The Great Depression Online




Great Depression Online Archive Issue:

Stimulus is for the Birds

Great Depression Online
Long Beach, CA
November 11, 2008

Inside This Issue You Will Discover…

*** The Answer
*** Answers Abound
*** Stimulus is for the Birds
*** And More

The Answer

What’s the answer to not having enough money?

Why it’s more money of course.

But just what is money these days anyhow?  We know it’s the cash in your wallet…for the moment, that is money.  So is the cash in your bank account. 

But what about credit…or debt…is that money?  If you consider money to be something you use to buy stuff with, then credit’s money too.

For overtime, the idea of what money is has changed.  Rather than cash in hand, it is now cash flow.  Rather than available savings, it is now available credit.  Rather than pay as you go, it is buy now pay later.  And rather than wealth accumulation, it is ability to service debt.

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Still, not all money is created equal.  As it’s levered up and loaned out, it gets diluted down from a Guinness Irish Stout to a watery O’Doul’s near beer.  And after a 30 year credit expansion, central banker’s now substitute “liquidity” for money.

But it doesn’t smell right, if you bother to sniff.  Rather, it smells like rotting mackerel aboard the deck of a charter fishing boat taxiing through the Long Beach Harbor.

So, as we said before, the answer to not having enough money…is more money.  But what’s now being pushed across the land as the answer is in the form of the latest lexicon for money to be driveled out…stimulus.

Answers Abound

Answers were in abundance over the weekend.  In fact, they were so plentiful we forgot what the questions were.

First, on Friday evening, we learned of President-elect Obama’s No. 1 Priority.  AP Writers Nedra Pickler and Terence Hunt explain…

“The No. 1 priority, Obama said, is to get Congress to approve an economic stimulus plan that would extend jobless benefits, send food aid to the poor, dispatch Medicaid funds to states and spend tens of billions of dollars on public works projects.  If the plan is not approved this month, in a special session of Congress, Obama said that ‘it will be the first thing I get done as president of the United States.”’

Next, on Sunday, we learned that China’s getting hooked on stimulants too.  This time Li Yanping and Chia-Peck Wong, for Bloomberg, report…

China announced a 4 trillion yuan ($586 billion) stimulus plan to spur expansion in the world’s fourth-largest economy, helping sustain global growth as the U.S., Europe and Japan teeter on the brink of recession.

“The funds, equivalent to almost a fifth of China’s $3.3 trillion gross domestic product last year, will be used by the end of 2010, the Beijing-based State Council said.”

And lastly, in what must be the most grandiose and moronic answer to come thus far, we stumbled across this headline in the International Herald Tribune…

“G-20 Leaders Work Toward Global Stimulus Package”

If you’re not familiar with G-20, don’t worry, it’s not some new Google gadget.  More precisely, it’s the Group of 20 finance ministers and other economic officials that are meeting across the planet to come up with the ultimate answer for dislodging the bristly chicken bone that’s stuck in the financial craw of the global economy.

Over the weekend, they met in Sao Paulo, Brazil.  And tomorrow, they’ll be in D.C.  Their answer: you guessed it…stimulus.

Stimulus is for the Birds

To an economy, stimulus doled out by the government is a fraud.

Sure the money that showed up in your stimulus check seemed real enough.  You could deposit it…cash it…use it to buy pizza and toothpaste, or what ever else.  But why stop at just $600 per check?  Why not do the job right and mail out $1-million dollar stimulus checks to every living man, woman, and child?

Then we would all be rich.  For we would all be millionaires.

You know this idea is absurd.  And that the money in circulation would rapidly lose value.  Yet, for several millennia, governments and rulers have attempted to defraud their people by creating an abundance of money.  Eventually, the people catch on…and the more suspicious of the money they become the less value it maintains.  But today, after thousands of years of practice, governments have learned that if they drip the stimulus out, ever so subtly, it can maintain a facade of being money.

To say something’s ‘for the birds’ has been repeated so many times for so many years, hardly a soul alive knows what its meaning originates from.  We’ll clarify.  Back in the horse and buggy days, horses would leave excrement along city streets.  These dung droppings were commonly referred as road apples…and were ‘for the birds’.

Sigmund Freud once said, “We know that the gold the devil gives his paramours turns into excrement after his departure.”

Likewise, stimulus is for the birds.

Sincerely,

M.N. Gordon
Great Depression Online

P.S.  In this anemic market, three investment strategies are still going strong.  Here’ the surest way to profit from all three.  Read on and see how thousands of investors are making impressive capital gains while pocketing double-digit yields during one of Wall Street’s most difficult times: 3-Best Ways to Profit with ETFs.

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