-- Posted Wednesday, 26 September 2007 | Digg This Article
Junior Mogambo Ranger (JMR) Dave R. sent an excerpt from the newsletter of Gary Dorsch, at sirchartsalot.com, that he thought might interest me, in that it is the exact kind of monetary crap that makes me crazy. "Martin Feldstein," it read, "chief executive of the National Bureau of Economic Research, called on Mr. Bernanke to lower the fed funds by 1% to prevent house price declines or a pullback in consumer spending from causing a recession."
Naturally I am instantly screeching at the top of my lungs that all this silly crap of always lowering interest rates is going to do is to postpone paying for our fiscal and monetary sins. And he even admits it himself, as this Feldstein halfwit said, "If Fed cuts rates and results in higher inflation - it would be the lesser of two evils." I can't believe my ears! What a moron! I bellow, "There is nothing worse than inflation! Nothing!"
Instantly I am on the phone calling the National Bureau of Economic Research and screaming into the phone, "Let me speak to this Martin Feldstein jerk, because I have some Big, Big Mogambo News (BBMN) for him that it is not a choice of two evils, but a choice of when the Big Freaking Evil (BFE) hits us! We can bite the bullet now, or by lowering interest rates to start another boom to inflate the prices of stocks, bonds or houses, have another round of temporary asset inflation leading to being forced to bite a bigger bullet later.
"And I know that you are just a stupid receptionist, but even you have to realize that each time you do that, the bullet gets bigger and bigger, and pretty soon you are having to chomp down on a bullet as big as a freaking cannon shell! Have you ever tried to bite down on a cannon shell? You can't! It's too big!
"And yet, this silly little man thinks that continually increasing the money supply by lowering interest rates so low that people will be compelled by negative interest rates to borrow and go deeper into debt, which drives up prices, and that this is the 'lesser of two evils', when it is the sheer enormous size of the debt that is causing all of our problems as it is? Wrong! So let me speak to Feldstein, and pronto, you dumb receptionist moron!"
The receptionist politely said, "I'll have to put you on hold, sir, as there are already thousands of people ahead of you who want to give this low-IQ putz a piece of their minds, and confidentially we are getting ready to fire this mental midget screwball because he is obviously a real wanker!"
Okay, I admit that I made that part up, but only to save my hurt feelings as she really said, "Goodbye, creep! I hate you!" and she hung up on me!
But Mr. Dorsch apparently couldn't get through to Mr. Feldstein, either, and sighs and says, "Thus, Americans must prepare for a further dilution of their purchasing power, and the most evil tax of all - higher inflation."
And anyway, I would expect Mr. Feldstein to say something idiotic like, "Who cares about inflation? Whatever the cost of a good or service, high or low, just put it on your credit card, and inflation will bail you out by letting you pay the debt in cheaper dollars!"
And it is not just more of this Feldstein guy acting insane, but insanity is everywhere, as I prove by juxtaposing two sentences from a report by the AP, as I flaunt my Awesome Mogambo Editorial Powers (AMEP) and deplorable lack of professional ethics.
First, I quote the article's report that "Individual earnings dropped for both men and women in 2006, but more members of each household worked, resulting in the overall increase in household income, said David Johnson, chief of the Census Bureau's Housing and Household Economic Statistics Division."
The actual facts are that clear-thinking guys like me have farmed the kids out to work in an illegal backstreet sweatshop to make some money. Hell, it's the only good reason to have children, as far as I can tell!
Now, note the jarring humor when I next quote the article as reporting, "The numbers provided some good economic news at a time when financial markets have been rattled by a slumping housing market." Hahaha! I'll say! The good news is that, as minors, their paychecks are sent to me, and I have the whole quiet house to myself since the kids are being chained to their sewing machines 24 hours a day, and my wife spends all her time out of the house, too, trying to get the police to get the kids back, for reasons I don't understand and I am tired of arguing about.
And it's not like I don't desperately need the money, as do we all, as I gather from the Wall Street Journal report that the latest estimate of Consumer Installment Debt was that total consumer borrowing increased at a 3.7% annual rate in July. Revolving credit (credit card debt) jumped at an astonishing annual rate of 6.6% in July!
In total, consumer credit outstanding grew by $7.5 billion in July, taking the total to a staggering $2.457 trillion owed! And as bad as that was, it was actually less than the whopping $11.9 billion that consumers added to their debt in June! Ugh.
Mogambo sez: The other day I woke up early, before the sun was up, and I thought the sky seemed brighter than usual. I idly thought that maybe it was because of everybody suddenly getting brighter, and that they were realizing that their only hope is to get their money into gold, silver and oil.
Then I went back inside, turned on the news and I saw that gold, silver and oil were up a little, but not enough to have resulted from people getting smart enough or bright enough to light up the night sky.
I don't know what this means. I'm too scared to think. That's why I think stupid things like this stupid "bright night sky" thing.
Now imagine what I would be like WITHOUT gold, silver, oil, and enough raw firepower to light up the sky. Brrrr!
So gold, silver and oil have obviously saved my worthless butt, and it might do wonders for yours, too!
P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed.
Editor's Note: 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.
The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications. To read all of The Mighty Mogambo's musings from this week, click here.
-- Posted Wednesday, 26 September 2007 | Digg This Article
