-- Posted Wednesday, 19 May 2010 | Digg This Article
| | Source: GoldSeek.com
In my darker moments, usually just before I go freaking berserk and start yelling and screaming about how “We’re freaking doomed!” from the idiotic Obama administration deficit-spending So Freaking Much (SFM) money and the idiocy of the Federal Reserve creating So Freaking Much (SFM) money, all of which is guaranteed – guaranteed! – to make consumer prices rise in a terrifying, catastrophic, ruinous inflationary spiral that will destroy us all, I sometimes get myself in the mood for a nice, long, loud Mogambo Banshee Wail Of Outrage (MBWOO) by merely mulling over the term “dynamic stochastic general equilibrium.”
This incomprehensible term reveals itself, as the term itself implies, as laughably worthless, but, even worse, it is the name of the stupid economic theory to which the moronic Federal Reserve hews so strongly and which has failed so, so miserably.
But if the Fed did not create the money that creates inflation in prices, then the Obama administration’s insane deficit-spending would mean that the government would have to borrow the money in the private market, sucking up a huge $2 trillion a year out of the accounts of people and agents who saved money, which is impossible because all of the savings accounts in the whole USA amount to a lot less than that!
How things have gotten to this point is made clear in The Free Market newsletter from the Ludwig von Mises Institute, where Jonathan M. Finegold Catalan writes, “The current situation is not unprecedented. High public and private debt has been the bane of large governments for the entirety of written history.”
It is, he notes, what Ludwig von Mises described as the “crisis of interventionism”, which Mr. Mises himself describes as “Intervention aims at confiscating the ‘surplus’ of one part of the population and giving it to the other part. Once this surplus is exhausted by total confiscation, a further continuation of the policy is impossible” which Mr. Catalan notes is made simpler with the immortal quote, “The problem with socialism is that eventually you run out of other people’s money.”
Of course, I had many, many questions, like, “Is your name really Finegold, or is that some kind of coded message signifying that The Marvelous Mogambo (TMM) was right when he said to buy gold, silver and oil?” and I wanted to know, “Are you saying, that we ought to run out and buy gold right now?” and, of course, “What does the ‘M’ stand for in your name?”
But of course Mr. Mises was writing when money was gold and gold was money, and thus they did not realized that with a fiat currency, the government can never run out of money because they can always just print more.
More correctly, the problem with socialism is that eventually the money runs out of buying power, which is another whole problem, but one which will not be a problem to those who have looked at the problem and bought gold, silver and oil instead of dollar-denominated assets! “Whee!”, I say. “This investing stuff is easy!”
-- Posted Wednesday, 19 May 2010 | Digg This Article | Source: GoldSeek.com
