Money creation, Geithner and the thin air between
By The Mogambo Guru
There was a photo of Tim Geithner, the former governor of the Federal Reserve
Bank of New York who is going to be the next Treasury Secretary of the United
States, on the front page of the Financial Times last Thursday, and it is
spooky in several ways.
For one, in the photo he is looking directly into the camera, point-blank,
which I know that he did on purpose so that I would see it and I could - using
my Extraordinary Mogambo Powers (EMP) - look deep into his eyes and thus know
exactly what he is thinking.
I can tell that he is thinking, "I know you are out there, Mogambo! I know that
you know, and now you know that I know that you
know, that I am a weird little guy who has no idea what in the hell economics
has to do with anything, and that I am, provably, a total failure if someone
takes the time to get up off his or her fat, stupid, trusting butt and walk
over to the window and look out at the world that I helped fashion when I was
governor of the Fed bank of New York."
I gotta give him credit, as he knows my opinion of him to a freaking T! When
you consider how the Federal Reserve, which is responsible for the creation of
all the money and credit that provided the financing for Huge Freaking Bubbles
(HFB) in the stock market, the bond market, the housing market, and in the size
of government, it is obvious that the Federal Reserve is a total failure, the
Congress ought to disband them and get the United States back to a
gold-as-money financial system, presumably with zero leverage, and put all of
the Fed governors and their henchmen, past and present, on trial in a Mogambo
Kangaroo Court Of Vengeance (MKCOV) for a quickie "guilty" verdict and
appropriate sentencing.
Instead, the Congress confirmed this guy as the next secretary of the treasury!
If that is not scary enough, the photograph of Mr Geithner is worrisome in
others ways, such as the way he was handling his microphone, sending the clear
message "You see this microphone, Mogambo? Well, if you keep telling people
about me, my corruption, my ignorance, and my total failure as a governor of
the Federal Reserve so that the USA and the purchasing power of the dollar are
both destroyed, then one of these days a goon squad dressed in black is going
to show up at your house and beat you with clubs that are a lot bigger than
this stupid little microphone! Hahaha! And anyway, even if what you say is
true, you are still a terrible father and husband, and everybody hates you!"
Stung at the cruel, although accurate, comment, my eyes filled with bitter
tears and I looked away from the photo, and I am sorry that I did, because my
eyes fell upon the terrifying headline that accompanied the photo: "Geithner
Vows Credit Action On 'Dramatic Scale'"! Yikes!
In the article, he says that he is going to destroy the credibility of the USA,
the purchasing power of the dollar and the economy itself by creating so much,
much, much more money and credit so that it will "get risk premia down,
interest rates down and get that basic mechanism of credit market going
again"!!
Junior Mogambo Rangers (JMRs) around the world (one in America and one in
Canada, as far as I can tell) are alerted to my ending that sentence with two
exclamation points, indicating special emphasis, which, in this case, is
obviously shorthand for, "This guy is a freaking idiot if he thinks that
creating money and credit on a 'dramatic scale' will solve the problems caused
by the creation of money and credit on a lesser-although-still-dramatic scale
without producing catastrophic inflation! It's freaking insane, I tells ya, and
it's enough to cause insanity in anyone hearing it, too, as is proved by my
inserting Rude Editorial Comments (REC) in the middle of a freaking explanation
of a couple of damned exclamation points!"
I keep looking at the prospects of a trillion dollars of new debt coming our
way, and compare that to the measly 100 million non-government jobs in the
country, and I wonder how any of these morons can think that anything good can
come of the government spending $10,000 for each of them?
And if the Treasury sells $2 trillion in new debt, then that is an astounding
$20,000 in federal government deficit spending for everybody who has a
non-government job! In one year!
And if, after all of this monetary and fiscal insanity you are not buying gold,
silver and oil (and indeed all commodities), then you are made of sterner stuff
than I!
And a lot less paralyzed with fear, for which I envy you!
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 2009, The Daily Reckoning.)
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