 ...snarling like a jungle cat
Richard Daughty
The Daily
Reckoning
...the angriest guy in economics
The Mogambo
Guru
Archives
December 2, 2004
- Congress, as confidently
predicted, approved increasing the limit on the Total National
Debt by another $800 billion, to $8.184 trillion. Personally,
I got another solicitation in the mail to apply for another credit
card. Of the two of us, only I have the smarts to turn down the
offer to go deeper into debt.
This is the third time since 2001 that Congress has raised the
debt limit, and now, only three years later, we are $2.2 trillion
farther in debt, and so soon we shall be $3 trillion more in
debt. The Treasury did not waste any time borrowing the money,
and as soon as the ink was dry on the legislation authorizing
the increase, they went out THE NEXT FREAKING DAY and put us
$21 billion dollars farther in the poorhouse! $21 billion! In
one day!
The dollar continued to crumble, of course, and even Greenspan
himself said that if anybody is NOT taking out some kind of defensive
insurance against higher interest rates or the falling dollar,
or both, then they have nobody to blame but themselves, because
he has said, and the international community has said, and the
stock market has said, and the bond market has said, and The
Mogambo has said, that interest rates WILL be higher the future.
The part that baffles the hell out of me is just who in the hell
is taking the other side of that "insurance" policy
against future interest rate hikes? That person is the most stupid
doofus on the face of the planet, or that ever lived on the face
of the planet, by that I mean that not even I, The Mogambo, am
that stupid, and you can believe me when I say that I have done
some really stupid things in my life, and I mean really, REALLY
stupid things, (audience yells out, "How stupid Mogambo?")
things so stupid that I look back and ask myself, incredulously,
"What in the hell were you possibly thinking?" and
other, secret things so unbelievably stupid that I do not dare
go back and look at them, because nobody normal is THAT stupid,
and so to even acknowledge their existence would prove that what
experts are saying about me from the witness stand, waving their
snotty little lab reports around and yelling "I have proof!
I have proof!", are true.
Although my credentials are obviously in impeccable order to
qualify me to testify as an expert on behaving stupidly, not
even I would DARE take the other side of that bet, even on my
craziest day, which would be, according to official transcripts,
on or about the 12th of June, 1967. So, this is another Take
It From The Mogambo To The Bank Moment (TIFTMTTBM) when I tell
you that taking the other side of this derivative trade is the
ultimate in stupidity, and one that will come back to haunt any
moron who thinks he can make money on that bet.
It would be the ultimate "blonde joke". A guy comes
up to this blonde on the street, and says "Hey! Blondie!
Want to make some quick cash?" and of course I say that
I would LOVE to pick up a little quick cash, and he says, "I'll
bet you that I will punch you in the nose" and I naturally
say "Okay, I'll bet you DON'T punch me in the nose, wise
guy!" and he says "Okay, let's see your money!"
and I say that I don't have any real money on me, if one defines
money as something that is, simultaneously, 1) a unit of account,
2) a medium of exchange, and 3) a store of value, although I
do have some of these American dollars, which are the first two
of those three things, and he says, "Okay. Let's bet ten
of them!" and I say, "Okay by me, bozo!" Then
he hits me-- oof! --in the freaking nose! Then goes running off
with my money!
The next thing I know, I'm sitting on the sidewalk nursing a
sore nose, and I get a call from a financial center, and they
say "Hey! Blondie! Want to make a little quick cash?"
and of course I tell him that I would LOVE to make a little quick
cash, and they say, "Interest rates are going up. I'll bet
you that they go up, and you can bet they don't go up!"
And then I say "No,"
because blondes are not stupid enough to take THAT bet! Hahahaha!
Well, it is not the funniest joke I ever heard, but I am not
here to make jokes. I am here to talk about economics, and maybe
borrow a few dollars from you, and I promise I'll try and pay
you back a little every month, if I can.
- American boneheads are still lining up around the block to
buy houses at prices that they KNOW are ridiculous, and taking
out mortgages that are huge freaking multiples of their incomes,
multiples that that are equally ridiculous, something like 4.5
times their annual gross income! The old standard was that you
could afford a house that cost about twice your annual income,
because experience had shown that mortgages for amounts more
than twice the borrower's annual income were too burdensome for
the borrower, and defaults were thus higher, and the banks tended
to lose money when they lent out so much money to such over-stretched
borrowers, and that is how Traditional Rules of Thumb (TROT)
are created. But rules of thumb are so old-fashioned, especially
when there is a chance to act really, really stupid, as only
government and their bastard offspring, Government Sponsored
Enterprises, can act.
This is, of course, a reference to Fannie Mae and Freddy Mac,
two absurd and absurdly gigantic mortgage lenders that were created,
of course, by the government, and who don't give a rat's patootie
about prudent lending practices, or defaults, or problem loans,
or rules of thumb, or any of that stuff that normal businesses
have to worry about. Only a GSE could get away with a business
plan that essentially promises, "We promise to ignore the
lessons of history, economics, finance and common sense, and
yet we will nevertheless make money for investors, although it
has always proved impossible before this, and that is why nobody
in their right mind ever lends such huge sums of money, and that
is why there is nobody in this bubble-making market niche!"
although that particular phrase is NOT included in the prospectus.
But it should be.
- And speaking of deceit and stupidity, the United Nations has,
once again, proven itself to be a corrupt, lying piece of expensive
worthlessness, and it is getting embarrassing to be supporting
it, much like my wife is getting tired of sadly nodding her head
in response to people asking "Hey, lady! Is that stupid
jerk really your husband?" I say we disband it, and then,
if you gotta have one of these supranational entities, start
fresh with a new bunch of guys who have not had time to organize
their cozy cobwebs of interconnected schemes and corruptions.
I will take over, and I'll give you a New United Nations, or
United Nations Part II, or The United Nations, the Sequel (The
Empire Strikes Back), that you can be PROUD of!
Of course, I figure that this great idea of mine will fare about
as well as my failed bid for the Presidency, and although Badnarik,
the Libertarian candidate that we should have elected pulled
in less than 1% of the popular vote, he still fared better than
the Presidential aspirations of the Mogambo, who didn't even
get an "honorable mention" or even a shot at the Miss
Congeniality Award, so I don't want to hear any boo hoo hoo crap
from him!
- Paul van Eeden has a new essay entitled "It's Over"
on the DailyReckoning.com site, and he is taking a look at the
concept of the eventual de-linking of the Chinese yuan and the
dollar, but from the perspective of the Chinese, instead of always
looking at what it means to us Americans. Now, normal, loyal,
flag-waving American bozos like you and me are thinking to ourselves,
"Screw the Chinese! What have they done for ME? Let's call
out for some chicken wings!!" If you know me personally,
or have ever seen me acting suspicious on America's Most Wanted,
you know that I am as fearful and xenophobic as the next guy
about these Chinese people, nefarious and inscrutable as they
obviously are. But you may not be aware that I am also happy
to be getting my share of those delicious chicken wings. Preoccupied
as I am, making these characteristic gobbling and slurping noises
that most people think can't be made by a normal human being,
I am getting barbeque sauce all over my face, and all over my
clothes, and I am getting it all over everything, and now my
wife is in one of her "moods" for some damn reason
that I can never understand, it is amazing that I still manage
to find the time to be alarmed that these foreign competitors
have been quietly working to undermine the whole economic fabric
of the USA by selling stuff to us for years and years at such
low prices! Treachery! I told you they were nefarious!
These bargains, flooding into America year after year, obviously
disguised the true rate of inflation, which was effectively masked
by the absence of a rise in prices in a whole range of stuff,
which would have been obvious if we still made the stuff we buy,
but we don't, or if we had to finance our own consumption, which
we don't, either.
The effect is that that clueless bozos like Alan Greenspan and
the whole gang of equally-clueless boneheads who work at the
Federal Reserve can get all dressed up, then parade around in
front of the TV cameras, showing off their latest Autumn fashions,
and look into the camera and bat their eyes seductively and say
"Inflation? What inflation? My dear Mogambo, there is no
inflation!" And because the schools and the media
and the governments all agree that very Laws of Economics now
obey the commands of Alan Greenspan, the lack of inflation means
that he is not only free, but OLIGED, to create more and more
money and credit, money and credit in amounts that are unprecedented
in size, year after year after year! He ignores the fact that
this creation of money and credit IS inflation! But just because
it has not yet shown up in higher prices, thanks to the Chinese
keeping prices low, this does not mean that they won't, because
they will, because they always have, every freaking single time
in history when any central bank or government acted so uncomprehendingly
irresponsible and deliberately ignorant as to try such a crazy
stunt.
But this is all by way of mere introduction. And so, without
further ado, I turn the podium over to Mr. Van Eeden, who says,
"The falling dollar has caused the price of Chinese raw
material imports to soar. Just in the last year, the cost of
oil is up 33%, copper is up 55% and nickel is up 18% - you get
the picture. If China allows the renminbi to float, and it appreciates
against the dollar as is widely expected, then the cost of raw
materials imports to China will drop significantly and that is
most certainly positive for the Chinese economy."
You bet that is positive! That is the joy of a strong currency!
People with strong currencies get to buy imported stuff cheap!
And it was that whole strong dollar thing that made imports cheap
for us all those years. And now, as China more and more responds
to domestic demand for stuff, they will want to start importing
stuff cheap, mainly oil and other commodities, which requires
a strong currency. Goodbye, dollar-yuan peg! And then it is goodbye,
dollar!
- "Banknote 'Bugs' In Your Pocket" is the headline
in the "This Is London" section of Mail on Sunday,
written by Dan Atkinson. "Electronic 'smart' tags could
be embedded in £50 notes within ten years, allowing the
state to invade people's financial privacy further, warns a leading
academic. Some Japanese notes are already fitted with the devices
and the European Central Bank is likely to follow suit next year.
The devices, which give off radio signals, are already being
introduced into clothing by major chains and are being used around
the world to keep track of pets and livestock. America's Federal
Reserve is also thought to be interested in tagging high denomination
dollar bills."
Earth to Dan Atkinson! I am SURE that they are interested, dude!
All powerful institutions are ALWAYS interested in gathering
information on people, and institutions with government coercive
power are more interested in knowing all about everything about
people, and wives who are becoming suspicious are even MORE interested
in every freaking detail of my life. But because they can't call
you up on the phone and ask you where you spend all your money,
because you wouldn't tell them, and because they can't break
your door down and demand to know where you spend all your money,
because it would be illegal, and because they can't interrogate
your dog about where you spend all your money, because that would
be stupid, and they don't need to interrogate my wife because
they can't seem to shut her yap about where all the money went,
and in fact she likes nothing better than yammering on and on
and on about how I wasted money on this, and how I wasted money
on that, and sooner or later she is going to get around to bringing
up that whole crazy mix-up with the two underage pole-dancers
from Leering Louie's Lounge of Lechery and that Bulgarian acrobat
troupe, then there is nothing left for them to do except interrogate
your money directly. Ian Angell, who is the head of the information
systems department at the London School of Economics says, 'The
state will know exactly how much cash is being carried, who is
carrying it and who has carried it previously."
And if you think they are NOT already doing a lot of this stuff,
then you don't know very much about how governments work, and
you really ought to pick up a book sometime, maybe something
like George Orwell's "1984,"
and then you can be scared out of your mind, too, right along
with the rest of us.
- For those of you who have been so kind to ask about the Fabulous
Mogambo Indicator (FMI), it has started acting weird again, and
so I am more dyspeptic and fearful than ever, which is probably
reaching a record of some kind.
- We have forced the world to forgive a lot of debt here lately,
the latest example being Iraqi debt, and most nations have gone
along with the scam, although with some screaming and complaining
and posturing. But let's be sure and remember that this is a
pure transfer of wealth, and somebody has to lose an equal amount
of wealth, because that is the way both accounting and economics
work. Yin yang. Karmic balance. Debits and credits. Dollars and
cents. Winners and losers.
So, if all these overly- indebted nations are the winners, who
pays? The same guys who pay the cost of everything, my dear Watson!
There is only one guy who cannot resell the widget or the baloney
sandwich, in whole or in part, and this guy is our old friend,
you. And me. Mister Final Consumer, and of course Missus Final
Consumer, and all the other Little Final Consumers who are busily
pitter-pattering around the house and squealing with that irritating
noise that they make, each of them growing bigger and more expensive
every day. And all of this forgiveness of debt will be added,
little by little, into the price of things you buy, now and in
the future.
But perhaps you don't believe me, as you have been recently disenchanted
with the advice of The Mogambo just because people are writing
the most horrible things about me in restrooms at the mall, which
only shows how ignorant those people are, because all those charges
were either dropped or I was adjudicated not guilty because of
mental impairment, so I was NOT GUILTY! See how wrong they are?
So I hope this puts an end to those ugly rumors. And besides,
those were all in the pre-Patriot Act era, and now the government
can come and get me anytime they want to, and take me away anytime
they want to, and make me conveniently disappear anytime they
want to, and I figure that the only reason they don't do it now
is that they are afraid that they will catch my cooties or something.
But what we end up with, after all this forgiveness of debt,
is money without the attendant debt, which is, again, inflationary,
and which will, sooner or later, show up in prices, and then,
sooner or later, it will start showing up in the headlines of
the newspapers, as crime and acts of desperation become more
and more numerous because rising prices and stagnant incomes
produces falling real wages, which always makes people real,
real grumpy (RRG) and real, real desperate (RRD).
But where were we? Oh, yeah! We were talking about how you don't
believe me that inflation is coming down the road and will soon
be slamming into you like a solid-steel, full-size '57 Buick
Road Master going, oh, about eighty miles an hour I'd guess,
and your Carbon-Based Spousal Final Consumer Unit and your little
Offspring Final Consumer Carbon Units will be yelling at you
to get up off the damn road and go out and get another job because
things cost so much, and none of them is willing to consume less
stuff, and for God's sake stop by the Precious Metals Shoppe
on the way home and pick up some gold, because all the damn people
who bought gold are now getting richer by the day as that damned
gold just keeps going up and up in price, which they say means
that the buying power of the dollar is going down, but we don't
understand any of that economics mumbo-jumbo, and all we know
is 1) we need more damn money coming into this damn house because
things cost so much nowadays, and 2) it just keeps getting worse
every day, and 3) if we had only listened to The Mogambo and
bought silver and gold and the stocks of companies that produce
commodities, we'd all be rich now, and living the easy life,
probably passed out, drunk as a skunk on some warm, exotic tropical
beach somewhere, which is probably where the Mogambo is right
now, and that is why we say "All hail Mogambo!"
Of course, there will be those nay-sayers who say "Tut-tut!"
to that, and who say that the people obviously got a concussion
from being run down by that '57 Buick Road Master with the snazzy
whitewall tires, which brings up a real sore point with me, which
is, whatever happened to whitewall tires? Black-wall tires look
like crap. Bring back the whitewall tire!
Which of course, brings me, full-circle, like a whitewall tire
going around and around, to gold and oil and commodities and
farmland upon which to grow some of these said commodities, preferably
something that is easily defended and already has some barbed
wire and defensive concrete structures already in place along
the perimeter. And while we are talking about gold and silver
and commodities, let's walk over and take a look at the price
action of those things here lately and for the last several years.
Oooh! Very exciting! And profitable! Which makes it more exciting!
Like I said, Oooh!
- Reader W.R.M. gave me a compliment, referred to The Shadow,
and demonstrated profound insight about the world of economics
and economists, all at the same time, which shows some fabulous
productivity numbers, but I'll bet Alan Greenspan doesn't even
call him up to say "Congratulations!" Anyway, he writes,
"Who knows the evil that lurks in men? Mogambo knows. A
lot of them are called Economists." Hahahaha!
- Jim Willy, of FinancialSense.com has penned an entertaining
essay entitled "Karl
Marx & Greenspan Over Coffee" in which Karl Marx
comes off sounding a lot smarter than Alan Greenspan. For example,
Karl Marx says things like "Two false horses pull American
capitalist wagon, DEBT and INFLATION. Materialism appeals to
greed through debt. Secretive theft from workers through sanctioned
inflation."
Still talking in that stilted Russian accent that is so entertaining,
he says, "Banking leaders, military complex, lobbyists,
they run government, not people. Leveraged bond trading to exploit
yield curve is not work, but rigged game for banker bourgeois,
as inflation steals from workers and savers." And here are
two new things to add to The List Of Things That Surprise The
Mogambo (TLOTTSTM): 1) when someone tells you that one night
very soon she is going to kill you in your sleep, you can actually
go for weeks and weeks and nothing happens, and 2) that I would
ever be writing that Karl Marx appears smarter than the Chairman
of the Federal Reserve, which is the name of our central bank
only because the name "Ripoff City" was too explicit
and "A Secretive Banking System Designed To Steal the Wealth
of People to Enrich Ourselves and Bail Ourselves Out of the Bankrupting
Messes We Get Ourselves Into" was, again, too descriptive,
and too cumbersome, too.
- USA Today reports that Asian soybean rust has entered the USA
farmlands. Soybean rust, which interferes with photosynthesis
and reduces crop yields by up to 80%, is spread via spores.
They write, "If supplies are cut, for consumers the disease
could mean higher prices for a wide range of items. But soybeans
are found in a variety of products, such as tofu, soy milk and
meat substitutes, as well as in non-food products, such as cleaners,
hair conditioners and fuel additives. And because soybeans are
fed to poultry, hogs and cattle, meat and dairy prices could
also increase if livestock producers are able to pass along the
higher costs." Then the USA Today shows that they are just
another bunch of ignorant hacks when they say, "Still, consumers
are expected to bear only 20% of the costs from the disease,
the USDA says." Hahahaha! What a bunch of morons! Hey! USA
Today! I got a hot flash for you! Consumers pay 100% of the costs
of everything, you stupid twits, because there is no one else
that CAN pay, and if you think that the company is going to absorb
those higher costs, and thus suffer lower profits, then you have
never suffered the wrath of a Board of Directors, and that is
why you laughably say that consumers will only pay 20% of the
costs.
- In the Star Tribune, journalist John Reinan wrote an interesting
piece entitled "One Nation Under Debt: Betting The House"
in which he restored a little of my faith in Harvard as an institution
of higher learning. He quotes Elizabeth Warren, who is a Harvard
Law School professor and co-author of the bestseller "The
Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going
Broke". She said, "There's no such thing as tapping
into your home equity. It's borrowing money. And if you don't
pay it back, they take your house away. That's all there is to
it."
Everybody has something to say about the weak dollar. To the
amazement of many, including myself, there are those who are
actually saying that a weak dollar is going to be good for us!
To explain how this is possible, sit down and make yourself comfortable,
as the plot is a long and complicated one, but it all started
with somebody in a coma not knowing that her sister had a baby,
the father of which is not her husband, and two sets of evil
twins return from a long absence, vowing revenge, while the father's
uncle, whose nephew is having an affair with her sister because
the mother had an affair with a Ukrainian dwarf that was in town
with the circus, which is secretly owned by the guy that she
was blackmailing, and, ummm, well, I sort of forget how the thing
goes, but there is another episode on tomorrow, where we find
out if the doctor lives or dies before he can perform the delicate
operation on the orphan, which not an orphan at all, but is the
illegitimate daughter of the mayor!
No! Wait! Now that I think about it, that is not the plot at
all! Sorry! In fact the plot is simplicity itself. A strong currency
is good for a country that imports stuff, because you get to
buy so much stuff for so little money, and you end up with a
whole shopping basket full of bargains, beautiful, beautiful
bargains, including that new hollow-point .50- caliber ammo for
the machine gun and two cases of grenades for the price of one!
And a new shower curtain that will look absolutely darling!
Conversely, a weak currency is good for a country that exports
stuff, as you get a pricing advantage over your competitors in
the international marketplace when your stuff hits the market
shelves in that foreign market and the shopkeeper puts a price
tag on it in local currency. Up to now, see, America has been
a consuming country, and therefore we had a strong dollar policy,
and we got to buy stuff cheap. And we borrowed money and bought
it all. Now we are at the limits of the amount of money a working-class
peasant like me can bear without waking up in the middle of the
night, drenched in sweat over impending bankruptcy and ruination.
As a sweat-drenched people desperately in need of sleep and debt
relief, we are not going to be buying as much stuff from now
on, and therefore we will not be importing as much stuff from
now on, and so we don't need a strong currency anymore. What
we need is a weak currency, so that we can sell stuff to foreigners
real cheap, and hopefully getting back into the game.
And now we are going to get one, and if you think that a nation
of gluttonous consumers in a Big Government Economy, who make
nothing, but consume everything, is going to seamlessly transition
itself into an exporting powerhouse without monumental disruptions,
and heartache, and misery, and ruination, and collapse of everything
you hold near and dear, then I know that, although you are much
better looking than me, and much smarter than me, and everybody
likes you, that there are more differences between us than just
those things. For instance, I also know that you have not spent
any time reading history, because if you had, then you would
be screaming in horror and fear, which is probably redundant,
but saying just "horror" or just "fear" sounded
inadequate, somehow, to describe the situation.
- Clive Maund, in an essay entitled "The
Dollar Stares Into The Abyss,"
writes "Vast quantities of US debt and dollar financial
assets have been created and ingeniously packaged and marketed
to foreigners who are right now waking up to the harsh reality
that they have been played for suckers and are about to get stuck
with this atrophying junk. They have delivered goods and services
in the expectation of eventual fair payment, and are right now
being defrauded out of a sizeable percentage of their earnings
by the falling dollar."
Don't spend too much time worrying about those foreigners, because
if there is one thing that I learned in an American public school,
it is that all foreigners are very rodent-like, and when things
start getting bad, they all go and hide in caves and things,
where they will patiently wait for America to come and save them.
So start worrying about yourselves, because, to paraphrase, "right
now you are being defrauded out of a sizeable percentage of your
buying power by the falling dollar."
And if there is one sure-fire bet, then it has to be that oil
will go up in price, when priced in US dollars.
- Paul McCulley, of PIMCO, has a nice essay entitled "A
Debtor's Blessing." In answer to Ron Paul asking Alan
Greenspan about fiat currencies, and how they always fail, and
all that stuff that makes me crazy when I think about it, Alan
Greenspan is quoted as saying, "Well, Congressman, you're
raising the more fundamental question as to the issue of being
on a commodity standard or a fiat money standard. And this issue
has been debated, as you know as well as I, extensively for a
very significant period of time." I leap to my feet and
shout "That is not true! In the whole history of currencies,
the desirability of using a fiat currency has been debated very
few times, because the evidence is overwhelming that every freaking
time you mess with the stupidity of using a fiat currency as
money, the economy gets ruined."
But he does not pay attention to me, but he knows I am here.
I can see him sweat. I can smell his fear, (or, I THOUGHT it
was fear, but it turns out that I was smelling the evidence that
adult disposable diapers are not as absorbent as they claim,
unless you put on a fresh one every once in awhile). Suddenly,
he reverses course, throwing me off the track, which was easy
to do because I was still thinking that I was smelling fear and
was thinking to myself "Hmmm! I did not know that fear smelled
so pungent!" He surprisingly tells the truth when he says,
"Once you decide that a commodity standard such as the gold
standard is, for whatever reasons, not acceptable in a society
and you go to a fiat currency, then - unless you have government
endeavoring to determine what the supply of the currency is -
it is very difficult to create what effectively the gold standard
did." Well, duh! No kidding? We'll, hey dude! That is probably
why nobody in history has ever pulled it off! Gosh! Ya think?
(Note to self: find out how much we pay this Greenspan bonehead,
because whatever it is, it is too much!).
Then, seeing as how everybody is now saying, "See, Mogambo?
The guy knows what he is talking about! So shut up and sit down!"
and I realize that the guy IS telling the truth now, and so I
sullenly sit back down in my seat with a big "Squiiiissshhhhhh!"
and that is when I found out about the diaper thing, and I was
mumbling something under my breath, I forget exactly what, but
I remember that there were a lot of obscenities in it. Then,
seeing me distracted, he goes out into la-la land again and says
"I think you will find, as I've indicated to you before,
that most effective central banks in this fiat money period tend
to be successful largely because we tend to replicate what would
probably have occurred under a commodity standard in general."
What? This is absurd! There has NEVER been an "effective
central bank" in this, or any other, "fiat money period," you blockhead! And I am here to tell
you that if you think that the simmering, constant inflation
since 1913 has been a replication of the stability of a gold
standard, or even a reasonable facsimile, or a rough approximation,
or even a vague resemblance, then you are lying right though
your stupid teeth! The dollar has lost 96% of its value in that
short time, you butthead! It is absolute lunacy to even SAY such
a thing, and it is damned insulting for Alan Greenspan to think
that we are so stupid that we could possibly believe such an
outrageous lie!
By this time, members of the audience are now physically holding
me back, pinning my arms behind me, and I am straining to break
free of their grasp, and I am trying to gently persuade them
to release me ("Let me go, you bleeping bastards, or I'll
kill you all!) so that I can leap on the stage and slap the hell
out of this Greenspan person, and you can tell by the way I spit
out the word "person" that The Mogambo is in one of
his Mogambo Hollywood Modes (MHM), and I am actually snarling
like a jungle cat for some reason, which is a bizarre plot twist,
but we have had script problems from day one.
Seeing that I am liable to break free, he quickly goes on to
say, "I've stated in the past that I've always thought that
fiat currencies by their nature are inflationary." And I
say, "No, they are not, you ignorant butthead! You just
have to keep from creating a boom by expanding the money supply
via credit and debt! The currency itself is not inherently inflationary,
you pompous dolt, because paper and electronic accounting digits
have no mind of their own! It takes arrogant, ignorant, twisted,
mentally ill morons like you to create an unsustainable boom
that ends in a bust, and the only reason we insist on
a gold standard, you butthead, is that we because we can't trust
government, and we sure as hell can't trust you, either!"
Sweating profusely, he throws what he thinks is the debating
equivalent of the Vulcan Nerve Pinch, and if you have ever seen
Spock using this technique on Star Trek, you know that it immediately
causes the victim to collapse, unconscious, and thus further
argument is pointless and thus you have - voila! -- won the debate.
He says, "I was taken back by observing the fact that from
the early 1990s forward, Japan demonstrated that fact not to
be a broad, universal principle." Wow! Let me get this straight!
Just because one stinking country, one that had a gigantic trade
surplus and a population that saved huge wads of money in the
banking sector, and who had a government that bizarrely went
on a huge, budget-busting deficit-spending boom, did not quite
collapse for fourteen whole years after their bubble burst? Bubbles
caused, I might add because that is just the sort of kick-them-while-they-are-down
lowlife bastard that I am, by their own idiot central bank creating
scads and scads of money and credit, namely doing the same damn
thing as us American dolts are still doing right now? And now
you are ready to immediately discount the rest of the entire
5,000 years of economic history? The same history that heretofore
dictated that a ruinous collapse always follows credit-financed
booms? Wow! Are you gullible or what? Or what arrogance! I can't
make up my mind which one!
Ugh.
** The Mogambo Sez: The New Imponderable is whether the government
can keep this market up until midnight, December 31, and thus
insure lots of tax revenues next April 15th, or whether they
will be overwhelmed by scared and desperate people dumping stocks
and bonds before they fall in price as things fall apart in 2005.
Quite exciting!
 Dec 1, 2004
Richard Daughty
email: scgcjs@gte.net
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Daily Reckoning
Richard Daughty
is general partner and C.O.O. for Smith Consultant Group, serving
the financial and medical communities, and the writer/publisher
of the Mogambo Guru economic newsletter, an avocational exercise
the better 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.
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