27-8-09 Semana única en emisión de dólares ???

Será éste el acontecimiento que anunciábamos para la semana con epicentro en el 25 de agosto ???
Evidentemente el dólar no puede aguantar mucho más sin hiper-devaluarse.
Y una hiper-devaluación del dólar generaría un caos mundial de consecuencias imprevisibles.

Spewing out money

By The Mogambo Guru

I had thoughtfully turned off all the audible alarms to the circuits monitoring the nefarious activities of the US Federal Reserve, but you could tell by the way the indicator lights were furiously flashing and the recording pens were scratching maniacally across the seismograph paper that something important was up.

Sure enough, my paranoid suspicions were right! Federal Reserve credit, which is the stuff that the Fed creates out of thin air that becomes Whole Freaking Multiples (WFM) of that amount in actual money when somebody borrows this new "larval money" from a bank, jumped a whopping US$45 billion last week!

$45 billion! In one week! One! Week!

As if my heart was not already pounding in my chest and my breath coming in ragged gasps was not enough of a blow to my
system, I foolishly divided this $45 billion increase in Fed credit by the fractional-reserve ratio (the part of any new deposit that a bank must keep on hand as reserves, while remaining free to loan the rest of the new deposit), which is currently less than 1%. This means that the Fed has, with this one act, enabled the possible creation of (at the current fractional-reserve ratio) another $4.5 trillion! In one week! In case you weren’t paying attention earlier, I repeat that this is in One Freaking Week (OFW)!

"This is more than a third of gross domestic product (GDP) in One Freaking Week (OFW)", which deserves at least two exclamation points, which I now supply thusly: "This is more than a third of GDP in OFW!!"

Naturally, JMRs around the world realize that the secret punctuation code is calling attention to the huge increase in Federal Reserve credit, which will (so the Fed hopes) become a vastly increased money supply when people borrow the new "money" and get it into circulation, which means that inflation in consumer prices will increase horrifically as this new money is used to bid for a static-in-the-short-run supply of goods and services, which means that the number of people that will suffer a falling standard of living will increase dramatically because they don’t have more money with which to pay higher prices, and then these poor people come over to my house and ask me to loan them some money, like I am going to loan money to someone so stupid that they do not buy gold, silver and oil when I tell them to buy them, which is "all the time" for more than a decade, because 1997 is when Alan Greenspan, then chairman of the disastrous Federal Reserve, started really, really, really creating Fed credit in the books of the banks, which in turn created Whole Freaking Multiples (WFM) of money when this credit was loaned with a marginal fractional-reserve ratio of literally zero so that it could finance the biggest explosion of borrowing and pandemic economic stupidity in history to inflate huge, bankrupting bubbles in stocks, bubbles in bonds, bubbles in houses, bubbles in consumer spending, bubbles in derivatives and bubbles in size of government, with astonishing, towering, crushing debt, debt, debt everywhere you look!

And a person does not have to be a paranoid, gold bug, gun nut, conspiracy freak (like me) to see treachery in everything and rogue government agents everywhere spying on me, shooting dangerous mind-control rays into my brain while they root around in my computer and steal all my best porn.

In short, we are freaking doomed because the short version of the economic history of the world is that the economy collapses and gold soars in value when a government is so stupid, so brain-dead, so abysmally ignorant, and so monumentally corrupt as to allow a creation of excess money and credit, like Congress allowed the Federal Reserve to do, which paid for all the bubbles that are now popping and handing out losses and misery by the bucketful.

But, notice, not a gold bubble! There WILL be a gold bubble, to be sure, but the top of the bubble in gold is a lot higher than this, and so high, in fact, that the upper limit is "infinity dollars per ounce", which is not out of the question now that the US government is spending, and the Federal Reserve is creating, so much money that the dollar could fall to zero value.

And anything less than "infinity dollars per ounce" for gold, when I can now buy the stuff at less than $1,000 an ounce .

Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter – an avocational exercise to heap disrespect on those who desperately deserve it.

(Republished with permission from The Daily Reckoning. Copyright 2009,



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