MOGAMBO GURU: Suddenly, Ammunition Is Very, Very Scarce

[Tace]

Richard Daughty, the angriest guy in economics -- World News Trust

I was surprised to see that Total Fed Credit was not exploding last week. I was even more surprised to see that Foreign Holdings of U.S. Debt held at the Fed was actually down by $8 billion last week, too. Even the banks were not making fools of themselves, as is their wont, by gobbling up huge fistfuls of government debt. It was, in a word, quiet. In the movies, when somebody remarks how quiet it is, the hero says "Too quiet!" and the next thing you know there are arrows and/or bullets flying all over the damned place.

So I nervously remark that it is, indeed, the proverbial "too quiet," because I know that there are enemies out there. For one thing, crude oil prices are up to around $66 a barrel, although to think that oil exporters would NOT factor in an increasing devaluation of the dollar into the price of oil, in the face of enormous American trade deficits, monstrous American budget deficits and stupefying rises in American business and household debt levels, is to insult their intelligence. And in that regard I will note, with a snide Mogambo sneer (SMS), that they were smart enough to grab the global real estate that had most of the oil, while we took the part that is next to Mexico and South America, places so corrupt and stupid that economic refugees are flooding into the USA to get away from there!

And for another thing, bonds are rising in yield, meaning that bonds are falling in price, meaning that all those billions of people around the world who own U.S. bonds lost some money and are getting ready to lose some more as interest rates keep rising. Beyond that, two other noteworthy things happened last week: The Federal Reserve has now officially stopped reporting M-3, the broadest measure of the money supply, and we have the new Treasury Statutory Debt Limit of $8.965 trillion, up by the $781 billion approved last week by Congress at the last minute. Potent stuff!

I hear a rustling in the bushes off to my right, and my trigger finger spasms. This is the economic enemy of loans/leases at the banks increasing to a record $5,569 billion, and savings deposits also soaring to a record of $5,238 billion, yet Required Reserves in the banks fell to a microscopic $40 billion. Hahaha! The record low was in 2001, when Required Reserves sank to $38 billion, which was the "insurance" against losses in their much, much, MUCH smaller books of loans/leases and deposits. You wanted fractional-reserve banking carried to ludicrous extremes? Well, brother, you've got it now!

more

http://worldnewstrust.org/modules/AMS/article.php?storyid=2880

[fasttense]

1. Probably his wife hid all the ammunition from him.

:shrug:

[Tace]

2. Tee Hee

And the guy down at the gunshop is saying, "Gee, Sorry Mogambo. We're all out of bazooka rounds."

[rman]

3. Lumping all of Latin America in with Mexico

shows some ignorance of certain facts (ie the strongly growing economy of Venezuela), but it's an interesting article nontheless.