-- Posted Sunday, 25 January 2009 | Digg This Article
| Source: GoldSeek.com
Bloomberg.com reported that "The Federal Reserve, engaging in what Chairman Ben S. Bernanke this week termed 'credit easing,' bought $23.4 billion of Fannie Mae, Freddie Mac and Ginnie Mae mortgage bonds under a program aimed at lowering home-loan rates" which goes along with another Bloomberg news item that said this same Federal Reserve Chairman Ben S. Bernanke and Vice Chairman Donald Kohn "urged a new effort to address the toxic assets held by financial companies", by which he obviously means "create the money to buy them."
This shameful behavior fits perfectly with the Wall Street Journal, editorializing about President Bush, that "While the Fed is most to blame, the Administration encouraged the credit excesses. It populated the Fed Board of Governors with Mr. Greenspan's protégés, notably Ben Bernanke and Donald Kohn, who helped to create the mania and even now deny all responsibility."
Now, these clueless weenies "called for the government to remove or insure the assets", and what better place to put them than into an 'aggregator bank' created especially for the purpose? Hahaha! What fraud! What corruption!
This harebrained idea is, for those of you with a Biblical bent, akin to the Jubilee, a time when all debts are cancelled and borrowed things must be returned to their owners.
In this case, the debts of greedy pigs are being cancelled by the government giving them their money back by buying worthless assets, a scam wherein we define the term "greedy pigs" as "all of us."
I say that we are all "greedy pigs" not because I see my own greedy piggishness reflected in others, nor because I condemn the same greedy lusting after money and the same piggish lack of personal hygiene stemming from lack of caring one way or the other, as I, and others, fall deeper and deeper into a deep, deep, deepie deep deep, deep, deep depression amplified by a liquor-fueled stupor as I despair - replete with involuntary wails of terror, interspersed with childish whimpering - of the terrifying, unprecedented, suicidal economic sins that are being committed by the Congress, the Treasury and the Federal Reserve, as they desperately clutch at monetary and fiscal straws to somehow, miraculously, avert the natural collapse of a huge, bloated, misshapen, cancerous, mal-invested, sick and perverted economic system born of a giant system of governments whose spending equals half of GDP and is supported by inflating a fiat money via the brain-dead expedient of everybody going into crushing, un-payable debt.
Then, one day, my wife says, "I completely understand your terror at the prospect of the terrifying, bankrupting penalty that we must pay as a result of acting so stupid that we did not adhere strictly to the Constitutional requirement that the dollar shall be made of gold, which is the only thing that can prevent a corrupt Congress from deficit-spending the money created by a brain-dead Federal Reserve, where these Fed halfwits actually believe in their stupid neo-Keynesian econometric models, using data that are outright lies, to expand the money supply with excess money and credit so that governments and a debt-besotted populace can finance their unwholesome gluttony, but what in the hell does that have to do with your not bathing or shaving? You stink like a pig!"
Then the kids started making pig noises, oinking and grunting, and everybody was laughing and making pig-like snarfling sounds, which caused me to explode, "Stink like a pig? Is that what you said? Well, that's the same thing that my boss and my hateful co-workers say to me, too! What is this crap, some kind of hideous conspiracy?"
Before I was so cruelly mocked, I was going to kindly explain to them that the new theory is that all this massive new deficit-spending of money and credit, as bad as it is, will, in one way or another, actually affect us in a beneficial way, which is because all things financial are connected to all other things, and if the banks go down, then their stocks go down, and that little part of our retirement portfolios that is made up of bank stocks goes down, and then we go down, too, but with a lot of new money looking for a place to go after it finally ends up in somebody's pocket, some of it will end up in bank stocks and all the other depressed assets, making their prices go up!
The theory is that with enough new money, the stocks will go up, see, and thus we will all be wealthier, see, and then we just sit back and rake in the money as the "wealth effect" takes over to add "oomph!" to the economy.
Of course, the rest of us have to come up with the money that they are given! Hahaha!
The choice of repayment is to either tax the money from us, or pay the higher prices of consumer goods (price inflation) after the government borrows the money, dutifully created by the foul Federal Reserve, which inflates the money supply, which makes prices go up, which makes gold go up, which makes me go, "Whee! This investing stuff is easy!"
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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 Sunday, 25 January 2009 | Digg This Article | Source: GoldSeek.com
