It is not just us Americans feeling the
inflation in prices, the ugly price we must pay
for allowing the government and its lapdog, a
central bank, to create excess money and credit
(monetary inflation) which produces price
inflation, as from Bloomberg we read that consumer
prices in Taiwan, "advanced 3.08% from a year
earlier", mostly reflecting higher prices of food.
Yikes!
And in Russia, the Federal
Statistics Service said that "consumer prices rose
more than expected in September as sunflower oil,
dairy and other food products
became more expensive." Yikes, yikes!
How
much more expensive? "Consumer prices increased a
monthly 0.8%" and "7.5% in the first nine months
of the year", which shows that prices are rising
the most in the recent past, meaning that they are
rapidly getting worse. Yikes, yikes, yikes!
And it may soon be getting worse for all
of us, as shown on the cover of a recent Economist
magazine. It is a photo of Bill and Hillary
Clinton walking in a parade, smiling and waving at
the crowd, with the caption "The comeback kids".
The significance of the whole stinking thing is
that if you look closely, behind Bill Clinton is a
half-hidden person who appears to be wearing a
folksy dress and holding out an orange plastic
bucket. Due to the angle of sunlight, there
appears to be something IN the bucket! Like money!
Obviously, the only possible, logical
conclusions that anyone with half a brain can come
to are that this visible hand and bucket are
either:
1) Like the guy that sweeps up
after the elephants in the big circus parade,
picking up all the stinking socialist/communist
"love muffin" crap pumped out by these two leftist
morons, before too many people get a whiff of that
stinking collectivist effluvium and say rude
things like, "Jeez! What in the hell is that awful
stink? Did somebody cut one, or is the Mogambo
around here or something?", or,
2) The
Economist magazine has doctored the photo, adding
the dress, the hand and the bucket so that the
really smart people (like you and me) will
immediately recognize it as brilliant Bill and
Hillary Clinton satire, as the photo is now
clearly, clearly, clearly showing a mysterious,
half-hidden somebody in the background (faceless
bureaucracy!) with a gun (not shown but obviously
implied), who is confiscating the buying power of
the money of the very people who are cheering the
collectivist Clintons on! Hahaha!
The real
joke is that none of the cheering, mindless people
in the photograph realize that this is happening,
and is destined to get worse under a President
Hillary Clinton, as all of her promised additions
to the nanny-state redistribution and
outcome-equalization crap (that has become the
very lifeblood of our economy!) will become more
and more expensive from now on, and the government
will borrow more and more money, which the Federal
Reserve will create as credit in the banks, so
that somebody can borrow the money from the banks
with which to buy the new government bonds, which
increases the money supply, which drives up
prices, which kills the economy. Whew! What a
piece of cover art!
All of this means that
dollars will be created like you will not freaking
believe, the dollar will go down and down and down
in value like you will not freaking believe, and
that everyone ought to be buying gold, silver and
oil right now, but they don't, because they don't
believe their own eyes.
And of course, as
soon as I open my Fat, Stupid Mogambo Mouth (FSMM)
about how all of these new dollars are such bad
news, here comes Peter Schiff of Euro Pacific
Capital with his essay "Are There Too Many Dollar
Bears?"
I immediately think to myself,
"Oh, crap! If Mr Schiff is going to repudiate what
I just said, then I am really screwed! I hate
this! Am I ever going to be right about anything
my whole pathetic life?" Sure enough, my
fears seemed justified when he started out that we
dollar bears are "united by two basic assumptions.
First is that the dollar's decline will be
orderly, and second is that the decline will
actually be positive for both the US economy and
the stock market. Therefore, other ways to
confound the consensus would be for the dollar's
decline to be disorderly or for it to be negative
for both the US economy and the stock market."
Suddenly, I am thinking to myself "Huh? I
think that? I didn't know that is what I thought!
I thought I thought that a weakening currency is
only good if you are a net exporter, which we
aren't, because you can undercut your
international competitors' prices while keeping
your domestic prices steady when sales are
converted into your own currency, but that a
strong dollar is good if you are a net importer,
like we are, because it keeps price inflation down
by making imports cheaper!"
I was trying
to wrap my three remaining functioning cranial
neurons around this seeming paradox when I
discovered that he was just toying with me!
Teasing the poor mental defective cripple like the
big bully he is! It turns out that he actually
agrees with the premise that the dollar will fall,
but that his disagreement is that "Of course
should such a run on the dollar commence, it will
not be the orderly decline everyone seems to
expect."
Apparently, standing next to me
in a crowd or even agreeing with me about anything
is somehow repugnant to Mr Schiff, as it is to
most people, so he makes a joke of it and says,
"However, I am still not sure why so many feel a
declining dollar is not a problem so long as it
does so in an orderly manner. If you're headed to
the poor house, what difference does it make how
you get there? Whichever road you travel, you're
just as broke when you arrive!" Hahaha! Perfect!
This is all at odds, of course, with a
Bloomberg.com article headlined "Weak Dollar
Boosts Growth Without Fueling Inflation", which
was full of the feel-good story that a weak dollar
is good for exports, which it is, and that it is
good for net-import America, which it is not. And
as the joke goes, "Not only is it not, it's snot!"
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,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
