An easy way to increase the money supply is by counterfeiting money, or its
equivalent, by printing coupons, and this is now being done by the Chinese, as
we learn from the report titled
Chinese Offered Consumer Tickets by Olivia Chung at this site on
February 14.
She writes that there is a lot of tension in China as the economy slows, which
is probably true as when factories close, people are fired, fortunes are lost,
millions of people are displaced and ruined, and a general frustration and
anger are on the rise since the Chinese economy does not have tacos with those
delicious crunchy corn tortilla shells, but they have TV so that they see
other people eating the tacos that they do not have! Horrors!
In reality, the economic problems of the Chinese are - as are the problems of
all exporting nations around the world - not taco-related, and are the result
of the loathsome Alan Greenspan creating all the unholy mountains of excess
money and credit when he was chairman of the American Federal Reserve from 1987
to 2006, which he infamously did to finance The Greatest Sin Of All (TGSOA),
which is to allow the monstrous enlargement of government and to pay for huge
increases in government programs, and for which Greenspan deserves to die in
prison, alone, sick, vomiting up blood and hearing my voice ringing in his
ears, "Suffer, you miserable bastard, as you have made so, so many billions of
people suffer by your insane expansions of the money supply!"
And how did the horrid Alan Greenspan do all of that? Easy! His creating all
that money and credit meant that all those trillions of new Treasury-debt
dollars originally sprang into being as loans to the government, which it
spent, and from there the dollars eventually went to pay for a trade deficit
that ranges around US$800 billion Per Freaking Year (PFY)!
This meant that all those other countries had the trade surpluses that equalled
our trade deficits, and all of those new dollars pouring into their countries
necessitated similar monetary stupidity in those other countries, hurriedly
creating more money to soak up those new dollars piling up in their banking
system, increasing their money supplies in lockstep with us, lest their own
currencies gain strength against the dollar and thus effectively raise prices
to us, their huge, and essentially only, customer! Horrors! Hahahaha! We're all
freaking morons!
Now, the Chinese economy is sinking since the American economy has been
completely ruined by the horrid Alan Greenspan and the Federal Reserve, and
thus we cannot keep going further into debt so as to buy their exports, and
thus "China's local governments from Hangzhou in the northeast to Chengdu in
the center of the country, concerned at factory closures and millions of
workers losing jobs as export markets collapse, are taking their own steps to
boost economies in their areas by", and here I pause the to add a sense of
drama and sheer stupidity, "issuing shopping vouchers". Hahahaha!
They obviously know that if they simply print money and give it to people, it
will be so highly inflationary that I will raise a real First Class Stink (FCS)
about such monetary stupidity and denounce them throughout the galaxy, which
nobody wants.
So they then think to themselves, "Hmmm! Maybe Mogambo is too stupid or drunk
to realize that shopping vouchers are just another fiat currency! Hahaha! We
play plenty good trick on Mister Moron Mogambo (MMM)! Hahaha!"
I, however, am uncharacteristically stone-cold sober at this time of day, and
instantly realize the ruse! With the agility of a jungle cat, I lithely leap
atop my desk, shouting "Shopping vouchers? Ha! It's the same as money, you
low-IQ halfwits, just issued locally! Talk about an inflation in the money
supply! Hahaha!"
Carried away with the charming way my Loud Mogambo Voice (LMV) echoes in the
room, I continue berating them, "You stupid Chinese morons think that you are
going to lead the world into the future but you are too damned stupid to
comprehend that continually increasing the money supply will cause inflation in
consumer prices, which leads to social unrest as people start to realize that
they are starving to death because they cannot afford to buy food or keep warm
and the next thing you know, Bad, Bad Things (BBT) are happening and it's all
an Ugly, Ugly Mess (UUM)? Hahaha! You Chinese halfwits are morons, just like
the rest of us! Hahaha!"
Well, you can sense their frustration, as "China's factories are closing and
workers are being laid off at a frightening rate as overseas demand for their
products crashes. The pace of decline in exports surged to a 17.5% fall to
US$90.45 billion in January."
Even worse, "Imports contracted by 43.1% year-on-year to US$51.34 billion last
month". Upon inspection, the preceding sentence shows how famously serene
Asians are, as I would have punctuated the sentence, "Imports contracted by
43.1% year-on-year" as "I am freaked out of my mind that imports contracted by
43.1% year-on-year - almost half! - which is such Bad, Bad News (BBN) that it
is enough to send The Mogambo (your genial host), screaming in horror to his
Mogambo Bunker Of Doom (MBOD), leaving you to your pathetic fate, which, in
case you are new around here, is that you're all freaking doomed!!!!"
There are "conditions" and exclusions, of course, mostly that "they be used by
September 30 to buy goods locally. They cannot be deposited as savings in banks
or exchanged for cash. No change will be given if the value of a purchase is
less than the value of the coupons."
This "no change" policy is, in case you were unfamiliar with it, how
small-change commerce is carried out with gold and silver coin; you offered a
silver coin or a coupon, and you received, in exchange, a variable amount of
goods and services, depending on the "price" that day. The total price was
always the same (one silver coin or one coupon), but sometimes you got more and
sometimes you got less goods and services to put into your basket to take home.
Anyway, the head of the counterfeiters is in Chengdu, the capital of Sichuan
province in west central China, which "led the nation at the start of the year
by issuing shopping vouchers worth 100 yuan (US$14.60) to about 380,000
low-income local residents in urban and rural areas."
Unsurprisingly, "A spokesman of the Chengdu bureau of civil affairs claimed
success for the scheme, saying almost all the issued vouchers had been used",
and it makes you wonder what kind of an idiot did NOT use a soon-to-expire
coupon for free food! Hahaha!
The funny part was that, when "Asked whether the vouchers could boost gross
domestic product, the spokesman said 'definitely' - but declined to give
figures."
Anyway, the scam is not about actually fixing anything economically, and
everyone will die of roaring inflation very soon, anyway, but the whole purpose
of the "scheme", he said, was also to "let people feel the government's concern
for them, a reflection of widespread worry that slowing economic growth will
increase the risk of civil unrest."
Roaring inflation causing civil unrest? Hahahaha! Welcome to the real world,
pal! Now you understand the wisdom of having your money made of gold or backed
up with gold? You do? Hahaha! Too late!
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.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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