Fortunately, I was cowering in the Mogambo Big Brawny Bunker (MBBB) when I
looked at Total Fed Credit (TFC) and saw that it was up by US$4.6 billion last
week, which is $4.6 billion in new credit that has magically appeared in the
banks, created by a special little button that the Federal Reserve can push,
anytime it likes, to make credit appear either in its own account or in the
accounts of the banks. "How handy!", one thinks.
What makes this so important is that this magical, out-of-nowhere credit turns
into money when someone borrows it, which inflates the money supply, which will
soon (after a few iterations of the economic system) make the prices of some
things go up, and then make the prices of most things go up, and then finally
make the prices of everything rise in a burning, incinerating general inflation
as too much money chases too few goods, and money, money, money everywhere bids
up prices, more and more all the
freaking time, worse and worse until the society implodes because prices are so
freaking high that nobody can afford to buy things or even feed their crying,
whining children, and pretty soon all that incessant children's whining and
crying is driving you freaking crazy, and then there is rioting in the street
when prices rise like that after the money supply is allowed to increase like
So you can see why I spend a LOT of time in this fortified bunker, doors
locked, armed to the teeth; somebody has to baby sit those damned crying kids
while their parents are rioting in the streets, and it sure ain't a-gonna be
This money supply/inflation thing is important because the world's biggest
collection of idiots in the field of economics (featuring the clueless academic
Ben Bernanke, chairman at the Federal Reserve) are convening at Jackson Hole,
Wyoming, for the big annual conference on monetary policy where they will try
and come up with some new scam or scheme that will hopefully correct the
problems they caused with their last scam or scheme, which predictably failed.
This convention, which I routinely dub "A-holes at the J-Hole", still makes me
smile because it so perfectly describes my Disdainful And Highly Scornful
(DAHS) attitude towards them all because of their Complete And Utter Failure
(CAUF), an acronym that I used to see only on my Annual Employee Performance
Evaluations, so you are talking to an expert of a guy who knows what CAUF
really means, first-hand!
The theme of the Jackson Hole seminar this year (and you gotta have a "theme"
if you are going to sell T-shirts and coffee mugs as souvenirs), is this week's
proud winner of the coveted Mogambo Award For Sheer Economic Crap (MAFSEC). The
theme and winning entry is "Maintaining Stability in a Changing Financial
The Lex Column in the Financial Times describes Bernanke's address at the
Jackson Hole confab with a little disdain of his own, as he reports, "The Fed
chairman's last speech - delivered, appropriately enough, in a Hole - was on
'maintaining stability'", which I gather is apparently to be achieved through
keeping "Wall Street on life support until it wakes up into a nightmarish world
of tighter regulation - the central thrust of his Jackson Hole address."
This corrupt commingling of Wall Street with the banks at the control of the
Fed is scary enough to warrant bringing back the Glass Steagall Act without
delay and throwing former president Bill Clinton and his treasury secretary
Robert Rubin into prison for having repealed it in the first place.
But before I could get up a lynch mob or even mild interest in anybody, I was
distracted by another part of the speech by Mr Bernanke that is even more
horrifying, as he is apparently "banking on recession hammering commodity
prices enough to see off the inflationary threat posed by negative real
interest rates at home and looser monetary conditions in emerging markets."
I can't stop laughing! This is so bizarre, so "theater of the absurd", that my
mind is stuck in laughing mode! Hahahaha!
Jim Puplava at FinancialSense.com humorously explains,"Now, if you follow the
logic here, they're saying commodity prices are weakening because of slowing
economic growth, but at the same time economic growth is going to go up because
of falling commodity prices." Hahaha! That's exactly what they are, apparently,
counting on! Hahaha!
Now I am really laughing hard that the Federal Reserve actually thinks that a
spontaneous recession will offset negative real interest rates and massive
growth in the world's money supply! Hahaha! I am laughing so hard that my
stomach is starting to hurt and I think I might have peed in my pants! Hahaha!
Of course, everybody in the office sees my paralyzed-with-laughter condition,
and they decide to seize the opportunity to steal some of the 12 color-coded
staplers that I have neatly arranged on my desk, which they do just because
they keep "losing" their own stupid staplers, which I say just proves that they
are stealing office supplies, the thieving, lying bastards.
It's sort of like how the Federal Reserve is stealing all the buying power from
our money, except that with a stapler you can at least bind two pieces of paper
together, while the theft of the buying power by the Fed just makes the stapler
"Maintaining Stability in a Changing Financial System"? What a load of crap!
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.