MOGAMBO GURU: America Being Looted By The Federal Reserve

[Tace]

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

snip

Still, there was not a sound! Instinctively, my hand slowly started inching towards the bazooka I keep in my shoulder holster, which I admit is not only very heavy and unwieldy, but stupid, too, although it is somehow very comforting in a "raw firepower" kind of way. My fingers close around the cold steel of the trigger as I say, "Do you comprehend, even remotely, the staggering enormity of America being looted by the Federal Reserve, which is just a private bank owned by a shadowy, semi-anonymous group of people that includes a lot of foreigners, all for the obscenely profitable benefit of these selfsame mysterious foreign strangers? Do you?" I viciously snarl.

Suddenly, from behind the curio cabinet, my daughter springs out, puts her little fists on her hips, and with a booming voice says, "I, the one known as Daughter-Possessed-By-Demons, know!" I watch, dumbfounded, as she bellows, "This means that we will soon be taxing ourselves more, and imposing roaring inflation on ourselves (which is, actually, just another gigantic tax, in effect) by letting the Federal Reserve create the money to finance the government's increasing deficit-spending, which is supposed to 'offset' the government's increasing debt without resorting to the alternative of levying taxes. And this increased inflation in the money supply will be followed by horrific inflation in prices. Ain't that right, mighty magnificent Mogambo moron (MMMM)?"

I am stunned! She's exactly right! I naturally suspect a trick of some kind. So, cautiously, I test her by leaning forward, looking her right in the eye, and open-endedly asking, "And…?" She immediately answers, "To support rich foreigners who can't even speak English without some thick, stupid accent, who drive foreign cars, who marry other foreigners, and who actually live in foreign countries, too! And then, while they are living it up, having a wonderful time spending our American money and eating weird, exotic foods like, oh, I dunno, filet of marmot earlobes or something, we Americans will suffer from crippling inflation in prices as the dollar is devalued to accommodate them in their gluttony!"

For some reason, the shock of hearing my own kid saying this, and all this talk about devaluing the dollar, makes me suddenly recall the essay entitled, "Vox Populi, Vox Suckers," by Gary North of LewRockwell.com, who writes, "The history of the demise of the dollar is the history of the replacement of a gold coin standard with the Federal Reserve System. The decline began in 1914." I remember thinking to myself, "Huh? Why am I remembering this, and why right now?" Then I see the wisdom of it when I further remembered that he went on to write, "But it has come in waves of depreciation. We are on the cusp of the dollar's next great decline."

I am kind of freaking out here about what the kid and Dr. North are saying about this coming decline in the dollar, and so I was overpowered when she, again correctly, says, "And don't even get me started on Robert 'Elliott Wave' Prechter and that whole Socionomics thing, Pops, where society mirrors the economy, which both break down into a post-Apocalyptic nightmare when the buying power of the currency is destroyed!" Suddenly, the room was silent. I looked at her. She looked at me. Then she said, softly, "We're freaking doomed!"

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http://worldnewstrust.org/modules/AMS/article.php?storyid=4021

[Demeter]

1. Lord, He's On A Tear Here!

Not that I can disagree with him: that's the trouble with unvarnished truth.

[Tace]

3. He's Funny

It's really something how he can make economic arcana interesting and funny.

[tanyev]

2. We're freaking doomed!

:scared:

[magellan]

4. Hey

Was just reading and got to this bit:

"Look at the dollar, you low-life blockheads! The price of oil is going to climb and climb as the dollar falls and falls in purchasing power, because the government is deficit-spending, and the Federal Reserve is creating the necessary excesses of money and credit to finance that increasing debt, which is the very damned, damned, damned definition of monetary inflation, you halfwit municipal turkeys! All this monetary inflation means that a resultant roaring price inflation is guaranteed, which can be actually defined as a yet weaker dollar, and so oil will go up and up and up in price! Up, jerks! Up!"

This hit me right between the eyes. How much does the fall of the dollar account for the rise in gas prices?

[On the Road]

5. I Agree That Inflation is Coming

driven by higher oil, commodity, and real estate. I agree that the Fed will allow it to proceed for awhile, because the alternative will be too deep a recession. And although it will hurt the average wage earner, it will make the debt crisis less severe.

But the gold standard? Wanting to abolish the Fed? You had waves of boom-and-bust expansion and contraction which made the rich richer and screwed the poor. There's a reason that populists at the turn of the century supported greenbacks and dropping the gold standard. It took while for the Fed to get its head on straight. But compare the economy since WWII with any part of the century before the Fed.

[Tace]

6. I Suppose It Depends If One Thinks Inflation Is OK

The period from the U.S. Revolution to about 1900 saw virtually no price inflation. Since 1900 we've seen the dollar lose more than 95 percent of its value.

[On the Road]

8. That is Correct

But it benefits primarily those holding lots of cash and other assets. During the 18th century, you had three periods of serious sustained deflation. That is arguably worse for the average working person, and allowed those with cash assets to buy up property and businesses during a recession.

The advantage of the post-WWII economy is that the business cycles are much milder and there are mechanisms to avoid the risk of poverty in old age, loss of savings, and financial ruin during a recession. Now if Americans would only use them.

[TrogL]

7. Bear in mind that MOGAMBO GURU is a gold bug

He needs to join the real world. Nobody is going back to a hard metal standard.