-- Posted Thursday, 18 November 2004 | Digg This Article
November 16, 2004
- The stock market going up at the same time as the dollar going down, with all the other economic headaches both domestic and foreign, is just too, too weird for me, and I thank my lucky stars for the calming effect of modern pharmaceuticals, doctors who are not squeamish about keeping me overly-sedated and a wife who prefers it that way. Otherwise, I would be in Pure Mogambo Panic Mode (PMPM), and remember that I am the guy who invented the concept of hooking a machine gun to a motion detector just because I was merely “anxious” about something, probably about those Girl Scouts and their cookies and how it may NOT be just a coincidence that our whole bankrupting mess started about the same time as they started peddling their delicious treats door to door. So it was with trepidation, which I define as “Hoping that my heart doesn’t explode from the shock” that I meandered through the Market Laboratory section in Barron’s.
I see that a lot of the money for the recent spike in the stock averages last week came from Total Fed Credit going up $1.4 billion, and the Fed continued that blatant monetary fraud known as U.S. Government Securities Bought Outright, and it was up another $1.8 billion. So if we add these two numbers together for some reason, mostly because I want to show off that I am competent to add two small numbers together (“Watch me cipher, Uncle Jed!”) and it yields a bigger number, which makes the government look bad, we get, wait a minute here while I get my calculator out, $3.2 billion dollars. If this number looks familiar to you, perhaps it was due to a recent newspaper headline that you probably saw, “Armed Lunatic Screaming About $3.2 Freaking Billions of Freaking Dollars in One Freaking Week!”
And then we cruise on over to the actual banking side of the system and note that they ALSO bought up a lot of government debt last week, if you are the kind of person who thinks that $5.1 billion is a lot. I am, personally, one of those old-fashioned guys who still thinks that 5.1 billion of anything is a lot, and especially that 5.1 billion of anything in one crummy week is a lot. And when we are talking about money, if you are the kind of person who thinks that 5.1 billion dollars is, likewise, a lot, then we have something in common. And since we think so much alike, maybe you would like to buy me a beer and we can talk about it. And as long as you are paying, then maybe we can get really drunk, and hopefully forget about it, and then we can talk about other interesting thing, like how the waitress has a big case of the hots for me, even though she tries her best to hide it underneath a thin veneer of sneering hostility.
And while we are still snooping around in the banks, I notice that Required Reserves never seem to go up, although every time I get out a book on economics I am always reminded that 1) I am an idiot and that I don’t seem to understand any of this stuff, and 2) I am always reading things like how banks set aside reserves as some big percentage of liabilities, and the starting place for every example is that we are asked to assume that reserves are 10% of liabilities. Keeping this classical 10% figure in mind, I look around at the banks and I am surprised to note that Required Reserves are always essentially unchanged, especially since the banks’ assets and liabilities have both been increasing like gangbusters all this time, all these years, right along with the growth in M3, and right along with the growth in total debt extant throughout the whole freaking country until, and I think I read this somewhere but I know it is about right, the total debt (personal, business, local, state and federal governments) is now over 400% of GDP. 400%! Note the use of the exclamation point, which is a clever literary device I am using at this particular place to indicate emphasis since I cannot come over to your house and grab you by the scruff of your neck and force your head down until you agree to look at it, and then I laugh (Hahaha!) at the expression on your face as the enormity of it sinks into your brain. My knees buckle at the very thought of owing four times as much as everything this whole freaking country produces in goods and services in a whole year. And this is right along with the growth in house prices, and right along with the growth in the price of every damn thing you can name that can be measured in money, and especially those things that can be measured in terms of MY money.
But Required Reserves are still hovering around some piddly $45 billion, while Liabilities are north of $4.5 trillion, which makes Required Reserves a nice, round 1%. One percent! Now you know why almost all economic disasters start in the damn banks.
It is spooky. In fact, every time the wife and I are on our way somewhere in the car, she productively uses the time and opportunity to list a few hundred of my most recent faults that have come to her attention. And then it predictably gets into that crap about how I don’t pay any attention to her, and things would better if I would only listen to her once in awhile, and blah blah blah, and pretty soon my mind is wandering, and I am in Mogambo Land, a wonderful place where there is no central bank supplying excess money and credit, and the people are very happy because prices seem to float ever-so-gently downward, and there is no inflation, and everybody is enjoying a rising standard of living, and there is no Big Freaking Government and little birdies come and sit on my shoulder and sing songs to me that sweetly go “tweet tweet tweet.” And then I start thinking about economics, because all I ever do is think about economics, and this is because, and you might want to write this down because it is THAT important, everything is always about, and I will pause here to sound a loud fanfare on this trumpet (“Blaaaattttt!”) to indicate emphasis, the money. To repeat myself, and it bears repeating: Everything is about the money. In fact, the answer to Question Number 7 on last night’s homework assignment (which is, if you recall, “Nothing is EVER about anything except___________(fill in the blank)”) is “money.”
But after awhile, while my wife is winding up her remarks about my more glaring personal faults and is starting to get into what I call Rhetorical Question Mode, which involves her asking things that start off with “And just what in the hell were you thinking when you…”), I look forlornly out of the window of the car, gazing at the passing cars, and I see the people driving those cars, and I think to myself “All this debt misery I write about, and am fearful about, and am getting more and more nervous about, and now that I am talking about it I can hear those voices in my head getting louder and louder, is being borne by you. And you. And you.” And as each car goes by, I think of their dire financial situations that are at the root of the total debt in the American and economies of the world, and my heart goes out to them.
But not for long, as I then remember what usually happens next, and these same people I am feeling sorry for are going to be rioting in the streets, trying to break into the Mogambo Bunker, that citadel of reinforced concrete and hair-trigger weaponry where resides The Mogambo, proving once again that I was right when I said that everybody is out to get me. But it ain’t a-gonna be no free ride, as I have what one reader (whose email I have inadvertently deleted and so cannot give credit where credit is due) termed GG&G, which is Guns, Gold & Groceries, and if you don’t want to get caught in a crossfire, then keep your damn kids out of the Neutral Zone!
Meanwhile, back in economics land, foreigners decided that they would hold their noses, bite the bullet, and buy another $5.1 billion of US debt and store it at the Fed. If you go to the Mogambo Dictionary, you will find that when I say “foreigners” in this context, I mean foreign central banks. And the reason that these foreign central banks started buying our debt again is that these selfsame foreign central banks are reeling from the pain of listening to people, powerful people, with money invested in US debt, who are screaming on the phone, everybody wanting somebody to get up off their big butts and make us Americans do something about our financial problems because they are losing money on their portfolios. Now, if you are like me, you assume that all foreigners are backwards idiots who dress funny and stuff their portfolios with cheese and the icky parts of dead animals. In reality, it turns out, their portfolios are crammed with, along with the aforementioned cheese and animal pieces, US debt and equities. The downside is that after awhile the cheese starts to stink, the meat products go rancid, and, once their dollar holdings are exchanged/translated back into their local currency, they are finding that the whole portfolio stinks.
So the foreign central banks call Alan Greenspan on the phone, who has Caller ID, and so he knows it is them calling, and so he doesn’t answer the phone, and goes back to saying nasty things about The Mogambo. So after awhile, they get tired of waiting on the phone, listening to it ring and ring and ring, and so they give up trying to get us Americans to strengthen the dollar by acting like responsible grownups. Then the foreign central banks choose the Mogambo path, and if you look up The Mogambo Path (TMP) in your Mogambo Dictionary (MD), you will find that TMP is “taking the easy way out, with overtones of irresponsible and imbecilic.” The idea is, and follow me closely here because this is the essential crux of the whole plan, that if everybody acts like irresponsible monetary morons (IMM), then, somehow, derivative-like, everybody wins and everything works out fine. I don’t know how they do it, but they figure they can do it.
- In other news, the Federal Reserve raised the Fed Funds rate, which is the rate that bankers use to lend among themselves, by the least amount that they could get away with, which was another measly quarter point. This brings us aaaaaaallllll the way back to, let me check that figure again, 2%. This microscopic interest rate, which is still less than the rate of even “official” inflation, is very, very low. The audience intones as one, “How low, Mogambo?” and I say “So low that it is down around the lowest point that anybody who is alive has ever seen in nominal terms, and in real, inflation-adjusted terms, lower than at anytime in the last 450 million years of Earth history, although there are fossil records of an extinct species of fungus that lowered interest rates to a mere fraction of the rate of actual inflation. The details are sketchy, but I point out that they ARE extinct, and they were a fungus.”
In a slap to the face of The Mogambo, which becomes painfully clear if you read between the lines of the actual statement that accompanied the Fed notice of a hike in rates, you see clearly that the Federal Reserve hates my guts and they are saying that The Mogambo is a big fat liar. I say that inflation is high, and they say that inflation is low. And not only is inflation low, but it is “under control”, too!
The little propeller on my Mogambo Propeller Beanie (MPB) is spinning around and around with a little whizzing sound! The Federal Reserve says, and you can tell by the way I am laughing in my manly Mogambo way (MGW) that this sounds stupid to me, inflation is “under control”? Hahahaha! Inflation in prices is never under anybody’s control! That’s why prices go up in the first place, jerk! It’s like trying to hold an inflated balloon underwater! If you stop pumping more air into the balloon, the task never gets harder. If you start letting air out of the balloon, the task gets easier. But if you keep pumping more and more air into the balloon, making the balloon bigger and bigger, then you may be, MAY be, able to keep this up for awhile. But I am here to tell you that if you think you can keep this up forever, then using the Amazing Mogambo Vocational Aptitude Test (AMVAT), I confidently conclude, by looking at your test results, that you are a born American economist! Congratulations! I say you should immediately quit your stupid job, a job that is not utilizing you and your fabulous brain as a brilliant economist, and go to work for the Federal Reserve.
But while we have the Fed feeding us a big fat lie like that, the Europeans are not so sanguine. Consumer prices over there are rising at a 2.5% rate, which is, oddly enough, almost exactly the same as our “official” inflation. They are scared and worried, while we hotshot Americans, drawing exclusively on our own historical record of the last forty short years, proclaim this as “low” and “under control”! What makes this so sad is that the poor Europeans, running around in their bare feet and saying things like “Sacre bleu!” and “Blongqvist gesorten!” because they cannot afford shoes and Europe has a lot of prickly things that hurt your feet, have not had the fabulous benefits of an American education. So they do not realize their own folly or how silly they seem to us Americans. They don’t listen to us Americans when we tell these Euro-numbskulls that inflation at 2.5% is low, benign, tame, under control, not worth worrying about, because the government says so! This makes it all okay! See how easy this stuff is?
Yet, the stupid Euro-trash, babbling along in their stupid foreign languages, think that just because the entire 5,000-year history of inflation indicates that 3% inflation is Truly Bad News (TBN), and just because it has always worked out for the worse for the entire 5,000 years in a row, that inflation approaching 3% is somehow bad. How quaint, eh?
Who is right? In this corner, wearing red, white and blue trunks, we have the Americans, using a mutant strain of bizarre economic theory that grotesquely grew from the Keynesian cancer, now sick and coughing, facing an economic Armageddon after only forty years of acting like big-spending morons. In the other corner, wearing the blue trunks with the white stars, we have the Europeans, who rely on the lessons of 5,000 years of economic history.
But, to show you that even the European Central Bank is not much better than our own despicable Federal Reserve, despite all their tough talk, they belie their pious talk about being inflation hawks, and are now laying in the gutter of central banking, fiat currency and deficits, just like the idiot Americans. To wit, they recently passed on a chance to raise interest rates up to stave off incipient inflation. So once again political pressure trumps integrity and smarts, which is another Very Bad Thing (VBT). And if you don’t believe me, read that 5,000 years of economic history and show me where it WASN’T a VBT.
- The latest trade numbers came in, and of course we idiot Americans were caught shoveling imported goods into our mouths with both hands, although most of you were not making those disgusting gulping and slurping sounds like I do, and for that my wife says “thanks!” But The Labor Department soft-pedaled the unnerving statistic that import prices rose 1.5% in October. Now this 1.5% is not for the last year. This 1.5% price inflation was for ONE LOUSY FREAKIING MONTH! In fact, if you want to talk about the inflation of imports over the entire last year, then prices are up a staggering 9.7%!
In a related vein, U.S. producer prices shot up 1.7 percent last month. This is, so they say, “the biggest gain in nearly 15 years.” Not only was energy a big gainer in price, but food prices surged, too. Food! So much for inflation being “under control”! Hahahaha!
To round out the picture, wholesale prices were up 1.7% in the month of October, which works out to about a 21% annual rate. As my hands clutched at my chest and I am screaming, a la Redd Foxx, “This is the big one! I’m coming to join you, Elizabeth!”, alarmed passersby reminded me that the Federal Reserve says that inflation is “under control.” Whew! That was close!
What does all this mean? Several things. For one, it means that The Mogambo has locked himself in the closet under the stairs, clutching a machine gun to his chest and whimpering, “Inflation is under control! Inflation is under control!” I agree that is not much help. So instead of poking at The Mogambo with a stick, trying to get him back to dealing with reality, let’s walk over and ask Peter Schiff, of Euro Pacific Capital, who opines that prices rising are bad news. “In the end, both total sales and profits will fall, as America businesses sell fewer goods at higher prices. Real sales and GDP will fall, while unemployment and consumer prices will rise. The ultimate result will be a declining standard of living for average Americans.”
I also just love the part where initial jobless claims rose last week by 2,000 to a “seasonally adjusted” 333,000. As a guy whose ears are still sore from being forced to hear the lackluster “economists” of the world who used to say that as long as claims were less than 300,000, then we are still in expansion and that everything is wonderful, and in fact everything is better than wonderful, and that you ought to get up off your fat butt and go out and buy some stocks right now. But since initial jobless claims are always above 300,000 nowadays, these jerks don’t say that any more. They are still advising you to buy stocks, however, because everything is, as they say, wonderful.
But is you think that inflation is low, non-existent, benign, controlled, contained, blah blah blah, then all you gotta do it go to the mall and walk around. And while you are marveling at the price tags and commenting to yourself “Hmmm! These prices seem higher than I expected! It must be my imagination, because Alan Greenspan tells me that there is no inflation, and even if there was, it is under control!” And while you are doing that, sooner or later you are going to hear a big ruckus, and people will start running around yelling, and pretty soon there are armed-and-armored SWAT team guys barricading the place, and there is The Mogambo screaming at some poor teenage clerk about how the prices are higher than last week, and higher than last month, and higher than last year, and higher than I have ever seen in my whole life, even when I was just a young larva, as yet unacquainted with economics. The store’s video camera allegedly shows me kicking at the cash register and screaming, “Maybe your cash (kick) register (kick) just needs a little adjusting! I already know (kick) how the (kick) government adjusts inflation (kick) figures, so I’ll be (kick) happy to adjust the price inflation (kick) in your cash register for you!”
- In last Thursday’s Wall Street Journal, Edward Prescott, who is the most recent winner of the Nobel Prize in Economics, has written an op-ed piece entitled “Why Does the Government Patronize Us?” The thrust is that we Americans are a smart and educated bunch of people who can be trusted to provide for our own retirement, which shows that this Prescott guy is a certified idiot, even though he has that Nobel Prize under his arm, is a senior advisor at the Federal Reserve Bank of Minneapolis, and is a professor of economics. You’d think with all that going for him, he would show a little smarts. He doesn’t. He only shows education. An AMERICAN education, as if I had to say it.
The sad, sad fact is that before there was Social Security, people did NOT provide for their own retirement by investing money in the stock market. Back then, people saved a few bucks, they got old, and then they passed on their little family farms to their ungrateful children, who took care of them on the farm until they died.
But some did invest their money in the stock market. Then, because the damnable Federal Reserve spent the entire decade of the 20’s creating lots and lots excess money and credit (just like now) and people invested that money into the stock market, they all lost their butts in the end. Then nobody had any money. And so the Great Depression came along, and not that many people had farms anymore, and although they did not have any farms, they still expected that their children would take care of them. And the children did, for the most part. But not all of them. And people who didn’t have farms or money tended to starve, and the last thing anybody wanted was a bunch of old people hanging around eating the groceries. Then the Chamber of Commerce started noticing that there were all these damn people starving all over the place, and they said to themselves “Whoa! This looks really bad in our brochures!”
So the jerks in the government, namely the detestable FDR and that whole contingent of Democrat asses, decided that what we ought to do is create a big welfare program to take money away from people who work, and give it to people who didn’t. In this case, old people.
And then through the years the butthead Democrats decided that since the Social Security welfare program was so popular, that they would increase and enlarge it, and include more and more people in it, so that today more than a quarter of the entire population of the USA gets a monthly check, a welfare check, through the Social Security system.
Now the whole stupid, bankrupting mess is coming to its predictable and inevitable end. So what is the answer? Well, it is obviously too late to listen to The Mogambo, who heroically got into his Time Machine and went back to help them out, and whose fabulous idea it was to storm the White House and slap FDR’s nasty little face until he stopped cramming his whole foul communist New Deal down the gullet of America, and if his wife, that damned commie twit Eleanor, happened to come into the room, we’d give her a few pops across the chops, too. But nobody listened to The Mogambo, and here we are.
So, to ask again, what do we do? To listen to this Prescott bozo and a lot of other bozos, the idea is to privatize Social Security, see, so that Americans can once again throw all their money into the stock market (to the joy of the Wall Street crooks who will consume the lion’s share of all that money, just like they always do), so that once again we can act like morons who think that you can get something for nothing, so that once again we can have mass unemployment and misery on a scale unprecedented in history when the stock market again succumbs to the inevitable force of gravity. At the end, of course (and here is where he reveals his loathsome Democrat credentials) he suggests that the payouts from the Social Security pot of money be means-tested, meaning that if you manage to save a few nickels by retirement, then the guys who did NOT manage to save a few nickels can have YOUR nickels.
Specifically, he suggests that the government require you to put three-quarters of your Social Security contributions into individual retirement accounts. And here is where it gets weird, as he says “The other one-quarter of Social Security contributions would finance welfare and increase the labor supply, resulting in higher output and an increase tax revenues.” What? Where in the hell did THAT come from? One minute we were cruising along, privatizing Social Security, investing money in the stock market, maybe stop off for a burger and a milkshake, and then-- bam! --from out of the blue we’re going to increase the labor supply? Increase tax revenues? Did he really say it would increase the labor supply? Hahahaha! Did he really say it would increase tax revenues? This guy won a Nobel Prize in economics? Hahahaha!
John Hussman of the Hussman Funds obviously knows a lot more about economics than this Prescott guy, and he writes “Without cuts in federal spending elsewhere, privatizing Social Security will neither increase the ‘rate of return’ on Social Security investments nor increase its solvency. This is the cruel fact of equilibrium. Barring current spending cuts, any diversion of Social Security taxes toward private accounts must be offset by an increase in the issuance of government bonds. No new net savings are produced by this shift.” Which ought to take care of Prescott’s increase in labor supply and increase in tax revenues.
And to show you that this Prescott guy gets a paycheck but obviously doesn’t write them, he says that the Social Security contributions are only 12.4% of wages, as he conveniently forgets the required Medicare surtax, which brings the total bite to 15.3%, which means that the socialist government is grabbing almost one out of every six dollars of your gross income as it is! But somehow, maybe since it is a Medicare surtax, then it doesn’t count or something. But when you have 15.3% taken out of every dollar of your income, I am here to tell you that I, The Mogambo, DO think that there is a BIG freaking difference between 12.4% and 15.3%.
Obviously, the whole socialist/commie idea that you can have a huge wealth redistribution program that will NOT be a huge, gigantic bankrupting failure is the whole idea of the loathsome Democrat Party, although there has NEVER been a huge, gigantic bankrupting wealth redistribution program that was NOT a colossal failure. And yet the Democrats keep on pounding that same stupid idea, election after election after election, which proves my point that the Democrat Party is the political party of the stupid and the ignorant. And if you don’t believe me, then listen to one of them talk sometime, and you will walk away shaking your head in disbelief that anyone could be so arrogantly stupid or so purposefully ignorant, which of course, proves only my point that that the Democrat Party is the political party of, in case you weren’t listening or you attention wavered, the stupid and the ignorant.
And to further prove my point, in the very same issue of the WSJ we have an article entitled “More Muscle, More God, Less Shrum” by Dan Gerstein, which is a whining little piece by a Democrat about how the Democrats lost the election to Bush, and that to win the next election they have to “work to convince the broad majority again that government can be an effective agent for economic and social progress.” This is probably the most stupid thing that anybody can possibly say, which can only come out of the mouth of a Democrat, because there is not one damn example that I know of where government was “an effective agent for economic and social progress,” unless you mean that you want to change them both for the WORSE, and then, I guess he is right and I am wrong, because government has proven, over and over and over again, that it is the best agent to change economic and social things into a living hell.
But the whole idea behind privatizing Social Security is that the government will force people to put money into the stock market, and that will make stock prices go up. And it is this anticipation of stock prices going up that is probably behind this mini bull market we have been seeing here lately, because all the fundamentals dictate that only a certified idiot would be putting money into stocks at this point, ceteris paribus, which means “all things being equal,” but then again, we know that all things are NEVER equal. And, I am sorry to say, this privatization of Social Security is such a terrible idea that is almost certain to become law. Not only is it a really, really, really, really, really bad idea (RRRRBI), but I am absolutely sure that the moneyed interests of Wall Street and the mutual funds and the banks and money managers of every stripe are already sending smarmy lobbyists and basketsful of money to Congresspersons to make sure that this really bad idea is put into play.
- Darin G. sent an email and said that my stupid Mogambo crap reminded him of a bumper sticker which read, "Where are we going and why are we in this handbasket?" Hahahaha! Why are we in the handbasket? Hahahaha!
- Doug Casey, editor of Casey Investment Alert and the International Speculator, who has been doing this for 26 years, writes “The way I see it, the dollar is on the way to reaching its intrinsic value. This is a catastrophe for the average American, but boon for those who follow the trend. I fully expect to see gold trading well over $1000 before Bush's term is over.” Let’s see: four years gets me a 250% increase. Sounds good to me! And if you want it to sound good to you, then I suggest that you load up on gold and silver at the earliest opportunity, which is, looking at my watch, right now.
And speaking of gold, Richard Russell, the guy who has been writing the Dow Theory Letter so long that I hear that Moses was once a subscriber, figures that gold is in its ascendancy. “The second phase of a bull market is usually the longest (in duration) phase. It's in the second phase that the public begins to be interested in an item. And it's in the second phase that the funds start to take their initial positions in an item. I believe we're at the start of the second phase in gold.”
- There is an interesting site by a group of guys who call themselves People For Mathematically Perfect Economy. They say that they have deduced that the “practical lifespan” of the US economy reaches only to approximately 2010.
- The South Korean Central bank decided, out of the blue, to cut interest rates to a record low of 3.25%. The Korean central bank boneheads have decided that a slowing economy is a bigger problem than rising inflation. Wrong.
And how slow is their economy perking along? They forecast a growth of 5.2%, which is a level growth that the Bush administration would kill to have, and are killing to have. But by cutting rates they figure that they are making sure that their economy grows at least by 5% next year.
This may have something to do with the fact that the Korean won is strengthening against the ridiculous US dollar, and that this strength in the won is hurting their export market. Gosh! Ya think so?
- Pat Buchanan says “Two predictions seem solid: the mighty U.S. dollar has begun an inexorable decline, and the American empire is coming to an end. The Dow is falling, the dollar is sinking, our dependency on imported oil is growing, our country goes billions deeper into debt every day, and U.S. forces are stretched to the limit containing a medium-sized insurgency in a medium-sized Arab country.”
He also has a few choice words to say about us Baby Boomers, and he notes that we “will likely go down in U.S. history as the most self-indulgent and selfish.” If not the most self-indulgent and selfish, then the most stupid and ignorant, for sure.
- Just to show you that we Americans are not the only stupid people in the world, Doug Noland writes, “Mexican govt. yields ended the week at 5.20%, down 2 basis points.” I amble over to look up Mexican consumer price inflation, and I find that it is 5.4%. “Russian 10-year dollar Eurobond yields added 5 basis points to 5.79%” and then we go and look at consumer price inflation in Russia, and we find that it is 11.5%.
So the Fed policy of monetary excess is hurting everybody around the world, as all those dollars seep into everything.
- Martin D. Weiss, Ph.D. who is the editor of Safe Money Report, says that he is gearing up for the “official re-launch of my father's Sound Dollar Committee, a non-profit, non-partisan organization dedicated to fighting for an honest budget and a sound dollar.” Good luck! If I would only shut my fat mouth for a minute, I am sure that I would be able to hear the FBI tapping his phone and writing his name in the Official Enemies List, which, although you never read about it in the papers, is part of the Patriot Act.
- For those of you who like metaphors, here’s one from Peter Schiff of Euro Pacific, who writes that “The reality is the dollar is weak, it’s going to get much weaker, and there isn't anything the administration can do about it. The situation is reminiscent of a college student who parties all night instead of studying. It's not that he wants to flunk, he would of course prefer the honor roll. However, failure is the natural consequence of his actions. Similarly, the administration would prefer a strong dollar, but a weak dollar is the unfortunate result of an American economy characterized by declining production, inadequate savings, reckless consumption, soaring household debt, ballooning federal budget deficits, and an overly-accommodative Fed.”
“Those of you still holding dollars had better do some serious reflection, and ignore all the talk about a mythical ‘strong dollar policy.’ The alternative is to go down with a sinking ship, as the captain stands saluting atop its bridge, waist deep in water, assuring all aboard that ‘a strong ship is in its passenger’s interest.’ " Hahahaha! Ugh.
*** The Mogambo Sez: Gold is at a multiyear high, and if it weren’t for that spike in 1980, then it would be at an all-time high. But then, lots of things will soon be at all-time highs in terms of price. That is the inescapable end result of this whole ridiculous economic theory that we laughably call Modern Economics.
-- Posted Thursday, 18 November 2004 | Digg This Article
