03/19/09 Tampa Bay, Florida You will be happy to know that we have nothing to fear from the Chinese, as they are as stupid as the rest of us, as I learned from a Bloomberg.com report that China’s Premier Wen Jiabao says that China is “the U.S. government’s largest creditor” in terms of T-bonds, and he is “worried” that something might happen to the buying power of all of that American money, and he “wants assurances that the investment is safe” and that he “requests” that the U.S. “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.” Which makes me laugh that anyone would even bother saying such a thing! Hahaha! Moron!
Of course, being The Mogambo like I am, it is my duty to enlighten world leaders about economics, and in that regard I say to them, “Of course those dollar-denominated assets are safe, Chinese dude! If they ever get lost or destroyed, the United States will merely give you more paper promises! That’s the beauty of a fiat currency, you morons: We can give you more and more dollars until you are freaking drowning in them!”
I don’t expect the Chinese to hear me and suddenly say, “Thanks, Mogambo!” or even something that sounds like “Wong choi how wong!” which I interpret to mean, “That Mogambo fellow is one sharp economic cookie, and maybe we ought to be following his Strong Mogambo Suggestion (SMS) to buy gold, silver and oil against the terrifying inflationary conflagration that will inevitably result from such insane monetary and fiscal irresponsibility by the Federal Reserve and the Congress, respectively, which is about the only time you can ever use the word ‘respect’ in relation to either one of those lying, corrupt institutions, which does not even mention the sheer corruption of their state and local governments, and governments and central banks around the world who are doing the exact same thing, which is enough to give you the Horrified Mogambo Screamies (HMS).”
But perhaps such gracious social niceties are foreign to Chinese culture, or maybe they are still miffed that I have been calling them “morons” for years since they ignore me when I tell them that they, of all the countries on the earth, need the stability of a gold standard so that they can grow their economy with cheap imports and low cost of capital, which is what you get from a gold-backed currency, and that is why they should be exchanging their excess dollars for gold bullion.
But whatever the reason, they have plenty to worry about, as the American Congress and the Obama administration have already announced, crafted and passed legislation authorizing multi-trillion dollar federal budget deficits! And these unbelievably massive federal budget deficits will continue for as far as anyone can see, meaning that the Federal Reserve will create more money and credit to pay for it all, thus vastly expanding the money supply some more, which makes prices go up some more, which devalues all the other existing dollars, which makes prices go up some more, which makes people more angry and rebellious, but which – in this case – makes me laugh and laugh and laugh; and I say to Wen Jaibao, tears of laughter running down my face and ruining my mascara (which is another sad story of heartbreak and betrayal best left for another time), “Hey, Chinese dude! Don’t worry about your stinking dollars losing value! Hahaha! We’ll take real good care of your money, you moron!”
Or, if the Chinese are not interested in the Valuable Advice Of The Mogambo (VAOTM) just because I am widely considered to be an idiot with no redeeming qualities, then they could instead just read in the respected Economist magazine where the “budget balance as % of GDP 2009” for the USA is now a negative 11.1%, which is one of those “I never thought I would live to see it” kind of things, sort of like my family waiting for me to live up to my responsibilities and act like a normal human being, which are (as I gather from the way they ask me about it), not too much to ask, although I politely remind tell that I am too old and hateful to give a crap about what they think about anything, including this.
And if they want something more immediate, In fact, all they would have to do is keep reading, as this is where I cite Doug Noland of the Credit Bubble Bulletin, who reports, “M2 (narrow) ‘money’ supply jumped $29.5bn to a record $8.304 TN (week of 3/2).”
In case Mr. Wen Jaibao wants to know how much of a rise in price inflation that will follow such a rise in the money supply, I will tell him, “I have no idea, but (in keeping with mixing up Eastern philosophies with religions), I have a riddle for you, Wen, baby: ‘What is the sound of one hand clapping when the hand is burned to a cinder with two red-hot pokers instead of just one red-hot poker?’“
Naturally, he will be confused at the sheer stupidity of the question and probably offended at what appears to be a crude slur, whereupon I will tell him that as part of the answer to his original question of “How much inflation in the money supply” Mr. Noland calculates that, that “Narrow ‘money’ has now inflated at a 16.9% rate over the past 24 weeks and $738bn over the past year, or 9.8%.”
As to being offended by my laughing at his apparent lack of intelligence, if he doesn’t want to look like an idiot, then stop saying stupid things like he “requests” that the U.S. “maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.” Hahaha! Like that’s going to happen!
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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My gosh! These Chinese are morons, they forgot their own history when they themselves were the first ones in the history of the world to issue a paper currency (and how did that workout for them, as if I had to ask)
Those who don’t learn from history are doomed to repeat it (at least thats what my history teacher told me.)
At least the Chinese are smart enough to spend some of their US Dollars on oil (they have some of the largest oil storage tanks in Asia) and on commodities and mines, and they are using some of their US Dollars to build bridges, dams, roads, etc. so the Chinese not as moronic as the US Government.
Jumnior Mogambo Ranger #777
Should have read
Junior Mogambo Ranger #777
typo, my error
They may not be quite as dumb as we think. They have been planning to buy America for decades.
Those Chinese are already coming around here in Southern California and buying up houses left and right. And they just bought Oz Minerals, the third largest miner in Australia, at pennies on the dollar because Oz couldn’t come up with financing to continue operations. No surprises here, if you’ve ever read The Art of War.
Awesome article. After reading this, I also laughed a lot at the Chinese stupidity. LOL
But I guess the Chinese are realizing the truth; for why else are they aggressively buying assets worldwide?
The Chinese exchange Yuan for USD in FOREX and loan us the USD. Much of the Yuan is unsterilized, so in essence, much of the money is printed by the Chinese.
Effectively, the Chinese print money and loan it to us and they’re worried that our money printing is going to devalue their debt obtained via printing money.
Maybe instead of investing in Gold, Silver, and Oil, we should be investing in paper and ink companies.
China now has leverage against the US. If they stop buying treasuries or, even worse, start dumping the ones that they have then the game is up and America financial domination is over. China could easily take over Taiwan if it was not for the US defending them. The back door negotiations are unknown to me. I see a better than 50% chance that Taiwan will ‘volunteer’ to join the Peoples Republic in the next 18 months.