Probably like you, I have spent a lot of time in bars educating the common
people found there that central bankers and most economists of the world are a
corrupt, moronic and treacherous clot of intellectual traitors who don't know
squat about economics, and instead believe strange, new equation-based theories
that have names like "General Dynamic Integrated Analytical Equilibrium
Monetary Whiz-Bang Do Wah Diddy Theory" that is all predicated on
laughable-yet-inviolable imperatives like, for instance, "If you lower interest
rates, borrowing will automatically increase", which is followed by the even
more preposterous "if borrowing increases, GDP will automatically increase",
which is all so ludicrous that it makes you laugh until you realize that this
describes the economic system of the United States, whereupon you puke your
guts out in fear and you scream, crying like a little
baby, "The Mogambo was right! This is crazy crap! We're freaking doomed!"
That explains why you are naturally gloomy about the inflationary and
deflationary horrors that are soon to be unleashed, and you are becoming
fixated on the ideas that the government is spying on you (which they are),
that you don't have enough guns and ammo around the house (which you don't),
and that you need to buy more gold, silver and oil (which you do).
Day after day, week after week, month after month, year after year, your life
spirals down and down in utter despair until you are outraged and angry at the
monetary stupidity that is all around us until, one day, by mere happenstance,
you come across an item that says that you have been doing the right thing by
sending hate mail to the Federal Reserve ("Dear Fed Scumbags: Your creating
excess money and credit to satisfy the borrowing needs of the insanities of
government and leveraged speculating is Really, Really Stupid (RRS), and that
is why I hate your guts and why I think you ought to be in prison where I can
come by and throw things at you to torment you, partly because you deserve it,
but mostly because that is just the kind of vengeful, hateful, physically
violent, sicko kind of guy I am, and who, if you recall, hates your guts.
Sincerely, A Concerned Citizen").
The item that sent my heart soaring was in an update from the annual Jackson
Hole economic confab, where central bankers, various lickspittles and similarly
clueless academic weenies all gather around, sniff each other's butts and talk
economic-talk, like they had a freaking clue what in the hell they were doing,
which they obviously don't, as evidenced by the inflation and its attendant
suffering and misery that is growing like a malignant cancer around the world
as a result of their glaring monetary incompetence and despicable intellectual
and criminal corruptions.
The article is titled "Bankers Debate Asset Pool And Arbitrage" by Krishna
Guha, and it starts out dryly reporting the same old Federal Reserve grab for
power blah blah blah and that "banks might have to pool their troubled mortgage
assets into giant special resolution vehicles" that are blah, blah blah the
government will pay for everything blah, blah, blah, and a Fed spokesman says
that everything will be wonderful again very soon blah, blah, blah.
You know; typical Fed crap. But then, suddenly, towards the end, entirely out
of nowhere, Mr Guha writes that these laughable lowlife central banking morons
might be getting a little smart as regards the Austrian school of economics! My
heart leaps for joy to read that, incredibly, "Central bankers agreed that they
would have to pay more attention to measures of credit extension in future."
Wow! Fabulous! Wonderful!
The Fed and the other central banks say they are finally, after all these
years, going to restrict credit and keep the money supply from growing, to keep
inflation from growing, like as with gold-backed money?
I would love to say "Hooray!", but central bankers are all known as liars, and
always have been, so I will not say "Hooray!" And so we are still doomed, as
the banks and governments will willingly continue to expand credit extension
and engage in various "stimulus" measures of literally giving money to people
either in cash or as tax credits, all of which must be paid for with additional
borrowing, which means Really Bad News (RBN) is a-coming, as I gather from Mark
Lundeen in his essay titled "Swimming Against The Rip-Tide Of Their Own Making"
at gold-eagle.com, where he reminds us that "In a single sentence, the 1921 to
1932 bull and bear market cycle can be described as follows. The Federal
Reserve System provided banks with the means to transform the stock market into
a towering edifice of debt that by 1929 became so grotesquely bloated that a
normal 10% correction in September - October 1929 became a self-destruct
mechanism to a margin debt load twice the valuation of US Currency then in
Circulation. All else is commentary."
And, in case you had to be told, things are worse now than they were in 1929. A
lot worse. Orders of magnitude worse.
However, the reasons to invest in gold, silver and oil are a lot better than
they were in 1929. A lot better. Orders of magnitude better.
Hey! This economics stuff is so easy! 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.)
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