Government and Economy Decline In Tandem

Government and Economy Decline In Tandem

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I did not hear it, but I read that Ben Bernanke, chairman of the satanic Federal Reserve, admitted that “Our nation’s fiscal position has deteriorated appreciably since the onset of the financial crisis and the recession.”

Well, neither he nor the Federal Reserve are going to take any of the blame, even though they are solely responsible, and he says that the problem is the government’s fiscal position, as “The exceptional increase in the deficit has in large part reflected the effects of the weak economy on tax revenues and spending, along with the necessary policy actions taken to ease the recession and steady financial markets.”

No mention, of course, of the crucial role of the Federal Reserve, which was to create the money to create the boom, which created the bust, and now to create the money to bail everybody out so that we, as a nation, would have time to leisurely wait for some miracle to happen, sort of like at the end of old Grecian dramas where the plot has become so impossibly and hopelessly tangled up that the only solution was to resort to a “deus ex machina,” which is when a supernatural power comes roaring in and magically fixes everything, applause, applause, applause, curtain comes down, the actors take a bow and everybody goes home happy.

As if waiting for a deus ex machina was not enough, Bernanke then contradicts himself. In the first paragraph when he said that the fiscal position of the nation has “appreciably deteriorated,” which is code for “We’re Freaking Doomed In Spades (WFDIS)” because the American system of governments IS the economy!

In fact, the incestuous conglomeration of local, county, state and federal government is now so large that it, literally, is the economy when you combine local government spending and county government spending and state government spending and federal government spending, which collectively now spends slightly more than half of GDP! Half! And taxpayers pay them to employ 1-out-of-6 workers! And government supports half of the population consisting of the old, young, infirm and needy or greedy in some way or another.

Therefore, I postulate that since government, and those who depend on government spending, is the majority of the population, if the government is not doing well, then the economy is not doing well.

This is like when you were a kid and you learned that when mom isn’t happy, then nobody is going to be happy, or, if you are an adult, when the boss isn’t happy, then nobody is going to be happy, which happened to me just last week when my boss was waiting for me, in my office, when I dragged myself back from lunch two hours late, stinking of beer and pizza, mostly because I had dribbled a lot of each down the front of my shirt and pants.

For some strange reason, probably indicating drunkenness and/or mental illness, I decided, on the spot, that a good offense was preferable to a good defense. So I said to her, “What in the hell are YOU looking at?”

Well, it made her unhappy, and she subsequently made me unhappy. And while I am always ready to use things like this to prove, as if any more proof is needed, that people are naturally hateful to me and they are all out to get me, in this case I will merely use the point to prove that when the government is not happy, the economy is not happy, although this is immediately contradicted by that moron Ben Bernanke, of the Federal Reserve, who says that the economy is recovering! Hahaha!

In fact, he said that not only is the economy recovering, but it will continue to recover! Just listen to this: He actually said, “As the economy and financial markets continue to recover, and as the actions taken to provide economic stimulus and promote financial stability are phased out, the budget deficit should narrow over the next few years”! Hahahaha!

This makes me laugh out loud – hahahaha! – at the humorous, “Theater of the Absurd” quality of saying such a thing, sort of like Pollyanna on steroids and antidepressants! Hahaha!

Then he goes on “Even after economic and financial conditions have returned to normal,” which is a point in his remarks where I just couldn’t take any more of that crap, and my mind leapt to add “In your freaking dreams, Bernanke! Show me one time in all of history where some dirtbag government and its half-witted populace bankrupted themselves with printing, and then borrowing and spending, too much fiat money, for too long, and how printing, and then borrowing, more fiat money fixed everything! Just one! Hahahaha!”

Naturally, he does not acknowledge my rude interruption, and goes on, as if I was not even there, ignoring my rude taunting, by saying that it is still the government’s fault for borrowing and spending all the money that the Federal Reserve created, and that “in the absence of further policy actions, the federal budget appears to be on an unsustainable path. A variety of projections that extrapolate current policies and make plausible assumptions about the future evolution of the economy show a structural budget gap that is both large relative to the size of the economy and increasing over time.”

And what he will do is print the money the government needs, which will cause terrifying, bankrupting inflation in consumer prices, which should lead me to say that buying gold, silver and oil are the only things that will let you keep up, and probably make you a fortune in the process.

And sure enough, it did lead me there! Whee! This investing stuff is easy!

The Mogambo Guru
For Money Morning Australia

 

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64 Comments on "Government and Economy Decline In Tandem"

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Drew
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Drew
6 years 5 months ago

Great article – very funny!

peter fraser
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6 years 5 months ago

“Real estate, though, unless it’s a world-class cluster-storm like the U.S. subprime crisis, rarely blows up. It unwinds over many years. Buyers are generally not forced to sell and the market can remain illiquid for many years until a market clearing price emerges. In real terms, house prices stagnate.”

Thanks Dan – nice quote.

cb
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cb
6 years 5 months ago

PF – Who said that? Who are you quoting? Danning? Would you have the link?

cb
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cb
6 years 5 months ago

The Race to Debase – or is it a coincidence? With evidence like this, would the likes of Joye and Robertson game to go short gold?
http://goldsilver.com/newsletters/newsID/8580/ref/1

peter fraser
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6 years 5 months ago
hi cb – remember I did say the Denning Rory Robertson debate would be conducted at a sound academic level (or words to that effect) Link here – http://www.dailyreckoning.com.au/the-platypus-exception/2010/07/07/ The other quote I enjoyed was “We’ll leave it others to decide who won last night’s debate. To be fair to Rory, most of the time, anyone making the orthodox, steady-as-she-goes, keep doing what you’re doing argument is right. Most of the time, the extremists are wrong.” Of course Dan said more than that, but nice to see a sensible debate rather than an emotion charged blue. I have to commend… Read more »
bb
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bb
6 years 5 months ago
But there is the disclaimer “unless its a world class cluster storm like the US”. Might we add Spain, Japan, UK to the list? Many suggest that residential property prices in Australia’s capital cities would not only fit the bill neatly they are likely to head the list of indicators of a cluster storm crash rather than a gentle plateau of prices. Stable and ongoing working incomes are the fundamental key and the building construction/materials industry is the biggest local economic driver. As the BER stuff eventually winds down watch unemployment go large and that is the cluster event trigger.… Read more »
peter fraser
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6 years 5 months ago

bb – he didn’t add Spain, the UK, Japan or any other nation – why don’t you throw in Mars and Venus if your going to add thinsg that don’t exist to Dans words.
Why does it offend you that he is not expecting a crash but a slow unwind instead? How does that change the end result?

cb
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cb
6 years 5 months ago
bb = maybe so, but isn’t the point exactly that, that it is not different here, that given the spare capacity of our public balance sheet, and the eagerness with which the robber barrons stand ready to load it up like they have done in the US and Europe, we might be still a long way off before our economy will run out of puff, and when it does, it will not be stimulated again, if that will also serve the inclinations and interests of those in charge? The logic of an argument that it is not different here, in… Read more »
bb
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bb
6 years 5 months ago
PF. Put your glass down and your glasses on. I said ‘we’ not ‘he’. It’s my view. I wasn’t quoting him. Merely suggesting that there is commonality in a house price crash that has occured in other western economies – not just the United States. cb. He went on to conclude that Australia may be unique and used a very good example (platypus) and a very bad one (meat pies). Our egg laying monotreme is most unique. Meat pies – not quite so. I just have an opinion that I don’t think our perceived ‘uniqueness’ will generate an economic shield… Read more »
Drew
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Drew
6 years 5 months ago
The Wolf, peter fraser, cb, A few threads ago, it was suggested that low unemployment in Australia is a key factor in supporting house prices. The Wolf said: “the more telling reason why property in the US is in the toilet is because the unemployment rate is (reported) around 10%”. But I wonder if high unemployment is the RESULT of falling house prices rather than the CAUSE. Because with falling house prices: 1) People feel poorer and therefore spend less. 2) They focus on paying back their mortgage to retain positive equity and so have less to spend on other… Read more »
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