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-- Posted Wednesday, 28 May 2003 | Digg This Article
"... 'Dear Alan,' I open a kindly letter to the Fed chairman, wherein I state the problem - and the facts. 'People are not buying things because they have no money left at the end of the month. It's not a supply-side thing, Alan. It is a demand-side thing. We Americans are sitting on new, huge mortgage payments, big gas-guzzling SUV's with huge zero-interest car loans, being saddled with more and more taxes and fees, and having more and more very expensive benefit costs passed onto us. In short, the problem is that after-tax wages are not going up as fast as prices. And for the non-workers who live on their savings, the after-tax yield on saved and invested money, thanks to your meddling in the economy, is less than the rate of inflation, so these people have less money to spend, too.'..."
The Mogambo Guru St. Petersburg - The Fed actually contracted credit a little bit last week, but still managed to drag themselves over to the cashier's window and buy up another $2.5 billion in government debt with money that they created especially for that purpose, continuing to commit that particular fraud in their usual serial fashion.
- Congress finally raised the bounds on the Treasury Debt Limit by $984 billion. How they arrived at that particular amount I have no idea. I would have just made it a nice, round trillion bucks and be done with it, but I suppose that Congress has some reason for precisely making it $984 billion, as if that last $16 billion is going to make some difference. Maybe it just sounds better, being in "billions" instead of "trillions."
And that is a real nice chunk of change, nonetheless, and I can't even begin to tell you how many weeks go by and nobody gives me a trillion dollars. Lots of them.
But is it is enough, they assured us, to tide them over for awhile, which, I assume by their winking and nudging each other in the ribs and all that smirking and trying not to giggle, is defined as "up through the elections in 2004," or about sixteen short months. This authorization alone represents almost $9,000 in new government debt per non-government worker in the whole economy. This is, of course, on top of the $58,000 of national debt already piled on the back of each non-government worker in the economy.
And this is just official debt. When you combine all that stuff that Congress likes to think of as "off-budget," as if it did not really exist, then the figures get really weird, and to keep me from waking up screaming in some psychiatric ward a few weeks from now we will just drop the subject and keep moving along. Maybe whistle a happy little tune, tweet tweet tweet.
And since we are talking about debt, let's divide the total amount of official debt outstanding, namely $32 trillion, by the mere 110 million non-government workers that we have in the USA. Furiously pounding the keys on the calculator, we get the hard-to-comprehend figure of $290,000 of debt per private-sector worker. The new debt limit, when borrowed over the course of the next sixteen months, will obviously bring the new total to $299,000, if nobody in the country adds another single dime to their debt loads. To which I guffaw with a blatant undertone of stark sarcasm and disrespectful disgust.
And in case any of you are still laboring under the textbook idea that the Federal Reserve and the banks are an independent, non-government entity, here is a quote from Mr. Greenspan to completely disabuse you of that stupid idea, coming as it did on why he will not discuss the dollar: "As I think you may remember that we in the United States government have made a decision in which the value of the American currency will be discussed only by our chief economic spokesman, which is the secretary of the Treasury." Didja get that part about "...we in the United States government..."? We?
Up until Mr. Greenspan came along, there was never any "we in the government" when it came to the banks. The independence of the banks was supposed to be our big asset. Now, after taking over the government, the schools, and the media, the commie Leftists have now also succeeded in taking over the banks!
And here is a pithy quote about how flooding the planet with dollars and dollar-denominated assets is not a bad thing in Greenspan-think: "...the stock of dollar assets is so huge and the ability to move them around is fairly limited, that...(t)he question is, what do the holders do with those assets? They're so heavily involved in dollar-denominated claims that while obviously they can move out of them, and would, there are limits to how fast these things tend to move."
Man, oh man! We are truly living in an age of economic miracles! In short, if I have issued so incredibly much, so overwhelmingly much, so preposterously much debt that my IOU's are literally everywhere and held by literally everybody, then even if I declare total, irrevocable bankruptcy today, the value of my debt would not go down in value very much! This is because, "There are limits to how fast these things tend to move." In other words, maybe thanks to derivatives or something, prices will not "fall off of a cliff." So that means, prices will gradually adjust downward, which in government-speak means that prices will not fall at all, which means, in more government-speak, that everything will be just peachy, and we ought to all just relax.
- Doug Noland provides an interesting bit of data. "April data from the Ports of Long Beach and Los Angeles are worth highlighting. Combined Inbound Containers jumped 10% from March to the highest level since August, and were up 7% y-o-y. Conversely, Outbound Containers declined 8% for the month to 3% below the year ago level. Containers leaving the two ports empty were up 29% y-o-y, and accounted for 57% of total Inbound Containers for the month." So, we are buying roughly two containers of stuff and exporting one container of stuff. I assume that the one container that we did manage to export was full of money and American jobs.
- Foreign holdings at the Fed soaked up nearly $20 billion in government debt last week, as the little foreign-dirtbag playmates of Greenspan and Snow continue to cover for their buddies. These foreign morons have now absorbed $170 billion of government debt in the last year alone! It total, they now hold $917 billion of our debt! By the end of the year, they will almost surely be sitting on well over a trillion dollars of American debt! A trillion!
I suppose that the idea is that when these foreign central banks sterilize the dollars and debt, that it keeps the dollar inflated, and the dollar-denominated assets still held by their fellow countrymen inflated, and the buying power of us Americans inflated, and everybody wins somehow. - Watching Greenspan addressing the Congressional Joint Economic Committee I constantly interrupt myself by vacillating between gagging in revulsion and laughing hysterically at what is being said. Nevertheless, it was a real pleasure to know that Ron Paul is alive and well.
Actually, the questions by the whole group did not seem as insipid as usual, so that was nice, too. There was one interesting spectacle, where some bozo, I forget who, wants to allow Afghanistan or Iraq or something the contract to print our money and let them keep the seignorage. Seignorage is the mark-up between what it costs to print a twenty-dollar bill (a few cents) and what they get, namely twenty dollars of spending power. The idea, I guess, is that Afghanistan or whoever would exchange the dollars they print up by buying, at full value, American-made goods and services, and thus everybody would win, in the big scheme of things or something, and Iraqis would end up with brand-new SUV's ,and American auto companies would book sales and pay sales taxes and remit taxes on the profits to the government and everybody would be happy happy happy. He was ignored. But it shows the unbelievable degree of stupidity and commie/socialist/fascist redistribution schemes that run rampant in Congress.
Well, let's don our waterproof boots and wade through the muck of Greenspan's prepared remarks. "Incoming data on labor markets and production have been disappointing. Payrolls fell further in April, and industrial production declined as well." I was not expecting him to be so candid and refreshingly accurate, even though the second sentence is completely redundant to the first, but sometimes us old guys repeat ourselves repeat ourselves repeat ourselves.
"Businesses are apparently continuing to discover un-exploited areas of cost reduction that had accumulated." First, let me stick my big fat nose in here and say that your "cost reduction" is my sales shortfall. It forces me to reduce my prices to clear inventory. So that's another economic bummer.
But it also says something verrrrryyyy ugly about the general competence of these high-paid executives, now that more "un-exploited areas of cost reduction" are revealed. How much are we paying these jackass executives, who are just now discovering more and more "un-exploited areas of cost reduction"? And when did these "accumulated" costs accrue, if not right under their noses? Where have these guys been all this time, other than at the bank cashing their outsized and obviously-undeserved paychecks? Now, this next part here is where I got so shook up that trained scientists think they detected a seismic tremor that coincided with my reading it. He says, "In recent months, inflation has dropped to very low levels. As I noted earlier, energy prices already are reacting to the decline in crude oil prices, and core consumer price inflation has been minimal. Inflation is now sufficiently low that it no longer appears to be much of a factor in the economic calculations of households and businesses. Indeed, we have reached a point at which, in the judgment of the Federal Open Market Committee, the probability of an unwelcome substantial fall in inflation over the next few quarters, though minor, exceeds that of a pickup in inflation."
Now, I don't know where to start! Let's start at the top with, "In recent months, inflation has dropped to very low levels." Low compared to what? Prices are SUPPOSED to be slightly falling! That is how you increase standards of living! Falling prices and an expanding economy is the Promised Miracle of Productivity Made Manifest, for crying out loud!
Okay, inflation has not been as bad as it has been in the past, considering that the Fed is the root cause of decades of persistent price inflation, which is also one of my big beefs, and speaking of beefs, as in juicy and delicious hamburgers, all this talking about beef has made me somewhat peckish, but the point is that not only am I getting more and more hungry by
the minute, but that inflation is still running at well over 2% a year! This is intolerable! And yet, here is not just a Fed-weenie, but THE Fed-weenie, saying that inflation is too low at 2.5%, that they want MORE freaking inflation! I wish you could see me now, because I am sure that it is quite entertaining to see me writhing on the floor in some weird fit of convulsions, my brain cooking in its own juices, and my hair literally standing on end. It kind of tingles, too! Like when lightning is getting ready to strike. Which may be a very profound analogy when talking about trying to ignite inflation.
And, anyway, this lowball 2.5% inflation is the inflation figure that emerges from the government AFTER they drag it into the basement and, umm, massage it with blunt instruments and jabs to the kidneys, as they manipulate the poor little raw-inflation number to seasonally-adjust down, substitution-effect adjust down, income-effect adjust down, adjust adjust adjust down down down. And even after all that, allowing the poor old inflation number to stagger to its feet, it is so bloodied and smashed that it can't even recognize itself in a mirror, and it is STILL not a good inflation reading! 2.5% inflation is still a BAD inflation number! Bad! Watch my lips! Baaaaddddd!
Now, let's examine the exquisite phrase "Energy prices already are reacting to the decline in crude oil prices." How about re-wording that to "With thanks to the idiot exporters of crude oil, they have not increased the price of a barrel of oil to reflect the drop in the value of the dollars they are getting in payment. Hahaha! Almost nobody here at the Fed expects those morons to keep THAT up for much longer, but we are not going to mention that inconvenient fact. Except Eddie, the cloakroom attendant, who is not a team player, and who will probably blab it all over town."
Now, we move to, "Inflation is now sufficiently low that it no longer appears to be much of a factor in the economic calculations of households and businesses." Man, I heard that! Most people I know are wondering how to cut costs, how to scratch up a few extra bucks, how to sell one or more of the kids to slave traders for a little ready cash, and they spend hours upon hours pacing back and forth wondering how in the hell they can pay down a few of the bills that seem to be getting bigger and more numerous by the day.
When I bring up the fact that inflation is still a problem, they act like I'm not even there. In fact, most of the time they are acting like THEY aren't even there, like when they tell me to answer the ringing telephone and tell whoever is calling that they are not there, so I tell the guy on the end of the phone that he is not there, and he gets all flustered and huffy and says that he certainly IS there and he wants to talk to you, and then I tell him that you are standing right there in front of me, and you just told me to tell the guy at the other end of the phone that he is not there, and then I scream "And that means you aren't there! And if you aren't there, then you can't possibly talk to anybody, you dumb jackass!" And then I slam down the phone. And then we all have a cold, frosty brewski and get back to wondering what in the hell we are going to do about these bills.
Finally, he puts us out of our misery by saying, "Indeed, we have reached a point at which, in the judgment of the Federal Open Market Committee, the probability of an unwelcome substantial fall in inflation over the next few quarters, though minor, exceeds that of a pickup in inflation." So now we are quoting probabilities, are we? Something in the fifty-fifty range? The sixty-forty range? Seventy-thirty?
And, yes, he is correct that there will be some falling of some prices, thanks to cutting prices in a desperate last-ditch attempt to at least clear out some inventory, because people just do not have the wherewithal to keep buying and buying and accumulating more and more debt.
But a fall in inflation is "unwelcome?" That shows you he is a real supply-side kind of guy! From us drooling, debt-besotted consumers out here on the demand side, a FALL in inflation would be wonderful news! And rises in inflation are NOT good news at all. So you can see whose team Alan Greenspan is on.
Alan also continues to weasel that he doesn't want to talk about the dollar. He retains the right to destroy the dollar by his serial episodes of profligate excesses, but the result of those excesses on the dollar is something that he doesn't want to talk about!
He does, to his credit, admit that neither he nor the Fed have any idea about how to deal with deflation. This is manifestly true, as most of the time the whole purpose of central banking is dealing with putting out the fires causes by their own mismanagement. In most cases, we are talking about inflation that they fostered by one of their recurrent episodes of money and credit-creation, because one of the unwholesome by-products of the sin of having a central bank is constant, persistent inflation and boom-bust misery.
So, I call out, "Take a memo to Alan Greenspan!" Oblivious to the fact that absolutely nobody is paying the least attention to me, I begin. Leaning back in my chair, I assume a pose of contemplation, tent my fingers and close my eyes for a moment, and mentally compose the message. I decide to start out with a standard salutation, "Dear Alan." I suspect that when I used to send him memos and letters addressed as "Dear Dimwitted Jackass" that he never even read them.
Anyway, continuing past the opening of "Dear Alan," we move directly to a new paragraph, which will introduce "the body" of the letter, wherein we state the problem and the facts. "People are not buying things because they have no money left at the end of the month. It's not a supply-side thing, Alan. It is a demand-side thing. We Americans are sitting on new, huge mortgage payments, big gas-guzzling SUV's with huge zero-interest car loans, being saddled with more and more taxes and fees, and having more and more very expensive benefit costs passed onto us. In short, the problem is that after-tax wages are not going up as fast as prices. And for the non-workers who live on their savings, the after-tax yield on saved and invested money, thanks to your meddling in the economy, is less than the rate of inflation, so these people have less money to spend, too."
Next we move to a "summary paragraph" section, in which I state, "And if people are not in possession of more money, then obviously money does not get spent."
And then I get to the part I like the best, I guess because this is the part of Modern Literary and Communication Theory and Practice that I personally invented! My momentous achievement, however, is never mentioned in the history books, probably because the government is out to get me, as I have been saying all these years. Anyway, this section of the letter is the part that I used to call "the action section," where I proceed to insult the recipient mercilessly. To wit, "And yet, somehow, all this is some big freaking surprise to you, Mister Big Shot Alan Greenspan and your jackass buddies, you know who I am talking about, that Bernanke guy for instance, because you are all idiots and morons, and you all smell funny, and your
butts stick out when you walk."
This is not "the action section" of yore, since the original version also contained an escalating verbal abuse clause, where opprobrium was piled on opprobrium until it reached the glorious Crescendo Phase of story and song, which was defined as using gratuitous profanity to issue vague, violent death threats and place nonsensical gypsy curses on them and their whole
nasty families for seven generations as punishment for their daring to Piss Me Off, also known as PMO. I used to tell them, "Don't PMO the Mogambo!" but of course they did not listen.
But I don't do that anymore, since copping a homicidal attitude these days may give John Ashcroft the idea to send Janet Reno, who now has a lot of time on her hands, over here to my house to give me a little Waco-style "talking to." Nowadays, I merely paraphrase one of my favorite quotes from Marlon Brando in "The Mutiny on the Bounty," and I now conclude my letters with the line, "And you can thank whatever pig-god that you pray to that I can't overtly threaten to come over there and strangle you with my bare hands, you slimy little bastard!"
- George Soros came out and said that he was selling the dollar. Beyond the few currencies that he was getting into, he also said that he was buying gold, too.
Speaking of gold, it has moved up pretty good here, and somebody must be noticing. Me, for one. So why the move? One theory, and the one that I like the best, is that the Chinese peasants and workers, if that is what they call themselves these days, will be allowed to buy gold bullion starting June 1, so there is surely going to be SOME increased demand above the status quo from another billion people suddenly appearing in the marketplace.
My personal theory, of course, is that the Chinese government is going to encourage the accumulation of gold by citizens, and then, when a goodly fraction of the world's supply of gold has flowed into China, use it to convert their currency to the gold standard, which will make their currency instantly strong, which, from then on, they will use to batter the living hell out of Japan, as a pay-back for WWII, and us, just because they traditionally hate our guts.
- Just to makes sure that we don't get carried away with this idea that inflation is dead, there is now going to be a tax credit health care for low-income people. In short, inflation has now pushed the cost of health care so high that, instead of reining in price inflation caused by the damn Federal Reserve, the communists/fascists running the government are now just giving the poor the money. And there is going to be a nice $1,000 credit for child-care expenses. Here we are again, with the communists/fascists in Congress actually giving taxpayer money to people so that they can afford to pay for someone to baby-sit their damn kids for them while they go to work! In a rational world, we would rein in the inflation and income-inequality created by the damn Federal Reserve, so that one guy working at a minimum-wage job could afford to have a stay-at-home wife and raise his damn kids. But noooOOOooo! This is, as I grab my head in stupefied bewilderment, insane! You cannot have a viable government nor economy that gives people money to pay their baby-sitters! This is, and I see that I already used the word "insane," so I will say that this is madness! This is lunacy! This is a place where even Marx and Lenin were afraid to go! This is what happens when you elect Democrats to Congress! - An article by Larry Kudlow in last Friday's WSJ, entitled "The New Flat Earth Society" took me over the edge, and I am hanging on by my fingertips to the last scrap of my being that is not actively engaged in outrage. Not only am I upset at the WSJ for printing such drivel, but I have decided to make Mr. Kudlow my gratuitously-attacked target for the week, even though I am sure he has many fine qualities. For example, when he sings, his voice is probably so sweet and pure that the angels gather around him to hear such
dulcet tones.
The article itself is the usual know-nothing idiocy about how deficits have no bearing at all on interest rates. They do. And the proof is simplicity itself; how can they not? Fortunately for the guys who obviously need something to fill up the editorial page of the WSJ, along comes Mr. Kudlow to aver the exact opposite. In fact, Mr. Kudlow even says, "If deficits send interest rate skyward as they claim, why is the 10-year Treasury note now trading near 3.5% - a 45 year low?" As if that explains it.
Because, Mr. Kudlow, and I strongly suggest that you write this down as youare seemingly incapable of comprehending even the basics of Economics 101, the Federal Reserve is printing up the money! The stock of money is not being depleted, because the damned Fed is printing up more and more of it, so that people can borrow it and use it to buy the debt! And they are doing that because the debt issues that they are buying today are bound to go up in price, since the Fed is spending every waking moment of their days promising to create MORE money to provide MORE demand for MORE buying of government debt, so everyone figures they are going to make a profit by buying this debt, no matter HOW freaking high the price goes nor HOW freaking low the interest rate consequently drops!
And, to top it all off, the Fed is actually using some of that newly-created money to buy the debt outright themselves, which is the ultimate monetary fraud!
And then you, and notice that here I am grabbing my own head with both hands to keep it from exploding in outrage, make the jump that because interest rates have not immediately responded to the monetary stimulus, that it means that rates will NEVER respond to the monetary stimulus? My God! That deficits immediately put upward pressure on interest rates is what used to happen in the old days, back before the jackasses at the Fed got the idea that they liked trying to control how the world works. In those halcyon days of yesteryear, the source of capitalism and funding was the accumulated savings of people. If you wanted money, you had to borrow it from some guy who had saved his money. Potential borrowers had to compete for the limited pool of savings, and they bid against one another with the highest interest rates that they were willing to pay.
Nowadays, that is no longer necessary. The damned Fed will merely print up as much money as they figure is needed.
"Well, how come they didn't just do that in the olden days, too?" you ask in that charmingly innocent way you have. Because for two reasons, my little darling. First, and foremost, all that extra money eventually filters through to higher prices. It has to. There is no place else where it CAN go. And there is a little-understood phenomenon about price inflation whereby people who are miserable and starving because they increasingly cannot afford to buy food for themselves and their children often react violently, for reasons not really understood by trained scientists using powerful computers, no matter HOW many research grants they get.
The second reason is that when money is thrown willy-nilly at marginal investments, a lot of that investment will not pay off, and the resulting bankruptcies cause a lot of misery and unemployment, so people now don't even have jobs to occupy their time when they aren't busy starving and whining.
And it keeps getting worse and worse, and then one day- boom! -out of the blue, the starving and miserable masses typically rise up in angry rebellion at the higher prices which they increasingly cannot afford to pay, and murderous mobs spontaneously take to the streets, burning and looting and killing, taking what they need and/or what they want, overthrowing the government, destroying the city, and the whole thing going up in flames and Hollywood producers start looking at the whole thing as some epic motion picture and start sewing up the rights. All of which is so upsetting, and creates a hell of a mess that somebody is going to have clean up tomorrow, and it ain't a-gonna be me.
So waves of bankruptcies and layoffs at the same time as price inflation is a heady brew, it appears from reading history. And THIS is why governments do NOT try and ignite price inflation. This is why government tried to PREVENT inflation. Until now. Until Alan Greenspan. Now, all of a sudden, this is some terrific idea.
And just because Mr. Kudlow and his lackluster ilk missed Economics 101 on the day they discussed this whole subject does not make it any less inescapable or ugly.
Now we get to the educational-content section of today's boring litany, and I say that this is why it is so damned imperative that you buy something that will go up in value, in terms of dollars, no matter what happens in the future. Like gold. Hell, the future may be so bizarre that it turns out Mr. Kudlow and his buddies are right after all! Maybe deficits will have no effect on prices! And even if they did, the higher price inflation that must follow money-creation will maybe have no effect on interest rates! Which will, maybe, remain lower than even the rate of inflation! Forever! And in fact, the higher the price inflation gets above wage inflation, and maybe the more debt that we assume, the better it will be for everybody! Out here in this Brave New World, maybe you can, after all, borrow your way to wealth! "Debt is wealth!"
But I can tell you that even then, even way out here at the fringes of Strange New Dimensions of the Economic Universe, that gold is guaranteed to go up in dollars, because it always has gone up in price every time that any government created more fiat money and credit, which created price inflation, which does not, as Mr. Kudlow and Company have been so kind to explain to us simpleton morons out here, impact on interest rates whatsoever.
Now we clamber back into our Space Scooter, make the jump to hyper-space, and deposit ourselves- plop! -back in our own time and space. We see that everything appears the same, although oddly not the same in some creepy, spooky way. For example, over here on this side of the universe, deficits DO have an effect on interest rates, because the deficits have an effect on prices.
And now that we have determined that Mr. Kudlow was out somewhere playing hooky during economics class and history class, probably shooting pool and smoking cigarettes and telling raunchy jokes and having a perfectly wonderful time, we are also forced to the conclusion that the didn't go to math class either. Because if he had, then he would know the graph of an exponentially-increasing function.
You know, like the one that shows aggregate debt levels per capita. There is a limit along the "time" axis along the bottom, and the curve approaches that limit as "cumulative debt," the dependent variable that is measured up along the vertical axis, starts to rise straight up in the air. This is that hypothetical area where the debt load per capita is doubling every, oh, twelve seconds. Then doubling again every six seconds. Then doubling again every three seconds. Then...
The problem is that time does NOT stop, even though there is no way to plot such a thing on a graph, because the graph would have to be so tall that that we would need a piece of paper that measured nine inches by eighty million miles. And when I called the office supply store and asked about a piece of that graph paper that size, they said that it was out of stock. And anyway, even that would only take us out a few more days.
So obviously, debt cannot keep expanding indefinitely. Regardless of what Mr. Kudlow says, and no matter how desperate the Wall Street Journal gets for something to print.
- John Embry at Sprott Asset Management published "Fundamental Reasons to Own Gold," and I would reprint them here, but the list is so exhaustive and therefore lengthy that I will take the easy way out, which is how I usually handle things, and summarize the easy way, which is to reprint Mr. Embry's own summary. "Gold is under-valued, under-owned and under-appreciated. It is most assuredly not well understood by most investors. At the beginning of the 1970's when gold was about to undertake its historic move from $35 per
oz to $800 per oz in the succeeding ten years, the same observations would have been valid. The only difference this time is that the fundamentals for gold are actually better." Man! Talk about bullish! Gold went from $35 an ounce to over $800, and the fundamentals are even better now? Wow!
He continues, "All physical gold in existence is worth somewhat more than $1 trillion US Dollars while the world's shares of gold mining companies are worth less than $60 billion US Dollars. When the fundamentals ultimately encourage a strong flow of capital towards gold, the trillions upon trillions worth of paper money could propel gold and gold shares to unfathomably high levels." No wonder he is so bullish, eh?
- Philip Spicer, that handsome dude who treads the halls of the Canadian Gold Trust, keeps sending me informative and newsy tidbits from around the world of the web, and in sum total it is getting really spooky. But, oddly enough, it has all the other gold bugs waxing ecstatic over the prospects for the yellow metal. Me too. Although I seem to be the only one who giggles like a demented schoolgirl.
- Alan M. Newman, Editor of Longboat Global Advisors, wrote and article entitled "The Matrix: Reloaded." He compares, I assume, the remarkable similarities between then current environment with the weird fantasy-world reality of the movies, especially "The Matrix."
Anyway, it is his belief that, "This bear follows the greatest stock market mania of all time, greater than the South Sea Bubble, greater than the Roaring Twenties, greater even than Tulipmania." Now these are pretty heady words, but understandable, since not everyone participated in those bubbles. But damn near everyone is participating in this one..
"As of last week and extrapolated through the end of the year, Dollar Trading Volume comes in at 170.7% of GDP. Thus, for every dollar Americans spend on goods and services, $1.70 in stock is traded on our stock exchanges. For the seventh year running, the stock market is more important than the economy. Excluding the prior mania years of 1928-1929 and 1996 to date, the average for DTV is a mere 19.5% of GDP. This means that trading
activity is still almost nine times "normal."
Well, everyone agrees that the stock market is more important than everything else combined, and that is because everything else if built on them, from government revenues to retirement plans and everything in between.
And that is why the Fed is doing everything it can to make sure that stocks do not go down in price in some dreaded "deflation." And that is why you, me, and everybody we know is being led, willingly or not, to be sacrificed on the altar of inflation. Ugh.
-- Mogambo Sez: The time remaining before zero-hour is tick, tick, ticking away. Exactly when this dreaded zero-hour is, I have no idea. But I am sure that there are no examples in all of history where such a grotesque, gargantuan, misshapen monstrosity of an economic system did NOT experience a zero-hour. The Mogambo Guru Lives! Richard Daughty is general partner and C.O.O. for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise the better to heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning, and other fine publications.
-- Posted Wednesday, 28 May 2003 | Digg This Article
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