-- Posted Thursday, 14 February 2008 | Digg This Article
| Source: GoldSeek.com
Total Fed Credit, which is that electronic pixie dust that magically creates available credit in the banks, which turns into money when somebody borrows it from the banks, which increases both debt and the money supply, was actually down by $2.9 billion last week, taking us back to $861.7 billion. Not much, I admit, but a negative number is a long, long way from the usual positive zillion or so dollars per week, as has been the terrifying habit of the Fed since 1997.
For those who fancy the technical analysis side of things, the long-term chart of Fed Credit shows a marked deceleration in the growth of Fed Credit since March of 2007. To those whose inclinations run towards calculus, the second derivative (the rate of change of the rate of change) has gone negative.
I'm not sure I understand any of it, but I am sure that none of this means anything good, as the economic system with which we have saddled ourselves is not the good kind of "saddled", like when you are on your hands and knees as your wife rides you around the bedroom, whacking you on the butt with a riding crop and shouting, "Yahoo! Prepare for a full galloping frontal assault, my Powerful Mogambo Stallion (PMS)!", but rather the other kind of "saddled", where not only does your wife NOT do any of this fun stuff or even want to discuss it, but you can't even go out and hire professional jockeys because inflation is so bad that prices are too high, and they are getting more so all the freaking time, and then you REALLY understand the ugliness of the term "saddled" when describing an economic system!
Like the kind that John Stepek at MoneyWeek.com reports has England all in an uproar; "The price paid for goods leaving factories rose 5.7% year on year, which is the highest rate since 1991. Wholesale food prices were up 8.5%, while petrol prices were up by almost 23%. Overall, input prices were up an incredible 18.9%."
And it doesn't take a real genius to see that higher costs for producers means they will have to charge higher prices, which means that when Brits buy something from now on, they will pay higher prices.
And it is going to get worse for Brits, as Ian McAvity shares a BBC item that indicates that the British government and bankers are just as slimy as the ones we Americans have, according to the article's title, "Secret Bank Rescues To Be Allowed". Reading on, horrified at the concept of the government handing out unknown amounts of money with no accountability, we astonished to see that it is true, and, "Chancellor Alistair Darling has proposed that failing banks should be able to receive help from the Bank of England in secret", so that there would not be an, "immediate adverse impact on consumer confidence"! Hahahaha! A delayed impact, as the last-to-know are handed the empty bag after everyone else has fled, is okay, though! Hahahaha!
And the inflation in consumer prices that huge creations of money and credit will cause, secret or not, will be explosive; sort of how Iraq is so explosive and anti-American, which may be because of religious fanaticism, or maybe Iraqis lack, "consumer confidence", or maybe because prices are so high that people are just naturally angry, and they are looking around for the reasons why they can't afford to feed their children, and they see that America's Federal Reserve has created so damned much excess money and credit, and forced all the other central banks around the world to increase their own stocks of money and credit with which to soak up all these dollars and thus prevent their own currencies from getting so strong (as there would be many sellers of dollars and few buyers, meaning that the price of dollars would go down) as to crimp export sales to those selfsame, idiotic, consumption addled, debt-besotted American morons, and now prices are too high as a result of all that monetary inflation!
Well, of course I can't prove any of this, but that has never stopped me from making wild, baseless accusations in the past, especially when the evidence of the economic crimes committed is so blatant; Iraq had a price inflation rate of 12% in December 2007! This was relatively good news, as inflation was 65% last year, which is, I assume, before their government learned how to lie about inflation statistics from watching how America started that deceptive crap, and now governments around the world seem to all be doing it, like we ordinary citizens are too stupid to notice that prices are always going higher, much higher, and we are increasingly (as the saying goes), "Out of money before we are out of month"!
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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, 14 February 2008 | Digg This Article | Source: GoldSeek.com
