Debt clock runs on borrowed time
By The Mogambo Guru
John Stepek of MoneyWeek magazine says, "Federal Reserve chief Ben Bernanke has
studied the Depression, they say. He knows what to do."
Feeling particularly feisty, I immediately felt the need to burst in with a
rude remark ("Hahahaha! What a load of crap, and Bernanke is an idiot!")
because if there WERE a way to do something to prevent economic collapse from
debt-addled stupidity - which is so timelessly universal that it is almost a
cliche - then somebody in all the rest of world history would have thought of
it by now; and they have all literally thought of, and done, everything that
the brightest people of their day could think
of, and nothing has ever worked. Ever. Not once. Ever!
And so I make such rude remarks at the mere suggestion that Ben Bernanke, or
anybody else, "knows what to do" to prevent the economic implosion that always
comes from creating and spending so much money by racking up so many debts, for
so damned many years, by so damned many people, and by so damned many
governments.
And this time in history we have gone one step farther down the path of True
Economic Insanity (TEI) in that we not only created and spent all that money on
gluttonous consumption, but we borrowed it all into existence, too! Hahaha! We
still owe the money!
Mr Stepek apparently agrees with me, and he says, "Bernanke might have studied
the Depression for most of his academic life, but it looks to me like he was
studying the wrong half of the Depression", which is true because this Bernanke
bonehead bozo bastard never once considers it relevant that the Great
Depression of the '30s was actually the bust caused by the boom caused by the
damned Federal Reserve creating so much money, credit and debt to fuel the
Roaring Twenties, which is really weird, too, because it is obvious to everyone
else! Hahahaha!
That's why I say Bernanke is a fake, his economic theories are a Big Load Of
Crap (BLOC), and that anyone who listens to such stupidity is an idiot whom I
think I ought to be allowed to grab by the collar of their shirt and slap their
faces until my hands are sore and bleeding, whereupon I should be allowed to
use a handy truncheon of some kind to compensate for my sudden disability - and
a nice Handicapped Parking Sticker would be really nice, too!
Mr Stepek seems aghast at my sick, psychopathic violence and willingness to
fake a disability in order to get a prime parking spot, and offers instead,
"Put it this way, I wouldn't want to put Bernanke in charge of road safety. His
idea of efficient traffic management would be to impose ever-increasing minimum
speed limits and then employ lots of extra morgue attendants and road sweepers
in the hope that the carnage from multiple pile-ups could be cleaned up more
quickly and so avoid traffic jams."
Now it is my turn to be astonished, as his metaphor is a good one, but he's got
dead guys all over the place ... And he was looking down his nose at me? Just
for slapping a few faces?!
I notice that he quickly changes the subject, and under the heading "Why
Dropping Interest Rates Doesn't Work", he notes, "In normal times, cutting
interest rates encourages extra borrowing because it allows people to borrow
more money. But that assumes that people want to borrow", which, I might add,
the neo-Keynesian econometric economic theory crapola of the Fed actually DOES
assume! Hahahaha! Weird!
Thus, he says, "One of the reasons that John Maynard Keynes recommended direct
government intervention in the economy is that sometimes you reached a point
where cutting interest rates was like 'pushing on a string'. And we're already
past that point. So regardless of how low you drop rates, people don't want to
borrow more. They want to pay back their debts."
The ugly part is that people not borrowing is purely deflationary, because
money comes into existence by virtue of somebody going into debt, at interest,
to borrow it, meaning that all borrowers owe more than the amount they actually
borrowed, and so people not borrowing means that there is now not enough money
necessary just to pay the bills and service all the debt! Oops! Default!
So, welcome to the hell of fiat money, and to the inner hell of fractional
reserve banking. Now we get to the part where the history books will say, "So
incredibly much money and credit was created by the horrible Federal Reserve
and the disastrous fiscal policies of Congress, that this marks the beginning
of the hyperinflation and the ultimate collapse of America." Hahaha! We're
freaking doomed!
And don't forget the part about how people who bought gold, silver and oil made
out like bandits, because that is the best part! Whee!
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2008, The Daily Reckoning.)
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