Toying around with toxic
exports By The Mogambo Guru
I want to make it perfectly clear that the
MoneyWeek.com headline, "China's most toxic
export", does not, in any way, refer to any
products licensed under the trade name Mogambo
Discount Toys And Medicines, Inc that we import
from China, as was so cruelly and maliciously
maligned in the popular press as "Some kind of
murky corporate shell where cheap, nasty people
import cheap, nasty things (mostly cat toys and
baby pacifiers) that are apparently made with
cheap, nasty, toxic industrial by-products of some
kind, mostly something that stinks and
apparently glows in the
dark."
The "toxic export" from China
referred to in the title is, instead, inflation,
and to save you from the tedium of listening to me
expound relentlessly on how growth in the money
supply soon means inflation in prices, I will cut
right to the meat of the article, as far as I am
concerned; things bought from China will cost
more, and things that we will be importing from
other places will cost more, too, because of all
the new demand made possible with more Chinese
money.
And how much money? In China, the
"Money supply continues to grow at around 18%."
Yow! See what I mean?
And what did it buy?
From the Technical Market Report by Mike Burk, we
read, "In a recent WSJ article a Chinese
government official stated that over 70% of
publicly traded Chinese companies were worthless."
Hahaha! That ought to work out real good! Hahaha!
And speaking of worthless, of all the
people invited to rub shoulders with the worthless
idiot-savant weenies at the Federal Reserve
economics confab at Jackson Hole, Wyoming (which I
famously refer to as "A-holes at the J-hole"
because it perfectly suits my low opinion of them
all), two people were conspicuously missing from
the guest list; one is The Mogambo, who is every
bit as big an A-hole as any of the other
attendees, and William L Anderson, an adjunct
scholar of the Mises Institute, who teaches
economics at Frostburg State University, who is
NOT an A-hole, but was still not invited either! I
mean, what are the criteria for inclusion here?
How do you predict those guys?
I am pretty
sure that I was not invited probably because they
know that I hate them all and I have zero respect
for any of them or their stupid economic theories,
and they probably did not invite Mr Anderson
because he wrote the essay, "The Party is Over -
Again", where he says things like, "the markets
now seem to be catching on to the reality that
Austrians and their fellow travelers have
recognized for years, and that is that a policy of
easy money cannot sustain itself. Someone has to
pay the piper, and he has shown up at the door."
That was going to be my cue to suddenly
appear at the door, radiant and resplendent in my
Mogambo Super Outfit (MSO) with the oversized
bejeweled codpiece (with matching tunic and cap),
whereupon I was to order the doors locked and
bolted and then leap upon Ben Bernanke and the
other attendees to deliver the painful
face-slapping they all deserve and desperately
need.
The reason that I am so desperate to
wrest control of the Fed away from these guys is
neatly summarized in "It's Different This Time, I
Swear" by Charles Zentay of
thinkinvestblogspot.com. He writes, "Bernanke, a
long-time student of the Great Depression,
believes that the cause of the Depression was that
the Fed first overlent and then underlent,
whipsawing the economy into catastrophe. The
solution to prevent a future crisis is to flood
the banking system with liquidity during times of
instability."
Yow! Perpetually increasing
the money supply, meaning perpetually increasing
consumer price inflation! Now you see why I am so
despondent and suicidal!
And, even worse,
they can count on the cooperation of the
government, as one can surmise either from long
experience, or from the ML-implode.com site (where
one can view the on-going carnage in the mortgage
market, also caused by the Federal Reserve, via
the now-famous Mortgage Lender Implode-O-Meter),
which has the subtitle "Tracking the housing
finance breakdown: a saga of corruption,
stupidity, and government complicity." Hahaha!
Perfect!
And even if the Fed and the
government can get another fraudulent boom going
in stocks, bonds and houses, it will be a hollow
victory for the winners, as Jim Willie of the Hat
Trick Letter says that, "since the US dollar fell
by roughly the same 15% to 20% as the stock market
indexes rose", then the "purchasing power of one
Dow share or one S&P500 share has been
preserved. That is a wash, not a boom."
And while I laugh at market speculators
for not actually making a dime but merely breaking
even against the ravages of inflation, I notice
that nobody is talking about the effect that this
"15% to 20%" inflation in prices has on us lowlife
workaday bozos and slobs out here who, like me,
are not being "made whole" by an investment that
is rising, but instead must slave away at our
stupid jobs, day after miserable day, up to our
freaking necks in debt and overbearing supervisors
who correctly suspect that we are incompetent lazy
bums, while our stupid kids and hateful families
are out wasting all our hard-earned money on
things like "back to school supplies", even after
you remind them that inflation has made that stuff
expensive, and the school will be absolutely lousy
with the stuff as all the other students arrive on
that first day!
Hell, you could probably
outfit a freaking army with the amount of "school
supplies" the other kids will drop on the ground
("finders keepers!") when you accidentally bump
into them and knock them down! But do they listen
to you? NoooOOoooo! They want to buy their own!
New! Retail! With tax!
So you silently
seethe with anger as you work, and you spend one
more dreary day getting that little bit closer to
your death while imagining the fun you could have
had with the dollars that are flying out of your
wallet to pay for all that silly crap, and you
grind your teeth in rage and exasperation.
Inflation. It's a killer. Ugh.
Mogambo sez: I'm really, really starting
to get really, really freaked out here, as the
really, really outrageous mismanagement of
economies by the central bankers is getting
really, really weird, and the fact that people,
the world around, are NOT madly converting
everything into gold and silver is even MORE
really, really weird, and I can only conclude that
sinister mutant spores from outer space have
invaded the planet and are eating our brains,
making us really, really stupid, which is the
really, really weirdest thing of all because it is
the only thing that would really, really explain
it all. Really.
Richard Daughty
is general partner and COO for Smith Consultant
Group, serving the financial and medical
communities, and the editor of The Mogambo Guru
economic newsletter - an avocational exercise to
heap disrespect on those who desperately deserve
it.
Republished with permission from The Daily Reckoning.
Copyright 2007, The Daily
Reckoning.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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