John Stepek at MoneyWeek.com, talking about the "European bank stress tests"
that were "a whitewash, of course" said that it kind of reminded him of "one of
Gordon Brown’s budgets".
My immediate reaction, of course, and speaking as a true American, is to ask,
"Huh? Gordon who?" as a clever way of reminding these British guys that real
Americans, like me, don’t know about anything, or care about anything, that is
not about America and/or Americans and how it affects us, as Americans, but
mostly me, personally, as an American.
And this goes Freaking Mogambo Double (FMD) for some dirtbag, lying piece of
worthless has-been British ex-prime minister named
Gordon Brown, which rhymes with "clown", which could explain how he is infamous
for having sold all of Britain’s sovereign gold at the exact low price for
gold, which makes you laugh at him - hahahaha! - even though the record-low
price is more probably explained by the fact that he sold all of the gold,
glutting the market and driving the price down.
Usually, I would just dismissively say, with a condescending sniff, "Bah! More
euro-trash acting badly!" and let it go at that. I soon realized that if I had,
then it would certainly have been my loss, as his next sentence is pure gold as
regards the economic state of the world.
He wrote, to my delight, "You know the sort of thing - a glossy sheen of
half-truths and not-quite-outright-lies disguising the true horror of the
underlying economic situation." Bravo! Wonderful!
He goes on, although almost anti-climactically, "A roll-call of good news to
distract the attention, while all the bad stuff and caveats are buried in the
small print or left to the imagination."
Such a perfectly and precisely correct pearl of prose is completely wasted on
the aforementioned "euro-trash" of course, even though he is being
more-than-kind to not even mention that we corrupt Americans have again
surpassed our British friends, in that we also include bald-faced lies and
"hedonic adjustments" to the data in our "official reports"! Hahaha!
Of course, he did not mention the fact that there is no good news, anywhere,
and there never will be, because there is No Freaking Way Out (NFWO) of the
economic mess caused by the creation of too much money for too long (in this
case the foul Federal Reserve doing exactly that), except through massive
bankruptcy and losses, and misery and suffering, and then some more misery and
suffering until the government gets us into a distracting, devastating war,
whereupon everything gets worse.
So maybe I was particularly attuned to references to "a glossy sheen of
half-truths and not-quite-outright-lies disguising the true horror of the
underlying economic situation" because of an article by Laurence Kotlikoff,
referred to only as a "professor of economics at Boston University," by The
Financial Times, who writes, "during the past half-century, the US has sold
tens of trillions of unofficial IOUs, leaving it with liabilities to pay Social
Security, Medicare and Medicaid benefits that total 40 times official debt."
I could feel my heart literally shudder at the thought of how much money we are
talking about at "40 times official debt" but although nobody "does the math",
it doesn’t take a rocket scientist to intuit that multiplying 40 times $13.3
trillion is a lot of money to owe, especially when the entire GDP of the Whole
Freaking Country (WFC) for an entire year is little more than $14 trillion! If
that!
Yikes! My hands visibly shake to realize that we're on the hook to pay 40 times
what we make as an entire nation, but people can't get a loan on a house
costing six-times income, although we are already paying, collectively, 50% of
GDP in federal, state and local taxes, which is not to mention all the layers
and layers of government and agencies that are spending more than half of all
the spending done in the Whole Freaking Country (WFC)! Yikes!
Yikes, indeed! Look at my hands shake! Listen to my heart going
thumpa-thumpa-thumpa in fear! Wow!
Mr Kotlikoff makes no mention of my shaking hands or veins pulsating ominously
in my forehead, perhaps because it is obvious that these infirmities are the
least of my many, many problems, one of which is that I am Completely Freaked
Out (CFO) because, as he says coincidentally, "The US is one foot away from a
deep and permanent economic grave."
Anyway, maybe the realization that "We’re freaking doomed!" is why he concludes
his piece with the gloomy last sentence "It is far past time to do meaningful
long-term fiscal planning, level with the public, and implement radical reforms
that permanently put America's fiscal house in order."
Now, that is scary! "Far past time!" Just like I have been screaming all this
time!
In fact, if I was writing the piece, I would have at least concluded with a
hopeful, uplifting sentence like "So, buy gold, silver and oil with a frantic
abandon in preparation for a final, ruinous cataclysm and almost certainly a
huge, deadly war, which is the lesson one learns from what has happened all the
other times in history when moronic governments borrowed too much money and/or
when the greedy banks created too much money, and especially what happened in
all the other times of history when the money was made of mere paper and other
easy-to-produce yet completely worthless numeraires like computer bits and
bytes, which can't even be seen, for crying out loud!"
As a literary note, I would have closed the article with, "Whee! This investing
stuff is easy!" but I was advised that The Financial Times is a little too
classy a place to parade my embarrassingly childish glee at the happy, happy
fact.
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.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
