bolivian Economic miracle that has unfolded over the past 10 years from the left.  It seemed to start with an article from the New York Times back in February, which highlights Morales’ success and the paradox that it presents.  On one hand, he is a, well, a proclaimed Socialist.  On the other, he runs a balanced budget and has largely rejected the advice of the IMF and other financial overlords of the world:

Turnabout in Bolivia as Economy Rises from Instability

Then, a widely read article in the Guardian, where the author makes the bold claim that “socialism doesn’t damage economies,” which sparked a swift reaction from the neo-con/neo-lib right.

Evo Morales has proved (sic) that socialism doesn’t damage economies

It is true that the Bolivian economy has grown at a mighty pace over the past 10 years, however, to simplify this miracle to solitary policy changes such as the legalization of coca farming, a deeply personal matter for Morales, or other various social policies noted by the authors is to miss the point completely.

As a public service, we present to you today the short list of reasons why Bolivia is experiencing an economic miracle in the eyes of many Westerners:

  • Benford’s Law, which would account for Bolivia’s rapid relative growth. As a country, it was near the bottom of many world measures in terms of economic statistics.  As such, things tend to go up from a low level quickly on a relative basis.
  • Currency policy: The Boliviano trades tightly with the USD similar to the Yuan.  This is due to the fact that much of the country’s savings are held in dollars.  Currency stability = real growth
  • Legalize it: While the legalization of coca is controversial, the removal of regulations has opened up a wild west of trade and attendant economic activity.
  • Anarchy reigns: Ever since Simon Bolivar freed it from Spanish rule in 1825, Bolivia has had 81 Presidents and been ruled by various “Juntas” or forms of military rule 9 times.  By contrast, the US has been around for 50 years longer and had just 44 Presidents.  If our theory that Anarchy produces stability holds, it would follow that the Bolivian economy is one of the most resilient on the planet, one that cannot help but grow from a solid base.
  • Evo’s Charisma: While Evo Morales is often chided, he is simple and lovable at heart, an anomaly in the cesspool of modern politics.  He has drawn a great deal of positive attention to Bolivia as the first indigenous President in the nation’s history.  This has given Bolivia international exposure not before seen.
  • The Open Letter: While it is a longshot, perhaps Evo has read our open letter to him and is secretly implementing our policy proposals.
  • While Bolivia was extremely poor in the eyes of the world, yet rich in so many ways.

We love Bolivia, it is one of the most precious, pristine, and complicated places on the planet and we are honored to call it our second home.  While speculation as to what has caused the current economic miracle there will continue, we know one thing to be true:

It is Bolivia’s time.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 27, 2014

Copper Price per Lb: $3.08
Oil Price per Barrel (WTI):  $80.66

Corn Price per Bushel:  $3.63
10 Yr US Treasury Bond:  2.26%
Bitcoin price in US:  $350.95
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,225

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   0.1%
Dow Jones Industrial Average:  16,818
M1 Monetary Base:  $2,747,700,000,000

M2 Monetary Base:  $11,514,900,000,000

BofA FX Strategist breaks down the state of G10 Currencies

10/16/2014 Portland, Oregon – Pop in your mints…

Yesterday we had the pleasure of hearing a presentation by John Shin, the G10 FX Strategist at Bank of America.  Mr. Shin is highly intelligent and a deft presenter, as one would expect from someone of his caliber (Harvard PhD in Econ, etc.)  He also managed to make the material, essentially a rehash of Central Bank rate policy over the past several years through today, somewhat entertaining and relevant.

One of the big takeaways from the presentation was that the ECB has not been performing well in its role when compared to the FED, Bank of England, and Bank of Japan, against which it is often compared.  Mr. Shin acknowledged that in many cases their hands are tied as, while they have the experience, they seem to struggle with their mandate, to maintain a stable currency, as they are vilified in a world where other Central Banks have taken stimulus to extremes once thought unimaginable.

The Euro is a very important currency.  The Euro and the ECB as its managing institution are also very young relative to their counterparts.  Making their job even more difficult is the fact that they are managing the currency for the Eurozone, whose internal fiscal and market dynamics at time defy analysis if not logic.  Here at The Mint, we recognize that the ECB is simply making the best of what’s around as they constantly mend the currency union that holds what is at times a tense economic union together.

Mr. Shin also spoke at length about the Unemployment rate in the US and the associated workforce participation rate (roughly 64%) which has rapidly declined due to, according to Shin, a roughly 50/50 mix of demographic and economic factors.  He also put the workforce participation rate in perspective, as it is still above where it was in the 1960’s, roughly 59.5%.

Generally, he was bullish on the US Economy and the US Dollar, and had pegged his expectations for FED rate increases to mid-next year.  It will be interesting to see if his call plays out.

After the presentation was finished, we asked him for a nugget of advice in terms of what his one Key Indicator was to keep a pulse on economic activity.  He said that, while they track many indicators, as one would expect, there is none that speaks more to the contemporaneous state of the US economy than the monthly jobs numbers.  Concretely, when they top 200,000, the economy is in good shape, anything below that is a bad thing in his view.  He said no other data point correlates so well with other economic growth indicators.

So there you have it, the dollar will remain strong and as long as the economy adds 200,000 jobs or more per month, all is well from the perspective of one of B of A’s best and brightest.

Creidt Sui

Mr. Shin is in charge of the “World at a Glance,” which is their flagship publication which highlights the bank’s key forecasts in FX, rates, and commodities.  An extremely interesting read put together by some of the best in the business.

Will his forecasts on FED rate increases come to pass in mid-2015?  If today’s market action is any indication, low rates could be with us for a long time to come.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 16, 2014

Copper Price per Lb: $2.98
Oil Price per Barrel (WTI):  $83.02

Corn Price per Bushel:  $3.52
10 Yr US Treasury Bond:  2.15%
Bitcoin price in US:  $391.63
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,239

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   -0.2%
Dow Jones Industrial Average:  16,117
M1 Monetary Base:  $2,815,400,000,000

M2 Monetary Base:  $11,513,000,000,000

5.9% and why it doesn’t matter

10/3/2014 Portland, Oregon – Pop in your mints…

Today the BLS reported that payrolls grew in September and that the stated unemployment rate dropped to 5.9%.  They also published the labor force participation at 62.7%.  The handy chart below from the folks at Business Insider shows how steeply labor force participation has dropped over the past five years.

Labor Participation Courtesy of BI
Labor Participation Courtesy of BI

Labor Market Participation aside, the 5.9% unemployment is exciting for banks.  On one hand, it can be seen as a sign that more people are working and theoretically becoming creditworthy.  This is big because consumers with deposits are cherished in the Basel III framework that they are painfully working their investment ladders into.

On the other hand, it is seen as just high enough that the Federal Reserve will not raise short term interest rates for fear of “derailing the recovery” or whatever phrase Janet Yellen chooses to employ in her latest effort to mask the brutal fact that they are continuing to provide money free of charge to a painfully inept banking cartel.

While much will be written about today’s “Goldilocks” job report, it matters not in terms of Fed policy.  The Fed will continue to offer money free to banks until they are certain that Basel policy reforms will not inadvertantly cause (rather than prevent, as they are designed to do) the financial crisis.  Meanwhile, in the real world, the cost of labor, meaning the cost of hiring someone who can actually perform a specific task, is about to skyrocket.

The reason for this is that there remain severe imbalances in the labor market caused by recent advances in technology, namely cloud based administrative services and logistics, which are now colliding with a relative decline in the recent productivity gain that said technology was providing.  While large productivity gains having been the norm, there is soon to be a lack of persons who have the requisite skills to run such systems efficiently, which means that those productivity gains will at a minimum not continue and may even be lost.

There is also another labor undercurrent that the BLS data does not capture.  This is the large scale disruption of entire industries that the cloud and logistics revolution is enabling.

Indeed, there is much more to the labor market than a tidy percentage point can express, as nearly five years of ZIRP is pushing the division of labor to new extremes.  Employers, Employees, and the BLS may soon become archaic terms, as American Society moves towards outsourcing on steroids.

Today’s 5.9% is little more than bad information, unless of course, you are a banker, in which case it means that the Goldilocks days are here again, and the Fed’s subsidy, a license to strip mine the earth that is provided on the backs of its inhabitants and nature herself, will continue until further notice.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 3, 2014

Copper Price per Lb: $3.04
Oil Price per Barrel (WTI):  $89.68

Corn Price per Bushel:  $3.23
10 Yr US Treasury Bond:  2.45%
Bitcoin price in US:  $377.60
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,192

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   -0.2%
Dow Jones Industrial Average:  17,015
M1 Monetary Base:  $2,833,300,000,000

M2 Monetary Base:  $11,418,000,000,000

The US Economy is Already Going Gangbusters

8/29/2014 Portland, Oregon – Pop in your mints…

Amid what has become a nearly constant stream of alarming news from the Middle East and the escalation in the Ukraine conflict, the US Economic growth has quietly been amassing the fuel for what is shaping up to be an impressive period of extended growth.

Readers of The Mint are aware that we follow a baker’s dozen of key indicators, which are presented at the end of each edition, in order to gauge the actual state of the economy via money supply growth and some of the key inputs and outputs as to what expectations are as to the future state of the money supply. Setting aside the fact that what we use as money is not really money at all, but not so cleverly disguised debt, the state of the money supply gives us a sense as to what will happen in terms of employment and asset prices, the fodder which ultimately impacts GDP. Overall, our key indicators have been steadily signaling growth ever since 2009.

While the fuel has been amassing for approximately 5 years now, it is now poised to be coupled with the proverbial spark necessary to spur growth rates reminiscent of the late ’90s – 2007: Improving sentiment.

You won’t see improving sentiment on TV, hear it on the radio nor read about it in the news. You see, improving sentiment doesn’t draw people to read the news, doom and gloom does.

Improving sentiment can be seen in a very conspicuous place in American cities: Increased traffic, be it car, pedestrian, freight, or public transit. When people are out and about, they are generally doing something. The fact that more people are out tends to beget additional economic activity. It is largely a chicken and egg question but in the cities, when you see traffic increase, it is a good bet you are witnessing economic growth first hand.

Have you seen traffic on the rise where you are? In Portland, it has been staggering.

Confirmations that the US Economy is already going gangbusters and may be poised to go into hyper drive for at least the next 5 years are beginning to pop up in the mainstream media:

Deutsche Bank us expansion timeline
Deutsche Bank us expansion timeline

You might ask what will drive this expansion? While there is truly no catalyst or new age industrial revolution on the horizon, there is an avalanche, tsunami, (insert your favorite metaphor) of money itching to get out of government bonds and into something, anything that will paradoxically give it increased yields and security.

2014 government bond yieldsAs in the past, this money will find its way into real estate, the much scourged asset class that is now surprisingly affordable on a relative basis. Once that happens, we know the script, and the expansion expected by the market in the first chart above seems probable, indeed, inevitable.

Here at The Mint, we have been beating the drum of recovery for some time now by virtue of following our “MINT Perceived Target Rate” which lags the more famous Federal Reserve Target rate by 39 months, the estimated amount of time it takes for Fed policy to hit main street. Through this lens, we see at least 39 months of accelerating growth in the future. Once sentiment kicks in, the game will really be on, and the time to position oneself is now.

Is it time to jump back into real estate? Back in early 2013, Nadeem Walayat, at the Market Oracle gave this prognosis for the US Housing Market, which today is holding true to form, as most of Mr. Walayat’s analysis does.

One would do well to mind his final word of caution, do not make the mistake of leveraging oneself too far. If you do, you must time the exit perfectly, and who needs that kind of pressure? The inflationary mega trend to which he refers and our Key Indicators confirm will be with us a very long time, which means real assets trump money in the back any day of the week. The key is to stay liquid.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for August 29, 2014

Copper Price per Lb: $3.19
Oil Price per Barrel:  $95.08

Corn Price per Bushel:  $3.62
10 Yr US Treasury Bond:  2.35%
Bitcoin price in US: $508.89
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,287

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  6.2%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  17,103
M1 Monetary Base:  $2,732,600,000,000

M2 Monetary Base:  $11,406,000,000,000

The ECB negative rate announcement is a cannibalistic non-event

6/22/2014 Portland, Oregon – Pop in your mints…

On June 5th, the European Central Bank made modern Central Banking history by providing the world with its first announcement of what they call a negative interest rate. For those who may be scratching their heads at the concept of a negative interest rate, we offer the following layman’s definition:

It is a commission that is charged every month for holding too many Euros in the wrong place.

In the mind of the clever central banker, a negative interest rate provides a simple disincentive to hoard Euros. In his or her mind, the way to invigorate the European economy is to force Euros into circulation by turning them into a sort of hot potato, though at -0.10% the analogy is more akin to a potato emanating scarcely enough heat to melt a pat of butter.

Following the infallible logic of the central banker, the banks will take the money and lend it, as putting 100% of deposits at risk via a loan in a terribly disjointed economic zone is clearly a better alternative that loosing a guaranteed 0.10% annually by parking it overnight at the ECB.

This would be a brilliant solution were the simple hoarding of Euros the only thing ailing the Euro system. Unfortunately for the ECB and indeed, Euro holders in general, the problem with the Euro is that it is dying a strange death at the hands of deflation and strangulating the European economy in the process. Following this set of facts, it would hold that the safer bet for those who find themselves holding excess Euros would be to pay down higher rate liabilities in lieu of holding Euros overnight at the cannibalistic ECB, whose actions, while for the moment are foreseen to be a non-event, will ultimately lead to an implosion of the 15 year-old Euro currency.

What is lost on the European central bank is that they are managing a debt-based currency that looks like money but smells something much different. While charging a commission on bank deposits in hopes of getting currency flowing again may seem a good idea, the dynamics of the debt-based currency make this strategy akin to economic suicide.  Fabian for Liberty appears to take a slightly different slant on the subject and arrives at the same conclusion:

Debt is the lifeblood of modern currency, and a large part of what gives debt based currency its allure is the illusion of getting something for nothing in the form of usury. On June 5th, the ECB pierced the veil on interest rates and the illusion of getting something for nothing along with it. This has never been attempted by a modern monetary authority, and once again the ECB has shown that if there are errors to be made in the management of debt based currency, they are willing to make it.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for June 22, 2014

Copper Price per Lb: $3.10
Oil Price per Barrel:  $106.83

Corn Price per Bushel:  $4.53
10 Yr US Treasury Bond:  2.62%
Bitcoin price in US: $599.07
FED Target Rate:  0.10%
Gold Price Per Ounce:  $1,315

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  6.3%
Inflation Rate (CPI):  0.4%
Dow Jones Industrial Average:  16,947
M1 Monetary Base:  $2,728,900,000,000

M2 Monetary Base:  $11,306,300,000,000

The Great Work of Janet Yellen

3/29/2014 Portland, Oregon – Pop in your mints…

“…Sanballat and Geshem sent to me, saying, ‘Come, let us meet together in the villages in the plain of Ono.’ But they intended to harm me.

            I sent messengers to them, saying, ‘I am doing a great work, so that I can’t come down.  Why should the work cease, while I leave it, and come down to you?’  They send to me four times like this; and I answered them the same way…”

– Nehemiah 6:3

Nearly 30 days and nights have passed since our last correspondence, fellow taxpayer, and we, like Nehemiah, have only one excuse:

We are doing a great work.

Nehemiah’s great work, referred to above, was to rebuild Jerusalem, the Holy City.  He found that, though he had been given authority to perform the work, on the ground, he often encountered hostility and detriments to the work that came from quarters where he had reason to expect help or, at a minimum, indifference.

Our great work at the moment, fellow taxpayer, is to concurrently rebuild a Fiscal department and restore an accounting record that has fallen into disrepair, all while undergoing an annual audit and responding to the day-to-day tasks and myriad of reporting requests which come with the territory of modern financial management.

{Editor’s Note:  While it is a subject for another day, we must comment on the tool of the trade that is being employed in the great work, the Yardi Voyager accounting software.  We last touched Yardi over 10 years ago and, while the software retains many of its origins, the current version is a beast in terms of cloud processing.  We reckon that, given the correct tactician at the helm (which we humbly consider ourselves to be), accounting records in Yardi can be administered by considerably fewer finance staff than many competitors.}

For the moment, we face no hostility and, generally speaking, the finance profession is free from mortal danger.  However, there is great interest in the work as there are ultimately a great number of interested parties, and we find that, like Nehemiah, we are often called to the ‘villages in the plain of Ono’ for other matters.

There are risks in undertaking any great work, and there is also great exhilaration in making progress and ultimately, after facing all of the difficulties and suffering through the doubts of naysayers, doing the impossible.

Janet Yellen’s Great Work

Janet Yellen came onto the job as the Federal Reserve’s first Chairwoman on February 3, 2014, just 10 days after we began our great work.  Unlike ourselves, Yellen has had the benefit of watching her predecessor hone his craft as Vice Chairman for four years and has enjoyed the benefits of the revolving door between government and academia since the early ’80s.

In other words, Yellen has no real world experience, which is a prerequisite to serve in any high-ranking office in America, circa 2014.

A Shameless plug on our volume dealing with the constant unity of Capitalism and Socialism
A Shameless plug on our volume dealing with the constant unity of Capitalism and Socialism, click to purchase

According to her dossier, it counts among her previous great works a study dealing with East Germany’s integration into the German economy upon the reunification of the country. {Editor’s Note:  For those to young or indifferent to recall such matters, the East German integration was a major windfall for West Germany at the time, who then (1990) was jockeying for position in what was to be the European Union.  The reunification caused 16 million more Germans to appear overnight, giving the unified Germany a considerable voice in the negotiations.}  Beyond this, Yellen is given credit for a form of clairvoyance regarding the financial crisis in 2007, apparently seeing something amiss from her post as the President of the San Francisco Fed (she must have seen Jim Cramer’s rant in July).

Janet Yellen now has a new great work to undertake as Chairwoman of the Federal Reserve.  While she was likely performing many of Bernanke’s tasks from at least October of last year when President Obama nominated her as Bernanke’s successor, one task that could not be delegated was that of the press conference.

As such, Yellen took the stage on March 19th, 2013 and dutifully attempted to explain the rationale for the decisions of the Federal Reserve’s FOMC regarding short-term interest rates and its Quantitative Easing programs.

The press conferences, which began under Ben Bernanke, were meant to clear up any confusion, which may have been read into the numbers and written statements provided by the FOMC which had until then served as the primary window for the outside world into the machinations of the committee which decides how much credit will be conjured out of thin air.

For some reason, perhaps the novelty, the press conferences have taken on a life of their own.  The reason for this is that, while the FOMC may have deliberated and arrived at a consensus regarding their curious task, the person who gives the press conference ultimately has the last word and, though the event is meant to be carefully scripted, it cannot help but introduce an element of uncertainty into a process (the conjuring of credit out of thin air) which already defies the laws of economics and indeed works in direct opposition to nature herself.

At minute 20, which we have clipped below, Jon Hilsenrath of Wall Street Journal calls out the fact that there is an upward drift in a dot plot reflecting expectations for short-term interest rates of the individuals on the committee, and how one should reconcile that with the guidance given in the FOMC statement.

Yellen deflects Hilsenrath from the dot plots and then goes on to target the end of 2016 as the time when rates will likely rise.  She also calls out 6.5% as the target for the unemployment rate, and reiterates the eternal 2% target for inflation as triggers for tightening.  As you can see below, unemployment clocked in at 6.7%, meaning tightening could be around the corner.

This degree of upside uncertainty, which Yellen interjected as part of her great work at the press conference, managed to spook markets, as, while 2016 may be a long ways off in Yellen’s mind, as it would be when one is waiting to obtain their driver’s license, for those who are writing bonds today based on the Fed’s guidance, 2016 is in many cases a thing of the past, and Yellen’s utterances shattered a countless number of assumptions that the bond market had begun to hold dear.

Conjuring credit out of thin air is risky business as it is, and when those who are primarily responsible for it attempt to explain their actions, things can become incoherent in a hurry.

In the near future, we may hear Yellen uttering Nehemiah’s refrain the next time she is called to the press conference,

“I am doing a great work, so that I can’t come down.  Why should the work cease, while I leave it, and come down to you?”

For the last time Yellen came down, fixed income nearly imploded.  The risky business of conjuring credit out of thin air is best performed in the dark, if at all.

Stay tuned and Trust Jesus!

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for March 29, 2014

Copper Price per Lb: $3.02
Oil Price per Barrel:  $101.07
Corn Price per Bushel:  $4.92
10 Yr US Treasury Bond:  2.71%
Bitcoin price in US:  $501.24
FED Target Rate:  0.08%
Gold Price Per Ounce:  $1,295
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  6.7%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  16,323
M1 Monetary Base:  $2,694,800,000,000
M2 Monetary Base:  $11,229,900,000,000

The Division of Labor Gives Rise to the Monetary Premium

2/8/2014 Portland, Oregon – Pop in your mints…

Today we find ourselves, along with the rest of the inhabitants of the Willamette Valley, enjoying what has been dubbed “Snowpocalypse 2014.”  The valley’s residents are now three days into this rare event and, while much in the way of normal transit has been disrupted (truly, it does not take much snow to paralyze Portland).  We do not have a solid measure of just how much snow has fallen and whether or not the event lives up to its name, what is unmistakable is that the snow is beautiful and is has revealed many a great sledding hill in our midst.

Some of our faithful readers will recall that back in December, we began exploring the Monetary Premium, the portion of an item’s relative value owed to the utility of an item as money (those new to The Mint can glance back at these essays for a thorough exploration of the definition of money).  In that essay, we presented the portion of the Monetary premium that arises as a result of an Imperial authority demanding tribute in said currency.  Logically, it may also be said that laws declaring what is legal tender or any law which dictates the monetary unit in which debts are to be cancelled in an economic zone will also give rise to the monetary premium.

Of Money and Metals by David MIntGiven the above example, it may appear that the primary drivers for an economic good to carry the monetary premium are related to imperial or government action.  However, this is decidedly not the case, for the ultimate origin of and primary factor contributing to the monetary premium of any economic good has nothing to do with the government or what is used as money, rather, the Monetary premium comes into being as a result of an increase in the division of labor.

For those not familiar with the term, the division of labor is what makes urban society possible.  While perhaps the most easily understood metaphor is that of the assembly line, where each individual worker dedicates him or herself to completing one facet of the production process, relying on their counterparts on either side of them to ensure that the chain of production, of which they form part of, remains unbroken.

Economic systems are, in a sense, a collection of interconnected assembly lines both large and small, with each member of the system dedicating themselves to a set of tasks; the more time and energy that each individual is allowed to dedicate to their task, the more efficient each individual generally becomes.  The fact that each individual dedicates an increased amount of time and energy to a specific task gives rise for other members of society to pitch in and specialize in tasks that others cannot do for themselves given the specific scope of their labors.

The division of labor, if allowed to rise and sort itself out on its own, is generally good for economic output, as increased efficiencies translate into increased outputs.  However, as individuals increasingly specialize in certain tasks, they increasingly rely upon other members of society to fulfill their need.  As logic would follow that the increased division of labor does not allow much time for barter transactions, an increase in the division of labor always gives rise to the need for a monetary premium to both emerge and expand, attaching itself not only to traditional transmitters but giving rise to new ones as well.

Once the monetary premium expands, it gives rise to an increase in the division of labor, and in this way the dynamic between the two drives real economic growth.

Limitations on the Division of Labor and Monetary Premium

After reading the above, it should be clear that both the division of labor and the monetary premium are generally good for humankind, and that both factors driving real economic growth, if left to operate unhindered would eventually run up against and adapt to the limitations of the natural environment.

However, today, circa 2014, both the division of labor and monetary premium are hindered not by natural limitations, but by limitations placed upon them by well meaning legislators.  While all legislation tends to have either a direct or indirect effect on economic activity, there are two kinds that are particularly harmful to economic growth as they cut off the lifeblood of economic expansion:  The dual expansion of the division of labor and the monetary premium.

The first are laws dealing with minimum wages.  While minimum wages laws strive to guarantee a living wage for all members of society, they never achieve this goal and, in the process, serve to directly hinder the expansion of the division of labor when actual wage rates for certain activities are below the minimum wage rate, and serve no purpose when wage rates are above it.

The second set of laws are those referenced above; legal tender laws.  While Legal tender laws strive to codify what serves as money in a society, they invariably serve to direct an inordinate amount of the monetary premium into instruments that are not worthy of serving as money on a grand scale.  In the process, they serve as a severe limitation on what can carry the monetary premium and, by extension, the expansion of the monetary premium and the division of labor.

We all suffer to some degree due to manmade hindrances to the expansion of either the monetary premium or the division of labor; however, it is those farthest from monetary spigots, as defined by legal tender laws, who suffer the most.  In order for peace and prosperity to accrue to the greatest possible number of persons, it is critical that we grasp the importance of encouraging the division of labor to operate unhindered.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for February 8, 2014

Copper Price per Lb: $3.26
Oil Price per Barrel:  $99.88

Corn Price per Bushel:  $4.44
10 Yr US Treasury Bond:  2.68%
Mt Gox Bitcoin price in US:  $680.00
FED Target Rate:  0.07%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,267

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  6.6%
Inflation Rate (CPI):   0.3%
Dow Jones Industrial Average:  15,794
M1 Monetary Base:  $2,752,800,000,000

M2 Monetary Base:  $10,968,700,000,000

How Money is Made

1/13/2014 Portland, Oregon – Pop in your mints…

We were fortunate to have the video below brought to our attention recently.  As you can see, this brilliant video presentation of what is wrong with the current monetary system does in 30 minutes something that we have taken lengthy stabs at expressing via the written word over the past three years, and it does so with some nice animation to boot!

Enjoy this presentation of “How Currency is Made, How Debt is Created, and How you are Impoverished,” the fourth video in a series on the monetary system courtesy of Liveleak.com:

We are especially fond of the scene where the workers shovel the currency into the piggy bank, only to have a large bird swoop down, pick it up, and fly it to the offices of the tax authority.  It is truly something that nearly all of our fellow taxpayers can related to, and this depiction drives the point home.

For better or worse, this is the monetary and taxing regime in which we live.  Getting out of it is as simple as changing your mind with regards to such matters.  The difficult part is changing the minds of others so that meaningful advances towards monetary freedom can be made.  For if you act alone, you are merely a prepper, but if you act in concert with all of those in your community and circle of trade, you are a history maker.

One way or another, we will all find ourselves in the latter camp, but, like campsites on the fourth of July weekend, the best spots will go to those who get there early.  Will you be one of them?

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

On 2013, the year of the Crypto Currency, and Long term Unemployment Benefits Social Programs made Necessary by Debt based Currency

12/28/2013 Portland, Oregon – Pop in your mints…

As 2013 winds down, it must be acknowledged that in the financial and monetary world, the story of the year has been crypto currencies.  Our own awareness that Bitcoin may be something more than a passing fad, our monetary epiphany, if you will, came in March of this year, when we were contacted for assistance in forming a business plan for an exchange.  The episode, while it has yet to be fully capitalized on, caused us to look deeply into Bitcoin.

Our Bitcoin Guide Available at Smashwords and Amazon

What we found was astonishing.  You can read the details in our eBook on the subject but the jest is that it is digital gold.

As the crypto currency gained in price and popularity, many have been the detractors who have dismissed it on the grounds that it is “nothing”, or a “Ponzi scheme.”. What such detractors fail to realize is that it is they that do not comprehend the very nature of money.

Money, in any form, is nothing more than a concept.  All that Bitcoins do is capture this concept, that we refer to as the monetary premium, in its purest form.

JPMorgan Steps Into the Fray

The latest news on the crypto currency front is that JPMorgan is dusting off a patent it filed in 1999 in what is surely a heavy handed effort to exert its primacy in the crypto currency space.  Whether or not they will succeed remains to be seen, but one thing is clear, the digital currency space is divided into those who want to mainstream these currencies and being them under sovereign control, and those who do out.

These types of philosophical divisions are as old as time itself, that of the anarchist and the statist, and the schism will remain, though the thought of anarchists and statist sharing a blockchain is interesting indeed.

Dogecoin

Another development worth following is the rise of the Dogecoin, which is all at once a joke and a serious foray into the crypto currency space.  You see Dogecoin is one of many cryptos that we foresaw coming into existence back in April and is further proof that the fiat currencies of the world are wholly inadequate and act as a restraint on human trade rather than a facilitator of it, which is really their only redeeming quality.

It is a beautiful irony that a fellow Portlander had a hand in creating it.

Why Long Term Unemployment Benefits Must be Extended

Those who have suffered through The Mint for any amount of time are likely aware of our Libertarian and Anarchist philosophical sympathies.  As such, it may come as a surprise that we believe that most Social Safety nets should be maintained.  As such, we think that lawmakers are making a grave error in failing to extend the emergency extensions to the Federal unemployment programs that have recently expired.

It is not that we champion sloth or laziness, as our position may cause some to assume, (though we admit that at times, our own inner-laziness gets the best of us).

Our reasoning behind this position is that poverty, joblessness, the skyrocketing cost of living and the like are largely a result of the current, insane debt based monetary system in which the United States and much of the world have been forced to live for over a century now.

As one looks back on the origins of what has become known as the Social Contract, it must be noted that they occurred in the 1930s after the great depression had ravaged the country.  What the politicians realized was that they had a very big problem on their hands, the workforce was severely “dislocated,” to use today’s terminology.  What they did not realize that the cause of this was the currency act that had been signed back in 1913, when debt, in the form of Federal Reserve Notes, became money.

The mandate for the American populace to use this system amounted to a cosmic shift in everything the American workforce knew about money and how to make it.  The economic rules had been turned on their head, and it would take a very long time for an honest and hard working people to understand that in the new system, the only way to get rich was to severely indebt oneself.

Indeed, today many still do not get it.  However, the debt based currency system must keep growing in order for it to remain viable, meaning that contrary to the beliefs of some, the Federal Government will always run a deficit, or at least strive to, and the largest companies will be the ones who are able to indebt themselves faster than their rivals and convince others to do so.

Using debt as currency changed the entire societal paradigm, making Social Safety nets a necessary part of the landscape, not because people were better off or well cared for as a result of them, rather, because the debt based currency system requires every member of society to participate in order for it to perpetuate itself.  Even those who are unemployed must be given some currency to circulate so that they stay attached to the game.

Otherwise, if too many of them stayed out of the game for too long, as is the case now with youth in much of Europe and even here in America, they may just realize that there is much work to be done outside of the currency system, and that, in fact, the debt based currency system acts as a giant straight jacket on human potential.

If they dwelt upon the above clever metaphor, as you may find yourself doing now, fellow taxpayer, they might understand that Bitcoin, Dogecoin, and other crypto currencies are the latest attempt by humanity to break out of the straight jacket.

If efforts to hinder them, such as JPMorgan’s patent filing, ultimately fail, as we believe they will (at least in practice), the straight jacket of debt based currency will be off and the systems of the nation state which supported them will become relegated to the second class status they so richly deserve.

The very concept of Unemployment is made necessary by debt based currencies, as such, it is right that they should provide Safety nets to catch those who fall out of the workforce.  At this stage, it is inconceivable that the current Congress would cut these benefits, for to do so is to plant but one more nail in the coffin of the current debt based currency system, and to encourage a new and better understanding of money, one that will benefit both humankind and the creation itself.

Stay with us, there is much more to come.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for December 27, 2013

Copper Price per Lb: $3.35
Oil Price per Barrel:  $100.32

Corn Price per Bushel:  $4.28
10 Yr US Treasury Bond:  3.01%
Mt Gox Bitcoin price in US:  $779.89
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,214

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.0%
Inflation Rate (CPI):   0.0%
Dow Jones Industrial Average:  16,478
M1 Monetary Base:  $2,620,500,000,000

M2 Monetary Base:  $11,050,600,000,000

The Greatest North American Holiday is Upon Us

11/27/2013 Portland, Oregon – Pop in your mints…

Inflation in asset prices is beginning to appear at a breathtaking pace, and, while $1000 Bitcoins and 10% month over month increases in the London property market appear to scream “bubble,” the truth of the matter is that we are just getting starting.  The Federal Reserve and every other Central Bank on the planet have given up on any sort of meaningful restraint, and there are Trillions of fiat currency units that are just looking for a reason to stir up what passes for economic activity circa 2013.

There will be plenty of time to watch numbers tick higher and even more plentiful opportunities to be had for ventures of all sorts in the weeks and months ahead.  Today, we must pause, reflect, and give thanks.

For tomorrow is Thanksgiving.

"The First Thanksgiving at Plymouth" (1914) By Jennie A. Brownscombe
“The First Thanksgiving at Plymouth” (1914) By Jennie A. Brownscombe

Thanksgiving is the Greatest North American Holiday, for, in an age where most holiday traditions can be only dimly observed beyond the lights of commercialism, it is one of the few that most purely reflects its heritage.

And what a heritage it is.  While the general idea of “Thanksgiving” has existed in religious and other faith centered communities from time immemorial, the Thanksgiving that we will celebrate tomorrow traces its origins to a three day feast held on the Plymouth Plantation in November of 1621, which was the culmination of a series miraculous events that came to pass for a group of Pilgrims who boarded the Mayflower in mid-July, 1620 and brave companions from the Speedwell who were determined to carry on despite the Speedwell springing a leak and being forced to turn back to England.

The Mayflower, like many ships of the day, was a trading ship, and the Pilgrims, who were English Dissenters (to give one an idea of conditions in England, Guy Fawkes Night had occurred a mere 15 years earlier, and religious tolerance was non-existent on the isles), were on their way to freedom having been financed by merchants eager to tap the riches of the New World.

The journey was perilous, and the storms in the North Atlantic took a heavy toll on the ship and its passengers.  At least twice during the more difficult stages of the journey the idea of returning to England was debated.  Frankly, anyone who has been on a journey that has become imperiled by weather conditions will understand the nature of such conversations.

The Mayflower, as we now know, pressed on and landed in the New World on November 11th, 1620.  After a difficult journey, they had now arrived on land, and their true perils were about to begin.

After failing to find land suitable for a settlement, the advance party again boarded the Mayflower and sailed down to what is now known as Plymouth Rock, where they found an area that was ideal for both settlement and agriculture.  As it turns out, the Patuxent tribe had inhabited this land until a plague wiped out all but one of its members just four years earlier.

The surviving member of the Patuxent tribe was named Squanto, and he was to play a key role in making the first Thanksgiving possible.

In November of 1620, the Pilgrims set about the first order of business to be tended to before the winter would set in, building a common house (in what turned out to be our own strange homage to this event, we spent today racing against the winter rains to complete a tree house/play structure/deck in our backyard).

Over the winter and early spring, 49 of the 101 who had made the journey on the Mayflower (during the journey, two perished at sea and one baby was born) had perished, and the prospects for the coming spring were grim, as there were now just 20 adults and 30 children.

It was then that a series of miracles began to occur.

First, a Native American named Samoset, who spoke English well enough to communicate, came to the settlement to welcome the Pilgrims.  Samoset then went to get Squanto, who was at first hesitant to come near to the settlement, as he had been captured and sold into slavery twice by English ships prior to this encounter.  However, he had been observing this group of Englishmen and found them to be quite different than the others.

{Editor’s Note:  You can read a bit more of Squanto’s fascinating story here.}

Squanto taught the Pilgrims how to grow corn and other key survival tactics to the new inhabitants of his native land, who he now called his people.  He then brought Massasoit, the chief of the Wampanoag and the leader of the tribes of the region.  Massasoit provided foodstuffs to the Pilgrims and agreed to a peace treaty with them that would last for 50 years.

With the aid of the Native Americans, the Pilgrims survived and, in the fall of 1621, had a bountiful harvest.  They declared a feast of Thanksgiving that lasted for three days and was attended by Massasoit and 90 other Natives.  It was a feast of Biblical proportions in the sense that it was a true tithe, where the first fruits of the season were brought together and enjoyed by all in the community.

Massasoit and governor John Carver smoking a peace pipe
Massasoit and governor John Carver smoking a peace pipe

And the rest, for better and for worse, is history.

Thanksgiving is a time to celebrate the miracles that occur in the lives of each and every one of us.  It is a time to reflect upon the people and the providence that have provided for us in miraculous ways throughout the year.

For each circumstance in which we live is a miracle simply because it is, and our lives are tapestries that are woven together by the Creator of such awe inspiring beauty that any difficulties encountered along the way simply pale in comparison to the whole.

Thanksgiving is a time to step back and celebrate this tapestry with the Creator, and, when contemplated along with the abundance that fills our lives if we would only pause, reflect, and open our eyes, join together with our loved ones and all of humanity, lifting songs of praise and Thanksgiving to the Father of us all.

As it was at Plymouth in the fall of 1621, so let it be with us tomorrow, for it is what our present circumstances call for each and every day.

Happy Thanksgiving

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 27, 2013

Copper Price per Lb: $3.18
Oil Price per Barrel:  $92.25

Corn Price per Bushel:  $4.17
10 Yr US Treasury Bond:  2.75%
Mt Gox Bitcoin price in US:  $1,067.29
FED Target Rate:  0.09%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,238

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  -0.1%
Dow Jones Industrial Average:  16,097
M1 Monetary Base:  $2,516,700,000,000

M2 Monetary Base:  $10,921,000,000,000

An Ode to the Veterans We’ve Known

11/11/2013 Portland, Oregon – Pop in your mints…

2012 - Another defeat to the Land of the Free
A Salute to the Veterans we have been privileged to know

With most of the markets we follow taking a breather for the holiday, save the Bitcoin, which bows to no sovereign and raced up to $383 today, we turn our gaze and tip our hats once again to veterans, not just those of the United States, which has specifically set aside this day to honor them, but of all men and women who have thrown themselves into the face of danger and worked in extremely difficult conditions to defend a national ideal that they believed in with all of their heart.

Here at The Mint, we wish to honor them by remembering the four veterans that we have known, three have passed on and one remains.  Each story is woven in with our own, and has changed the course of history for us.

First, there is our Grandfather Collins, who, as World War II raged on, managed to memorize the eye chart so that they would allow him to enlist in the Army.  While leaving our grandmother behind with countless other young women in the same situation at an Army base in Kansas, he boarded a troop transport which zigzagged its way across the Atlantic Ocean, dodging German U Boats, while sleeping on a rack with many other men, packed in like sardines for roughly 18 days until they safely reached their destination in England, where, as an ambulance driver he witnessed first hand the casualties returning from the D-Day invasion of Normandy.

“They didn’t tell us, but you could see they were mounting something big,” he told us of the preparations for D-Day.  He mentioned that they would ride bicycles 20 miles for a beer at the Pub on weekends.

When VE day arrived, he said they were allowed to stay in some of the finest hotels in Paris, but he was extremely anxious to get home to his young bride and could not enjoy it as one might imagine in retrospect.

Next, there is our other Grandfather, Victor, who enlisted in the Army early on in World War II and was sent to the Pacific Theater of operations.  While all of the Veterans we knew passed for difficult things, it was he who had the most difficult time.  He was an excellent baseball player in the Army and had the bad fortune of rupturing his spleen while playing ball in Hawaii.  While the surgeons were able to successfully remove it, they sewed up his abdomen with a sponge still inside!  The incision became so infected that they shipped him back to San Francisco to be operated on once again as he was close to dying.

When he recovered from this ordeal, he was sent into back to the Pacific Theater and, from what the family knew, contracted malaria and got lost in the jungle.  It was not until much later, after he had passed away, that we found out that he had actually been a Japanese POW and, at the end of the war, weighed just 98 pounds and again was at the brink of death.

They sent him on a train to his uncle’s farm in western Nebraska, where, fortunately, he was nursed back to health.

Third comes Edgar, our Grandfather Victor’s brother (our great uncle), who fought Germany’s Rommel, the Desert Fox, in Northern Africa.  Uncle Ed’s observations of the war that he related to us were that dentistry in the field involved a drill that was powered by a stationary bike.  As such, it was best to have a cavity filled when the men with the best bicycle legs were able to help.

He also observed that water was scarce, and it vexed him as to how the villages they visited during the war, who seemed short of water then, had grown to tens of thousands of people some 40 years later.  He and his wife, Ethel, were featured in the Reader’s Digest as a letter Ed sent to Ethel was found among a bag of US Army mail that had been found 40 years later.  It had words cut out of it to prevent the letters from giving away troop positions and planned movements that the servicemen may have inadvertently included in the letters to their sweethearts.

Ed often said that if any of us youngsters were drafted, he would pay for us to go live in Canada.  After the events of 9/11, he recommended that we read The Haj in order to understand Arab culture.

These three brave men above went on to live long, full lives and, while we have recounted some of the difficult things they were called to live during World War II, they did not doubt the call of duty which was given to their generation, and were glad to have served, and even gladder to be home when it was over.

The final veteran that we’ve known is a friend and former colleague who left the company before we did to occupy a UN post in Geneva.  We went to visit him once and he led us on a hike through some of the hills leading up from Ouchy, a nearby village, where at the top, we took in a pot of fondue and enjoyed the views over Lake Geneva.

We knew that Ryan, our friend, had been in the military before we knew him.  During our ascent over short rock walls and past cows donning bells, we took the opportunity to ask him about his experiences.  He was the leader of a tank unit in desert storm in 1991, and recalled how he would have to run up to holes in the sand to see if there were any Iraqi soldiers that had survived in their foxholes in the desert as the tank units advanced.  Not for the faint of heart.

The sacrifices of men like Collins, Victor, Ed, and Ryan all too often go unrecognized and, even more often, are not recounted, even by the very men who lived through the horrors of war to their immediate families.

We tip our hats to them and to all veterans across the United States and throughout the world of all nations, for they have demonstrated that at times it requires uncommon valor to keep the light of freedom burning in this world.

May they be remembered fondly and often, and may those who made the ultimate sacrifice rest in peace.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for November 11, 2013

Copper Price per Lb: $3.25
Oil Price per Barrel:  $94.87

Corn Price per Bushel:  $4.29
10 Yr US Treasury Bond:  2.75%
Mt Gox Bitcoin price in US:  $383.00
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,282

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  -0.2%
Dow Jones Industrial Average:  15,761
M1 Monetary Base:  $2,515,000,000,000

M2 Monetary Base:  $10,867,000,000,000

Why the IMF has no clue how to deal with the Spaniards and Italians


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10/15/2013 Portland, Oregon – Pop in your mints…

As the world continues to bite its collective nails while it waits for the US Government to decide whether to punt the ball down the road another stretch or capitulate on its debt in what we have dubbed “The Ultimate Stimulus Measure,” the IMF is busy scolding the US Government and proposing hack solutions which completely miss the point.

Just try to tax usThe world that the IMF operates in exists only in theory, it is like the perfectly closed system where energy is a constant which is the the basis of many physics theories.  On one hand, the assumption of a closed system is the only way to test a hypothesis.  On the other, to assume that the closed system is a given in real world situations is folly in the physics profession.

While the physics professor recognizes the limitations of his theory in practice and makes the requisite adjustments, these limitations are all too often lost on the IMF and others in the economics profession.  The situation of the latter is dangerous, as for some bizarre reason their theories influence wide-ranging policy decisions which affect the lives of billions based on its closed system fantasy.

Such is the case with the recommendations made in its October 2013 World Economic and Financial Survey which is eerily titled “Taxing Times.”

Taxing Times IMF 10-2013

In the report, the IMF makes two data driven observations:  That the national debt load in certain Euro zone countries is excessive and that there is a certain level of net family wealth in these countries.

Fair enough, however, what happens next is disturbing, for it reveals both the closed system fallacy as well as the arrogance of those at the IMF.  The IMF takes the above two data points and arrives at the following conclusion:

A one time, 10% tax on net family wealth in certain heavily indebted countries would make the national debt loads once again “manageable.”

If you have yet to laugh, cry, or hurl at what we have just described, you may stop reading as you are unlikely to get what follows and reading it will be a waste of time you can otherwise spend watching CNBC or the teletubbies.  Please carry on.

If you are still with us, allow us to heap it on by adding that the IMF believes that this one time family wealth tax would help as it would simply reduce the national debt, specifically in Italy and Spain, who, true to form, have managed to avoid full-scale bailouts suffered by the Irish, Greeks, Portuguese, and Cypriots to this point and gamed the ECB into issuing bonds on their behalf.

This last point should give you, fellow taxpayer, all the information you need to understand why, as ludicrous as a family wealth tax sounds, it becomes even more ludicrous when one thinks that it can be imposed on Spaniard and Italians, who are hands down the world champions in tax avoidance.

The governments of Italy and Spain have managed to have the ECB foot the bill for their respective bailouts to this point.  However, the only reason they need a bailout in the first place is because their citizens are experts in tax avoidance (it is a genetic adaptation acquired during Roman times which has grown stronger and more agile over time, that is all you need to know.)

Now, the IMF, in its infinite wisdom, glances at the problem and a dim light bulb goes on!  If you just tax 10% of each family’s wealth, you can reduce the national debt to an acceptable level!  “Voila,” says Lagarde!  “C’est comment son fait!”

“The genius of the tax,” she continues “is that it is one time only, so it won’t have any effect on investment or savings preferences!  Its perfect, I tell you, perfect!!!!”

This is why she’s paid 300,000 pounds a year, of course, to put two and two together.  At this moment, Christina Lagarde has now transformed into Cruella DeVille, the villainess of Disney fame (a transformation that requires only a slight wardrobe adjustment and a little imagination.)

As word of the IMF’s latest ploy spreads, the few Spaniards who have not opened a Bitcoin wallet called up their grandchildren and asked them to do it for them.

(Wondering what a Bitcoin is?  Check out our reasonably priced e book on the subject here)

By the time any sort of 10% one time wealth tax hits the Spanish and Italian Peoples, there won’t be a peseta or lira, er, Euro to be found from the Pyrenees and Alps to the Mediterranean coast, where avoiding the looting hands of emperors has been a national pastime for over 2000 years.

Stay tuned and Trust Jesus!

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for October 15, 2013

Copper Price per Lb: $3.28
Oil Price per Barrel:  $101.38
Corn Price per Bushel:  $4.37
10 Yr US Treasury Bond:  2.70%
Mt Gox Bitcoin price in US:  $152.89
FED Target Rate:  0.09%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,277
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  15,236
M1 Monetary Base:  $2,689,400,000,000
M2 Monetary Base:  $10,790,700,000,000

The Secret of Robert Parker’s Nose

10/14/2013 Portland, Oregon – Pop in your mints…

As the political fiasco en Washington continues, it is becoming clear that nearly any asset class that is not the US Dollar stands to benefit were the unthinkable to happen.  Here at The Mint, we have been investigating one of the more tasteful alternative investments:  Fine Wine.

Today, we continue by presenting to you a man whose nose literally moves the Market, Robert Parker.  Enjoy!

Tempranillo Photo credit: Mick StephensonROBERT PARKER “THE WARREN BUFFETT OF WINE”

Robert McDowell Parker Jr. is the world’s most influential wine critic. Born in Baltimore, Maryland (USA) on July 23rd, 1947, he continues to guide the fine wine industry with the tip of his nose, still going strong at the age of 66.

The Robert Parker Wine Rating System

The Robert Parker wine rating system (Parker Points) is a commonly used scoring system to rate fine wines. Although there are various, universally adopted rating methodologies, usually based on 20-point scales, Robert Parker’s 50-100 point scoring method has been very popular in the fine wine industry.

Robert M. Parker Jr. is undoubtedly the world’s most renowned wine critic. Since the late 70’s Robert Parker has been a prominent figure in the world of fine wine; his publication ‘The Wine Advocate’, an independent wine consumer guide, first published in 1979 draws a following of at least 50,000 subscribers to date.

Ever since the relatively new market of fine wine investment has taken off, wine connoisseurs, financial experts and investment brokers have been paying close attention to Robert Parker’s ‘million dollar nose’.

Robert Parker Jr. – the Million Dollar Nose due to the fact that Parker’s ratings have been known to significantly affect the value of wines and cause severe price fluctuations in the market, any investor in the fine wine industry should be well aware of Robert Parker’s opinions.

Robert Parker introduced his own wine rating system because he felt that critics often undervalued or overestimated a fine wine, mainly due to conflict of interest, for example the critic having a financial interest in the wine they are rating. Additionally, Parker felt that the commonly used 20-point system did not offer enough flexibility, and often resulted in unjustified, misaligned ratings. Therefore, Robert Parker’s 50-100 point quality scale (referred to as ‘Parker Points’) offers a widely accepted industry standard by which to gauge fine wine quality.

Robert Parker Wine Rating System

• 96 – 100

An extraordinary wine of profound and complex character displaying all the attributes expected of a classic wine of its variety. Wines of this calibre are worth a special effort to find, purchase, and consume.

• 90 – 95

An outstanding wine of exceptional complexity and character. In short, these are terrific wines.

• 80 – 89

A barely above average to very good wine displaying various degrees of finesse and flavour as well as character with no noticeable flaws.

• 70 – 79

An average wine with little distinction except that it is a soundly made. In essence, a straightforward, innocuous wine.

• 60 – 69

A below average wine containing noticeable deficiencies, such as excessive acidity and/or tannin, an absence of flavour, or possibly dirty aromas or flavours.

• 50 – 59

A wine deemed to be unacceptable.

Strange as it sounds, Mr. Parker’s nose can make or break a vintage in terms of market value.  He has risen to this status by breaking the mold in terms of rating Fine Wines.  What will be your great contribution to the world?  We encourage you to find and pursue it, for every calling, be in sniffing fine wines to pursuing monetary theory down uncharted paths, is a great contribution to the mosaic of life in which we move and breath.  Stay tuned for more information on Fine Wine Investing.  If you are interested in learning more about this asset class, please email us at the address below.

Stay tuned and Trust Jesus!

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for October 14, 2013

Copper Price per Lb: $3.27
Oil Price per Barrel:  $102.21
Corn Price per Bushel:  $4.37
10 Yr US Treasury Bond:  2.69%
Mt Gox Bitcoin price in US:  $146.24
FED Target Rate:  0.09%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,274
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  15,301
M1 Monetary Base:  $2,689,400,000,000
M2 Monetary Base:  $10,790,700,000,000

 

The DC Budget/Debt Ceiling Drama is Reaching a Crescendo

10/7/2013 Portland, Oregon – Pop in your mints…

The current scenario in Congress which has managed to entangle the Federal Budget, the Debt Ceiling, and Obamacare in the same line of debate is quickly reaching a crescendo as the rhetoric in Washington has degenerated into personal attacks and accusations that the other side is unwilling to compromise.

We recently saw reports that a number of Congressmen reeked of alcohol as they exited the chambers the night the Government shut down.  Apparently the only thing worse than the pressure of public office is these days is having to face it sober.

As we’ve said before, this type of stalemate in terms of budget matters is absolutely normal and to be expected of technically bankrupt entities.  As the US Government is the largest bankrupt entity on the planet, it should come as no surprise that its dramas will dominate the airwaves until they appear to be resolved.

We have been here before, you can read our commentary back when all of this latest round of bickering began back in 2011:

US Debt Ceiling Vote to Ignite Armageddon in Bond Markets? Key Indicators all Point to Inflation

This time, as both sides appear to be playing a dangerous game of chicken, the dire warnings of what will happen should the government default appear to be reaching a deafening crescendo.  The Chinese and Japanese governments, both large holders of US Treasury paper, are both pressuring Washington for some sort of assurance on their “Investments.”

US Financial Executives, who find themselves in the shoes of the Chinese, albeit on a smaller scale, are also beginning to sweat.  In a recent survey on the perceived effects of the debt ceiling breach, the Association for Financial Professionals summarized their findings in this way:

“Financial executives see dire consequences to prolonged political theater in Washington and a potential U.S. government default, according to a survey released today by the Association for Financial Professionals (AFP).

On October 3-4, AFP surveyed financial executives in the corporate treasury and finance departments of a broad range of U.S. companies across many industries, receiving 964 responses. The survey found that in the near term, finance executives believe political wrangling in Washington will lead to reduced demand for goods and services and that a failure to raise the debt ceiling in time will result in reduced capital expenditures and reduced hiring or layoffs at many companies.

But the damage goes beyond just short-term consequences. Forty percent of organizations report that they are holding back on making growth-oriented investments in the U.S. because they are having difficulty evaluating U.S. investments, due to the recurring battles over budgets and debt limits.”

As for effects on short-term investment preferences, the report goes on to state:

“A default would make U.S. Treasury securities, an investment vehicle used in many companies’ short-term investment portfolios, far less attractive. The survey found that one-sixth of U.S. organizations currently holding U.S. Treasury securities would shift out most or all of those investments if the debt ceiling isn’t raised in time. Another 36 percent of organizations would hold onto their current holdings of Treasuries, but would not purchase these securities going forward.

Meanwhile, half of the respondents say that a government default would harm their organization’s access to, and raise their cost of, capital. An increase in the cost of bank credit and higher cost of debt financing were each cited as possible outcomes by 27 percent of financial professionals.”

Scary stuff, right?  A default would cause a nearly instantaneous shift in short-term investment preferences for almost anyone holding US Treasuries.  You can read the entire horror story in the report via the following link:  AFP Survey: The Federal Budget and Debt Limit.

Joe Weisenthal over at the Business Insider presents a Goldman Sachs chart which refutes the argument floated by some that the US Treasury could continue to pay interest on its debts once it hits the debt ceiling.

Treasury Payments

It appears that once Halloween passes and the Federal Employees and Social Security recipients come calling on November 1, the well will be dry.

The well has been dry for some time now, and while it makes for great theater, it is difficult to see why it is in the interest of the government and its direct dependents to let it play out.  If it does, it can only mean that a new monetary system will be imposed, for the Mushroom Shaped Dollar Debt Sponge will have been squeezed.

However, should the US default on its debt, we reiterate our position that it “matters not,” for while the US Government and its dependents will be in a world of hurt, there will be a flood of new money available to private enterprise.  For, contrary to popular belief, Federal spending acts as a damper on the Federal Reserve’s loose money policies, and a US default may represent the ultimate in monetary stimulus, if not true economic growth.

It would be a wild and rapid adjustment but, while the numbers of those who depend directly on the US Government have risen steeply in recent years, the increasingly interconnected US and global economies are exponentially larger and the US, sans its government, is in an extremely strong competitive position both demographically and geographically.

A default may be just what the country needs to shake itself free of its economic doldrums.

So relax and choose your Halloween costumes wisely this year, as it could be dangerous to step out as your favorite politician, if indeed you still have one.

Stay tuned and Trust Jesus!

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for October 7, 2013

Copper Price per Lb: $3.28
Oil Price per Barrel:  $103.03
Corn Price per Bushel:  $4.49
10 Yr US Treasury Bond:  2.63%
Mt Gox Bitcoin price in US:  $137.00
FED Target Rate:  0.08%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,322
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.3%
Inflation Rate (CPI):  0.1%
Dow Jones Industrial Average:  14,936
M1 Monetary Base:  $2,556,500,000,000
M2 Monetary Base:  $10,726,300,000,000