Read it and weep. Is it any wonder he calls it the 'Gong Show?'
THE GOVERNMENTAL GONG SHOW
by The Mogambo Guru
My Puny Mogambo Mind (PMM) is actually retreating into a little Mogambo Inner Bunker (MIB) of its own, and I find that I avoid looking at what is happening at the hands of Treasury Secretary Hank Paulson and Fed chairman Ben Bernanke, as all of this money is going to show up in an explosion of prices, including food and energy, and that is when societal hell breaks loose and it’s, “Game Over, Player One.”
So I was doing a pretty good job of evading things, and I had finally relaxed enough to pry open one corner of my mouth in which a straw could be inserted so that I might at least drink something. Then, in what can only be described as careless, Karl Denninger’s essay – posted at market-ticker.org – hit my eyes and my brain with, “to fund all this crap that Congress, Paulson and Bernanke have in the pipe (you know, the TARP, the newly-minted SIV that Ben announced this morning to buy commercial paper, etc.) the treasury issue requirements will be north of three trillion dollars in this fiscal year”!
While the tone of Mr. Denninger’s sentence is well-suited to the subject matter, I regret that the concluding exclamation point of the sentence was added by me, as Mighty Mogambo Editor (MME), and I have issued a stern rebuke to Mr. Denninger about proper punctuation, such as this Freaking Screaming Horror (SFH) of $3 trillion dollars in fresh governmental borrowing in one year!! Which you will notice merits two freaking exclamation points just by itself! Jeez!
Well, to be fair, the AP news service reports – without exclamation points – that the Federal Reserve announced that it will “provide up to $540 billion in financing to bolster the money market mutual fund industry, its latest effort to get credit flowing more freely again.” Gonggggg!
I include that “gonggggg” because that is the sound that I distinctly heard when I saw the figure “$540 billion”, so you can see why I was distracted with this “gonggggg” thing, as the first thing that crossed my mind was that it sounded like a funeral gong or something equally as spooky.
But it got weird when I read, “The Fed’s new program, called the Money Market Investor Funding Facility, will be used to support a private-sector initiative designed to provide liquidity, or cash, to money market investors.”
So what in the hell is a “private-sector initiative” whereby people would loan money at less than 1%? I don’t know, and the only thing that I know is that it will be the proverbial cold day in hell when I will loan money at squat interest rates!
But it is the sheer magnitude that is shocking! $540 billion! The last thing that I saw before I passed out on the floor from the shock is that while $540 billion seems like a lot, it IS a lot! In fact, it is 16% of the whole “$3.45 trillion held in money-market funds as of Friday”!
And speaking of money, from Reuters we read that the People’s Daily – “the official newspaper of China’s ruling Communist Party” – had “front-page commentary” that said, “The United States has plundered global wealth by exploiting the dollar’s dominance, and the world urgently needs other currencies to take its place.”
I have two objections to this crap, one being that the People’s Daily is wrong; the United States did NOT “plunder” anybody; rather, the U.S. just took advantage of a bunch of ignorant rubes and hustled them out of their money! Hahaha! Ever heard of a guy name Ponzi? Well, look it up, morons! Hahahaha! Welcome to the big leagues!
The second objection is that if there is another currency that is NOT corrupted by over-creation – as is the U.S. dollar – I would love to hear about it, but the ugly fact is that all the world’s currencies are fiat currencies now, all composed of nothing but paper and electronic promises in some computers somewhere, and all being created in incredible excess even as we speak, which means that all of the world’s currencies are racing towards worthlessness.
Anyway, the article went on to say, “A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order”.
Of course, I sent them a telegram suggesting that they move their meeting to Disney World in Florida, near where I live, as I would love to tell them that they should swap their dollar reserves for the gold, and then I could send them a big whopping bill for my “consultation” services.
But they insist on holding their stupid meeting in China, and I am certainly not going to go all the way to China to give them my Priceless Mogambo Advice (PMA). So I change my tactics, and I send them my advice and bill them anyway! Hahaha!
I learned this technique from doctors who come by your hospital room and say, “Hi! I’m Doctor Blah Blah! I was walking by, so I looked at your chart, and now I can charge you $375 to tell you that and you should stop grinding your teeth in outrage at the unbelievable monetary excesses of the Federal Reserve and the corrupt compliance of Congress and the Supreme Court! Goodbye!”
I then discover, to my horror, that I may be waiting a long time for the Chinese to pay the bill for my terrific advice to get all the gold they can get their hands on, and I may be facing a protracted lawsuit because GATA.org already had the headline that “Economist Mundell says China should buy all IMF gold.”
So even though Mr. Mundell’s good advice to the Chinese to buy gold obviously preceded my own, that does not mean that my advice is valueless, just like Dr. Blah Blah who looked at my chart in the hospital, read the notes, came to the same conclusions, agreed with everything the attending physicians had done, had no new suggestions, and yet I still had to pay him $375.
But either way, gold is going higher in price, as it must, and now the tables are turned and it is me that is getting rich! Whee! This investing stuff is easy!
Until next time,
The Mogambo Guru
for The Daily Reckoning
Editor’s Note: 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.