Inflation targeting for idiots
By The Mogambo Guru
I have always feared and loathed Jean-Claude Trichet, the socialist/communist
moron put in charge of the European Central Bank, mostly because I think he has
always been a socialist/communist moron, and he spends most of his time both 1)
Avoiding me so that I won't get in his face and remind him of his complete
failure, and 2) Proving me more and more right about him all the time.
First off, this mental midget is actually using the central bank to "target
inflation", which means to actually cause inflation to be "close to, but not
more than, 2%"! Gaaah!
Purposely causing inflation! This is insane! This is beyond insane! This is the
work of the anti-Christ! The purpose of a central bank
is to prevent inflation, and to make sure that inflation is always, always,
always zero!
Now, get this; his failure as a central banker has now produced a horrific
annual inflation of 3.6% in the euro zone, almost double his stupid "inflation
target" of 2%, and yet this execrable halfwit is now making noise to lower
interest rates! Lower interest rates! He wants to lower interest rates!
I can't believe my ears! He wants to lower interest rates at the same time the
Fed is furiously pumping over US$600 billion into the banks of Europe,
providing a big boost to the money supply? And don't increases in the money
supply lead to increases in consumer prices - which are already at a terrifying
3.6%?
Of course, this brings up shame of the also-execrable Frederic Mishkin, whose
ridiculous theories of economics got us into the mess we are in while he was a
governor of the Federal Reserve, which brings up the shame of Columbia
University, which has subsequently hired this guy to teach economics at their
Graduate School of Business! Hahaha! I mean, how embarrassing for Columbia
University students and alumni! Hahaha!
In particular, I laugh at Mr Miskin's stupidity because he is a fan of
"inflation targeting", and in a laughable article he wrote for the Financial
Times incredibly titled "Do Not Abandon Inflation Targets", he actually asks,
"Is inflation targeting an idea that worked well in the past, but cannot cope
with the stress of the present environment?" Hahahaha!
Who in the hell said that inflation targeting "worked well in the past"? When
the hell was this? What kind of an idiot can say something as preposterous as
this, when all one has to do is get up off of one's fat butt, walk over to any
window, and look out upon the economic landscape and see nothing but flames and
destruction as far as the eye can see as a result of the inflation that we
have?
Again, a long, mournful cry of impending doom escapes my lips, and apparently
he took that as a sign of confusion, so he explains, "Inflation targeting
establishes a transparent and credible commitment to a specific numerical
inflation objective that provides a firm anchor for long-run inflation
expectations, thereby directly contributing to the objective of low and stable
inflation." Hahahaha!
Stealing the buying power of the currency by 2% a year is so outrageous that,
naturally, I figured that this was too good to be wasted on former Federal
Reserve trash, and now Columbia University trash, and so I excitedly went back
to the office to work out my fantastic new presentation to my boss to make this
work for me, too!
All night long I worked, worked, worked, and the next morning I was ready.
As soon as she gets to her office, I call her up on the phone and say, "I need
to see you right away, boss lady!" and she replies, "How did you get my private
number?" and I say, "That is not important, but is crucial that I see you right
away!"
So, now cautious, she asks, "Is this going to be about giving you more money,
more benefits, more time off, a bigger office, a company car, taking
incriminating evidence out of your personnel file, paying off witnesses or
blackmailers, buying you lunch or giving you money with which to buy your
stupid lunch?" I say, "No! Not this time! It's my new business plan I have been
working on all night long, modeled after the policies of the Federal Reserve,
now being taught to graduate students at Columbia University!"
So, she says, "Okay. I'll give you two minutes of my time". So I go up to her
office and her snotty little receptionist keeps me waiting for just long enough
so that I could remember how much I hate her guts for always making me wait.
Then she languidly hits the intercom button and says, "He's here" in a flat
monotone, which - to deliciously quote George Hamilton as Zorro in Zorro, the
Gay Blade - is as dull as her wit.
So I go into my boss's office and I proceed to wow her with my new plan, which
I call The Mishkin Plan (TMP), and I start off by reminding her that this new
TMP is not to be confused with The Mogambo Plan (also TMP), which is the plan
whereby I would make more profit for the company if I was paid more money,
given more benefits, more time off, a bigger office, a company car and an
expense account which would pay for, among other things, lunch and pesky
blackmailers.
Anyway, I say, "Here's my new plan, boss, and I know you are going to love it!
The plan, which I call The Mishkin Plan (TMP), is that I will now actually try
and lose money! But (and this is the good part) at a constant 2% rate! Why? So
that there will be a firm long-term anchor to the losses I generate, thanks to
my obvious incompetence, natural stupidity and generally poor work ethic,
thereby contributing to an objective of low and stable losses!"
The shocked look on her face told me that she was having a heart attack, but
after being rebuffed at trying to save her life by helpfully jamming some
nitroglycerine pills and aspirin down her throat as she is yelling "Get off of
me, you idiot!", I now see that she was not in cardiac distress, but merely
severely shocked.
She was still in the "angry stage" of shock for a long time, too, and she would
not accept my apology, and she says, "You had your knee on my throat, you
moron!" and I am explaining that I was just trying to hold her still, as she
was putting up quite a fight while I was trying to open her mouth by jamming a
letter opener between her clenched teeth so that I could give her the pills to
save her damned life!
Well, she was obviously hysterical, but I was soon back to pitching TMP, even
as two security guards came bursting into the room, grabbing me and dragging me
out of her office. As I am being hauled out the door, I am yelling, "What about
TMP? Shall I plan to lose 2% a year?" and she is yelling, "NO! NO!"
And so I say, "What do I tell Frederic Mishkin?", and she is yelling at me
"Tell him he's an idiot, too!"
And so, covering all the bases, I quickly say, "How about the other TMP that
had the big raise in salary and all that other stuff? Can we just go with
that?"
Well, she never did say, but I can tell by the way she slammed the door that
she is thinking it over.
In the meantime, inflation targeting means that you ought to be buying gold and
silver, not with "every breath you take" like Sting suggests, but with every
spare dime you can get your hands on, like the Big Mogambo Moron (BMB)
suggests!
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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