What a Maroon!
It took Greenspan 3 months to create as much money as 1 week of Bernanke...
SO ONCE AGAIN I don my adult-sized diaper and tinfoil hat in careful preparation to look at the change in Total Fed Credit last week, writes the Mogambo Guru for The Daily Reckoning – and it's a good thing, too.
Because the Federal Reserve (as expressed in their secret motto "We Are Evil") brazenly admit to creating, out of thin air, $29 billion new dollars in bank credit.
The interesting part is that the Federal Reserve used that new money – and a lot more besides – to buy $62 billion of US government debt last week. Hahaha! What a fraud!
$62 billion in one week! With $29bn of pure debt monetization! In one week! We are so, so, so freaking doomed!
Now, if you are having a hard time understanding my words because I am so outraged that I am actually incoherent...or you are so disgusted by the way drops of frothy spittle fly from my hysterical lips as I loudly scream! Scream! SCREAM!...then what I am trying to say is that all of the economic problems we have, and all of the economic problems of everyone around the world, were caused by former Fed chairman Alan Greenspan creating what was, back then, a staggering $10 billion-a-month in new Total Fed Credit, which was then multiplied dozens of times over by the banks and financial centers, and which drove up asset prices so high that they are now falling, to the dismay of people who own assets and the greedy government which rakes off a nice Chunk Of Change (COC) from those assets every time they change hands and also in income tax on dividends, rent and interest.
And now – now! – comes Ben Bernanke with his fresh monetary insanity, creating in One Freaking Week (OFW) some $29 billion. Whereas it took old Greenspan an entire month to come up with $10 billion!
Yow! This is insanity.
And how did the loathsome Alan Greenspan accomplish such a horrific feat? Easy! He used the power of the Federal Reserve to create money out of thin air, year after year, for almost two continuous decades, which appeared as a credit on the books of the banks, ready for loaning, which the banks then loaned out as Huge Freaking Multiples (HFM) of that money. And it just kept on going like that, year after year.
And then the money – all that money, all that staggering tonnage of dollars – eventually ended up in the hands of ultimate American consumers, who used the money to buy consumer stuff from overseas, creating a trade deficit, so that foreigners ended up with all those dollars, which those governments had to "monetize" by creating more of their own currency to keep their money from getting scarce in relation to the absolute glut of Greenspan's dollars flooding the world, all of which is now called the fabled "savings glut" that turned into a "savings inflow" into the United States, blamed by the idiotic Ben Bernanke for causing the housing boom!
Hahaha! As Daffy Duck would say, "What a maroon!"
And speaking of that maroon Bernanke, chairman of the Federal Reserve, who saw none of this happening, he recently spied "tentative signs that the sharp decline in economic activity may be slowing" – which made me laugh for so many reasons, firstly because an idea for a witty Mogambo Editorial Cartoon (MEC) flashed into my mind.
In the MEC, a man has fallen from the top of a skyscraper, and as he plunges down, Ben Bernanke shouts, "Flap your arms! Flap! The little bit of lift will slow your descent, and we will see signs that your sharp decline may be slowing!"
Well, even though my wonderful idea for an MEC is so marvelous that it would have obviously win a Pulitzer for "Best Editorial Cartoon" (BEC), the idea did not even get off the ground, as I kept being distracted by the question, "Why did this guy fall off the building?"
Then I decided that he fell while trying to escape government predators, so I had to draw a bunch of people labeled "government" looking down from the top of the building and saying, "We know you have lost your job and your house, and that half of your retirement savings and other investments are gone, prices for everything are rising, and you are desperate...But we still need to raise your taxes. A lot."
Then I decided it needed "something", so I thought to add some naked ladies because I like naked ladies, but I couldn't decide how to actually work that into the theme of the cartoon, even though they all had that seductive, "come hither" look in their eyes and were saying, "I want you, Mogambo! Take me!" which suggested the seductive "free lunch" promises of Congress and the Federal Reserve, which was another way to go.
And then this "free lunch" thing brings up the grim fact that the national debt has shot up over $11.2 trillion, thanks to the Federal Reserve creating the money so that the government could spend it. So, instead of working on some stupid cartoon, I decided to just grab you by the collar and shout "We're freaking doomed by a spendthrift Congress spending tons of new money created by the evil Federal Reserve!" into your terrified face; but I realized it will never suffice to convince you of the terror, especially with you wiggling and struggling to break free from my Powerful Mogambo Grip (PMG), so I will give you some actual numbers, which ought to make you feel better because it makes me look like I am an idiot.
As a guy who spends a lot of his time being outraged and vocal about how inflation in prices is going to destroy us all as a result of all of this global creation of money, it was particularly surprising to me when I first read the AP report that "Over the past 12 months, consumer prices have fallen 0.4 percent, the first 12-month decline since a similar drop for the year ending in August 1955."
So, my face is red, and I hear you say; "Prices are going down! It's a deflation! So let go of me, you Stupid Mogambo Idiot (SMI)!"
Well, the joke is on you, as prices really aren't going down as, "Core inflation, which excludes energy and food, rose 0.2 percent last month, matching the gains of the past three months", and in fact, "Over the past 12 months, core inflation has risen 1.8 percent."
And inflation in prices is going to get a lot worse, as the loathsome and thoroughly despicable Federal Reserve is financing the absurd Obama stimulus programs so much that (audience shouts out, "How much, Marvelous Mogambo Master (MMM)?") on Wednesday, April 8, the national debt was $11,145.4 billion, while on April 15 – which was just One Freaking Week Later (OFWL) – it was $11,218.8 billion, which is not only $73.4bn greater inside 7 days, but is also a Hell Of A Lot Of Money (HOALOM) to owe anyone for anything.
And thus we are naturally led to the point where I tell you, with sincerity in my voice and a crazed look in my eyes, that a HOALOM just OFWL means that if you are not Buying Gold, silver and oil in response to such monstrous fiscal and monetary irresponsibility and outrageous insanity, then there is something very, very wrong with you, and you deserve the ruinous punishment that will be inflicted on you very, very soon.