Alan Abelson, in his column in Barron's, notes that the US$9.1 billion drop in
consumer installment debt in May makes it four months in a row that this debt
balance went down, and that "Credit card use (so-called revolving debt) shrank
by $7.4 billion, extending its string of monthly declines to 20". Yikes!
Perhaps realizing the powerful emotional impact such a dismal, horrifying fact
produces on paranoid, fearful people like me, you can see where he tried to
make a subtle joke out of his next terrifying revelation, which was that
"April's reported increase of $954.8 million, it turns out, was slightly
exaggerated and duly revised to a drop of $14.9 billion." Hahaha! "Slightly
exaggerated"! Hahaha!
So, after saying, "thanks for the clever and subtle humor, Alan, and in
graciously trying to protect my precious remaining brain
cells from exploding in fear at the horror of what you are saying!" I realized
that there were lots of people on whom such literary gems are wasted, and/or
insouciantly have the brain cells to waste, and they want only to know one
thing: "How can I use this information to make a lot of money, in a hurry,
without working?"
Hey! Now that I have thought about it, that's how I feel, too! So without
further ado, the facts are that this was an error of $15.8 billion on an
original estimate of less than $1 billion, which produces an error rate of
1,605%! Suddenly, I involuntarily leap to my feet and scream in outrage, "What
in the hell is going on here?"
My own outburst surprised even me, which is not to mention how it so startled
my wife that she spilled a spoonful of milk and Cheerios as she was lifting it
to her mouth, and which splashed into the bowl containing more milk and cereal
where (and this is the funny part) a droplet of milk inexplicably splashed all
the way up, up, up, breaking laws of physics the whole way, onto her nose, but
she didn't realize it.
Being the kind-hearted and real peach of a guy that I am, I helpfully tell her
about it so that she would, you know, stop looking so stupid with that drop
milk hanging off her stupid nose. So I lovingly say, "Hey, doofus! You got a
big honking drop of milk on your stupid nose and you look like a doofus!
Hahaha!"
Well, she, without a word, wipes the milk from her nose, and I could see that
she has misinterpreted my kindly interest in her appearance, which I do so that
people (me included) don't get disgusted and mistake her for someone so
clueless, so stupid and so oblivious that she doesn't even know to buy gold,
silver and oil when the Federal Reserve is creating So Freaking Much (SFM)
money, especially so that the insane Congress and White House can borrow and
spend that SFM money to fund and expand entitlement programs and new,
weird-and-wasted stimulus programs, so that when they write the history books
about this era, the perplexing problem will be people arguing about just what
in the hell was the matter with us that the American electorate believed in the
proverbial ‘free lunch' and elected politicians to give it to them, but which
may explain why people bizarrely have drops of milk hanging off their noses.
I had originally thought that I would be amused by this milk-on-nose thing and
Mr Abelson's funnies, but now I see that I am, instead, outraged that such an
egregious governmental error could possibly be made! What kind of lying,
deceptive, treacherous morons could make a mistake of 1,605%?
I mean, you should hear the crap I have to put up with at work when my stupid
boss starts yammering about how my budget projections are off by 2%, or 5%, or
20%, or sometimes 70%!
But as for the debt itself, this fall in accumulated debt is, obviously, not a
good sign for an economy that is based upon consumption that is financed by a
stupid fiat money multiplied by laughably lax fractional-reserve ratios in the
banks, like ours.
You can relax, however, because debt is less than mox nix for an economy that
is already based upon a Federal Reserve that will insanely create So Freaking
Much (SFM).
And the reason for the, shall we say "mox nixity" of all that staggering new
money and new debt is that congress could - literally anytime it wanted -
legislate a 100% write-off of all debt for all debtors, a corresponding tax
credit for the stiffed lenders, and with the Federal Reserve ever ready to
create, as is popularly known, a Freaking Butt-Load (FBL) of new money to loan,
or even just give, to everybody!
And don't believe for a minute that these kinds of things won't happen, in one
form or another, as history has shown that there is no depth to which a corrupt
government will not sink when it is desperate.
And that brings up the corollary that there should be no limit to the amount of
gold, silver and oil you should buy when the government and the Federal Reserve
are sinking into such a cesspool of fiscal and monetary insanity, which makes
the decision to buy gold, silver and oil so easy that it makes you happily
squeal with delight, "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 2010, The Daily Reckoning.)
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