Bloomberg.com reported that "The Federal Reserve, engaging in what chairman Ben
S Bernanke this week termed 'credit easing,' bought US$23.4 billion of Fannie
Mae, Freddie Mac and Ginnie Mae mortgage bonds under a program aimed at
lowering home-loan rates", which goes along with another Bloomberg news item
that said this same Federal Reserve chairman Bernanke and vice chairman Donald
Kohn "urged a new effort to address the toxic assets held by financial
companies", by which he obviously means "create the money to buy them."
This shameful behavior fits perfectly with the Wall Street Journal,
editorializing about now former president George W Bush, that "While the Fed is
most to blame, the administration encouraged the credit excesses. It populated
the Fed Board of Governors with
[former chairman Alan] Greenspan's proteges, notably Ben Bernanke and Donald
Kohn, who helped to create the mania and even now deny all responsibility."
Now, these clueless weenies "called for the government to remove or insure the
assets", and what better place to put them than into an "aggregator bank"
created especially for the purpose? Hahaha! What fraud! What corruption!
This hare-brained idea is, for those of you with a Biblical bent, akin to the
Jubilee, a time when all debts are cancelled and borrowed things must be
returned to their owners.
In this case, the debts of greedy pigs are being cancelled by the government
giving them their money back by buying worthless assets, a scam wherein we
define the term "greedy pigs" as "all of us".
I say that we are all "greedy pigs" not because I see my own greedy piggishness
reflected in others, nor because I condemn the same greedy lusting after money
and the same piggish lack of personal hygiene stemming from lack of caring one
way or the other, as I, and others, fall deeper and deeper into a deep, deep,
deepie deep deep, deep, deep depression amplified by a liquor-fueled stupor as
I despair - replete with involuntary wails of terror, interspersed with
childish whimpering - of the terrifying, unprecedented, suicidal economic sins
that are being committed by the Congress, the Treasury and the Federal Reserve,
as they desperately clutch at monetary and fiscal straws to somehow,
miraculously, avert the natural collapse of a huge, bloated, misshapen,
cancerous, mal-invested, sick and perverted economic system born of a giant
system of governments whose spending equals half of GDP and is supported by
inflating a fiat money via the brain-dead expedient of everybody going into
crushing, un-payable debt.
Then, one day, my wife says, "I completely understand your terror at the
prospect of the terrifying, bankrupting penalty that we must pay as a result of
acting so stupid that we did not adhere strictly to the Constitutional
requirement that the dollar shall be made of gold, which is the only thing that
can prevent a corrupt Congress from deficit-spending the money created by a
brain-dead Federal Reserve, where these Fed halfwits actually believe in their
stupid neo-Keynesian econometric models, using data that are outright lies, to
expand the money supply with excess money and credit so that governments and a
debt-besotted populace can finance their unwholesome gluttony, but what in the
hell does that have to do with your not bathing or shaving? You stink like a
pig!"
Then the kids started making pig noises, oinking and grunting, and everybody
was laughing and making pig-like snarfling sounds, which caused me to explode,
"Stink like a pig? Is that what you said? Well, that's the same thing that my
boss and my hateful co-workers say to me, too! What is this crap, some kind of
hideous conspiracy?"
Before I was so cruelly mocked, I was going to kindly explain to them that the
new theory is that all this massive new deficit-spending of money and credit,
as bad as it is, will, in one way or another, actually affect us in a
beneficial way, which is because all things financial are connected to all
other things, and if the banks go down, then their stocks go down, and that
little part of our retirement portfolios that is made up of bank stocks goes
down, and then we go down, too, but with a lot of new money looking for a place
to go after it finally ends up in somebody's pocket, some of it will end up in
bank stocks and all the other depressed assets, making their prices go up!
The theory is that with enough new money, the stocks will go up, see, and thus
we will all be wealthier, see, and then we just sit back and rake in the money
as the "wealth effect" takes over to add "oomph!" to the economy.
Of course, the rest of us have to come up with the money that they are given!
Hahaha!
The choice of repayment is to either tax the money from us, or pay the higher
prices of consumer goods (price inflation) after the government borrows the
money, dutifully created by the foul Federal Reserve, which inflates the money
supply, which makes prices go up, which makes gold go up, which makes me go,
"Whee! This investing stuff is easy!"
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 2009, The Daily Reckoning.)
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