-- Posted Thursday, 24 April 2008 | Digg This Article
| Source: GoldSeek.com
I was, of course, acting stupidly, gobbling random medications by the handful and washing them all down with tequila just to try and calm down enough so that I don't start screaming and screaming and screaming in fear at the terrifying economic disaster that is unfolding all around us, by which I mean, of course, how inflation is going to kill us and eat us alive, leading one inexorably to the immortal yet pithy phrase, "We're freaking doomed!"
For one thing, Total Fed Credit was up by only $357 million last week, which is such chump change that it is, coincidentally enough, approximately equal to the cost of an ordinary emergency room visit these days.
This TFC-not-expanding thing is Bad, Bad News (BBN) because this is the stuff that the Federal Reserve creates at their whim, which causes credit to appear on the books of the banks, which turns into money when someone takes out a loan at a bank. Thus you see how this TFC is the actual raw material from whence Magical Money From Thin Air (MMFTA) comes.
If you are like most people, you have given up believing in magic a long, long time ago, as it is the stuff of fairy tales, which you have also given up believing in, too, because you learned the hard way that there is no such thing as a "happily ever after" ending for anything, and in fact the "ever after" is usually filled with bosses screaming at you because you keep screwing up, children screaming because that is what kids do, spouses screaming because that is what spouses do, creditors screaming on the phone about taking you to court which is what creditors and collection agencies do, and you end up screaming about the sheer economic madness that is rampant in the world and how you are going to die an ugly, ugly financial death because of the Federal Reserve creating the money that creates inflation in the prices we have to pay.
But all is not quite lost yet! The category of Other Fed Assets went up by $15.6 billion last week, taking that category to $80 billion, which is up $40 billion in the last twelve months, which is a staggering increase, given that it has taken since 1913 to amass the first $40 billion. I assume that this is where some of those worthless assets that the Fed is taking off the hands of its nasty little banker buddies winds up.
This disgusting largess at taxpayer expense was partially offset by the Fed selling another $12 billion of its Treasury bonds last week, taking this main asset of the Federal Reserve itself down to $548 billion, which means that they have sold a full third of their ownership of Treasury bonds that they have been gradually accumulating to expand the money supply since the founding of the Federal Reserve 1913, in just the last few months! A third of it gone, in three months! Months! Something very bad is happening, meaning that we're freaking doomed!
And speaking of lying, stinking messes, I am reminded of Senator Christopher Dodd of Connecticut, the laughably incompetent, blowhard chairman of the Senate banking committee, who never saw anything wrong with banks or the actions of the Federal Reserve the whole time as this whole stock bubble, the bond bubble, the housing bubble, the government bubble, the subprime mortgage/derivatives mess were growing, growing, growing, even though Greenspan (and then Bernanke) testified in front of him at least twice a freaking year, each time saying the most preposterous things while Dodd and his stupid little banking committee buddies just sat there and ate it up like the ignorant morons they really, really are, when they were so close that they could have sprung over the desk ("boinggggg!"), grabbed one of those Federal Reserve chairman weenies by the necktie with one hand and slapped the living hell out of them with the other hand, while yelling at them as loud as they could, "Stop this stupid, insane expansion of the money supply before you create consumer price inflation, which is the thing to be feared above all things, or we will fire you and use the IRS to hound you until you die, slowly, screaming in pain, alone, in the dark, in the rain, just like an Earnest Hemingway novel at its most depressing." But did they use that golden opportunity? NoooOOoooo!
Anyway, not content with committing that gigantic, unforgivable incompetence, now this Dodd creep says that he wants the taxpayers to bail everybody out by having the Federal Housing Administration, a government-owned mortgage insurer, guarantee another $400 billion in mortgages, which means the taxpayers paying for the inevitable losses! Hahaha!
This, to be fair, is just typical, loathsome Democrat commie-think, all of whom actually believe that the reason government exists is to continually give money and mandate unfunded benefits to more and more people. And yet you still think that the United States has a viable economy? Hahahaha! I point at you and laugh in utter contempt, as that is the Rude Way Of The Mogambo (RWOTM) at such stupidity! Hahaha! Communism that works? Hahaha! Too much! Hahahaha!
Perhaps this hysterical laugher of mine means that I am just overmedicated, but you would think that since a fiat currency has never worked in the whole history of mankind, and since a fiat currency has destroyed every economy that tried it, and since giving banks unlimited power to create money and credit has never worked in the whole history of mankind, and it has destroyed every economy that tried it, and since having large, expensive, suffocating governments has never worked in the entire history of mankind and as destroyed every economy that has tried it, it would seem obvious that we should not elect bozos like, for instance, Dodd, Kennedy and Pelosi.
But I am heartened to learn that my medications have nothing to do with it, as from chartoftheday.com we also get their "Quote of the Day", this week by the German philosopher Georg Hegel, who said, "What experience and history teach is this - that people and governments never have learned anything from history, or acted on principles deduced from it."
And thus I know, beyond a Shadow Of A Freaking Doubt (SOAFD) that the rest of history will repeat, too, and that gold will, again, just like it always has, rise in price as the value of the over-issued currency in which it is priced falls in purchasing power.
I mean, how simple can it be? Whee! This investing stuff is easy!
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. Click here to visit the Mogambo archive page.
-- Posted Thursday, 24 April 2008 | Digg This Article | Source: GoldSeek.com
