If you want to know the reason why America is freaking doomed, it is because of
lowlife losers like St Louis Federal Reserve president William Poole, who is
being quoted at MarketWatch.com as saying that nothing is his fault, as,
"Investment professionals' 'shortsightedness' led them to make fundamental
errors that led to the mortgage crisis and credit meltdown." Hahaha!
MarketWatch.com reports that, "In a speech to financial planners, Poole
detailed five key mistakes that borrowers and lenders made that have pushed the
economy to the brink of recession." These "mistakes" were, according to Poole,
that "Borrowers took on mortgages they could not afford," which sidesteps the
issue that
nobody would have taken out a mortgage if the damnable Federal Reserve, of
which he was a part, had not created all the money. Which created inflation, as
it always does, in housing.
The second "mistake" was supposed to be that "Mortgage brokers put too many
people in unsuitable mortgages. They knew, for instance, that adjustable-rate
mortgages probably wouldn't be right for many borrowers if interest rates rose
as the market expected." Hahaha! Again this Poole jerk does not mention that
the banks, with his approval, provided so much money and credit that they drove
interest rates down to abnormally low levels! Of course they had to rise!
The third "mistake", he says, was that, "Investment banks jeopardized their
reputations by securitizing mortgages without doing due diligence on the
underlying assets, many of which were based on 'inadequate or spurious
information'." Again, the damned banks underwrote the whole thing by creating
all the money necessary, so you can see why everybody else thought that the
banks had already done due diligence!
Another "mistake" was, he says, that "Rating agencies put their stamp of
approval on securitized mortgages without considering whether AAA ratings could
be maintained if house prices fell." There is not even a mention that the
rating agencies could not help but notice that the banks has loaned all of this
money for this overpriced housing crap, and if the guys whose money was at risk
were okay with this stupidity, then you can see how the rating agencies were
mollified.
And, then, this Poole bozo says that lastly there was the "mistake" of how
investors, "scooped up those securities without doing adequate analysis" by
"too readily" accepting the AAA ratings at face value, as if the investor had
to actually disregard the fact that Poole and the stupid, greedy banks and
Federal Reserve had dropped interest rates to historic lows to loan money on
the houses, AND ignore that the rating agencies had given them a clean bill of
health!
Poole is obviously implying that everyone should know by now that the Federal
Reserve and its banking system is a stupid, lying pit of vipers who cannot be
trusted, and that the ratings agencies are even worse, and that only an idiot
would trust either of these despicable organizations to tell you the correct
time of day, much less rely on them to know what they are doing in establishing
risk or telling you the truth about it when they are all raking in the big
bucks by being incompetent.
And let's not forget that this lowlife loser is a guy about whom
Marketwatch.com reports, "Last year, he voted in favor of all the FOMC's rate
cuts"! Hahaha! What a creepy little worm!
Mr Poole, obviously embarrassed by my rude comments, says that, "A reach for
yield with inadequate attention to risk is another basic lesson that apparently
cannot be relearned often enough," when he actually means, "To never, ever
trust the word or competence of the Federal Reserve is a lesson that cannot be
relearned often enough."
And not only is the Fed a bunch of laughably incompetent morons, but they never
learn, and in Poole's own words, "There are no new lessons here. The mistakes
that brought us to this point have been made before."
Indeed they have! And that is why the US constitution has the requirement that
money be only of gold and silver; to keep bank morons and government morons
from creating so much money that they produce inflation and busts!
Hell, so much money was created that the Government Accountability Office says
that government agencies were unable to determine "the full extent to which
improper payments occur", and not only that, but these agencies had no idea how
to even "identify and resolve information security control weaknesses and
manage information security risks on an ongoing basis." Hahaha!
Anyway, the point is that the government's promises for future benefits payable
under the Social Security and Medicare programs are now estimated to be at $53
trillion, in current dollars. This is up from about $20 trillion in 2000.
Naturally, I whip out the old HP12C calculator, and in a matter of just a few
moments I had produced several contradictory answers to the question, "What in
the hell is the hyperinflationary horror, in percentage terms, of liabilities
increasing from $20 trillion to $53 trillion in 7 years?", most of them
clustering around 15%, which is so terrifying a number that I instinctively
repeat the calculations, hoping I am wrong. But I am not.
So a lot of money has to be created, and for those who wish to know the
eventual outcome of a central bank constantly creating excess money and credit
over the long term, the Reserve Bank of Zimbabwe (the worst of the worst)
calculates that their inflation in consumer prices was 24,059% in 2007. In
other words, if a loaf of bread cost $1 in January, it now costs $240.59 in
December.
Actually, it is Much, Much Worse (MMW) than that, as the Voice of America
reported that "Recent estimates of Zimbabwean inflation by independent
economists have tended to run quite a bit higher, ranging from 50,000% to
100,000%", and "Zimbabwe's Central Statistical Office stopped providing data on
inflation in September, saying it could not find prices for key goods because
they were not on store shelves." Hahaha!
In America (the place where lying with statistics achieved official government
status, thanks to the loathsome Alan Greenspan, the worst central banker in the
history of central banking, and the despicable Michael Boskin of Stanford
University, his willing henchman), a complete absence of goods on store shelves
means that "everything costs zero"! And then Greenspan and Boskin could, with
their new method, claim that this proves that inflation is falling! Hahaha!
Time for a rate cut! Hahahaha!
And that would have been all Mr Poole would have wanted to hear before voting
to create more money on the spot! Hahaha!
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 2008, 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
