For several weeks, the tragic soul of The Mogambo has been troubled by subtle undertones in The Force, inexplicably using an old Star Wars metaphor, which brings up the interesting question as to how a Jedi light-saber would fare against a couple of belt-fed .50 caliber machineguns at point-blank range.
Other than pondering those kinds of deeply philosophical questions, it was the old “It’s quiet. Too quiet” kind of thing, where you are always nervously looking over your shoulder, and seeing enemies lurking in every shadow, every nerve on the razor’s edge. Trigger fingers twitching, too, which is difficult to say five times quickly, which only proves the point.
For instance, I started sensing strange vibrations in what people were saying, such as Paul Krugman, Janet Yellen and others, as concerns monetary policy.
And when I call them up to demand an explanation, and maybe helpfully explain how they are mere Earthling idiots who don’t know squat about economics, they won’t take my calls! Economics in One Lesso... Best Price: $2.98 Buy New $8.68 (as of 04:30 EDT - Details)
I mean, I clearly tell the receptionist that I am the Fabulous Mogambo Genius (FMG) on the line here, and I am calling to explain to them how their whole idiotic Keynesian idea of Quantitative Easing has been a big, fat, flatulent bust, and I want to find out what they are going to propose to do next, as concerns monetary policy, and it better NOT be any more of that stupid Quantitative Easing crap, as I am prepared to clearly and loudly detail how they must be the biggest idiots in the whole world to actually believe that the profound inflationary and bankrupting stupidity of vastly increasing the money-supply (and thus vastly increasing debt), and then committing that same incredible, suicidal folly over the long-term, could possibly, highly-improbably, one chance-in-a-million, one chance-in-a-zillion years, work!
But, alas, I never get through to anyone. Ever! Even after I CLEARLY explained to the receptionist who I am and exactly why I, the Fabulous Mogambo Genius (FMG), am calling, so as to hopefully speed things along.
Even parsing their oily remarks through a Junior Mogambo Ranger Secret Decoder Ring (JMRSDR) yielded, alas, nothing.
Thus, I am left exhausted and confused, with an increased sense of dread, as actually befits the situation, but knowing little else about what’s ahead, monetary-wise.
Nonetheless, I instinctively knew something BIG was up, as my furrowed brow, exaggerated startle-reflex, and a frenzy of buying gold, silver, and defensive armaments so colorfully indicated. Against the State: An ... Best Price: $9.94 Buy New $9.95 (as of 11:00 EDT - Details)
And, thinking about it, with your heart pounding, covered in a cold, clammy sweat, you suddenly realize that, alarmingly, the only thing it COULD be is a new, colossal attempt by the Federal Reserve and the government to somehow, some miraculous way, some fabulous way, some glorious deus ex machina way, please, please, please let this new version of massive Quantitative Easing work, even though 2,500 years of global economic history, a sad tale of one dirtball government after another bankrupting itself, with or without creating paper money in its death throes, proves that it can’t, and it won’t.
Of course, since I am the aforementioned Fabulous Mogambo Genius (FMG) of story and song, I always knew that the ultimate fate of grotesquely expanding the money supply to expand the size of government was to inexorably have to, in one fashion or another, relive the infamous “bread and circuses” policies of ancient Rome, the government desperately placating the teeming, impoverished masses, suffering as they are from rising prices, a large, oppressive government and abysmal living conditions, by giving them food and entertainment, which is a disastrous policy that always leads to Bad Bad Things (BBT).
So, was I more paranoid and cynical than usual, or was something actually, you know, up. But what?
Who knew that it would be brought to my attention by Zerohedge.com, with the chilling title “It Begins”? When I saw it, I thought I heard banshees wailing, and ravenous wolves howling in the distance, growing frightfully closer. Ever closer. Economica Mogambo: The... Best Price: $9.22 Buy New $6.00 (as of 10:55 EDT - Details)
“It Begins”, I am sorry to say, is not the title of a terrific new horror movie, a grand and glorious gore-fest of bloody, gun-happy shoot-‘em-up action, fiery explosions, high-speed car chases and hordes of mutant zombies who mostly look like beautiful lingerie models, only less clothed.
Instead, “It Begins” refers, even more horribly and tragically, to an article in Foreign Affairs magazine, written by Mark Blyth and Eric Lonergan, of the Council on Foreign Relations, which is spooky enough.
Unbelievably, the essence is “Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People.” Yikes!
To save you the trouble of rubbing your eyes in complete disbelief, it goes on that “Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly.”
Giving cash away! It’s bread and circuses, alright, in spades! “Here’s some money to buy your own food and circus!” Wow!
The authors, who are so wrong about so many important things in the article, are nonetheless absolutely right when they say “In the short term, such cash transfers could jump-start the economy”!!! Gold, Peace, and Prosp... Check Amazon for Pricing.
The three concluding exclamation points were added by me, as a clever and clearly dramatic emphasis, to make sure that you completely understood that millions of consumers suddenly spending lots of new, free cash will certainly make the economy go!! Wow! What a boom it would cause!
The most laughable part is when they said that giving people cash “wouldn’t cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them.” Hahahaha!
I told you they were wrong about some things, and here are three at once, because, firstly, it certainly WOULD cause inflation, however you define “damaging.”
And, contrary to the laughable conclusion of the authors, nobody doubts that it would work! Nobody! Lots and lots of new money continually pouring into an economy would NOT make a boom? Hahahaha!
And the reason that no government has tried it is because it is Stupid Writ Large (SWL), as in “No government that tried giving away money to the population lasted long enough to write it down.”
The authors thought they were so smart to anticipate the Disagreeable Mogambo Naysayer (DMN) loudly objecting “Because terrifying inflation is guaranteed to ensue, you morons, and poor people would be more and more poor and starved, and they will all get testy about their kids crying from hunger, and they can’t stay warm in the winter, or get out of the rain, and everything goes downhill pretty fast when people are rioting in the streets, and What Has Government Do... Check Amazon for Pricing. pretty soon you can’t get a good pizza anywhere within miles.”
Instead of wincing and slinking away in shame at my cruel scorn, they write, hilariously, “Other critics warn that such helicopter drops could cause inflation. The transfers, however, would be a flexible tool. Central bankers could ramp them up whenever they saw fit and raise interest rates to offset any inflationary effects.” Hahahahahahaha!
Central bankers could give away more and more cash “whenever they saw fit,” and yet there will be some glorious time when the Fed sees “fit” to stop giving away money and thus cause an economic slowdown, risking asset-price deflation that is leveraged a 100-to-1? Hahahaha! As Monty Python would say, “Pull the other one!”
And raising interest rates to somehow sterilize a tsunami of cash? I care about interest rates when I am receiving more and more cash and price inflation is roaring? Hahaha! I’m busting a gut here!
But jocularity and complete stupidity aside, somebody must be expecting some new income, as Chuck Butler of Everbank reports that “July Consumer Credit (read debt) grew by $26 Billion, and June’s number was revised upward to $18.8 Billion from $17.2 Billion. But, $26 Billion!”
He, as well as I, characterizes it as “off the charts folks, as if 2008 never happened! What the heck is going on around here? Doesn’t anyone ever learn lessons?” Amazon.com Gift Card i... Check Amazon for Pricing.
Dave Gonigam of the 5-Minute Forecast parses it down to “Of that total, $5.4 billion came in credit cards — a surge previously unseen during the anemic ‘economic recovery’ these last five years.” “Of the remaining $20.6 billion, most of that was in auto loans, very little in student loans.”
So do these people suddenly have jobs, explaining their spending spree? No. In fact, ever fewer people have jobs.
And if you want some bad news on the employment front besides the usual upsetting stories about high unemployment and how jobs are disappearing faster than a pizza at a Super Bowl party, the booklet titled “Pocket World in Figures,” from The Economist magazine, has a table titled “Largest Manufacturing Output” which puts the United States at the top of the list, at $1,771 billion.
This puts us a measly $14 billion ahead of China, which is bad enough, but when you look at the next chart down the page, under “Largest Services Output”, the United States is again number one, at $10,574 billion, while the second place is held by Japan at a measly $3,904 billion, and China at a distant $3,172 billion.
In short, five times as many U.S. workers are providing services as are employed manufacturing something. Probably has something to do with explaining our $40 billion-per-month trade deficit! Hahaha!
But lamenting the gaping trade deficit aside, it is this terrifying kind of weird, economy-distorting “services” thing, and the bizarre thing about giving money away to people, that will almost certainly lead to new fiscal policy accommodating them both, since behavior that was once considered idiotic, suicidal desperation, is now the only way out. Probably connected with a new war, if history is any guide.
And when the government starts doling out all that luscious cash, and calling it our patriotic duty to spend all this new cash, it’s party time! Par-tay!
And if this “give money directly to people” thing plays out even vaguely as proposed, then you will happily have some time left to accumulate lots of gold and silver during the Big Monetary Party (BMP) that will surely follow, and you will have some time to think and idly daydream of what their prices will be at the calamitously inflationary end of the aforementioned Big Monetary Party (BMP), when everything else is ashes and heartache. Astronomic!
Whee! This investing stuff is easy!