Mish, writing at globaleconomicanalysis.blogspot.com, quotes a guy named
Professor Lewis, who says, "I have never been one to believe you can have a
true deflation with a fiat currency."
Memo to Professor Lewis: Danger! Danger! You have been misquoted or the
government goons are sabotaging you, and that means that people at work are
ganging up on you, just like they are around here, which explains why my water
heater is acting up all of a sudden, and why that cute new intern down in
accounting has filed a grievance against me, and so I can only imagine the
horror that is being visited upon you!
It hardly needed explaining that only a moron would say that you
CAN'T have a true deflation when using a fiat currency, when you obviously
MEANT to say, "I have never been one to believe that you will get a true
deflation with a fiat currency, if for no other reason than there is no reason
to believe that a corrupt government long-accustomed to gorging itself with
massive deficit spending and obliging various corruptions both in and out of
government, all made possible by a fiat currency that has produced inflation in
the prices of so, so many things in a series of bubbles is going to one day
slap itself on the forehead and say, 'Whoa! That's enough spending! From now
on, governments will spend less and less money, no matter how much pain it
causes!' Hahaha! Like that's going to happen!
That's why Mish should have been quoting me saying, "We're freaking doomed!"
instead of using this Professor Lewis guy, and I was going to tell him so, too,
when I was interrupted by Mish going on to ask Paul Kasriel of Northern Trust
about the nature of inflation; "How does inflation start and end?"
Mr Kasriel replies, "Inflation starts with expansion of money and credit,"
which is exactly right and perfectly phrased, too, which permits it to be
quickly committed to memory, which is a helpful mnemonic that this country
sorely needs, as even Ben Bernanke, the chairman of the Federal Reserve and
former head of the economics department at Princeton University, thinks that
inflation comes from high energy and food prices! Hahaha! Unbelievable but
true!
By this time, I am getting really upset that I am not being quoted or being
consulted in any of this, and nobody even mentions how my flashing blue eyes
seem to twinkle with a light of their own, even though I sent them a memo about
it, for crying out loud!
Since nobody liked the suggestion about mentioning my sparkling eyes, I thought
that maybe they could instead say, you know, how I am a terrific, wonderful
father, regardless of what a bunch of malcontent, whining teenage morons say.
But before I could bring it up, Mr Kasriel said, "Inflation ends when the
central bank is no longer able or willing to extend credit and/or when
consumers and businesses are no longer willing to borrow because further
expansion and/or speculation no longer makes any economic sense", which is also
exactly true, but not as easily committed to memory.
So Mish then asks "So when does it all end?" To which Mr Kasriel replied, "That
is extremely difficult to project," because for instance, "if there were a run
on the dollar in the foreign exchange market, price inflation could spike up
and the Fed would have no choice but to raise interest rates aggressively."
To this I think to myself, "Says who? You? Hell, interest rates are already
less than half the rate of inflation because the Fed and other central banks
are pouring so much money into the markets! And with a fiat currency and a
demonstrated willingness on the part of Congress, and every other government on
the face of the planet, to abide every possible corruption in a desperate,
clutching-at-straws attempt to forestall the inevitable collapse of the global
bubble, they can spend and spend and spend, and it will never end until it
collapses in a Big Stinking Heap (BSH)!"
I don't know why, but the phrase Big Stinking Heap made me think of tacos with
their golden shells, which made me think of gold, which made me think about how
I don't have enough gold in the face of such rampant monetary inflation, which
made me think about how I can't buy any gold because I don't have any money,
and I don't even have enough for a damned taco.
It's going to be rough in the minutes and months ahead. Take heed and take
action!
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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