-- Posted Thursday, 13 December 2007 | Digg This Article
| Source: GoldSeek.com
Total Fed Credit, to my great surprise, dropped last week by $2.6 billion, which explains some of the seismic squiggles the Sensitive Mogambo Economic Sensors (SMES) detected that were reverberating around the economic fabric of the universe, as this reduction in Money From Thin Air (MFTA) is being absorbed.
Oh, I realize that there are many of you who think that Earthlings are the only beings in the universe, but that is not true. And Earthlings are not the only ones who like to bet on things, and this sudden drop in Total Fed Credit has altered some big leveraged bets on the stupidity of Earthlings, mostly in backstreet casinos in the Andorian Nebula.
Most of the bets were that the Federal Reserve, the most corrupt and laughably incompetent central bank on the planet Earth, would keep creating more and more excess money and credit until a hyperinflation destroyed the country. Up to now, this seemed like a good bet, as TFC has been increasing at over $5 billion a month for most of the last decade. Now, this little drop is making some invertebrate space creatures nervous, even though the level of TFC has not really dropped here on Earth.
But that "the Earth will be destroyed" is still a good bet, as the staggering incompetence of the Federal Reserve created the crushing debt that is owed by every economic entity in the whole country, dozens of times over. And as bad as this is, Bloomberg.com reports that you ain't seen nothin' yet, as we stinking little taxpayer worms are doomed to be ground into the dust by inflation in prices because the dollar is going to be ground into the dust by massive amounts of new debt and money.
I say this because this is the only conclusion that I can draw from learning that the official Federal Reserve prescription for too much debt is (a drum roll, please) more debt! And to that end, Bloomberg reports that Federal Reserve officials "are signaling that they are looking for additional ways to increase credit to companies and consumers." Like lowering interest rates again, again, and again! Hahaha!
And speaking of debt, one of the chilling things I noticed is that the national debt (the amount of debt incurred by the federal government) went up by about $90 billion in the last month, which, although staggering, is just the same average monthly increase in the national debt since the middle of 2001, more than six long years ago, taking us from about $5.6 trillion to $9.8 trillion in federal debt, which is roughly equal to the money deficit-spent by the moronic Congress (except Ron Paul).
Larry Edelson of MoneyandMarkets.com doesn't comment on that directly, but implies that it might have something to do with the fact that, "The subprime mortgage crisis and real estate implosion in America have created a debt debacle. Consumers and corporations are in debt up to their eyeballs. As a result, the Fed has been forced to crank up the printing presses to flood the economy with paper money in an attempt to inflate away the debt and keep it from crushing the economy."
I jump up and excitedly exclaim, "In other words, the government has to create the money to bail these people out, and that is just what they are doing!"
I can see by the look on Mr. Edelson's face that he is not too pleased to have me interpret what he has said, or put words in his mouth. Ha! If I had wanted to put words in his mouth, I would quote him as saying, "That Mogambo is a real peach of a guy! And I like him so much that I will let him use my car anytime he wants, or I will give him one hundred dollars in cash to show how sorry I am to disappoint him and his joy-riding hoodlum friends, because the car is not yet back from the repair shop from the last time he borrowed it!"
You can see that I hit a sore spot, so Mr. Edelson changes course slightly, throwing me off his tail, by saying "Meanwhile, on the other side of the planet three billion new consumers in Asia continue gobbling up natural resources at a rate Mother Nature has never before seen, creating huge shortages in commodities across the board, and igniting the biggest natural resource boom of all time", which, ominously, is Bad, Bad News (BBM), as "these two forces are adding to inflationary pressures around the world."
I am staggered at the implications of such an inflation in food prices, and I sit down in blubbering panic, which is when I noticed that I am sitting in something wet, and I hope it is not because I pooped in my pants in shock after hearing this horrifying news. Damn!
And it gets worse when you consider the dollar, as he goes on "And when you put them together with the falling value of the U.S. dollar, you have the biggest, strongest macroeconomic forces to ever hit the global economy at the same time."
And if you want another lesson in how Thomas Jefferson was right when he said that to allow a country to grow up around the banks was to wake up homeless and broke on the very land that our fathers gave to us, then I am happy to oblige you by quoting Mr. Edelson as saying "Our country WAS the world's largest creditor nation a few decades ago … IS the world's largest debtor nation now … And WILL SOON BE the world's largest foreign-owned country!"
And how can he back up such a dire prediction? Easy! He says "785 U.S. businesses were acquired by foreign investors for $129 billion this year through August."
Maybe that is why people at work are always yelling at me to wake up and get busy around here, but with a Chinese accent nowadays! I just thought I was dreaming of Chinese food!
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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. Click here to visit the Mogambo archive page.
-- Posted Thursday, 13 December 2007 | Digg This Article | Source: GoldSeek.com
