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Up and Down

October 1, 2013

So stocks were down rather significantly yesterday over concerns that our government might shut down. Now that it has actually shut down, stocks are up!!! What’s with that? Think about how crazy our financial markets are these days. The rumor that something bad may happen soon causes markets to slide, but when it becomes reality, it results in the markets going up modestly. This is just plain silly.

I’m willing to bet that one thing that does not shut down is the Fed’s money printing machine. How could we ever default on debt when you can just print money into oblivion? If we think this money printing scheme works so well, why not give a money printing machine to every man, woman and child in America? Wouldn’t that be euphoric? All those things I want but can’t afford? No problem; just warm up the printer!! Boy will my wife be surprised tonight when I pull up in a new Ferrari and tell her to jump in because we have an appointment to pick out the Italian marble for our new 10,000 square-feet summer cottage fronting Lake Tahoe, before we go look at our new jet!

“But Dear,” she’d say, smelling my breath for alcohol, “how can we afford all this?”

“No problem,” I’d respond. “I ordered my official money printer today. The Federal Reserve has decided they need help stimulating our economy to ‘stabilize.’ You should order yours also! I was thinking about getting us one of those around-the-world cruises, but instead I decided to buy the entire cruise line. I mean, really, why share the ship with others? What a country we live in! Isn’t this great?!?!?!

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One Comment
  1. Wayne permalink
    October 1, 2013 1:39 pm

    Hi Jon,

    I know you were being facetious about ordering an “official money printing machine”, but to some extent the nation has done just that with the availability of credit cards and unsecured credit in general. The average person is walking around with a printing press in their wallet. They have available, at their whim, thousands of dollars in fiat currency that has never been printed.

    Unsecured credit allows anyone holding a credit card to effectively create money out of thin air….No printing press needed. Merely run your credit card through the credit card reader and voila instant money. Currently unsecured credit card debt in the US stands at approximately $846 billion, if this is added to the unsecured student loan debt of over $1 trillion, and the trillions of debt monetization generated by the FED, it starts to add up. My point is that you are right on target, we are a nation of debt, debt and more debt.

    We have allowed responsible and irresponsible individuals to operate in a credit economy under the same rules. You probably are saying what do you mean the same rules? What I mean is that if you are responsible, you borrow money and pay it back. If you are irresponsible you borrow money and don’t pay it back. However, the irresponsible borrower is allowed forgiveness on his/her debt. All they are required to do is say a few mea culpas, attend a “Be a Good Borrower Class” and they are granted additional credit after a short repentance.

    So in effect we have numerous ‘official money printers” stealthy disguised as credit cards and other forms of unsecured debt just waiting to consume more and more debt on mostly valueless depreciable items that quickly bore us.

    Glad to see you back on the blog!

    Be Well,

    Wayne

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