You will be happy to know that we have nothing to fear from the Chinese, as
they are as stupid as the rest of us, as I learned from a Bloomberg.com report
that China's Premier Wen Jiabao says that China is "the US government's largest
creditor" in terms of Treasury bonds, and he is "worried" that something might
happen to the buying power of all of that American money, and he "wants
assurances that the investment is "safe" and that he "requests" that the US
"maintain its good credit, to honor its promises and to guarantee the safety of
China's assets". Which makes me laugh that anyone would even bother saying such
a thing! Hahaha! Moron!
Of course, being The Mogambo like I am, it is my duty to enlighten world
leaders about economics, and in that regard I say to them, "Of course those
dollar-denominated assets are safe, Chinese dude! If they ever get lost or
destroyed, the United States
will merely give you more paper promises! That's the beauty of a fiat currency,
you morons: We can give you more and more dollars until you are freaking
drowning in them!"
I don't expect the Chinese to hear me and suddenly say, "Thanks, Mogambo!" or
even something that sounds like "Wong choi how wong!" which I interpret to
mean, "That Mogambo fellow is one sharp economic cookie, and maybe we ought to
be following his Strong Mogambo Suggestion (SMS) to buy gold, silver and oil
against the terrifying inflationary conflagration that will inevitably result
from such insane monetary and fiscal irresponsibility by the Federal Reserve
and the Congress, respectively, which is about the only time you can ever use
the word 'respect' in relation to either one of those lying, corrupt
institutions, which does not even mention the sheer corruption of their state
and local governments, and governments and central banks around the world who
are doing the exact same thing, which is enough to give you the Horrified
Mogambo Screamies (HMS)."
But perhaps such gracious social niceties are foreign to Chinese culture, or
maybe they are still miffed that I have been calling them "morons" for years
since they ignore me when I tell them that they, of all the countries on the
earth, need the stability of a gold standard so that they can grow their
economy with cheap imports and low cost of capital, which is what you get from
a gold-backed currency, and that is why they should be exchanging their excess
dollars for gold bullion.
But whatever the reason, they have plenty to worry about, as the US Congress
and the Barack Obama administration have already announced, crafted and passed
legislation authorizing multi-trillion dollar federal budget deficits!
And these unbelievably massive federal budget deficits will continue for as far
as anyone can see, meaning that the US Federal Reserve will create more money
and credit to pay for it all, thus vastly expanding the money supply some more,
which makes prices go up some more, which devalues all the other existing
dollars, which makes prices go up some more, which makes people more angry and
rebellious, but which - in this case - makes me laugh and laugh and laugh; and
I say to Wen Jaibao, tears of laughter running down my face and ruining my
mascara (which is another sad story of heartbreak and betrayal best left for
another time), "Hey, Chinese dude! Don't worry about your stinking dollars
losing value! Hahaha! We'll take real good care of your money, you moron!"
Or, if the Chinese are not interested in the Valuable Advice Of The Mogambo
(VAOTM) just because I am widely considered to be an idiot with no redeeming
qualities, then they could instead just read in the respected Economist
magazine where the "budget balance as a percentage of GDP 2009" for the US is
now a negative 11.1%, which is one of those "I never thought I would live to
see it" kind of things, sort of like my family waiting for me to live up to my
responsibilities and act like a normal human being, which are (as I gather from
the way they ask me about it), not too much to ask, although I politely remind
tell that I am too old and hateful to give a crap about what they think about
anything, including this.
And if they want something more immediate, In fact, all they would have to do
is keep reading, as this is where I cite Doug Noland (see
Credit Bubble Bulletin, Asia Times Online, March 17, 2008), who
reports, "M2 (narrow) 'money' supply jumped $29.5bn to a record $8.304 TN (week
of 3/2)".
In case Mr Wen Jaibao wants to know how much of a rise in price inflation that
will follow such a rise in the money supply, I will tell him, "I have no idea,
but (in keeping with mixing up Eastern philosophies with religions), I have a
riddle for you, Wen, baby: 'What is the sound of one hand clapping when the
hand is burned to a cinder with two red-hot pokers instead of just one red-hot
poker?'"
Naturally, he will be confused at the sheer stupidity of the question and
probably offended at what appears to be a crude slur, whereupon I will tell him
that as part of the answer to his original question of "How much inflation in
the money supply" Mr Noland calculates that, that "Narrow 'money' has now
inflated at a 16.9% rate over the past 24 weeks and $738bn over the past year,
or 9.8%."
As to being offended by my laughing at his apparent lack of intelligence, if he
doesn't want to look like an idiot, then stop saying stupid things like he
"requests" that the US "maintain its good credit, to honor its promises and to
guarantee the safety of China's assets." Hahaha! Like that's going to happen!
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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