This week's prestigious Mogambo Award For The Best Sardonic Laugh (MAFTBSL) was
provided by Nicoles Michas of the Sparks Report, who suggested that "deflation
hawks" love inflation and the sound of hungry children crying, people baking in
the heat or shivering in the cold, and these horrible people want lower
interest rates and higher inflation since they "don't see any upward
significant price pressures beyond food and energy". Hahaha!
Although it is difficult to speak while gritting one's teeth, laughing
hysterically and trying not to vomit up blood in sheer anger and outrage, The
Heroic Mogambo (THM) rises to the occasion and bellows, "No inflation beyond
food and energy! Hahahaha! Relax, everybody! The guys who are afraid of
deflation say that you should be afraid of deflation, too, since there is no
inflation beyond food and energy! Hahaha!"
And since inflation is the thing I most fear, I knew that I needed
money, and fast. So I spent most of the week setting up Step One of my plan,
which involved setting up a fall-guy using the Da Vinci Code method to find in
the Bible the words "Danny in accounting will loot the employee pension fund",
but it was pretty much a bust.
Discouraged, I found, instead, an email with some clever anagrams, and I found
one that seemed to be pertinent to the times, in that nowadays every moron
government and all their moronic neo-Keynesian econometric buffoons (who have
been the instigators of the economic disaster that has befallen the world,
thanks to them and the despicably incompetent Alan Greenspan, former chairman
of the Federal Reserve) are so desperate that they are "quantitatively easing"
So Damned Much Money (SDMM) that we are, in a nutshell, freaking doomed!
Anyway, the anagram that tickled me is in taking the word DESPERATION and then
re-arranging the letters to get A ROPE ENDS IT! Hahaha! It works on so many
levels! Hahaha!
An upshot is that all of this "quantitative easing" of SDMM, and the reference
to the anagram, is that most of the money that the Fed is creating is used to
buy government debt! This increases the national debt, so it is not surprising
that Agora Financial's 5-Minute Forecast reports, "Your family's share of the
government debt is now over half a million dollars. A record $546,668, to be
exact"!
Naturally, I am thinking that at 5% interest, each family owes, in addition to
the US$546,668 principal, a princely $27,333.40 in interest this year alone!
Fortunately for the government, they do not have to actually tax each family
$27,333.40 this year because the government will just sell more Treasury debt,
bought by the Federal Reserve with money they created just for the purpose.
Unfortunately, the family will pay it anyway, except in the form of higher
prices as all this new money creates inflation in consumer prices!
The Agora says it was quoting a USA Today study, which claims that each
American family's share rose 12% in 2008. That's $55,000 in new government debt
last year for every US household - thousands more than the median household
annual income."
Perhaps as a result of all this bankrupting idiocy, the London Times reported
that Treasury Secretary Timothy Geithner told the students at Peking University
during his visit to China that "we believe in a strong dollar", and that all
the trillions of dollar's of US debt owned by the Chinese "are very safe".
If he had been addressing the usual kind of American morons that big-shot
officials usually address, like the Economics Club of New York, Princeton,
Harvard or Congress, then the audience would have sat there, dumbfounded,
before applauding politely and saying, "Duuuhhh! Okay!"
But in China, Geithner's speech was greeted with laughter! Hahaha! This shows
that the Chinese are very perceptive and not stupid, in contrast to the USA, as
this is the kind of response that it really, really, really deserves.
If Mr Geithner really wanted to act smart, he would ask the Chinese why they
have suddenly added their growing hoard of gold to their money supply. And if
the Chinese wanted to be gracious hosts, they would have told him.
If he had asked me why I am buying gold, I would have told him, "Because this
investing stuff is easy when a Federal Reserve creates 13% of GDP so that the
federal government can spend a third of GDP! Whee!"
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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