Best of the Week
Most Popular
1.Spain Ignores Scotland Lesson as Catalan Independence Referendum Could Spark Civil War - Nadeem_Walayat
2.Used Car Buying From UK Dealer Top Tips, CarMotion.co.uk Real Customer Experience - N_Walayat
3.Spanish New Civil War Begins as Madrid Regime Storm Troopers Quell Catalan Independence Rebellion - Nadeem_Walayat
4.Virgin Media Broadband Down, Catastrophic UK Wide Failure! - Nadeem_Walayat
5.Are the US Markets setting up for an Early October Surprise? - Chris_Vermeulen
6.The Pension Storm Is Coming To Europe—It May Be The End Of Europe As We Know It -John_Mauldin
7.Stock Market Crash 2018; Will it Prove to be Another Buying Opportunity - Sol_Palha
8.The Profoundly Personal Impact Of The National Debt On Our Retirements - Dan_Amerman
9.Stock Market as Good as it Gets; Like 2000 With a Twist -Gary_Tanashian
10.1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - Nadeem_Walayat
Last 7 days
Stock Investors Ignore What May Be The Biggest Policy Error In History - 20th Oct 17
Gold Up 74% Since Last Stock Market Peak 10 Years Ago - 20th Oct 17
Labour Sheffield City Council Employs Army of Spy's to Track Down Tree Campaigners / Felling's Watchers - 20th Oct 17
Stock Market Calm Before The Storm - 20th Oct 17
GOLD Price Creates Bullish Higher Low - 20th Oct 17
Here’s the US’s Biggest Vulnerability in NAFTA Negotiations - 20th Oct 17
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

The Fed Has Gone Insane, So I'll Just Pick Up Some More Gold and Silver

Interest-Rates / Inflation Oct 15, 2010 - 04:17 AM GMT

By: Richard_Daughty

Interest-Rates

Best Financial Markets Analysis ArticleMy stomach was hurting, so I decided to take a little time off and soothe the old midsection with a few medicinal brews and a dose of pizza. The reason that my stomach hurt was because I had just read the stupidest economic essay, which was, unbelievably, penned by another lackluster university professor, and surprisingly printed by The Financial Times newspaper.


The guy's name is Michael Woodford, of Columbia University, and whose execrable and totally idiotic piece is titled "Bernanke Needs Inflation for QE2 to Sail."

He writes, unbelievably, "The Fed should allow a one-time only inflation increase, with a plan to control it when the economy recovers." Hahahaha!

Hahahaha! Why am I laughing so hard that I am doubled over and actually gagging up pieces of stomach lining? Why? I don't know where to start! Hahaha!

Wiping the tears of laughter from my eyes, let's just begin where he began: "The Fed should allow a one-time only inflation increase"! Hahaha! It is so ridiculous to think that the Fed can produce a "one-time" inflation, when the fact is that the Fed has already engineered 50 years of constant inflation, sometimes simmering and occasionally roaring inflation! A "one-time" inflation! Hahahaha!

I can hardly breathe from all this laughing, but He-Man Mogambo (HMM) gathers his strength and with a Herculean effort manages to control the laughing spasm that I know is coming when this dimwit says that the Fed can stoke inflation and then come up with "a plan to control it when the economy recovers"!!! Hahahahahahahahaha!

That last, long laugh is where I really lost it! A plan to "control inflation"! Hahahahahahaha!

Maybe he gets the idea for this stupidity from Allan Meltzer, a professor at Carnegie Mellon U. and a "visiting scholar" at the American Enterprise Institute, and who is regularly invited to attend Federal Reserve functions because he seems to kiss their butts a lot, and as such you don't expect much, which is just what you get.

He does admit, to his credit, that inflation is the problem, and says that inflation is "another reason the Fed should give up this nonsense about more stimulus."

If he had stopped there, I would've changed Mr. Meltzer's category on the famous Mogambo Enemies List (MEL) from "Them" to "Us (probationary)."

Instead, he says, apparently anxious to show he has no idea what he is talking about and is ignorant of economics in general and the Austrian school of economics in particular, that instead of more stimulus, the Fed should "offer a credible, long term program to prevent the next inflation." Hahaha! Another plan!

Hahaha! A "credible program!" Hahaha! It makes you want to scream out, "And just what in the hell would be a credible program to get out of a monstrous monetary inflation that has been raging exponentially for almost 50 years, which produced the economic disaster of constant, simmering inflation and the suicidal growth of a giant, bloated, twisted and disgusting government-centric economy supporting half the population and a bizarre economy based on the continual financing of grubby, childish, insatiable final consumption, so that all debt in the USA now totals somewhere around $60 trillion (with the federal government having accrued liabilities of at least five times as much), and where the entire freaking GDP is only $13.5 trillion? Exactly what in the hell is a 'credible program' to reverse that kind of horrible, end-stage metastasized cancer? Hahahaha!"

In case you were wondering, as apparently Bigshot Economic Blowhards (MEB) wonder, the only "credible program" in an economy that relies exclusively on creating more and more money out of more and more debt, with which people buy more and more things and the government gives more and more money to more and more people, is different after these kinds of things have gone on too long (two weeks max), like this one that has gone on for Fifty Freaking Years (FFY)!

If you stopped in the first few weeks of money creation and deficit-spending, you could just stop spending to let the Federal Reserve stop creating money. But now, after half a century, the only "credible program" available is to suffer a complete economic collapse, sort of like the collapse of critical thinking by neo-Keynesian econometric economists who got us into this mess by actually believing their own "consumption function" stupidities and then, to our ultimate regret, relying on them.

Of course, this seeming abandonment of common sense is akin to astonishingly believing, like trusting, gullible children, all kinds of silly crap, like believing that it is possible for the population to finance comfortable retirements by investing in the stock market over the long term, or the bond market for the long term, or houses for almost any term, or any combination of the above! Hahaha! And this is not to even mention the tragedy of derivatives! Hahaha! Idiots!

And the silliness doesn't stop there! For example, Mr. Meltzer laughably says, "The most important restriction on investment today is not tight monetary policy, but uncertainty about administration policy. Businesses cannot know what their taxes, health-care, energy and regulatory costs will be, so they cannot know what return to expect on any new investment."

Since I am already laughing, it is easy to laugh with Rude Mogambo Scorn (RMS) - Hahahaha! - because the "most important restriction on investment today" is certainly NOT "administration policy."

Instead, the "most important restriction" is identifying where customers are going to get the money to buy anything!

I mean, if lots of customers show up with cash in their greedy, grubby little hands, and these customers are begging to buy, who cares about taxes, health-care, energy and regulatory costs? Nobody! Simply charge a high enough price, that the customers are obviously willing to pay, to cover all expenses, make a huge profit, give the executive staff large bonuses, buy up competitors, and donate lots of money to the corrupt politicians to make sure that the stupid government doesn't make any new laws that might ruin the cozy racket!

So, if you see this Meltzer guy, you tell him that the Fab Fab Fabulous Mogambo (FFFM) says that "the most important restriction on investment spending" today is that all the customers are up to their freaking eyeballs in debt, staggering under the crushing weight of debt from two insane decades of the loathsome Alan Greenspan at the demonic Federal Reserve constantly creating more and more money to finance bubble economies in raw, naked consumption, insane speculative bubbles in stocks, bonds, houses, derivatives and the cancer-like growth of a treacherous, corrupt system of governments, from local to state to federal, as trillions and trillions of dollars were deficit-spent to add to the orgiastic deluge of tax revenues already pouring in, and then going right back out again as new spending, from the aforementioned bubble economies in stocks, bonds, houses and derivatives spawned by, at the root, the Federal Reserve creating the money necessary!

It's too insane to continue, and so I will just pick up some more gold, silver and oil so that I can make a lot of money on the laughable economic foolishness rampant in the world and the universities, which makes it all so easy that one can only happily say, "Whee! This investing stuff is easy!"

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.

Copyright © 2010 Daily Reckoning

© 2010 Copyright The Daily Reckoning - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife