Did he say, 'Tighter monetary
policy'? By The Mogambo Guru
Total Fed Credit expanded only $2 billion
last week, taking the total to $861.6 billion. Not
much of an increase, and sure enough, Doug Noland
says, "Fed Credit has increased $9.4 billion y-t-d
and $31.9bn over the past year (3.8%)." Almost
nothing, considering their record!
So the
money to finance the world's bull markets is
coming from someplace else. Hmmm! I wonder where?
And I wonder why the people providing the money to
keep up the bull markets in stocks, bonds and
government are doing it? What is their motivation? And
if
they are that carefree with their money, can I
talk them into giving some to me? Or is there some
slimy corruption at the root of it all?
Being naturally paranoid and distrustful,
I vote for corruption every time, because the
history of the world is clear; the amount of
corruption at the end of long booms is always at
unbelievable levels. And then Jeremy Grant at the
Financial Times hears us talking about corruption
and volunteers that, "The number of cases
involving manipulation and false price reporting
in commodity and commodity futures markets caught
by US regulators has reached record levels in the
past 12 months. The Commodity Futures Trading
Commission, which oversees such markets, yesterday
revealed it had collected a record $540 million in
civil penalties, restitution and disgorgement (the
return of ill-gotten gains made as a result of a
fraud) from cases involving fraud, manipulation
and other misconduct. It said this was a record."
Hahaha! A record! It's just history repeating
itself, as corruption is at the maximum!
The good news is that when the regulators
get around to looking at the staggering
manipulation in the gold and silver markets, they
could probably balance the federal budget for
years to come if they forced the manipulators to
"disgorge" their "ill-gotten gains" as a result of
the price-manipulating frauds they committed for
the last few decades!
My face breaks into
a beaming smile and I rub my gnarly hands together
in wicked, ghoulish glee when I extrapolate from
this that when the regulators get around to
looking at the sleazy, shadowy, scumbag guys who
own the Federal Reserve and force them to
"disgorge" their "ill-gotten gains" for the entire
94 years since the despicable Federal Reserve was
created by a few loathsome senators late at night
on a deserted Christmas Eve in 1913, and then
unanimously passed by them, and the resultant
unconstitutional fraud of a fiat currency has been
upheld by every stinking traitorous Supreme Court
ever since, and how all of that means that we
should rise up as one and descend like a plague
upon Washington, DC ("Mogambo and a small mob of
drunken, obscenity-spewing mental defectives drive
to the nation's capitol and make a nuisance of
themselves!"), overrunning the Supreme Court,
immediately putting all ultimate judicial power in
the Capable Hands Of The Mogambo (CHOTM) for
about, oh, I'd say about 10 minutes ought to be
enough to order the arrest of all current and the
former Supreme Court justices, living or dead,
since 1913, for the crime of treason against the
United States of America, in that they colluded to
ignore the stark constitutional requirement that
money must be only of silver and gold, but it
isn't, and now we are paying the inevitable
economic penalty for it, and I positively break
into an Evil Mogambo Cackle (EMC) at the now very
real possibility of having the miscreants brought
before me, in absentia if necessary or even
expeditious, crying and sniveling, whereupon I
give them a quickie kangaroo trial before I
pronounce the seemingly-foreordained guilty
verdict and order an appropriate, thus excessive,
sentence.
Next, I will order the arrest of
all living and former members of Congress (except
Ron Paul) on the same charges, but with harsher
sentences because they deserve it so richly,
because they acted so irresponsibly, and so, so
willingly stupid, and have them "disgorge" their
ill-gotten gains, too.
Obviously, the
Financial Times correspondent is horrified by the
extremes of Savage Mogambo Revenge (SMR), and
perhaps tries to calm me down by imploring me to
realize that "the System is working" by saying,
mysteriously, "The disclosures are a sign that
unprecedented volumes in commodity markets are
giving rise to a corresponding increase in
enforcement actions."
Huh? So we still
have the same number of crimes per unit of volume
in the commodity markets? Criminal activity is in
a constant ratio with volume of transactions? What
in the hell kind of lackluster "law enforcement"
and "regulation" do you call THAT crap? Jeez!
In spite of that, and many more instances
of American stupidity, I have now officially
stopped standing at the street corner and yelling,
"We Americans are the biggest bunch of godforsaken
monetary and fiscal idiots in the history of
godforsaken monetary and fiscal idiots, and yeah,
I'm talking to you, you moron!" at motorists who
foolishly stop at the stoplight.
So why
this sudden change of heart? Is there some
evidence of Americans showing some smarts?
The answer is, surprisingly, yes! (and
please take note of all the surprises), as from
Associated Press we surprisingly learn that
"Long-shot Republican presidential candidate Ron
Paul raised a surprising $5 million during the
past three months." And this is certainly
surprising, in that, "Paul barely registers in
polls of Republican voters, a sign of low name
recognition nationally."
So, surprisingly,
"Since he entered the campaign, he has operated
with little media attention, getting the spotlight
only during debates," which surprisingly proves
that the media are co-conspirator idiots who can't
recognize real quality in candidates, and which is
surprisingly proved by the admission that people
can sure as hell know quality when they see it, as
"that has been enough to attract an avid Internet
following".
Wow! In short, the people who
actually know Ron Paul and his platform are so
thrilled by him that they are giving the big money
to him! So much so, in fact, that surprisingly,
"Paul, a Texas congressman who once ran for
president as a Libertarian, also will report
having $5.3 million cash on hand. The amount
places Paul well ahead of all but the Republican
front-runners in the race"! Fantastic! There is
real hope for America!
In fact, Ron Paul
is so popular that "His fundraising for the
quarter almost matches what Senator John McCain is
expected to report. His total is half the amount
that former Massachusetts Governor Mitt Romney is
reported to have raised." Hooray! Hooray for Ron
Paul and the people who are supporting him!
So I decide to celebrate Ron Paul winning
the presidency, and the fact that this shows real
intelligence in Americans, with a good
old-fashioned, "Lost Weekend", booze-guzzling
party. But just as I knocked a few drinks back in
one long pull on the bottle, just when I think
people are getting smarter, here comes Frederic
Mishkin, who is one of the new guys at the Federal
Reserve who apparently have to say stupid things
as part of the secret Federal Reserve initiation
process (probably getting their brains knocked out
by spanking, and then chanting "Thank you sir! May
I have another?" a la Animal House).
For
example, unbelievably, Mr Mishkin is reported to
have remarked that, "Gold is not a particularly
reliable indicator of inflation," which he thinks
somehow handily dispenses with that particular
piece of evidence, especially since gold is
roaring along at over 30% a year and thus has been
acting like price inflation, which is roaring at
over 10% a year (just like John Williams at
ShadowStats.com calculates), which I am sure is
probably true because the M3 money supply
(monetary inflation) has been growing at about 15%
a year, and price inflation is caused by monetary
inflation, and in roughly the same degree. It's
that simple!
So even as I am feeling the
initial effects of greedily chugging down some
powerful alcoholic beverages start to kick in, Mr
Mishkin is rendered comically beyond laughable
when he says that not only has inflation in prices
come DOWN, but that, "Inflation has come down in
the old-fashioned way. Tighter monetary policy and
a commitment to price stability by central banks
throughout the world have led to lower inflation
and an anchoring of inflation expectations."
Hahahaha!
And did he say, "tighter
monetary policy"? Hahahaha! All rates of interest
are less than half of the 10% rate of price
inflation (when calculated the traditional way,
which the government does not do anymore, but John
Williams at ShadowStats.com does). Hell, a 30-year
bond yields less than 5%! Five percent when
inflation in prices is running at 10%, even when
the dollar is not falling in value, driving up the
price of imports! And now? Who the hell knows?
And did he say, "tighter monetary policy"?
Hahahaha! The Congress just raised the limit on
the National Debt by almost $900 billion, which is
almost a trillion dollars, as made necessary when
the Congress has already used the last 12 months
to deficit-spend almost $500 billion more than
they collected, all made possible by the Congress
using the last 6 short years to increase the debt
by a staggering $3.2 trillion, all financed by the
Federal Reserve creating the money out of thin air
so that it could be borrowed and used to buy the
government debt, thus relieving the government
from having to raise that much in taxes or
borrowing that much in savings!
If you
look at my face, you will notice that I am having
a hard time not breaking into a big, loud belly
laugh of Maximum Mogambo Mirth (MMM) as I say,
"And I am supposed to believe that the Fed will
NOT create the money and credit to allow the
government to borrow all of this $900 billion
more, and then even more when that runs out in
about two years (extrapolating the long-term
trend)? Hahahaha!"
And did he say "tighter
monetary policy"? Hahahaha! Required Reserves in
American banks are, in total, still only a lousy,
insignificant, almost nothing, squat-like,
stinking $40.2 billion, which is about the same
low, low, low amount that it has been since 2000,
while deposits and loans grew like a cancer to
trillions of dollars, and now Required Reserves as
percentage of anything new in the banks is
certainly the lowest in the history of banking,
because there is nothing less than zero! Hahahaha!
So, for how much assets and debt is this
piddly $40.2 billion counted as its "reserves"?
Doug Noland, in his Credit Bubble Bulletin at
PrudentBear.com, reports that bank credit alone is
$8.923 trillion. And how fast is bank credit
growing? "Bank credit," says Mr Noland, "is now up
$280 billion over the past 10 weeks, with a
$627bn, or 10.1% annualized, y-t-d gain", while
"Loans & Leases surged $25.9bn to a record
$6.574 TN (10-wk gain of $249bn)."
So it
looks like about $15.4 trillion in bank assets and
liabilities is being backed up by a minuscule
$40.2 billion! That's a microscopic 0.0026%. A
quarter of 1%! Hahahaha! Fractional reserve
banking at its finest! Hahahaha!
And all
of this is Mr Mishkin's "tighter monetary policy"?
Hahahaha! I'm laughing my Stupid Mogambo Butt
(SMB) off here! Hahahaha!
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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