The Fortune Cookie Knows
June 26, 2015
By:
The Mogambo Guru
I was feeling particularly low, having sunk into a sloppy, self-pitying,
tequila-fueled, drunken introspection after (again) failing to achieve
blissful Nirvana, this time per my wonderful new (“Why didn’t I think of
it before?”) theory, which is to finally attain true transcendence through
sheer, strict gluttony.
Gloomily, as I sat, slumped, I burped, and, in a moment of blinding
enlightenment, clearly saw that I was such a shocking, colossal failure at
so, so many things.
Including (paradoxically) any discernable skills on how to handle failure,
for crying out loud, despite having had so, so much of it, which makes me
think I am even MORE stupid than everyone thinks, which makes me feel even
worse.
Then, just as I was ready to hit bottom, having dimly decided to give the
glories of gluttony one more try (but this time with less bacon and more
pornography), was absolutely delighted to read that Ben Bernanke was paid
$250,000 to give a speech. A speech!
I was reborn! The reason for my new-found zest for living is because Ben
Bernanke is BOTH a total, monumental failure as a former chairman of the
Federal Reserve (I mean, look around you!), and an arrogant Keynesian
dorkface chump if there ever was one. Yet, look at the loot!
One speech! A quarter mill! I mean, this guy is absolutely, completely
delusional by actually thinking, and believing, that laughable Keynesian
econometric gibberish (to replace falling consumer spending with more
government spending) can prevent the horrific economic collapse that
always comes after radical expansions of the money supply that distorts
the whole price structure of everything into a bloated, inflationary
insanity.
And what did we get, in terms of the aforementioned bloated, inflationary
insanity? Well, buckle your seat belt, because I’m going to tell you!
Peak bond prices so high that interest rates are almost literally zero!
The S&P500 peaking at a P/E ratio so high that it is in the “historically
high” range! Housing prices that cost an incredible four times the average
income! An $18 trillion national debt, more than 100% of GDP! Total
(government, business and personal) debt of an astonishing $60 trillion,
against an entire GDP of only $17 trillion!
Government spending (federal, state and local), school systems and myriad
taxing authorities together spend about 40% of GDP!
And a huge, unfathomable derivatives market that, combined with accrued
government obligations, totals in the multi-quadrillions of dollars! This
is thousands of trillions of dollars! Quadrillions! Truly incomprehensible
sums!
And taxes, taxes, taxes upon taxes everywhere!
And a vast ocean of laws upon laws! Regulations upon regulations! Bubbles,
bubbles, bubbles upon bubbles! Excessive repetition upon excessive
repetition, which gets complaint upon complaint.
In the late 18th century, of course, you could write stupid sentence
constructions like that last one, and nobody would say anything. But at
the same time, France sentenced John Law to death for essentially doing
this same damned thing: Creating paper money to excess, disastrously
expanding the money supply, which ruined France with price inflation and
economic misery.
It got so bad that Marie Antoinette (as I understand it) had to advise the
French people to eat cake instead of bread.
Perhaps (the historical records are very sketchy here) she suggested a
nice, chocolate layer cake with a thick, creamy icing, yum, yum. The
perfect breakfast!
Nevertheless, maybe because of consuming all that sugar in all those cakes
they ate, the French peasants got all huffy at the hyperinflationary
prices, starvation and economic ruination that comes from such insane
expansions of the money supply, leading to the French Revolution, the rise
of Napoleon, and yadda yadda yadda, and yet -- and yet! -- here are again!
Creating waaAAAaaay too much money upon waaAAAaaay too much money!
Anyway, Dan Cofall, of the eponymous Dan Cofall radio show, was musing
about how Christine Lagarde, whom I will graciously introduce as the
delusional Keynesian low-life socialist French honcho of the infamous
International Monetary Fund, said that it was better to just pay the
interest on debt, rather than paying it off.
As outrageous as it sounds to me, or Mr. Cofall, or any right-thinking
people, for a slimy banker to suggest that you, and by extension,
governments, perpetually stay in crushing debt instead of paying it off,
she is, alas, correct, from the point of view of the banks, governments
and the gigantic, vampiric financial services industry. Why?
Because the banks have created the oceans of money in order to lend it,
and the money went out into the economy. Year after year, decade after
decade! The money supply went up, bank interest income went up, businesses
went up, tax collections went up, consumer spending went up, government
spending went up. Everybody’s a winner, it seemed!
Now, if a debtor decides to pay off a debt, the money has to be
accumulated by the debtor, thus taking the money out of the money supply,
and use it to pay back the bank. The salient point is that the money
supply shrinks, the bank is not earning any more interest income, and
things go from bad to worse. Much worse.
As an aside, to those who like to hyperventilate over the velocity of
money (which is merely GDP divided by the money supply) as an indicator of
economic health, remember that GDP can actually shrink and collapse, but
the velocity of money still can go up (seemingly indicating economic
health) if the money supply was shrinking by more than the GDP collapse!
And collapsing it is! R.
Davis ConsumerMetricsInstiture.com reported that “the Bureau of Economic
Analysis (BEA) reported that the economy was contracting at a -0.17%
annualized rate,” which is bad enough, but that these BEA buttheads came
to that conclusion only after they “assumed a very mild dis-inflationary
annualized deflator of -0.06%.” What? A negative inflation rate?
Outrageous!
As I remember, ShadowStats.com calculates that price inflation is
definitely somewhere north of 6%! 6%! 6%!
I deliberately used repetition to produce the handy and
infamous-yet-ominously meaningless “666”, to indicate that things are
getting outrageous.
I was just about to angrily climb onto my soapbox to, again, denounce the
lying rat-faced lowlife bastards that infest government who produce such
lies, when Mr. Davis does it with much more elegance and class than I when
he notes that “ Interestingly, during the same quarter the far more
responsive Billion Prices Project (BPP) recorded positive annualized
inflation of +1.56%. If the BPP inflation metric was used to deflate the
nominal BEA data the economy could be shown to be contracting at more than
-1.79% annualized rate.”
And if the inflation rate of 6% was used to accurately reflect real GDP
growth, then yikes! We’re
Freaking Doomed (WFD)!
Now, I don’t claim to be an expert historian about the world, or boast
that I can remember famous dates or people, or even dimly recall that last
week I said I would finally clean out the damned garage after all those
other times I said I would clean it out, but always forgot for some
perfectly understandable and forgivable reason or another, but about which
hardly a day goes by without hearing some yammer yammer yammering about
it. Damned memory! Damned
garage!
But, as it happens, I actually DO know that, in The Whole Freaking History
Of The World (TWFHOTW), a shrinking money supply is Never A Good Thing
(NAGT), and, in general, is Always A Bad Thing (AABT), because now there
is, literally, not enough money to keep the status quo going; some (most)
things are going to have to come down in price, and some (most) people are
going to lose money as the whole price structure of everything,
everywhere, adjusts to the changes.
And with everything now jiggered into the bubble stock market, the bubble
bond market, the bubble student loan market, the bubble housing market,
and the bubble banks, you can see why the Federal Reserve, the financial
services industry, and the government are so desperately, frantically,
terrifyingly intent on forcibly manipulating/rigging everything, and why
they lie about everything.
And so what to do in a world of make-believe and financial bubbles? Gold
and silver, of course! Gold and silver are bargains, bargains, bargains
like no other bargains in history. To pointlessly return to bizarre
sentence construction, they are bargains upon bargains, and I mean Right
Freaking Now (RFN), too!
I hear you scoffing, saying “Such a rude and arrogant fellow, this
Mogambo! However, I remain unconvinced, haughtily rejecting gold and
silver, ignoring both 2,500 years of compelling world economic history and
this repellent little man whom the rabble call Mogambo The Fabulous
(MTF).”
Now it is MY turn to scoff, as your snide remarks affect me not. I get
worse at home. Like how you didn’t even touch on how I eat like a pig, but
with less manners. Amateurs!
Perhaps if this was TV, and if this was a Chinese dinner in the Twilight
Zone, the episode would end with your fortune cookie ominously reading
“You will soon learn a valuable lesson, but only after it is too late.”
It would be better, I think you will agree, for you to heed the lesson of
history: Buy gold and silver. And then maybe the Twilight Zone episode
would end happily, with your fortune reading “You will soon find true
love, vast riches, and live happily ever after,” which is like a dream
come true!
Unless, of course, you are married at the time. Rats!