Idaho's Weekly Journal of Local & National Commentary Week 2815


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by Free Market Duck

Central bankers redefine "hyper-inflation" as "liquidity"...
Inject over $326,000,000,000 into global markets to stave off stock market crash & recession 
(Aug 11, 2007)

New York, NY Well, yippee ky yeaaa, cowgirls.  Pour yourself another hot cup of Rocket Java and listen up as we review today's Econo-babble RE yesterday's stock market crash and intervention by the U.S. Federal Reserve and other international central bankers.

   We now live in a brave new world in which concepts and language have been morphed into contradictory nonsensical New Speak.  A car is now a choo-choo train or a glass of wine (your choice), war is peace, up is down, down is sideways and effect is cause.

   In the Econo-Babble of New Speak, money, which used to be defined as a measurable unit of a specific commodity, is now defined as "thin air."  A paper receipt for money, which used to be defined as a Promissory Note, an IOU, or a Redeemable Certificate for the commodity money, is now defined as non-redeemable  "paper" backed by nothing.  And now, hyper-inflation of Paper backed by Thin Air is defined as "liquidity."

   The definition of a "liquid asset" -- and thus "liquidity" -- used to mean: a commodity that can be exchanged very quickly, such as gold or silver or gold or silver certificates (true cash) as opposed to trying to sell a corporation or commercial building or cattle or hogs.  But the creation of billions of units of irredeemable paper money out of thin air and not backed by anything (hyper-inflation of money) is NOT the definition of "liquidity."  And hyper-inflation is not a rise in prices.  Hyper-inflation is an increase in the money supply, which is the cause of a general rise in prices.

   Wow, isn't this convenient?  In the twisted new definitions of New Speak Econo-Babble, the Fairytale Princes of the Federal Reserve's continual hyper-inflation of the U.S. money supply (CAUSE) to provide banks and Wall Street manipulators with billions of dollars of fake money so they can create a sub-prime housing bubble, yen carry trade (also known as international prime rate arbitrage), non-collateralized phony hedge funds, phony derivatives backed by phonier hedge funds, and Vapor Money backed by Virtual Smoke n' Mirrors (now it's here, now it's gone, where oh where has the money gone?), has now produced (EFFECT) the inevitable stock market crash and slide into a global recession.

   The problem is not the lack of "liquidity," i.e. the lack of hyper-inflated, non-backed paper money.  The problem is exactly the opposite:  too much Funny Money or "liquidity."  In fact, the global economy is swimming in trillions and trillions of non-backed paper dollars and other hyper-inflated paper currencies, which the New Speak Econo-Babblers (previously defined as idiots or crooks) misinterpret or misrepresent as "wealth" or a "strong economy."

   Nothing could be further from the truth.  Hyper-inflating the money supply, which causes price inflation, does not create a "strong economy."  By injecting an extra $326 billion "liquidity" into the already hyper-inflated global economy, $62 billion extra into the U.S. economy by the Federal Reserve, the New Speak Econo-Babblers have simply thrown more fuel onto the out-of-control wildfire. 

   The Federal Reserve did not create a "liquid asset" in the true sense of the word yesterday when it temporarily bailed out the stock market crash with $62 billion.  They simply tricked the public while creating more hyper-inflated dollars, which is the same as a de facto devaluation of the unit dollar.  This hurts the poor as prices rise and devalues the savings and fixed income of senior citizens.  The Fed did not save the U.S. market; they actually ensured a worse crash in the future.

   The real problem is that those who should know better, the editors at the WSJ who think it is the Fed's function to "manage" a free market (an obvious oxymoron), the Wall Street pundits and stock brokers who stated that the Fed was doing its job by injecting billions of new "liquidity" into the market are all living in an Economic Disneyland that will soon implode worse than Enron on Anabolic Steroids.

   Meanwhile, virtually nobody talks about President Bush and his central bankers' Plunge Protection Team as they continually and illegally intervene into both the Comdex and Forex markets in order to "game" the system and pretend to "solve" the problems they initially "created" through continual manipulation of our New Speak monetary unit: the Virtual Dollar.

   The solution to yesterday's global stock market crash is not more of the same hyper-inflated "liquidity" but rather a return to a sound and stable monetary standard, a gold standard. -- FM Duck

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