If you want to know what kind of monetary morons we have in charge of the
Federal Reserve, then you have come to the right place, because a record of
sorts was set last week, in that the loathsome, disastrous Federal Reserve
bought up - in the last 12 short months - US$1.011 trillion in US government
securities! Yikes!
And remember ... this is the Federal Reserve! This is a lousy private bank
operating irresponsibly, at the behest of Congress, and whose shadowy owners
include, to one degree or another, foreigners and foreign central banks that
are operating by the grace of their own governments, which are just as corrupt
and desperate as our own, but it was the Fed that created enough
money to buy a trillion dollar's worth of US government bonds for itself! A
trillion!
It's called "monetizing the debt", which Fed chairman Ben Bernanke said, in
response to a direct question about it recently, that the Fed would "never" do!
"Never" has now been re-defined to mean "continually?" Hahaha! Too much!
As an astute observer, you figure this must be pretty bad, judging by the way I
make a Very Loud Mogambo Fuss (VLMF) about it and droplets of spittle are
flying from my flapping lips at supersonic speed as a throbbing vein is bulging
out on my forehead.
And since a lot of this money was spent to buy government debt, how big was the
federal budget deficit? You will be sorry you asked, and if you want to know
the actual size of the actual federal deficit for the actual last year because
you are pretty sure that the government is lying to you about the real size of
their deficit-spending, then you have also come to the right place, because
Treasury Public Debt is, as of last Friday, $11.797 trillion, whereas 12 lousy
months ago it was $9.667 trillion, meaning that even if you are not sober
enough to get this damned calculator to work or see those tiny little numbers,
you can do the subtraction in your head!
The actual, in-your-face federal deficit was $2.130 trillion in the last 12
months! The deficit-spending by Congress is a whopping 15.2% of gross domestic
product, for crying out loud!
And if you are collecting unemployment, then you will be interested to know
that the federal contribution to your check could have been painlessly almost
doubled, as, according to Wikipedia, the 2009 federal budget had $360 billion
for "Unemployment/Welfare/Other", while the budget also had another $260
billion that could be used to help you out, but had to be spent for "Interest
on National Debt".
In short, if the damned government did not borrow and spend us into the
poorhouse, causing your unemployment and impoverishment, the government would
have had another $260 billion to help you and the other unemployed instead of
only being able to budget $350 billion!
And this brings up the interesting point that since the national debt is
$11,790 billion and this "interest on the national debt" is $260 billion, this
means that the government is paying an average of 2.2% interest! Wow!
And remember that this $2.130 trillion increase in the national debt is just
the deficit in Congressional spending, which doesn't even include the $2.6
trillion in the budget that was "paid for" by offsetting revenues!
So, being the cantankerous sort that I am, suspecting treachery at every turn
and disaster at the hands of the corrupt, the ignorant and the stupid that we
lovingly call "Congress", let me note that the morons of Congress have spent
$2.6 trillion, plus $2.1 trillion equals $4.7 trillion, which they spent in a
$14 trillion economy! The government is spending the equivalent of 34% of GDP!
Gaaahh!
And it is going to get worse and worse because the Fed is doing the more and
more of the same thing that created the economic problem in the first place!
Gaaahhh! We're freaking doomed!
But this time, instead of over-reacting, I sigh in relief - aaaaaahhhhhh! - as
I remember the last 4,500 years of history when governments acted monetarily
and fiscally irresponsible, and how owners of gold, silver and energy did very,
very well, which is the whole point of this investing stuff!
And the fact that it is so easy makes you say, "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.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
