Frank Holmes at USFunds.com writes, "When it comes to the global economy,
there's a huge surplus of bad news and there's a good chance that more is
coming" - so much so that "Positive indicators are in short supply", which he
qualifies by saying, "but there's a good chance that more of these are coming,
too."
One of these positives, he says, is that the current recession is now 13 months
old, whereas the worst recessions since the Great Depression lasted only 16
months (and there were two of them: 1973-75 and 1981-82).
Well, this is just the kind of technical-analysis thing that drives me crazy,
and I was just getting ready to try and grab a little of
the limelight and ream this guy out for using such technical-trading crap, when
he obviously sees me coming down towards the podium.
So, instead of letting his presentation degenerate into a pointless argument
with a loud and obnoxious lunatic like me, he quickly defuses the situation by
saying, "Just because every recession since the 1930s ended in 16 months or
less doesn't mean this one has to as well," which certainly takes the wind out
of my sails!
Having failed to get the attention that I so desperately crave for some weird
reason, I resorted to making rude farting noises as I went back to my seat, and
in doing so I almost missed it when he continued, "historical precedent plus
the massive amount of government-minted stimulus equals reason for some
optimism that we're closer to the end of this slowdown than to the beginning."
Man, he said a mouthful there! Trillions of dollars are appearing everywhere as
the loathsome Congress deficit-spends the money and credit that the Federal
Reserve creates with every breath!
Apparently seeing me working myself into a screaming hissy-fit, he calmly says,
"The Federal Reserve began cutting interest rates in September 2007, and
historically interest rate changes impact the economy with roughly a six- to
12-month lag. This increase in money supply is a very positive development for
both the economy and market" which he seems to prove by charting the
eye-catching similarity of the percentage change in the money supply (lagged
six months) with the year-over-year percentage change in consumer spending
since 1982, and it is certainly impressive to see.
Then he shows a graph of the percentage change in the US money supply and the
percentage change in "nominal" gross domestic product, going back to 1960, and
that's pretty impressive, too, particularly since the money supply right now is
zooming so far that it is, literally "off-the-charts"!
This is certainly going to look like good news to a lot of people, as Harper's
Index reports that 47% of Americans say they live "paycheck to paycheck", and
21% of those making over US$100,000 live that way, too!
It is also kind of weird to me that while there are 306 million American men,
women and children, a full 47% of them report living paycheck-to-paycheck at
the same time as only 47% of the population has a job (the government says that
143 million are employed)! So everybody with a job is living paycheck to
paycheck? Hahaha! We are so freaking doomed!
But regardless of how much money the stupid government and the morons at the
Federal Reserve create and spend, it will - regardless of all the charts and
graphs and historical comparisons - not be good news for people, as such
massive, irresponsible inflation in the money supply caused by the massive
government deficit-spending will cause catastrophic inflation, which may have
something to do with why Scotty is calling up from the Engineering Section,
"Captain! The dilithium crystals canna take the strain!" and out through the
window of the bridge you see Spock flying off to safety in one of the
Shuttlecraft.
With the gold, in case you were looking to Star Trek for a moral to the
story!
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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