Sensible is out, inflation insanity rules, OK?
By The Mogambo Guru
As usual, I take a long pull from a bottle of cheap tequila, use it to swallow
a handful of various calming medications, and manage to take a long, soothing
drag on a cigarette before my wife yells at me, "What in the hell are you doing
out there behind the garage? Put down that cigarette, spit out those
medications and put down that damned bottle of tequila! For crying out loud, it
is 6:30 in the damned morning, you idiot!"
So I turned my back on her, mumbling under my breath, and I gritted my teeth as
I started off, again as usual, with a look at Total Fed Credit, as it is from
here that new money comes, at the whim of the Federal Reserve, and if I tried
that crap they'd throw me in prison for a thousand years, and I am pretty
damned angry about the asymmetry.
This sudden surliness about asymmetry told me that I was
adequately liquored-up and prepared for reading that TFC was down US$3.367
billion last week, taking it back to $858.335 billion, a level where it has
been lingering for months, which is Bad, Bad News (BBN) if you are one of those
idiotic, debt-becomes-money economies that constantly requires more and more
money, more and more credit, and more and more debt just to achieve a financial
stand-still, like the stupid United States.
Of course, now that actual reserves in the banks are (unbelievably) no longer
required, financial corruption in the banks has reached its zenith, as the
banks are now totally free to create as much money as Ben Bernanke will let
them, which will theoretically be a lot. Therefore, inflation in consumer
prices will be likewise soaring a lot, and that makes the case for gold
stronger by a lot, as there is nothing that makes gold soar a lot in price like
a lot of inflation in consumer prices coming from a lot of new money and
credit!
Perhaps it was this corruption in the banks - or maybe his new-found fame in
the movie I.O.U.S.A. has gone to his head and he thinks that he is a
Hollywood star - or maybe it was being associated with this whole, dirty,
government deficit-spending mess that finally disgusted him, or maybe he is
repelled by the fact that nobody is getting terrified out of their freaking
minds after he tells them about the finances of the government and so he is
quitting in frustration, but for some reason David Walker announced that he was
leaving the US Government Accountability Office (GAO). He says it's because as
Comptroller General of the United States and head of the GAO, "there are real
limitations on what I can do and say in connection with key public policy
issues, especially issues that directly relate to GAO's client - the Congress."
So is he going to come over here and help me spread the word? No! Apparently my
offer of no salary and no benefit package in exchange for his total, slavering
obedience to my every command did not appeal to him, and he has taken, instead,
the CEO position of the newly-established Peter G Peterson Foundation, which
would "educate and activate" Americans while supporting "sensible policy
solutions", which makes me laugh my stupid head off and am suddenly happy that
this doofus is not working for me! "Sensible policy solutions!" Hahahaha!
Now, Mr Walker is a really smart guy; but history is full of really smart guys,
and none of them have found a "sensible policy solution" to an economic
collapse engendered by an inflating fiat currency and/or a wildly inflationary
banking system (and woe betide that poor country of morons who tried both, like
we are doing right freaking now!).
My advice to Mr Walker is to immediately get his old job at the GAO back, as he
has now reached that point where he is incompetent according to the Peter
Principle, which is brought into stark focus when you recall that he is going
to work for a foundation started by (or for) a guy named Peter Peterson!
Hahaha!
The Sad, Sad News (SSN) that Mr Walker is going to discover is that there is no
"policy solution" that can save our stupid economic butts, which I can prove by
showing that while all governments in history wanted to spend more than they
had, there has NEVER been any painless solution that worked to offset the
inflationary damage done by a government that succumbed to the temptation of a
fiat currency, and everything has always gone bust.
In fact, the only thing that consistently works is to prevent inflation in the
first place, by using gold and silver as money, and letting the free market set
interest rates by making borrowers bid for the limited savings of depositors.
Simple!
For those of you who wonder about a "sensible policy solution", perhaps a link
to the Toronto Sun, sent to me by Junior Mogambo Ranger (JMR) Phil S will be
instructive, as the news is about how inflation in costs, which comes about as
a result of inflation in the money supply, requires that some Canadians pay
more for electrical power, and "start paying the fluctuating hourly market
price for electricity, instead of the flat-rate regulated price that most
households and small businesses now pay", meaning that "hospitals and schools
that are already struggling, and cash-strapped cities, like Toronto, will pay
peak day-time hydro prices for water, subways and social housing".
How much higher will the price of electricity go? In the range of a quarter to
a third higher! Hahaha! Welcome to the hell of inflation!
If you are as outraged as everyone else seems to be at this stupid electricity
octopus and its executive staff acting like the greedy scumbags they are, and
you want to see the promised "sensible policy solution", then you will be
pleased to learn that they have one! Ontario's Independent Electricity System
Operator suggests that "municipalities shift consumption to the night-time,
when the cost is cheaper at 3.8 cents a kilowatt hour". Hahaha!
JMR Phil is not buying any of that "sensible policy solution" thing either, and
says that what will actually happen is that the "inflating of everyone's
electricity costs will be passed on and increases will ripple through
everything." And the result of that … "Costs rise and business decreases."
He stops short of predicting inflationary collapse where society has completely
broken down and people are running around wishing they had had the foresight to
get heavily into gold and much more heavily armed, but, "exactly!"
Then he asks, "Should we be practicing the spelling of 'inflationary
depression'?" My reply is, "Sure, if you want, but 'we're freaking doomed' is
easier to spell! 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 2008, The Daily Reckoning.
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