The Limits of Economic Garbage

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I was pretty
sloshed as I put another shot of tequila to my now-benumbed lips,
but the same thought kept going through my whirling head: Total
Fed Credit (also referred to as Federal Reserve Credit), zoomed
$70.3 billion last week! Yikes! $70.3 billion of new credit appeared,
as if by magic, in the accounts of banks in One Freaking Week (OFW)!

And this is
not, of course, new money. Instead, this is Fed credit, which the
Federal Reserve admittedly creates out of thin air at their whim
and gives to the banks, but which BECOMES money when somebody borrows
money from a bank.

And how much
money can be created out of this Fed credit? Almost unlimited amounts,
since the amounts of money that the banks must keep on hand as reserves
against this new “unlimited amounts” of new money and
loans is, apparently, zero! Hahaha! “Fractional banking”
indeed! Hahaha! What a fraud!

And so I look
around and wonder many things, such as, “Who the hell is borrowing
money? And for what? And why is my butt numb?” As I try to
focus my bleary eyes to scan the barroom, all I can see is a bunch
of no-account, slovenly, lowlife, bad-tempered, low-IQ losers like
me, drinking our lives away in some dingy, cheap bar that is far
enough away from the family and co-workers so that I don’t
have to put up with any more of their silly crap, and if one of
them does stumble in here, I am buzzed enough that I can use inebriation
as an excuse to beat the hell out of them for being so stupid that,
for instance, they don’t buy gold when their moronic government
is committing economic sin after economic sin! Any one of which
is more than enough to guarantee economic collapse and total ruination!!

And if you
don’t believe me, then go to Mises.org
and do a little reading, and then after you have your Moment Of
Economic Enlightenment (MOEE), get back to me, saying, “Although
they never come right out and say it, ‘We’re freaking
doomed!’ about sums it up! Now I am buying gold and guns since
I have been shown True Mogambo Enlightenment (TME), and now –
thus filled with paranoia, panic and screaming outrage – I
worship at your feet as a Junior Mogambo Ranger (JMR), where I can
but hope that they are not as smelly as I have heard!”

While we wait
for you to finish your reading assignment, I did a complete 360-degree
turn on that barstool, but I never did see anybody that was borrowing
money, since none of them had any, which I surmise from asking each
of them to loan me some money, but all of them said they didn’t
have any.

But I did notice
that all that spinning around made me dizzy! Whew!

Downing another
shot to steady my nerves and make “the spins” go away,
I happened to notice that the Federal Reserve bought up, for itself,
a whopping $94.5 billion of worthless, toxic crap last week! In
One Freaking Week (OFW)!

That is $3,000
for every non-government worker in America! What a blatant fraud!

I don’t
know exactly what they bought, but I am sure that it is not only
the usual fraud of amassing a clot of U.S. government and agency
debt, but also worthless bank securities that they have promised
to buy as part of the Fed’s efforts to socialize losses by
sticking everybody with inflation in prices as a result of such
an inflation in the money supply, which is (to use the correct “professional
economist” jargon) Off The Freaking Charts (OTFC)!

And speaking
of economists, the famous John Mauldin, in his Frontline Weekly
Newsletter, has unwittingly agreed with me about something other
than that we both agree that I am a know-nothing loudmouth weirdo.
Now, he has said just enough so that now I can say, “John Mauldin
and I say that” the majority of the halfwits who have been
teaching economics, infesting schools with their loathsome ilk,
are morons, as all of this economic calamity around the world, spawning
unimaginable suffering and losses with much worse to come for a
long time yet, took them all completely by surprise, while it was
the classical, Austrian school of economics that had long predicted
everything.

And now, John
Mauldin and I laugh at them all, and we shall wax rich as Croesus,
and gluttonously hedonistic so as to outshine Caligula as gold soars,
soars, soars to the top of the moon as the dollar falls, falls,
falls to the bottom of the toilet as a result of this huge, monstrous
final debasement of the dollar of the satanic Federal Reserve creating
the avalanche of credit, that creates the tsunami of money, to buy
over $2 trillion in new federal government debt this year alone!
Hahaha!

We’ll
be rich while everybody else is screwed! “It’s an ill
wind that doesn’t blow somebody some good!”

Well, I admit
that he did not actually say any of that, but he did mention my
name once in a telephone conversation that I treasure to this day
(“Hi, John! This is the Mogambo!” and he said, “What
in the hell is a Mogambo?” before he hung up).

And he did
say almost the same thing, if you kind of read between the lines,
when he writes, “We have been teaching generations of MBA students
economic garbage. Gaussian curves and things you could model. The
classic line is from Ibbitson, is a brilliant professor and a brilliant
mind, who said economics is a science. No it’s not. It’s
barely an art form. It’s voodoo. That’s what we practice.”
Exactly!

Ty Andros of
TraderView.com explains that “neither the Chicago School nor
Keynes can explain what is unfolding, and in the Austrian School
everything is and has been predictable. Why are the first two considered
mainstream? Because in both schools of thought, government is the
answer rather than the problem. For the mainstream, the problems
can always be solved by borrow, print, lend and spend.”

And since we
are talking about the abject failure, ridiculous theoretical underpinnings
and laughable incompetence of the Federal Reserve, I admit that
their performance is not as bad as those laughable institutions
that have “School of Government” in their names, when
they are, beyond a doubt, the most incompetent, traitorous bunch
of fifth-columnist morons that this country has ever seen.

I
mean, for crying out loud, government (federal, state and local)
now spends half of GDP! Hell, the federal government alone spends
a third of GDP!

And governments
now directly support half the population of the Whole Freaking Country
(WFC), and employs 1 out of every 7 workers in that selfsame WFC!
“School of Government”? Hahaha!

Mr. Mauldin
sums it up as, “As we trained a generation to believe they
could model, and they did it. They modeled garbage, and now we’ve
wiped out a generation of retirement income.”

Well, I would
like to amend that to say that people who bought gold have not been
wiped out, and if those people are as smart as they seem, then I
am sure that they are hanging onto that gold since this is surely
the beginning of Something Really Big (SRB)!

Whee! This
investing stuff is easy!

May
4, 2009

Richard Daughty (Mogambo
Guru) is general partner and COO for Smith Consultant Group, serving
the financial and medical communities, and the writer/publisher
of the Mogambo Guru economic newsletter, an avocational exercise
to better 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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