Naturally, I turned a jaundiced eye towards the new Total Fed Credit (the
magical fount from whence spews new credit, which becomes new money and a new
debt when somebody borrows this new credit) that was created during the week
that the federal government nationalized the bankrupt and corrupt behemoths
called Fannie Mae and Freddie Mac. It was, surprisingly, down by US$5.5
billion!
This is, theoretically, Bad, Bad News (BBN), in that we cannot stop creating
new money and credit, as we are already too far down the Rocky Road Of
Destruction (RROD) of a fiat currency that comes into existence by virtue of
somebody going into debt, and the "point of no return" has been long passed,
sort of like when an airplane is taking off and it reaches that place and speed
down the runway where it can no longer stop, and the pilot must therefore
continue to take off and try to fly that sucker, even if the
engines quit and the wings fall off, which makes the task that much harder, as
I understand it.
The good news is that "Rocky Road Of Destruction (RROD)" is the new hit release
of the band called "Mogambo and the Mogambo-Tones", where the fabulous band now
takes a dark foray into Goth, with a tune propelled by the catchy hook "We're
freaking doomed!" which is constantly repeated over a soundtrack of wolves
howling, people screaming and crying out "We're freaking doomed because of the
inflation that was set in motion in the '30s when the corrupt Supreme Court
overruled the Constitution and declared that paper money was the same as gold
money, and then it was brought to a head in 1997 when the Federal Reserve under
Alan Greenspan started an exponential creation of so freaking much money and
credit so that, in 1999, when the loathsome Bill Clinton repealed the
Glass-Steagall Act, the banks had the wherewithal to create so much more debt
and thus an increase in the money supply to finance asset bubbles and
derivative bubbles (now approximated at $1.25 quadrillion world-wide, or about
$200 for every freaking man, woman and child on the freaking planet), which
makes you laugh at the audacity of such lunacy, but then we did it for so
freaking long that the resultant inflation in prices no longer appears as
inflation in stocks, no longer as inflation in bonds, no longer as inflation in
houses, but always as more and more inflation in the size of government and the
cost of living (price inflation), which means that the Federal Reserve must
create more money that the Congress needs to borrow, which will make inflation
in prices worse, which was the original problem in the first freaking place! Oh
woe! Oh woe!"
Okay, I realized that the lyrics needed a little work, but I am too lazy to do
the work and nobody else wanted anything to do with it, but the point is not
that most people are tone-deaf morons who wouldn't know good music if it came
up and kicked them in the crotch.
I prove this brash allegation by showing how few of them own any gold, even as
the Federal Reserve keeps expanding the money supply, which is so stupid that
it qualifies as "moronic."
And as a true moron myself, let me tell you that this really takes the cake.
But don't start me talking about cake, because then I would not talk about
gold, and believe me when I tell you that there is nothing better in times like
these than cake. I mean gold. I mean cake. I mean gold.
Well, you know what I mean, so let's break for lunch. Maybe have some cake. And
then buy some more gold and silver! 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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