I thought I was dreaming when I read on Bloomberg.com that short-term
Treasuries rose in market value as buyers rushed to buy them, thus "pushing
rates on the three-month bill negative for the first time, as investors
gravitate toward the safety of US government debt amid the worst financial
crisis since the Great Depression."
More specifically, "The Treasury sold US$27 billion of three-month bills
yesterday at a discount rate of 0.005 percent, the lowest since it starting
auctioning the securities in 1929. The US also sold $30 billion of four-week
bills today at zero percent for the first
time since it began selling the debt in 2001."
Since I was dreaming, I figured that I would somehow involve some of the more
cute employees in some erotic fantasies, which I quickly discovered did not
turn out as I had planned and made me question the whole "I must be dreaming"
thing, even though according to Stephen Meyerhardt, "a spokesman for the Bureau
of Public Debt in Washington", he "wasn't aware of the three-month bill ever
trading at a negative rate before", indicating that this MUST be a dream!
In fact, I thought those bad old days were all gone, all the demons exorcized,
and that I had come to grips with insanely low interest rates and scumbag Wall
Street and governmental sharpies, when suddenly I am again waking up in the
middle of the night, bathed in sweat and screaming my guts out in fear, and
again instinctively grabbing for some kind of weapon to unleash a maelstrom of
hot, flying lead against unseen attackers and miscellaneous bric-a-brac.
Imagine my further disorientation when I suddenly find out that I cannot move,
and am restrained to the bed by a profusion of straps and belts, and all I can
do is struggle heroically against my shackles while I listen to my wife
laughing and saying, "Try to get out of THAT, you Homicidal Mogambo Moron
(HMM)!"
The reason for my relapse in symptoms is that Bloomberg.com reported that US
Treasury assistant secretary Karthik Ramanathan, "the department's chief debt
manager", said that the United States faces "as much as $2 trillion in
borrowing needs this year" and warns us that they "may introduce new financing
methods to sell a record amount of government debt", requiring them to use
"novel approaches to debt management". Yikes!
I remember when I tried this "novel approach to debt management" scam one time
early in my career when my natural incompetence and general lack of interest in
a career started to manifest themselves, which predictably ended badly,
although it looked so good on paper.
My "novel approach to debt management" was to loan the employee pension fund to
me as my "seed money" for a big run at the Vegas casinos using some stupid new
gambling "system" I developed back when I believed in the bell curve over the
long-term, and which has, thanks to the phenomenon of catastrophic Black Swan
events, now been shown to be a Big, Big Mistake (BBM), as if my subsequent
experience in Vegas was not enough proof! Hahaha!
But apparently nobody wants to hear about how I lost so much of the employee's
money, or how a "novel approach to debt management" did not work out, or how I
was personally embarrassed to have lost all their money while risking none of
my own.
But perhaps people will be interested to know that the federal government is
going to make sure that we are all losers, as inflation in consumer prices
destroys us, which I cleverly deduce when Bloomberg said, "Ramanathan cited
private analysts' estimates of borrowing needs that may reach $1.5 trillion to
$2 trillion in the financial year that ends in September 2009."
What? A $2 trillion federal budget deficit? In a $13 trillion national economy?
Gaaahhhh! When the trade deficit is running at almost $900 billion a year?
Double gaaahhhhh!
If you disregard my loud, terrified screaming as just a pathetic "cry for
help", you will realize that my underlying message is sound, and that it's too,
too weird, it's too, too unprecedented, it's too, too
everything-bad-from-an-economic-perspective, and it is so all-around terrifying
that even holding gold in one hand, and laying down some suppressive fire with
a 0.45 caliber semiautomatic in the other to send a little "message" to the
neighbors, provides but little solace.
A hell of a lot of noise, yes, but little solace! Hahaha! On the other hand,
without the safety of gold, absolutely none of the latter!
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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Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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