Laughable 'loans' to prevent the bust
By The Mogambo Guru
When I woke up, it was morning, which meant that the economic world did not
blow apart during the night, abruptly waking me up by setting off loud alarms
in the Mogambo Big Battle Bunker (MBBB), rudely alerting me to another outbreak
of serious financial trouble from the economic cataclysm ("bust") that I figure
is right around the corner, now that the decades of irresponsible over-creation
of excess money and credit ("the boom") by the misbegotten Federal Reserve and
its former chairman Alan Greenspan, and the rest of the central banks of the
world, are wreaking their inevitable damage.
Which is not to mention the inevitable wars that usually break out about this
time in the economic cycle, either, which is another damned thing to be
paranoid and worried about - as if worrying that my wife, children and
creditors are trying to drive me to suicide with their incessant demands for
more money, more
money, always more money is not enough to worry about.
But perhaps I am just in shock, or becoming jaded, because while Total Fed
Credit went down by a massive US$19.3 billion last week, I am strangely not
shaken or afraid, as it seems so insignificant nowadays, especially compared
with the $142 billion increase of the previous week, which, despite my deadened
sensibilities, still merits an exclamation point!
Then, just as I was congratulating myself on how "cool" I am and how maybe I am
finally growing up, I was again instantly childishly hysterical when I read at
Bloomberg.com that "The US government is prepared to lend more than $7.4
trillion on behalf of American taxpayers, or half the value of everything
produced in the nation last year, to rescue the financial system since the
credit markets seized up 15 months ago."
My brain went into convulsions, as the average increase in Federal Reserve
credit was a measly $10 billion per month during the Greenspan years that
created the bubble, and even Bloomberg notes that Fed lending is now "1,900
times the weekly average for the three years before the crisis." Yikes! We're
freaking doomed!
Laying there on the floor clutching at my heart and waiting for the emergency
squad to get here, I was laughing and choking up blood at the irony of American
taxpayers "lending" $7.4 trillion - half of the country's gross domestic
product (GDP) - when the problem is that American taxpayers are already up to
their ears in debt and can't make the payments as it is; and American
corporations are up to their ears in debt, and all the federal, state and local
governments are up to their ears in debt, which is actually good news because
with their ears still above the congealed mess, they can hear me laughing at
them, mocking them, and saying, "Welcome to the hell you rightfully deserve,
you halfwit lowlife morons! Hahahaha!"
So, I have some bad news for the US government; the taxpayers are not prepared
to lend anything to anybody! Hell, total debt-to-GDP is over 350% already,
maybe 450%, which is, either way, the highest, by far, of anything I've seen in
US history, including the height of the Roaring Twenties boom that preceded the
Great Depression!
Well, Bloomberg is not interested in the Mogambo Rude Mocking Laugh (MRML) and
they do not ask things like, "Tell us why you are so dismal, disdainful and
derisive, oh, Fabulous Mogambo Person (FMP) upon whose full, sensitive lips is
bloody froth and scornful laughter that chills our spines!"
Perhaps it is because nobody cares about me, or perhaps because $7.4 trillion
is already just another big freaking number that defies comprehension, but
Bloomberg continues, "The unprecedented pledge of funds includes $2.8 trillion
already tapped by financial institutions in the biggest response to an economic
emergency since the New Deal of the 1930s, according to data compiled by
Bloomberg." Yikes!
But this, as horrifying as it is, is typical government crap, and if you want a
good example of the kind of governments we have, Bloomberg.com reports that
"New York Mayor Michael Bloomberg said his administration wouldn't send $400
property-tax rebate checks due this month to owners of apartments and houses
because the slowing economy threatens to worsen a widening budget gap." Hahaha!
I wipe the tears of laughter from my eyes and ask, "Seeing the way the
government steals the buying power of the currency, the confiscation of taxes,
and now seeing what appears to be outright theft, you STILL say I'm wrong about
gold? Hahaha!"
Whee! This investing stuff is easy!
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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