Naturally, I was
aghast that things have gotten so bad that even
the Bank for International Settlements (the
infamous BIS) finally got around to noticing that
the results of three decades of central banks
creating more and more money is not, as they
thought, A Truly Wonderful Thing (ATWT).
They write that "drastic action" is now
needed, and that "the fiscal problems currently
faced by industrial countries need to be tackled
relatively soon and resolutely".
Instantly
I jump to my feet and shout, "Whereas yesterday,
nothing needed doing, nor was there any need for
any action at all, except to idly sit by as things
got worse and worse as central banks created more
and more money so that governments could
deficit-spend? But now we need
drastic action, you BIS morons?" Nobody
notices my rude objections, and the BIS blithely
goes on that "Failure to do so will raise the
chance of an unexpected and abrupt rise in
government bond yields at medium and long
maturities, which would put the nascent economic
recovery at risk."
Well, duh! Let me write
this down! Higher interest rates will put the
economy at risk, but creating so much money, for
so long, by so many central banks, to accommodate
so much more government and government spending,
to keep nominal interest rates at literally zero
and real, inflation-adjusted interest rates
negative, will not? Hahaha!
Well, perhaps
I am being scornful and disrespectful only out of
the long habit of being scornful and disrespectful
of all central banks, including the execrable BIS,
which is so worthless that it has created its own
fiat currency, the SDR! I mean, how low can you
go?
On the other hand, they seem to
understand that high interest rates cause
slowdowns in the economy, so maybe there is hope
that they will say something else intelligent!
No such luck. The very next sentence from
these incompetent, neo-Keynesian, fiat-currency
loving morons is that failure to take "drastic
action" to cut government spending "will also
complicate the task of central banks in
controlling inflation in the immediate future and
might ultimately threaten the credibility of
present monetary policy arrangements". Hahahaha!
You can tell that I am upset by the way my
fists are clenched into Mogambo Fists Of Rage
(MFOR), an action seemingly at odds with how I
laugh - Hahahaha! - the dreaded Mogambo Laugh Of
Scorn (MLOS) in a perfect demonstration of Utter
Mogambo Contempt (UMC): Monetary policy has no
credibility, you morons! None! Zero!
In
fact, it makes me chuckle and shake my head in
dismay to consider how in the hell can any
half-witted, leftist, neo-Keynesian, econometric
idiot, like these BIS idiots, possibly think that
the Federal Reserve would have any, any, ANY
credibility after achieving Total Freaking Failure
(TFF)? Again I laugh the Mogambo Laugh Of Scorn
(MLOS)! Hahaha!
If they wanted respect and
credibility, the bankers would have insisted upon
re-instituting the gold standard, or actually
stabilizing the money supply as if we were on a
gold standard! And then we would not have any of
these catastrophic economic problems, and the sun
would shine, and somewhere men would laugh, and
somewhere children shout, but, until then, there
is no joy in Mudville, the Bernanke has struck
out.
But those betting against Ben
Bernanke and his Federal Reserve by buying gold
and silver will see the sun shine, and men will
laugh, and children will shout, "Whee! This
investing 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 2011, 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
