I was, of course, acting stupidly,
gobbling random medications by the handful and
washing them all down with tequila just to try and
calm down enough so that I don't start screaming
and screaming and screaming in fear at the
terrifying economic disaster that is unfolding all
around us, by which I mean, of course, how
inflation is going to kill us and eat us alive,
leading one inexorably to the immortal yet pithy
phrase, "We're freaking doomed!"
For one
thing, Total Fed Credit was up by only US$357
million last week, which, chump change that it is,
approximately equals the cost of an ordinary
emergency room visit these days.
This
TFC-not-expanding thing is Bad, Bad News (BBN)
because this is the stuff that the Federal Reserve
creates at their whim, which causes credit to
appear on the books of the banks,
which
turns
into money when someone takes out a loan at a
bank. Thus you see how this TFC is the actual raw
material from whence Magical Money From Thin Air
(MMFTA) comes.
If you are like most
people, you have given up believing in magic a
long, long time ago, as it is the stuff of fairy
tales, which you have also given up believing in,
too, because you learned the hard way that there
is no such thing as a "happily ever after" ending
for anything, and in fact the "ever after" is
usually filled with bosses screaming at you
because you keep screwing up, children screaming
because that is what kids do, spouses screaming
because that is what spouses do, creditors
screaming on the phone about taking you to court
which is what creditors and collection agencies
do, and you end up screaming about the sheer
economic madness that is rampant in the world and
how you are going to die an ugly, ugly financial
death because of the Federal Reserve creating the
money that creates inflation in the prices we have
to pay.
But all is not quite lost yet! The
category of Other Fed Assets went up by $15.6
billion last week, taking that category to $80
billion, which is up $40 billion in the last 12
months, which is a staggering increase, given that
it has taken since 1913 to amass the first $40
billion. I assume that this is where some of those
worthless assets that the Fed is taking off the
hands of its nasty little banker buddies winds up.
This disgusting largesse at taxpayer
expense was partially offset by the Fed selling
another $12 billion of its Treasury bonds last
week, taking this main asset of the Federal
Reserve itself down to $548 billion, which means
that they have sold a full third of their
ownership of Treasury bonds that they have been
gradually accumulating to expand the money supply
since the founding of the Federal Reserve 1913, in
just the last few months! A third of it gone, in
three months! Months! Something very bad is
happening, meaning that we're freaking doomed!
And speaking of lying, stinking messes, I
am reminded of Senator Christopher Dodd of
Connecticut, the blowhard chairman of the senate
banking committee, who never saw anything wrong
with banks or the actions of the Federal Reserve
the whole time as this whole stock bubble, the
bond bubble, the housing bubble, the government
bubble, the subprime mortgage/derivatives mess
were growing, growing, growing, even though
Greenspan (and then Bernanke) testified in front
of him at least twice a freaking year, each time
saying the most preposterous things while Dodd and
his stupid little banking committee buddies just
sat there and ate it up like the ignorant morons
they really, really are, when they were so close
that they could have sprung over the desk
("boinggggg!"), grabbed one of those Federal
Reserve chairman weenies by the necktie with one
hand and slapped the living hell out of them with
the other hand, while yelling at them as loud as
they could, "Stop this stupid, insane expansion of
the money supply before you create consumer price
inflation, which is the thing to be feared above
all things, or we will fire you and use the IRS to
hound you until you die, slowly, screaming in
pain, alone, in the dark, in the rain, just like
an Earnest Hemingway novel at its most
depressing." But did they use that golden
opportunity? NoooOOoooo!
Anyway, not
content with committing that gigantic,
unforgivable incompetence, now this Dodd creep
says that he wants the taxpayers to bail everybody
out by having the Federal Housing Administration,
a government-owned mortgage insurer, guarantee
another $400 billion in mortgages, which means the
taxpayers paying for the inevitable losses!
Hahaha!
This, to be fair, is just typical,
loathsome Democrat commie-think, all of whom
actually believe that the reason government exists
is to continually give money and mandate unfunded
benefits to more and more people. And yet you
still think that the United States has a viable
economy? Hahahaha! I point at you and laugh in
utter contempt, as that is the Rude Way Of The
Mogambo (RWOTM) at such stupidity! Hahaha!
Communism that works? Hahaha! Too much! Hahahaha!
Perhaps this hysterical laugher of mine
means that I am just overmedicated, but you would
think that since a fiat currency has never worked
in the whole history of mankind, and since a fiat
currency has destroyed every economy that tried
it, and since giving banks unlimited power to
create money and credit has never worked in the
whole history of mankind, and it has destroyed
every economy that tried it, and since having
large, expensive, suffocating governments has
never worked in the entire history of mankind and
as destroyed every economy that has tried it, it
would seem obvious that we should not elect bozos
like, for instance, Dodd, Kennedy and Pelosi.
But I am heartened to learn that my
medications have nothing to do with it, as from
chartoftheday.com we also get their "Quote of the
Day", this week by the German philosopher Georg
Hegel, who said, "What experience and history
teach is this - that people and governments never
have learned anything from history, or acted on
principles deduced from it."
And thus I
know, beyond a Shadow Of A Freaking Doubt (SOAFD)
that the rest of history will repeat, too, and
that gold will, again, just like it always has,
rise in price as the value of the over-issued
currency in which it is priced falls in purchasing
power.
I mean, how simple can it be? Whee!
This investing stuff is easy!
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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