Insane economic news of the
day By The Mogambo Guru
Things are getting weirder and weirder out
there, and I am getting weirder and weirder in the
semi-gloom of the Mogambo Bunker Of Ultimate
Paranoia (MBOUP), like when I (for some reason)
weirdly thought that if I called 911 to report the
emergency of a rampant 20% monetary inflation that
is going to lead to unbelievable consumer price
inflation, which will lead to food riots and
societal breakdown, it might do some good!
The reason I did that was that I am just
about to give up using the Mogambo Method Of
Societal Change (MMOSC), variously called "crazy
drunkard screeching and writing hate mail to the
Federal Reserve, Congress, the Supreme Court, the
United Nations and all the other lying, thieving,
scumbags of the world, most of them Marxist trash
who depend on the damned Federal Reserve and their
own central banks to create so much money so that
they
can
finance their loathsome socialist/communist
agenda". It did not, obviously, work.
Well, the 911 operator is, I am sorry to
say, just as stupid as the rest of the people
around here, and she did not think that an
explosive 20% growth in the money supply was an
"emergency" either, even after I explained to her,
like I patiently explain it to my neighbors, how
she was beyond stupid if she didn't think that
zillions of dollars being jammed into the economy
was an "emergency" - because it is! We're going to
be murdered by inflation! And murder is an
emergency!
"Hell," I told her, "Get up off
of your lazy fat butt and look around you!
Inflation in consumer prices is already zipping
along at terrifying levels!"
I even told
her how even the laughably low "official"
government estimate of inflation is a terrifying
4%, and the new "official" government Gross
Domestic Product Deflator (used to wring out the
effects of inflation from raw GDP data) is 2.4%!
Well, apparently calling her "stupid
fascist moron worthless lowlife goon-squad trash"
was violating a half-dozen or so laws, and after
being reminded of it, I knew that the 911
emergency system was just another government
agency in league with those Federal Reserve and
Congressional devils, and I hung up in rude
dismay.
So now you know how weird things
are getting, and thus you are primed for a recap
of the Insane Economic News Of The Day (IENOTD),
such as Total Fed Credit, the magical ultimate
source of credit, which turns into debt and
literally into money if someone borrows from a
bank, being down a whopping $9.3 billion last
week! Zounds!
And as more Insane Economic
News Of The Day (IENOTD), the Fed's personal stash
of US government debt is down another gigantic $48
billion last week! $48 billion! In one week! One
freaking week! In fact, the Fed's stash of US
Securities Bought Outright is down a whopping $151
billion in the last 12 months alone, and this
mighty drawdown leaves them with only another $629
billion!
If you want a little MORE of some
hold-onto-your-hat IENOTD, how about the fact that
last week total reserves in the banks was $44
billion, and of that, a negative $62 billion was
"non-borrowed"! Does that make them "borrowed"?
Hahahaha! What? Hahaha!
I have to admit
that I never was much good with negative numbers,
and so I am having a Very Hard Time (VHT) getting
my faltering few functioning brain cells around
the concept that "free reserves" in the banks are
a sudden, staggering negative $75 billion! Total
reserves are only $44 billion, but "free reserves"
are a negative $75 billion? What in the hell is
going on here? It feels like we are going backward
through a time warp or something!
I mean,
the banks should be loaded with money, as Rick
Ackerman of Rick's Picks says, "Since August, the
US has thrown more than a trillion dollars of
rescue money at the banking system in a desperate
attempt to restore confidence."
And as
more Insane Economic News Of The Day (IENOTD),
gold went down! Hahaha! This is truly, truly
insane, because if there was ever a time when gold
should be soaring, this is it! But it ain't! Yet.
All of this is taking a toll on the
dollar, and Bill Bonner here at The Daily
Reckoning writes, "In terms of what a dollar will
buy in the United States, a dollar is down around
25% so far this century. In terms of what it will
buy in Europe, it is down by about 50%."
Please notice the way the two sentences
seem so well written, so informative, yet
non-threatening. Now, notice that since this
century is only eight damned years old, this makes
the sentences seem even more grotesque if they are
emended to, "In terms of what a dollar will buy in
the United States, a dollar is down by around a
whopping 25% in the last eight short freaking
years, and in terms of what it will buy in Europe,
the dollar is down by a staggering 50 freaking
percent in the last stinking short eight years,
too!"
Naturally, I think that this is a
good opportunity to remind the viewers at home
that gold, as a store of value, has gone up in
price to compensate for the loss of buying power
of the dollar, which is only one of the beauties
of gold!
Apparently in response, Mr Bonner
then said, "In terms of gold, it has shrunk 75%"!
Naturally, my computer-like brain
instantly deduces that since the dollar has lost
25% of its buying power for a market basket of
goods in the last eight years, but the dollar has
lost 75% of its value against gold, then gold is
not only a store of value; sometimes you can
actually make money on it! Like now! Whee!
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,
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