-- Posted Wednesday, 24 October 2007 | Digg This Article
| Source: GoldSeek.com
One of the reasons that I am so irritable is that I am constantly astonished by the stupidity of the Federal Reserve and the other central banks of the world creating so much excess money and credit, which creates inflation in prices.
JMR Mark Lundeen is doing what he can to calm me down, and sends along a clever quip about inflation from Pat Paulsen, who is listed as, "1968 Presidential Candidate & Comedian". Mr. Paulson comically says, "On the issue of inflation, I think I could solve it no matter how much money it took." Hahaha! This sounds exactly like the Federal Reserve and the moron "yes-men" with which they surround themselves!
Speaking of butthead "yes-men" morons, let me point out the idiocy of Martin Feldstein, who is noted as being a "professor of economics at Harvard and chaired the Council of Economic Advisers under President Reagan", although you would not know it from the way he thinks.
For example, his tired, predictable little essay is titled, "A more competitive dollar is good for America", which is (despite its argumentative title) ordinary for the most part, containing such hackneyed jewels as, "Since a falling dollar raises the cost of imports and increases the export demand for U.S. products, a dollar decline by itself puts upwards pressure on the U.S. inflation rate", which is true, as far as it goes.
Then he takes a sharp turn into Bizarro Coo-Coo Land when he says, "But the overall inflation rate need not rise if the Federal Reserve sticks to its goal of price stability." Hahahaha! What? Hahaha! What kind of insanity is that? Hahahaha! How can prices be rising in the first place if the Fed is achieving price stability? Hahaha!
If you really want to know, I'll cleverly tell you what the Fed is really doing about "price stability" by trotting out the other witticism sent to me by Mr. Lundeen, penned by a Professor W.H. Hutt: "The technique of inflation demands that governments and their agencies shall continuously deceive the public about the fact, the speed and the duration of inflation intended. Ministers of finance have no option but to employ what has been called 'the necessary untruth'."
So I say with a smug tone to my voice, "Well, Mr. Feldstein, how do you like them apples, moron?" I notice that he doesn't answer me directly, and rather just goes on that after his assumed "Federal Reserve sticking to its goal of price stability", things would be better in that "relative increases in the prices of tradable goods would be offset by lower inflation in other goods and services." Hahahaha! I can't believe I am reading this stupidity! Hahahaha! Says who? Where in the hell did that come from? Hahaha!
Blithely continuing on and ignoring my raucous laughing and hooting in Raw Mogambo Contempt (RMC), he yammers about how, "Markets must look beyond the slogan that a strong dollar is good for America to recognise (sic) that a more competitive dollar will help sustain U.S. growth and is necessary to correct America's trade deficit." In short, the erstwhile government attitude that "a strong dollar is good for America", which produced all the growth in the economy by keeping imported inflation low for decade after decade is now, for some unexplained reasons, wrong after all these decades, and that now some higher import inflation will magically "help sustain U.S. growth"! Hahaha! This is Too, Too Much (TTM)!
Then he put me right over the top when he said, "Governments of our trading partners must recognise (sic) that the dollar's decline will weaken demand in their economies and should use fiscal and regulatory measures to maintain their growth and employment." Hahaha! Now I am laughing so hard that my stomach hurts and I think I peed in my pants! Hahaha! He is saying, as astonishing as it sounds, that foreign countries should create excess money and credit to destroy their own currencies, bringing them down to the debased level of the dollar, which has been destroyed by the Federal Reserve creating excess money and credit! Hahaha! This is freaking unbelievable! This is "economics" to this halfwit? Hahahaha!
He somehow comes to the absolutely asinine conclusion that "With appropriate policies, the dollar's decline will correct the imbalances that threaten the global economy without higher inflation in the U.S. or decreased growth in the rest of the world." Hahahaha! He is saying that you can get a free lunch with "appropriate policies"! Hahahaha! And this guy supposedly teaches economics at Harvard! Hahahaha!
Perhaps Mr. Lundeen sent these quips to me because from Brian Blackstone at Dow Jones we learn that there is some Big Ugly News (BUN) about the Import Price Index. He writes, "In the 12 months through September, import prices increased 5.2%, up sharply from August's 1.9% year-on-year rate and the highest since August 2006".
This astonishing and terrifying news about import inflation is mostly because of higher oil and food prices, which are (being as sarcastic as I can manage without actually vomiting in rage) things we don't even need, according to the Federal Reserve, because neither food nor energy are included in their estimate of "core inflation", which is a fact that I already know, so don't write me and tell my how stupid I am to worry about the stupid prices of stupid imported energy and stupid food when the stupid government has already told me they are completely irrelevant to anybody's stupid lives.
While I quickly run to the restroom to throw up at this idiocy, I will leave you with some comments about energy from "Views from the Fuse" at DailyReckoning.com, which passes on the news from the AP news services that "The average total heating oil bill for the winter months is projected to rise by 28 percent from a year ago, to $1,834." A 28% rise in price to keep from freezing to death this winter!
The "good" news, I guess, is that, "Those who heat their homes with natural gas will see an increase of around 6 percent. This is because of ample natural gas supplies, according to the American Gas Association."
And the inflation news just keeps getting worse, as we had a 4.4% y-o-y increase in the Producer Price Index in September. And yet people wonder why I am in here puking into the toilet and cursing the Federal Reserve while I do it. Ugh.
Mogambo sez: There is just enough gold, silver and oil in the world to permit you, me and a few other smart people to prosper by owning them during these exciting times of banking and governmental economic idiocies, because everything they do seems specifically designed to drive up their prices because everything they do drives up their prices.
And the more idiotic and corrupt the central banks and governments act, the higher the prices of gold, silver and oil will go. And since there is no limit to the idiocy and corruption of government, there is no limit to how high gold, silver and oil will go. It's just that simple.
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, 24 October 2007 | Digg This Article | Source: GoldSeek.com
