The biggest laugh I had all week was from Bloomberg.com reporting, "European
consumers are 'suffering as surging food and energy prices erode the value of
their wages', finance officials said," which is not itself funny, but the
article immediately goes on that this is "urging governments to boost spending
to help the poorest deal with the fastest inflation in 16 years." Hahahaha!
Consumers are suffering because the stupid European governments boosted
spending for a decade or more, the money financed by debt, and it is all of
this spending that has made the
purchasing power of the euro to fall. And now the governments are going to
boost spending some more. Hahaha!
But it's okay, these guys are saying, because it's "to help the poorest deal
with the fastest inflation in 16 years". Hahahaha! Idiots! As Strother Martin
said of Butch Cassidy and the Sundance Kid in the movie of the same name as
they went down the mountain to La Paz, "Idiots! I've got idiots on my team!"
For example, Jean-Claude Juncker of Luxembourg is quoted as saying, "The least
well-off in our societies are very seriously exposed to a loss of purchasing
power due to the increase of oil prices, of commodity prices and food prices,"
which is true.
Then, bizarrely, he says that this inflation-from-too-much-spending makes it
imperative that "It's up to public budgets to react to this loss in purchasing
power by helping out the least well off"! Hahahaha!
And how does he suggest we do that? Naturally, anybody with an ounce of brains
or education knows that the first thing you do is stop creating more money and
credit, which is what causes a "loss in purchasing power" in the first damned
place.
Naturally, I figure that since the solution is so simple that it was time to go
out for something tasty to eat and something wet to drink, and then maybe take
in a couple of XXX-rated movies, but I was wrong, as here comes European
Central Bank president Jean-Claude Trichet saying that inflation will remain
"high'' for quite some time to come, and European Union monetary affairs
commissioner Joaquin Almunia saying, "We need to do more," because "inflation
is a socially negative tax on the poorest" people, which it is, and that is why
it is so imperative to stop creating more money and credit now, not create
more, you idiots!
Participating in this Gang of Morons Idiocy (GOMI) is British Chancellor of the
Exchequer Alistair Darling, who "cut the tax bills of Britain's poorest
families by 2.7 billion pounds [US$5.25 billion] in a bid to cushion the blow
from higher prices", which is a nice thing to do, especially if you don't want
to overlook the fact that they were taxing Britain's poorest families to start
with, which tells you all you need to know about the good intentions of the
British government.
But the horror is that they are NOT proposing to stop creating more money and
credit! They were proposing to create MORE money and credit, making everything
worse, as we learn to our horror when Darling said he will "raise government
borrowing to finance the decision as slower economic growth curbs tax revenue".
John Stepek, writing in the Money Morning newsletter from MoneyWeek.com,
writes, "[Prime Minister] Gordon Brown's response to the end of his economic
'miracle' is to rattle off yet another succession of bills. You'd think he'd
realize that the British consumer is sick of bills by now. But no. The man once
laughably described as the Iron Chancellor has thrown off all pretence of
fiscal competence and is now flinging money he doesn't have at problems he
can't solve."
And speaking of inflationary things that people can't solve, Christopher Laird
of PrudentSquirrel.com writes, "There is a report that 25% of the world's wheat
crop is at serious risk of a new virulent wheat rust that chokes the wheat
before it comes to head. The US has its own concerns over a wheat rust
spreading through the Mid West. So, what are the chances of a record grain
harvest in 08?"
Naturally, I have no idea about the chances of anything since I figure that
neither my marriage nor my career will last until the weekend, and so Mr Laird
gives us a hint. "Just to give an idea of the concern about food," he writes,
"China just spent a $400 a ton premium on fertilizer that used to cost $170 a
ton Jan 08. It was a huge order. Reason? They are afraid that if they don't
have great harvests this year, tens of millions may starve in 09."
And in case you don't care about Europeans but are concerned about the other
hemisphere because that is where you live, SteveQuayle.com posted a
news.bbc.so.uk story that "the price of tortillas, a staple food in Mexico, is
set to rise 18% in the next few weeks, an industry group says".
This is bad news because "thousands of people protested against tortilla price
rises in Mexico last year" when tortilla prices rose "by more than 10%".
So, Mexicans rioted at 10% inflation, and now everyone is wondering what they
will do about 18% inflation in tortillas? Hahahaha! Welcome to inflationary
hell! Ugh.
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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