I admit that I was pretty sloshed when I started haranguing the other barfly
trash sitting near me about how "It has been said that the big problem with the
human brain is that it cannot understand parabolic curves, and it cannot
comprehend the horrific folly of the Federal Reserve increasing money and
credit parabolically, and the amount of money that the Congress is spending is
parabolic, and the inflation in consumer prices will soon be parabolic, too,
and which means to you barfly trash that a lousy drink in this filthy rat hole
of a bar will cost $500, which means that we ought to drink up now while the
prices are still low!"
I was hoping that this would generate some healthy debate with somebody,
whereupon I could say, "A very interesting notion!
Why don’t you buy us a drink and we’ll talk about it?"
Unfortunately, the only person who wanted a debate was the bartender, who took
umbrage at his filthy little rat hole of a bar being called a filthy little rat
hole of a bar, so I said to him, "A very interesting notion! Why don't you buy
us a drink and we'll talk about it?"
Well, the only thing he wanted to talk about was how I was going to get my Fat
Mogambo Butt (FMB) up off that stool and get out and not come back, which I
did, but not before telling him that another parabolic curve is provided by
Darryl Robert Schoon at drschoon.com, who says, "What people do not understand
is that bankers loan money which doesn't exist and then receive compounding
interest and repayment of previously non-existent funds in return."
I could see him coming around the end of the bar towards me, so I thought it
would slow him down if I said, "This means that more money is owed than exists,
and the only way for you to pay off a loan and get those collection agencies to
stop calling you and demanding their money is for somebody to borrow the money
from a bank, increasing the total debt outstanding by more than you pay back
after you, somehow, ended up with the money, which you won't because you are
throwing out a paying customer, you moron!"
I soon found out that bartenders are not very interested in parabolic curves or
the crushing, parabolically rising debt that is going to destroy us all,
including his saloon, now that the fun of spending all that borrowed money
becomes The Big Problem (TBP), having arrived in bits and pieces over the long
run, as "Banker's credit creates constantly compounding debt, and today so much
debt has been created that the economy can no longer expand fast enough to
service it or pay it back. Homeowners, workers, farmers, business people,
corporations and governments are all indebted beyond their means to repay."
So, if you can't repay what you already owe, nobody will loan you any more
money, which you don't want to borrow anyway because you are not as stupid as
you once were!
But, admittedly, borrowing money is so old-fashioned, and today's morons, like
the Federal Reserve, just print their own, as I gather from Agora Financial's
5-Minute Forecast, which reported that "Communities around the country are
printing 'scrip' at the highest rate since the Great Depression."
One of them is the piece of paper known as the "Plenty", which is "an
alternative currency printed and exchanged exclusively in Pittsboro, North
Carolina", where "stores accept it as a dollar alternative, like at the local
feed store and produce co-op."
Well, The 5 notes that "The idea is nothing new" and scrips like the Ithaca
HOUR and Western Mass's BerkShare have been around for years and "have millions
worth in circulation".
In case you were wondering, this is not counterfeiting, which is the crime of
creating fake legal tender dollars and for which you, theoretically, go to
prison for committing. No, these are merely alternative currencies, which are
allowed as long as they are obviously not US currency, which is a niggling
little fact that took down the Liberty Dollar; their "rounds" looked so much
like a real US coin that people tried to deposit them in the bank!
Silver rounds, which have intrinsic value, aside, I am naturally aghast at
anybody being stupid enough to create paper currency, which does nothing except
expand the money supply, which causes prices to rise, not because of the usual
reasons, but because I am pretty sure that people will easily counterfeit these
alternative currencies, making the money supply of scrip rise even more, and
more, and more, until they are so numerous to be valueless, which is the
problem with counterfeiting, which is why it is against the law.
And I assume that the persons who get stuck with all of the scrips will find
that Gresham's Law ("bad money drives out good money") applies to them, too,
and that will be the end of the experiment with scrip, except for all of the
inevitable lawsuits and my volunteering to be called into court, not as a
defendant in a "disturbing the peace" complaint after yelling at a stupid
neighbor at 2am that because the Federal Reserve is creating so much money and
credit, inflation in consumer prices will consume us all, and if he was not
buying gold, silver and oil, then he was stupid, stupid, stupid, but this time
as an expert witness testifying that someone is stupid, stupid, stupid.
It's so easy when you know how, that it makes you shout with glee, "Whee! This
monetary 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 2009, The Daily Reckoning.)
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