MOGAMBO GURU: Looks Like The Beginning Of The End

[Tace]

Richard Daughty, the angriest guy in economics

--Not much happened last week that you could put a finger on, as then perhaps you could understand why I am in such a foul mood. I dunno why. I just am. And then I remember that I am The Mogambo, bearing the crushing weight of the world on my brawny Mogambo shoulders (BMS). There is no other way to feel.

Debt problems worsened, of course, but only to the usual degree of the average monthly increases in that particular bad news category (BNC), such as outstanding consumer credit increasing $5.5 billion in March, which means that the consumer's debt load is rising at an annual rate of somewhere between 3% to 4.5% or so, and is already at $2.12 trillion, which is a tidy $15,193 per every freaking worker in this whole freaking country (140 million of them) who has a damn job. And the interest rate is rising on that debt, or is getting ready to rise, because interest rates are rising. And if lenders DON'T start raising their interest rates on credit balances, then their own bottom line (which is where profits would be found, if any) will suffer, and then somebody's cushy executive job will be on the line, since they did not produce results that "benefit the shareholders", and then they get laid off, and then after awhile they start coming around here and wanting me to pay them back the money I borrowed from them five years ago. And then that bums me out. And then THEY get bummed out when I laugh in their faces at the very thought of me even having any money, and if I DID have any money I certainly wouldn't give it to him, as I had him in my crosshairs from the moment he turned the corner.

Maybe it was that foreign custody holdings at the Fed increased by $8.1 billion last week, which is, again, towards the top of its range, and is worrying to me, mostly because I am the worrying type. And I worry because I believe that the Austrian Business Cycle Theory school of economics is correct, and Mises and Rothbard were very explicit about what happens when a government has acted as irresponsible as ours, and especially when you have a central bank that has actually eclipsed Congress in pushing the envelope of the bizarre, hewing, as they are, to some lunatic economic theory that can be conveniently modeled on computers, which means that things are permanently linked, and which is why their dumb-ass theory starts out with the proposition that lowering interest rates always causes an increase in economic activity which is, on its face, such a stupid statement that you marvel that educated adults would say something so damned insane, especially when Japan is the living proof that it is NOT true, because they are limping along at interest rates that are almost literally zero, and have been for almost fifteen freaking years in a row (how do you say "Nice job of investing there, morons!" in Japanese? Answer: Mogambo him say Hahahahaha!"), and it is only an export surplus that is keeping them alive. For fifteen years bond holders make nothing, and shareholders make ditto.

That things are heading for doom was even at the meeting of the Berkshire Hathaway people in Omaha, which produced this memorable quote from Buffett's sidekick, Munger, who said "The present era has no comparable referent in the past history of capitalism. We have a higher percentage of the intelligentsia engaged in buying and selling pieces of paper and promoting trading activity than in any past era. A lot of what I see now reminds me of Sodom and Gomorrah. You get activity feeding on itself, envy and imitation. It has happened in the past that there came bad consequences."

So there are lots of people who are cognizant of the facts. Big deal. But now, the moment you have been waiting for! Now comes the reward for those who have not already stopped reading and said hurtful things like "This is really stupid! What kind of idiot reads this Mogambo crap?" which, although it is true, hurts my feelings nonetheless.

(more)

http://worldnewstrust.org/modules/AMS/article.php?storyid=691

[screembloodymurder]

1. Funniest column in economics

and he could be right.