Greece seems to be on everyone's mind, probably because Greece is just the
first to suffer from the governmental stupidity of bankrupting themselves
trying to borrow themselves into prosperity, which is just a microcosm of the
whole stinking Eurpean Union area, which has similarly been ruined by socialist
morons doing the Exact Same Thing (EST), thanks to that laughable leftist idiot
Jean-Claude Trichet, head of the European Central Bank, creating all the money
that made such profligacy possible, and somebody ought to volunteer to go over
there and slap the hell out of him and all his nasty little half-witted buddies
until they get some smarts.
By "somebody", of course, I mean "me", and by "volunteer" I mean "get a huge
salary and benefits package that would make Donald Trump envious", and by "get
some smarts" I mean "stop creating more and more money, you morons!"
I was hoping that Eric Fry here at The Daily Reckoning would
back me up on my fabulous Mogambo Plan Of Vengeance (MPOV), seeing that he has
a good grasp of the idiocy of the "Euro Defense Plan," in that "This US$1
trillion fix did not fix anything. It merely annoyed short-sellers for a couple
of days and inspired enthusiastic gold-buying."
"Annoyed short-sellers!" Hahaha! I don't know why I think that is funny, but I
do!
Anyway, he says, "The country's fiscal condition is beyond repair. Either
Greece slips into the Mediterranean, figuratively speaking, or the euro does
... or both."
I figure it will be both, and "In a worst-case scenario," he says, "the ECB
will exhaust its cash, credit and credibility trying to save Greece ... and
will destroy the euro in the process. Best case, the 'fix' will persuade a few
Wall Street strategists that the 'worst of the euro crisis is over' and will
suck a few more suckers into the European sovereign debt markets before the
situation gets REALLY ugly."
By that, I take it that he is referring to how 4,500 years of human history is
the story of how "Governments default. That's what they do. They tax; they
squander the tax revenues; they default."
The Big Freaking Problem (BFP) with default is that all the owners of all that
debt take a big, big loss as they watch the value of the debt crumble to ashes,
reduced to zero value, plus capital gains taxes will go to zero and thus
deprive government of vital revenue, plus all of the money that was lost was
borrowed into existence in the first place, and which will then go out of
existence when the borrowers don't pay it back. Money supply plummets. Doom.
I was going to use this as a springboard into a Loud Mogambo Tirade (LMT) about
how this explains why the Federal Reserve and the government are so intent on
"saving" the banks, and "saving" the financial services industry, and "saving"
the stock market, and "saving" the bond market, and "saving" the housing
market, and how the Federal Reserve is creating So Freaking Much Money (SFMM)
so that government can spend So Freaking Much Money (SFMM) via
deficit-spending, and how all of that new money is going to cause massive
inflation in consumer prices, but suddenly everybody stopped listening to me at
the instant Bill Bonner said, "If you add to the US national debt the debts of
Fannie Mae, GM, and all the other financial holes, which the government will
ultimately have to fill, the crater is about 120% of GDP - the same as Greece's
debt." Yikes!
I was completely disoriented from the abrupt change of direction of the
conversation, and I could only listen with a spinning head as Mr Bonner said,
"There are now nearly as many people relying on the US government for food as
the entire population of Spain. There are about as many people unemployed in
the US as the entire populations of Greece, Portugal and Ireland ... combined.
And there are as many people who have gotten negligible income gains as ...
well ... the entire population of America."
Confused and bewildered by the overwhelming horror of this onslaught of bad
news, I was foundering around, stumbling, lost, and only got back to reality by
Mr Bonner's excellent witticism, "Europe is wasting its blood transfusions on a
corpse" making me laugh in delight, so that all I had to do is follow the sound
of my own laughter through a dark and treacherous land of economic terrors
until, suddenly, here I am again!
Whew! Glad to be back!
Anyway, in case you were wondering if I was ever going to get around to telling
you to buy gold, silver and oil in the face of such economic catastrophe, I am.
And if you were also wondering if I was going to call you an idiot if you do
not buy gold, silver and oil in the face of such economic catastrophe, then,
again, yes, I am.
And this goes double for Greeks and the rest of the European Union!
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 2010, The Daily Reckoning.)
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