One of the reasons I am so irritable is
that I am constantly astonished by the stupidity
of the Federal Reserve and the other central banks
of the world creating so much excess money and
credit, which creates inflation in prices.
Junior Mogambo Raider (JMR) Mark Lundeen
is doing what he can to calm me down, and sends
along a clever quip about inflation from Pat
Paulsen, who is listed as, "1968 Presidential
Candidate & Comedian". Mr
Paulson comically says, "On the issue of
inflation, I think I could solve it no matter how
much money it took." Hahaha! This sounds exactly
like the Federal Reserve and the moron "yes-men"
with which they surround themselves!
Speaking of butthead "yes-men" morons, let
me point out the idiocy of Martin Feldstein, who
is noted as being a "professor of economics at
Harvard and chaired the Council of Economic
Advisers under President Reagan", although you
would not know it from the way he thinks.
For example, his tired, predictable little
essay, titled, "A more competitive dollar is good
for America", is (despite its argumentative title)
ordinary for the most part, containing such
hackneyed jewels as, "Since a falling dollar
raises the cost of imports and increases the
export demand for US products, a dollar decline by
itself puts upwards pressure on the US inflation
rate," which is true, as far as it goes.
Then he takes a sharp turn into Bizarro
Coo-Coo Land when he says, "But the overall
inflation rate need not rise if the Federal
Reserve sticks to its goal of price stability."
Hahahaha! What? Hahaha! What kind of insanity is
that? Hahahaha! How can prices be rising in the
first place if the Fed is achieving price
stability? Hahaha!
If you really want to
know, I'll cleverly tell you what the Fed is
really doing about "price stability" by trotting
out the other witticism sent to me by JMR Lundeen,
penned by a Professor W H Hutt: "The technique of
inflation demands that governments and their
agencies shall continuously deceive the public
about the fact, the speed and the duration of
inflation intended. Ministers of finance have no
option but to employ what has been called 'the
necessary untruth'."
So I say with a smug
tone to my voice, "Well, Mr Feldstein, how do you
like them apples, moron?" I notice that he doesn't
answer me directly, and rather just goes on that
after his assumed "Federal Reserve sticking to its
goal of price stability", things would be better
in that "relative increases in the prices of
tradable goods would be offset by lower inflation
in other goods and services." Hahahaha! I can't
believe I am reading this stupidity! Hahahaha!
Says who? Where in the hell did that come from?
Hahaha!
Blithely continuing on and
ignoring my raucous laughing and hooting in Raw
Mogambo Contempt (RMC), he yammers about how,
"Markets must look beyond the slogan that a strong
dollar is good for America to recognise [sic] that
a more competitive dollar will help sustain US
growth and is necessary to correct America's trade
deficit." In short, the erstwhile government
attitude that "a strong dollar is good for
America", which produced all the growth in the
economy by keeping imported inflation low for
decade after decade, is now, for some unexplained
reasons, wrong after all these decades, and that
now some higher import inflation will magically
"help sustain US growth"! Hahaha! This is Too, Too
Much (TTM)!
Then he put me right over the
top when he said, "Governments of our trading
partners must recognise [sic] that the dollar's
decline will weaken demand in their economies and
should use fiscal and regulatory measures to
maintain their growth and employment." Hahaha! Now
I am laughing so hard that my stomach hurts and I
think I peed in my pants! Hahaha! He is saying, as
astonishing as it sounds, that foreign countries
should create excess money and credit to destroy
their own currencies, bringing them down to the
debased level of the dollar, which has been
destroyed by the Federal Reserve creating excess
money and credit! Hahaha! This is freaking
unbelievable! This is "economics" to this halfwit?
Hahahaha!
He somehow comes to the
absolutely asinine conclusion that "With
appropriate policies, the dollar's decline will
correct the imbalances that threaten the global
economy without higher inflation in the US or
decreased growth in the rest of the world."
Hahahaha! He is saying that you can get a free
lunch with "appropriate policies"! Hahahaha! And
this guy supposedly teaches economics at Harvard!
Hahahaha!
Perhaps JMR Lundeen sent these
quips to me because from Brian Blackstone at Dow
Jones we learn that there is some Big Ugly News
(BUN) about the Import Price Index. He writes, "In
the 12 months through September, import prices
increased 5.2%, up sharply from August's 1.9%
year-on-year rate and the highest since August
2006."
This astonishing and terrifying
news about import inflation is mostly because of
higher oil and food prices, which are (being as
sarcastic as I can manage without actually
vomiting in rage) things we don't even need,
according to the Federal Reserve, because neither
food nor energy are included in their estimate of
"core inflation", which is a fact that I already
know, so don't write me and tell my how stupid I
am to worry about the stupid prices of stupid
imported energy and stupid food when the stupid
government has already told me they are completely
irrelevant to anybody's stupid lives.
While I quickly run to the restroom to
throw up at this idiocy, I will leave you with
some comments about energy from "Views from the
Fuse" at DailyReckoning.com, which passes on the
news from the Associated Press news services that
"The average total heating oil bill for the winter
months is projected to rise by 28% from a year
ago, to $1,834." A 28% rise in price to keep from
freezing to death this winter!
The "good"
news, I guess, is that, "Those who heat their
homes with natural gas will see an increase of
around 6%. This is because of ample natural gas
supplies, according to the American Gas
Association."
And the inflation news just
keeps getting worse, as we had a 4.4% year-on-year
increase in the Producer Price Index in September.
And yet people wonder why I am in here puking into
the toilet and cursing the Federal Reserve while I
do it. Ugh.
Mogambo sez: There is just
enough gold, silver and oil in the world to permit
you, me and a few other smart people to prosper by
owning them during these exciting times of banking
and governmental economic idiocies, because
everything they do seems specifically designed to
drive up their prices because everything they do
drives up their prices.
And the more
idiotic and corrupt the central banks and
governments act, the higher the prices of gold,
silver and oil will go. And since there is no
limit to the idiocy and corruption of government,
there is no limit to how high gold, silver and oil
will go. It's just that simple.
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
