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Bad boys, bad boys, whatcha gonna do? -- Economic Commentary by the Mogambo Guru
The Daily Reckoning ^ | 8/13/03 | Richard Daughty

Posted on 08/13/2003 6:35:09 PM PDT by arete

“...Theft. Watering down milk. Counterfeiting. And, likewise, I see the monetary and fiscal Bad Boys, namely central banks and governments, are being pursued by the immutable laws of economics and common sense, running down the citizens, crashing into our cars, running through stop signs, tires screeching, interest rates shooting up and down, shots being fired, currencies blasted, bond prices murdered, people who save their money being decimated, and the whole thing. And as such, I'll bet they are getting plenty worried about their own future, as in ‘Bad boys, bad boys. Whatcha gonna do when they come for you?’...”


The Mogambo Guru

St. Petersburg, Florida - Foreigners holding US debt assets at the Fed went up by another $4.8 billion this week, as they participated in the world-wide program to somehow save America. In actuality, they will end up not saving America, but owning American slaves, as we continue to sell the lives and taxable earnings of our own children in return for consumer goods today.

- The Levy Institute published a study by Philip Arestis and Elias Karakitsos entitled "Asset and Debt Deflation in the United States" with the subtitle of "How far can equity prices fall?" Being the Mogambo and always looking for an opportunity to prove that I am not as stupid as I look or sound, I naturally leap to my feet and loudly proclaim the answer is easy; prices can fall to zero. Then, with a smug look of self-satisfaction, I sit back down. But answering such easy questions is obviously not the thrust of the article.

What is this thrust? Well, first off these two guys figure that the recent rise in equity prices is only temporary, and that a recession is very probable, and they used the word "probable," and it will be caused by asset and debt deflation and a crash in real estate prices. Yow! Talk about gloomy guys, huh? They figure that equity prices will fall by a third in the next two years. "The authors find that there are only three important factors that influence the equilibrium value of the S&P500; the exchange rate, industrial production and credit risk." As for the exchange rate, they figure that the dollar will fall by 30%. That leaves industrial production and credit risk as the two variables that can keep the bubble economy from collapsing. And even though you did not ask for my stupid opinion, and don't feel bad because nobody else does either, it looks to me like industrial production will continue to fall as we continue to export all production to low-wage countries, and that credit-risk will rise until it reaches that area labeled "Guarantee of default."

One interesting little tidbit is that the authors think that a fall in the value of the dollar is necessary for recovery.

Am I the only guy around here who wonders what will happen to the price of oil when the dollar loses a third of its value? Huh? Am I? Or are we sure that the Saudis are such a bunch of dimwits that they will not ever comprehend that they are exchanging their finite supplies of oil for a perpetually diminishing purchasing power of dollars? Huh? These guys are really that stupid? Really? Are you sure?

- I laughed out loud when I heard that Merrill Lynch raised GM to some category that indicates you should buy its shares. Huh? Is this the same car company that just had to borrow $17 billion freaking dollars to keep its pension fund from imploding because the car production side of the company didn't make enough money to pay the light bill? And now, somehow, Merrill thinks that this behemoth, staggering towards insolvency, is a buy? Wow! Am I out of the loop or what, eh?

- When I see the government and the Fed and all the other central banks of the world and all their government doing the incredible things that they are doing, I am reminded of the TV show "Cops," and not just because the theme song is so catchy and I end up singing "Bad boys, bad boys, whatcha gonna do? Whatcha gonna do when they come for you? Bad boys, bad boys..." Now, on TV I see real-life Bad Boys careening their getaway cars up one street and down the other, running through stop signs and going the wrong way down one-way streets and causing other people to crash their cars trying to get out of the way, and me screaming at the TV screen "Turn left, dudes! Left! Now step on it! Look out! They're right behind you!" but they never listen to me and they always end up crashing and trying to escape on foot and then have to suffer the indignity of being tackled by swarms of uniformed law-enforcement types in some muddy field or some garbage-strewn alleyway.

Robert H. Miller, economist and appointee of Ronald Reagan, once wrote, in his treatise "Supply-Side Economics: A Critique" that "The rejection of gold - the money of the unhampered market - comes mostly from those holding the market system itself in contempt; to them monetary intervention is a necessary tool for rechanneling market resources to achieve socio-economic arrangements more to their own liking."

Well, to be fair, most all persons love to rechannel things more to their own liking. I know that I certainly do. For instance, around here drinking too much coffee, smoking cigarettes and eating fatty foods, especially fatty foods that are shaped like chocolate donuts, are deemed to be good for you, which I certify every time I think my wife is far enough away that I can get away with it.

And it is the same with criminals. When a common thief bonks you on the head and steals your wallet, he then has purchasing power and you don't, and the new socio-economic arrangement is much more to his liking.

When the government is rechanneling things, they don't bonk you on the head per se, and they don't actually take your wallet, again per se, but they destroy the money that is IN the wallet, so in the end the result is exactly the same; you ain't got any purchasing power. But since you didn't get actually bonked on the head, you don't realize that you are being mugged. But you are.

I say this as my pathetic way of introducing something that Hans Sennholz said, namely "Social and economic decline is facilitated by moral decay. Surely the Great Depression would be inconceivable without the growth of covetousness and envy of great personal wealth and income, the mounting desire for public assistance and favors."

To this end we notice the unending screeching of the Left for "soaking the rich" so as to pay for the perpetual enlargement of the welfare state, in which incomes are wealth are redistributed, or "rechanneled" to continue that motif, to the insatiably greedy and envious morons that constitute the overwhelming bulk of the voting population, all of whom want to "achieve socio-economic arrangements more to their own liking."

So what to do? Well, Judd W. Patton, a professor of economics, wrote and interesting little essay entitled "Morality and Economics" that addresses that very thing. He asks, "What if the country is in recession? Should the United States monetary authority, the Federal Reserve, stimulate the economy by lowering interest rates through expanding the quantity of money?" Well, Henry Hazlitt, a guy that needs no introduction, says, and I quote, "Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water."

But getting back to Professor Patton, he decries an easy money policy as theft. "Nevertheless, the artificial expansion of monetary savings will move interest rates lower than they otherwise would have been. A key economic signal is distorted. The inevitable result must be malinvestment." Later on he characterizes monetary debasement as the equivalent to legalized counterfeiting.

Theft. Watering down milk. Counterfeiting. And, likewise, I see the monetary and fiscal Bad Boys, namely central banks and governments, are being pursued by the immutable laws of economics and common sense, running down the citizens, crashing into our cars, running through stop signs, tires screeching, interest rates shooting up and down, shots being fired, currencies blasted, bond prices murdered, people who save their money being decimated, and the whole thing. And as such, I'll bet they are getting plenty worried about their own future, as in "Bad boys, bad boys. Whatcha gonna do when they come for you?"

- The Treasury refunding went pretty good, as whole boatloads of debt was sold to somebody. And who is that somebody? I'd like to see the list of ostensibly private-sector people who are buying such humongous amounts of debt at the same time as all of this monetary and fiscal mischief if going on, and at the same time as they are promising to get more and more of it for the next, oh, I dunno, decade or so. Such a list would make interesting reading, as such profound stupidity would make the Guinness Book of World Records. My wife would also like to see it, as she is getting really tired of being the current record-holder, as she was awarded that honor for making the horrible mistake of marrying a jerk like me, when even complete strangers in faraway places could see what a huge mistake that would be.

- Last Friday the WSJ quoted a guy named John Quail, a senior strategist at Mizuho Securities, who said what may be one of those good news/bad news jokes, and for some reason this really cracks me up for its brevity and wit, "Those who have lost jobs are finding it difficult to find new jobs, but less people are being fired." This was part of a literary thread that introduced the fact that unemployment and interest rates will rise from here. Mr. Quail them goes on to note that the opinions of economists, without naming names, are "mixed" about whether rising interest rates will be, and here I am quoting directly, "good for the economy."

And then I feel compelled to rush to the emergency room, rushing around loudly proclaiming "I am having a stroke here, so let's get moving! Man in need of immediately medical attention here! Chop chop, people!" Because even though I have been studying this economics thing a long time, well, truthfully spending most of my time coloring in the charts and graphs with my crayons, working as I do on the osmosis theory in which I figure that if I merely hold the book in my hand that some of it will migrate into my brain, but anyway absorbing SOMETHING, for so long that I am absolutely, positively, posolutely SURE that rising interest rates are NOT good for an economy. I say this because I can almost see in my little pea-brain some of those graphs from Economics 101 that have "interest rates" on one axis or another. And it seems to me, but obviously I am not sure so don't quote me here, but it seems to me that rising interest rates were always, as in the literal definition of "always," a bad thing, because in every freaking example, every freaking time, on every freaking page, in every freaking book, in real life and in all of history back to, and I don't mean to keep dumping on the Neanderthals like this all the time, but all the way back to the freaking Neanderthals when they were selling debt and issuing equity to finance mastodon hunts and hiring construction crews to excavate caves in solid rock to freaking live in, that rising interest rates are NOT a good thing.

But because I am obviously a semi-literate mutant of some kind, although probably carbon-based like everyone else, it is not surprising that I cannot remember reading things like, "Heroic central bankers raise interest rates to stimulate the economy!" Or see old newsreels that showed happy workers going off to work, all wearing snazzy hats and toting lunchpails, as the voice-over exclaims in a voice so cheery and optimistic, "Happy days are right around the corner! In a sweeping move that will have widespread beneficial implications, Federal Reserve has responded to exhortations from Professional Economists and engineered a broad and long-term program of raising interest rates to put handsome and brave Americans back to work!"

And thus I will lump Professional Economists in the same lump as Professional Piano Players, as epitomized by Glenn Gould, who was the world's premier piano player at one time. And just because he was such a mucho-talented piano player, everybody listened to what Glenn Gould has to say about music, as if being able to play the piano, like an over-trained monkey, gave him some insight into all things musical. It did not, as was proved when he turned right around and dismissed Mozart with "Mozart! Bah! Nothing but 1-4-5!" This was in reference to the chord structure that was, as is, so pleasant to the human ear that it is the basis of 95% of all the music ever written, and is 99.9% of every tune that has ever graced the Top Ten of Popular Music, and if you want to hear exactly what 1-4-5 chord structure is, all you have to do is listen to the immortal rock hit, "Louie, Louie." Yet, Glenn Gould found it, and Mozart, to be worthy of only contempt, since it did not give him the chance to exercise his fabulous talent to try and make music out of the tuneless, form-less, melody-less, structure-less, worthless crapola that has come to characterize almost every bit of classical music written since 1791, the musical equivalent of making a silk purse out of a pig's ear.

And thus it is with economics. Mozart's music is perfection in every respect, and know-nothing dilettante hackers banging out the notes will not improve on it, but will only diminish it. Likewise, Austrian economics is a perfection in itself, and has no room for dilettantes who want to exercise their huge brains to noodle around with interest rates and fiscal policy, and thus has nothing for Fed chairmen and Congressional dimwits to play with, and in every case cannot improve on it, but only make it worse.

I mean, if rising interest rates were NOT a bad thing, what in the hell stopped anybody from doing it before? People who loan their money are NOT thinking about raising the rates they charge? Huh? Now you see why official transcripts all say that I screamed out, "Doctor! Doctor! Yo! I'm having a stroke over here, or I have some kind of Alzheimer's, or something, and I need some full-time medical treatment that involves the rapt attention of every medical professional in the damn place, and maybe something to calm my nerves because I am freaking out here! Look at me, for God's sake! I'm hystericaaaaaaaaaaall!"

- Doug Noland, that brilliant dude who makes his living unearthing economic factoids that turn the blood of thinking humans into stone, has looked at the numbers and concluded, and I quote, "Money supply has now doubled since May 1995." Just like that. In a little over eight years the money supply has, let me check that quote again, doubled. So how does that Rule of 72 go? Of yeah, divide 8 into 72 to see what that figures out to as some annual percentage. Ok, grabbing the calculator and the instruction book we look up "How to divide one number by another" and, over the next half hour or so we manage to successfully divide 72 by 8 and get, let me check that number again, ummm, 9%. So the money supply, by the Rule of 72, has been increasing at 9% per year. Not content with that, we seek a second opinion, and use 2 as our future value, 1 as the present value, the period equal to 8, and solving for the exact compounding interest rate, it is also about 9%, maybe a little more.

Or, in a different way, we nervously note that the class is almost over, and so I cleverly sum up by picking up a piece of chalk and writing numbers at random all over the blackboard, at the same time as I say, in a ridiculous clipped Austrian accent as my pathetic way of showing solidarity with Arnold Schwartzenegger, an Austrian who is running for the governor of California, "Zee money supply ist compounding at der 9%, und der GDP ist expanding by less dann 2%, ja? Und zo der prices, vitch vee will call 'Der price X at time T sub-N,' MUSSEN be rising at, over der geshlugginer long term, der price inflation at 7%, nicht wahr?"

Students later recalled that my face suddenly went ashen at the prospect of a few years of 7% price inflation. As they left the room, it seemed as if I had slipped into a catatonic state, and I stood there transfixed by the horror of what I had just written.

The night janitor would later make the statement that he repeatedly saw me bent over my desk as he went about his janitorial duties in the otherwise-deserted building, working with a calculator through the night, the desk and the floor covered with a layer of coffee cups and cigarette butts and reams of discarded scraps of paper with scribbled numbers all over them, looking more and more haggard and depressed, endlessly calculating and re-calculating the price of Oreo cookies at the end of each period of retirement at a constant 7% inflation. To see me moaning and groaning at the results would have broken your heart.

So, since incomes are not sufficient to live on anymore, and destined to get worse, I can only say "Pilgrim, prepare thyself." Brace yourself for calls for a higher minimum wage, "living wages," more protectionist legislation, more tax rebates, more taxes and fees, more deficits, etc. It is that "etc." that is so scary, as it is an umbrella term for any and every way that the government can intervene in the workings of the economy. I shall assume that you are aware of the results of a government intervening in an economy, and I will wait for your hands to stop shaking in fear. Feeling better now? Okay, let's continue. Actually, that's the GOOD news. The bad news is that, after all these decades of the government getting bigger and bigger, the government IS the economy.

Doug also said "counties, cities, towns and villages across the country will continue to have little choice but to borrow to meet essential project needs, even if they do cut back on other spending. " To be sure, long-term municipal issuance is, and I quote "on target for yet another record-breaking year." The record of $357.1 billion was set just last year. About three thousand dollars in new debt, increasing the debt burden for every private-sector worker in the country by over $3,000 each.

- The Specialists on the NYSE suddenly went bearish in a big way, for some reason, and the Members were right behind them. As for something in the technical vein, the breadth of the NYSE has deteriorated markedly.

And the chart of the dollar looks like unwholesome things are a-happening there, too. And the bond market handed some nice losses all around. And commodities are still acting frisky, which is not a good thing. And putting them all together, perhaps one can not do better than Eric Fry of the Daily Reckoning website when he said, "After all, soaring bond yields and soaring commodity prices are not known to be the stock market's best friends."

- In Zimbabwe, their currency, the Zimbabwe dollar, fell to 6,000 to the US dollar. Back a few years ago, it was trading almost to a par with the US dollar.

I know that you think I am going to work myself into a fit of hysterical outrage about the situation in Zimbabwe, but I am not. It's been going on for years already, and we have the pretty exact same thing happening right here in the USA, so what's new, eh? Rather, what I am going to do is to use it as an object lesson in the power of gold. When the Z$ was selling at par with the US$, gold was, let's say, three hundred bucks an ounce, give or take. Suppose you, being the genius Zimbabwean dude or dudette that you are, correctly foresaw the coming collapse of the Z$, and you cleverly converted all your Zimbabwe money into ounces of gold. You paid Z$300 per ounce. Of course, by being a "gold bug" you had to endure the taunts and ridicule of your neighbors and family members.

Fast forward to today, and what is that ounce of gold worth? The answer is Z$1,800,000 per ounce. Now, to the ordinary man on the street, an investment that turns 300 currency units into 1,800,000 currency units is a home run! A hands-down winner of any investing competition you can name! Compounding that over twenty freaking years, it comes out to an annual return of 54.5%! Even compounding that over forty years, forty freaking years, it STILL comes out to 24.3% per year! Jeez, Louise! What more can you ASK from a damn investment?

But, as you are aware, it is just another example of money illusion. A loaf of bread that used to cost one Z$ now costs, one must assume, somewhere around Z$6,000, and that is why most Zimbabweans are starving and grumpy. So in terms of sheer wealth, you, as a clear-thinking Zimbabwean of genius and foresight, are not really any richer when wealth is computed in loaves of bread. But gold sure as hell kept you from being poorer! Unlike the persons who trusted the fiat currency known as the Zimbabwean dollar, who ARE poorer, and are now desperate and literally starving and on the verge of revolution. How special.

Now, you spend your days thinking about how you suffered when everyone made fun of you as a "gold bug," and now you now get to ridicule them for being "fiat currency bugs," and you are dissatisfied how that just doesn't seem to have the requisite biting acid sound that you were looking for, and it sounds kinda stupid, too. Where is the justice, eh? Damn.

Leaving Zimbabwe, which is probably good advice, we traverse the cold Atlantic Ocean back to the good old USA, and we turn our attention to the US dollar, and see how THAT currency unit is faring. It's going down. And now we note how the price of gold is faring against the dollar. It's going up.

- Doug Noland also encapsulates the mindless irresponsibility of government and the GSE's when he asks, "So what about Fannie's Allowance for Losses? Over (three years), the company has gone from $1 of loss reserve for every $1,541 of business exposure to $1 for every $2,537 of exposure."

Well, since he has taken care of looking at the GSE's, let's you can me take a little look at the reserves in the banks versus THEIR exposure. In 1997, required reserves were about $47 billion against, oh, let's say their "book of business" being assets, of which totaled $2.9 trillion. Last week required reserves were $44.3 billion, while assets were $4.4 trillion. So reserves of ALL kinds have been driven into the dust, and by similar percentages, so as to free up money to be "put to work," I suppose.

- "Despair of the Jobless," an article by Bob Herbert of the NY Times, contains the unnerving statistic that "When you combine the unemployed and the underemployed, you are talking about a percentage of the work force that is in double digits." The damn government unemployment static actually went down last month, as the government weenies explained that if a person is so discouraged about getting a job that they have just given up even looking, then that person is not included in ranks of the unemployed! So therefore unemployment went down! And this is supposed to be good news?

- Just to make sure that you get the inflationary hint, Sprint is replacing its 1.41% "carrier property tax fee" which they used to levy on each long-distance phone call, with a nice, round 99-cent fee to anybody who dares to make a long-distance telephone call. If you make less than $70 worth of long-distance call you will pay more per month. Not to be outdone, MCI is going to increase the fee they charge to merely put your MCI long distance charge on your local phone bill by 18%, up to $2.99 per month.

One of the clever and immortal bits of financial advice is, "Take care of the nickels and dimes, and the dollars will take care of themselves." It looks like Sprint and MCI have taken that to mean, "Get their nickels and dimes, and then we will get their dollars, too."

The only good news is that the government weenies will massage that inflation out of their statistics so as to not scare the kids. Of course you and I will notice it every freaking month when we write that check for telephone service.

- Nelson Hultberg, one of those clear-thinking fellas that is trying to lead us out of the fetid theoretical swamp in which we, and the world, is currently mired, wrote a nice article entitled "Contrarians and the Keynesian myth." Not merely screaming pointless obscenities at the top of his lungs, which is my particular choice of literary style, he goes to the extreme lengths of actually compiling data to make his point. He writes, "As recorded in 'The Statistical History of the United States,' real wages for the workingman tripled in the years 1850-1913, and the GDP increased over 500% averaging 4.3% annual growth from 1870-1913. This was all done without any inflationary infusions of fiat money from the Fed because there was no Fed. This highly productive era, based upon the 'barbarous relic' of gold, was accompanied by an actual deflation of prices. From 1800 to 1913, there was an overall 30% reduction in the Consumer Price Index from 43 to 30."

The reason that he stopped recording advances in 1913 is because that is the year, and you read it here first, that a virus from Mars destroyed the intellectual abilities of the human mind, and thus it was possible to inaugurate the Federal Reserve System. Up until then, everybody noticed that having the government in charge of the banks always ended up with everybody and everything in ruins. Since then, thanks to the Fed, things immediately started going downhill, and we are now getting to the end of the line. But note that real wages, the kind that are adjusted for inflation, tripled before the Fed had a chance to ruin us all. And since 1913, we have been caught in a gradual reversal of those gains, until nowadays we have the government actually sending checks to people because their wages are not increasing fast enough to keep up with prices!

- Gordon Rollins, an engineer who has delved deeply into the arcana of economics in a quest for Nirvana but has ended up, according to his self report, "glum," has decided to award the Rollins Prize in Economics. According to his e-mail, he writes that, "I have the great honor of granting the 2003 Rollins Prize in Economics to Mogambo." Unfortunately, there is no certificate, no parade, no cash prize, and, in short, no nothing other than the honor of the thing. But Mr. Rollins himself ought to get a prize for humanitarian reasons, as the only reason that he inaugurated this prestigious award in the first place was because he felt sorry for me, and had finally reached that point where he did not want to listen to any more of my incessant whining about not getting a Nobel Prize in Economics just because I was incompetent and unworthy. But now I can say that I won the very first Rollins Prize in Economics! Thanks, dude!

- An article in the Financial Times by Jennifer Hughes was entitled "Weaker Pound Drives Wholesale Inflation Up." Sterling, which is what the British call their currency even though it has no connection to silver at all, as far as I can tell, lost 7% of its value in one year. Big deal. Seven percent. Whoopee. The dollar has lost more than that, and once again we see that good old American know-how leaves the Brits in the dust.

But higher prices for imports is one of the results of a weaker currency, and that locked-in inflationary bias is seldom good news for consumers. In the same vein, I hear that wheat futures here in America have hit an 11-year high. I imagine that there is still some wheat in bread, but with all the advances in chemistry and industrial processes these days, who the hell knows for sure? I am sure, however, that if there IS some wheat in bread, and wheat costs more, then bread will soon cost more, too. Likewise, wait until you get a load of what a devalued currency will do to oil imports. If you like a devalued currency because you think American exporters are going to get a trade advantage, then you are gonna LOVE this.

- Jim Tesluk, my main man in Hong Kong, sent a copy of the poster for that old Clark Gable movie "Mogambo." The poster shows him snuggling up to Ava Gardner like the suave devil he is, and he has already gotten her loose-fitting top off of one of her shoulders, and she looks like she is digging it, hubba hubba. Now, Clark Gable and I obviously have a lot in common, as we both have pencil-thin mustaches, and just by looking at me you can easily tell that we are both real handsome and virile leading-man type dudes, but I don't ever remember scoring with chicks that look like Ava Gardner, and I seem to recall that whenever I managed to get a female shoulder exposed the world immediately erupted into lots of angry screaming and slapping and kicking and scratching at my face and I seem to remember that the delicate smell of Mace wafted, unbidden, through the still night air.

The disturbing part about the poster is the little blurbs, and there are two. One is "The battle of the sexes" and the other is "The battle of the gorillas." I think I now know where I made my mistake. Ugh.

---Mogambo Sez: The Chinese have placed an order for a billion chip-implanted ID cards for the citizens. This is truly the beginning of the ascendancy of the Chinese economy, as all they needed was a way to get credit extended to enable the gigantic pent-up demand. And now they have it. Americans, ask not for whom the bell tolls, for it tolls for thee.

The Mogambo Guru Lives!

Richard Daughty is general partner and C.O.O. for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise the better to heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning, and other fine publications.


TOPICS: Business/Economy
KEYWORDS: bonds; boom; bubble; bust; crash; credit; currency; debt; deflation; depression; dollar; economy; fed; fraud; gold; inflation; investing; jobs; mogamboguru; money; recession; silver; stockmarket
Well, first off these two guys figure that the recent rise in equity prices is only temporary, and that a recession is very probable, and they used the word "probable," and it will be caused by asset and debt deflation and a crash in real estate prices. Yow! Talk about gloomy guys, huh? They figure that equity prices will fall by a third in the next two years.

I laughed out loud when I heard that Merrill Lynch raised GM to some category that indicates you should buy its shares. Huh? Is this the same car company that just had to borrow $17 billion freaking dollars to keep its pension fund from imploding because the car production side of the company didn't make enough money to pay the light bill? And now, somehow, Merrill thinks that this behemoth, staggering towards insolvency, is a buy? Wow! Am I out of the loop or what, eh?

I shall assume that you are aware of the results of a government intervening in an economy, and I will wait for your hands to stop shaking in fear. Feeling better now? Okay, let's continue. Actually, that's the GOOD news. The bad news is that, after all these decades of the government getting bigger and bigger, the government IS the economy.

The government is the economy. That's a dead end street if I ever saw one.

Richard W.

1 posted on 08/13/2003 6:35:10 PM PDT by arete
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To: Tauzero; Matchett-PI; Ken H; rohry; headsonpikes; RCW2001; blam; hannosh4LtGovernor; ...
FYI

Comments and opinions welcome.

Richard W.

2 posted on 08/13/2003 6:36:08 PM PDT by arete (Greenspan is a ruling class elitist and closet socialist who is destroying the economy)
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To: arete
Hmmm...it was more like a stream-of-conciousness, drug induced rambling at 2:30 AM. No clarity of thought.
I just couldn't stay with it - not smokin' dope myself.
Mebbe I can come back to it when I have more time and a buzz on.

I got the impression that the sky is falling...was this written by Chicken Little?

3 posted on 08/13/2003 6:47:55 PM PDT by Rhetorical pi2
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To: arete
"The government is the economy. That's a dead end street if I ever saw one."

Isn't that sort of like blindfolding 1000 people and asking them to run a marathon? The government is clueless. For all the proof we need, just look at Big Al's performance.
4 posted on 08/13/2003 6:48:34 PM PDT by Beck_isright (Shenandoah and Blue Ridge will re-emerge as the investment of the 21st Century....)
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To: Rhetorical pi2
The Mogambo Guru isn't for everyone.

Richard W.

5 posted on 08/13/2003 6:59:11 PM PDT by arete (Greenspan is a ruling class elitist and closet socialist who is destroying the economy)
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To: Beck_isright
The government is clueless.

Holy crap, can you imagine the problems we'd have if they ever got their act together and really concentrated their efforts on debasing the currency and destroying the middle class.

Richard W.

6 posted on 08/13/2003 7:04:18 PM PDT by arete (Greenspan is a ruling class elitist and closet socialist who is destroying the economy)
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To: arete
"Holy crap, can you imagine the problems we'd have if they ever got their act together and really concentrated their efforts on debasing the currency and destroying the middle class."

You mean the middle class still exists? Where? Are they part of a carnival freak show? I want photographic proof....
7 posted on 08/13/2003 7:33:10 PM PDT by Beck_isright (Shenandoah and Blue Ridge will re-emerge as the investment of the 21st Century....)
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To: arete
Doug Noland, that brilliant dude who makes his living unearthing economic factoids that turn the blood of thinking humans into stone, has looked at the numbers and concluded, and I quote, "Money supply has now doubled since May 1995."

Is this true? If so, then what of his followup points that with money supply increasing at 9% a year and GDP growth of 2% a year that gives us a 7% inflation rate. That's way higher than the reported number, what gives?
8 posted on 08/13/2003 7:33:51 PM PDT by lelio
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To: lelio
That's way higher than the reported number, what gives?

What gives is that the government cooks the books. The Guru has explained some of the adjustments and modifications that are used not only on CPI but also income. For example, it you buy a loaf of bread and it costs you 12 cents more this year, the government may say the it actually decreased in price because it is now fortified with more vitamins and minerals and not only that, buy since you are "saving" money on the purchase of the loaf of bread, they add that saving on to your income. Can you believe all that crap? They do it and they put those fraudulent reports out there for the public. Government numbers are a hoax.

Richard W.

9 posted on 08/13/2003 7:49:40 PM PDT by arete (Greenspan is a ruling class elitist and closet socialist who is destroying the economy)
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To: lelio
Have you considered that Greenspan and the Fed provides the data? And congressional aides (can you say "aides plague?) also chime in, too.

Some choir, eh?
10 posted on 08/13/2003 8:04:42 PM PDT by GladesGuru (In a society predicated upon liberty, it is essential to examine principles - -)
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To: Rhetorical pi2
No I think it was written by the little piggy that built his house of brick or gold.

Be forewarned......the fat lady is about to sing in Mandarin.

11 posted on 08/13/2003 8:34:26 PM PDT by free from tyranny
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