Every time I get upset about the stupidity of the morons who infest the US
government, I find that I can usually calm myself by taking a lot of
prescription and over-the-counter medications or getting really, really drunk.
Or both.
The rest of the time, I can soothe my raw nerves by just being thankful that I
am not, for example, British, whose government, for example, not only sold
their nation's gold at the exact low price of the last couple of decades on
behalf of their socialist/communist touchy-feely Leftist stupidities, but now
the Wall Street Journal reports, "The UK, faced with its own funding headache,"
has now
decided that a little more socialist/communist stupidity is in order! Hahaha!
Now they are, "requiring banks to become buyers of government bonds". Hahahaha!
People are looking at me like I am weird for laughing so insanely at this, but
come on! Requiring banks to buy government bonds? Hahahaha!
Still, no one laughs with me, and so I explain that the article said that this
will, "cost UK banks (US$1.91) billion based on an estimated 1.5 percentage
points a year of lost revenue". Hahahaha!
Still nothing! Then I explain that "Everybody is trying to bail out their
banking systems, and here the British are crippling theirs! Hahaha! Too much!
Hahaha!"
In desperation to divert everyone's attention, I quickly agree with the Journal
when it concludes that "good news for the government isn't necessarily good for
the UK economy" whether or not they like it when I agree with them, but we soon
disagree again when they go on to say, "banks will be forced to cut back
lending to the rest of the economy as they divert funds into government debt".
Well, with a cruel sneer in my voice, I say, since they are not here to defend
themselves, that they are idiots, and that this "cutting back" on lending is
not remotely true! Banks can simply create as much money as is needed, to do
anything they want, including being diverted into any amount of government
debt, all of which is the Big Freaking Advantage (BFA) of having a fiat
currency in the first place! Hahahaha!
I was just about ready to call them up on the phone and tell these British
geeks, "The reason that we have a recession that is going to morph into a
depression is that the damned Federal Reserve, under the despicable Alan
Greenspan from 1987 to 2006, kept interest rates too low, by the simple
expedient of lying through his nasty teeth about the true rate of inflation!
What's the matter with you morons? Don't you jerks know anything about
economics? I mean, you call it 'football' instead of 'soccer', for crying out
loud, and you are always sticking an extra 'u' in everything, such as spelling
it 'colour' instead of 'color', and 'Thank you for calling us idiots, and would
you now do us the favour of desisting in such behaviour?' instead of 'drop
dead!'"
Fortunately, they seemed to take some pains to calm me down when they went on
to admit that "The paradoxical truth may be that the less volatile business
cycle (until recently) encouraged investors to take bigger risks with borrowed
money, driving asset prices too high and ending in damaging busts", which is
exactly right!
Not content to let them off that easy, I nit-pick at them by saying that they
did not finish the thought, and I would have added a clarifying "because a
worthless lying piece of crap named Alan Greenspan, along with his fellow
morons at the Federal Reserve and the odious Michael Boskin of Stanford
University and the Hoover Institution, came up with ways to lie with statistics
about inflation, such as 'adjusting for quality' and other asinine tricks, so
that inflation in prices that was truly in double-digits for years and years
was statistically reduced to an amazing 1 and 2%, which made real,
inflation-adjusted GDP look bigger after the necessary adjusting of raw GDP
prices by this miniscule estimate of inflation, which allowed them to keep
interest rates too low for too long, and then everybody conveniently looked the
other way as their nasty little bank buddies and co-conspirator Wall Street
sharpies securitized all that toxic debt crap and sold it to unsuspecting
investors around the world, who borrowed massive amounts of money from their
own stupid banks and their complicit central bank excesses to buy all those
worthless securities as some sort of hedge, with everybody operating with
insane levels of leverage of 10-to-1, 20-to-1, 30-to-1, 40-to-1 and higher! No
wonder the Mogambo Guru is going out of his freaking mind at the stupidity,
cupidity and sheer corruption of the banks and the governments around the
world, who are all doing this same silly crap, using the same silly fiat
currencies, and allowing their same silly banks to do this selfsame silly
crap!"
You can see how their idea is improved with my terrific editing.
Perhaps in response to my terrific editing, The Economist then went on, "But
some would still blame the Fed, for not deflating asset bubbles with higher
interest rates."
Again, I reach for the phone to yell at these Economist weenies that yes, the
Fed is to blame, but not for "not deflating asset bubbles with higher
interest rates", but because they caused the damned inflationary asset bubbles
in the first place by creating too much money and credit for so long!
Anyway, this is not about how we Americans are a stupid bunch of lowlife morons
who also consistently elect a subset of us stupid bunch of lowlifes to
government posts and who are so corrupt and ignorant that they let the banks do
that kind of crap, but about the stupid British, who (says The Economist
magazine) have let the Bank of England "cut the base rate by a full percentage
point, from 3% to 2%", which is significant in that "The Bank of England,
established in 1694, has never set the official interest rate below 2%."
Not once in over 300 years, but now!
In fact, in my last request to Zaxxtor, Tyrant Overlord of this quadrant of the
galaxy, to be taken off this ridiculous planet, I included in my official
pleadings a quote from The Economist magazine to prove that Earth creatures are
so stupid about the horrors of inflation that they almost uniformly think, as
does The Economist magazine, that the European Central Bank's tiny 2.5%
interest rate should be cut even more because "inflation is no longer a barrier
to big rate cuts and the banks needs to act to ensure it does not fall too
low." Hahahaha! "Fall too low"? Hahaha! I laugh in scorn and contempt!
How in the hell can inflation be too low? Inflation is supposed to be zero, or
better yet, prices should be gently falling as the fruit of rising
productivity, you halfwits!
So how low is this "low" inflation rate that will allow the cutting of interest
rates even though inflation is still positive? Well, it is now 2.1%, which has
just fallen from 3.2%, and 2% inflation is the ECB's target! "Inflation falling
too low"! Hahahaha!
I could use this to segue into a rant on buying gold, but government stupidity
is too easy a target these days. So, let's just call it a day and all go home
early, perhaps to buy more gold with which to capitalize on governmental
monetary stupidity!
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.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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