04/22/09 Tampa Bay, Florida As usual, I put on an adult-sized diaper and my tinfoil hat in careful preparation to look at the change in Total Fed Credit last week, and it is a good thing I did, too, because the Federal Reserve (as expressed in their secret motto “We Are Evil”) created, out thin air, $29 billion new dollars in bank credit! Wow!
The interesting part is that the Federal Reserve used that new money – and a lot more – to buy $62 billion of U.S. government debt last week! Hahaha! What a fraud! $62 billion! In one week! We are 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 disgusted by the way drops of frothy spittle fly from my hysterical lips as I loudly scream, scream, scream, “We’re freaking doomed!”, 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 more 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.
And now here – here! – is Ben Bernanke’s monetary insanity to, in One Freaking Week (OFW), create $62 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 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 maroons, Ben Bernanke, chairman of the Federal Reserve, who saw none of this happening, recently said that he sees “tentative signs that the sharp decline in economic activity may be slowing” which made me laugh for 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 is so marvelous that it would have been the obvious winner of a Pulitzer for “Best Editorial Cartoon”, 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 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 15, the national debt was $11,218.8 billion, while on April 8, One Freaking Week (OFW) earlier, the debt was $11,145.4 billion, which is not only $73.4 billion, but is also a Hell Of A Lot Of Money (HOALOM) in OFW!
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 HOALOM in OFW 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.
The Mogambo Guru
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. For podcasts featuring the Mogambo, click here.
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Mogambo: Bugs is the one who said ‘What a maroon!’, I believe. Not Daffy.
what a nice piece of work i enjoy the articles wish you would write more about gold and silver what to buy etc…
Dear gab: buy gold and silver and take delivery. The end.
Oil stock is CHEEEEEAP! (naysayers forget the wars there are a’ boiling as they read). Give it some long action…
And scoop up the coinage wherever and whenever you can. Real coinage of course. Those little ones too… Merc dimes, 1/10th oz golds etc.
And, as the Wise Mogambo Man Of Wisdom keeps neglecting: Stockpile Whiskey and Cigarettes. If you don’t consume them, they are commods above the rest when TSHTF
One of the Best from Mogambo Guru!!
And all the time all we kept hearing was (over and over again) “We have confidence because America is the most dynamic and powerful economy in the world that is based on the strong and sound principles of free market capitalism, and is also based on the relentless drive of its hard-working citizens living in the glory and freedom of democracy!” (Or something like that). And everyone looks up to us. Really in complete contradistinction from what you wrote above. They keep forgetting the part about how the hard-working (and law abiding) citizens are being sucked dry and swindled in the face of high platitudes (sometimes referred to as propaganda).
Soume doubts are reducing my faith in the hyperinflationist Mogambo Prophecy.
I remember some time ago he dismissed and ridiculed “core inflation”, and now he use it as the only proof of his argument.
It seems more likely that all the trillions they are tinkering with will remain buried in the balance books of banks & governments. Nobody will ever see them in paper (provided that there are enough forests on the planet to print them all). Accounting by government end central banks will become an esoteric mistery, and we will have just a Great Depression 2.0, with very little inflation.
Of course, this does not imply that gold & silver are not among the few tings that you can “buy and forget” with maximum security of making a good investment. (BTW, gold jumped up from 891 to 906 while I was writing this, maybe the fireworks in gold price are starting?)
I honestly hope you are dead wrong with all what you write. Have a nice day.
Government goons can always make your real money illegal. They did it once in this country and they will do it again. Just remember that when paper money becomes worthless, gold and silver will become black-market commodities, not the real money you were hoping for when you bought it.