Mark McHugh

Archive for August, 2012|Monthly archive page

Gold Is A Barbeque Relish

In Open Thread on Friday, August 31, 2012 at 10:15 am

My Doctor’s an idiot.  A few years ago, he started expressing concerns about my weight, pointing at this chart supposedly showing how much a man of my height should weigh.  One glance at his stupid chart and it was clear to me that he had completely misdiagnosed my condition.   There was nothing wrong with my weight, I just wasn’t tall enough.  Clearly I needed to grow my way out of this. So I went home and googled “how to stimulate growth.”  Once I got past the all the baldness cures and penis pumps (it’s not my bag, baby), I found hundreds of papers so incredibly boring I knew they had to be true.  In no time, I was able to design and implement my own stimulus plan based on the irrefutable scientificky principles of Nobel prize winners and other people so smart they never had to do an honest day’s work in their lives.  Despite the difficulty climbing stairs, I was feeling pretty good about things until my last check-up….

“Hi, Doc.”

“Hi,” he said, examining my file.  He looked up, “You’ve put on twenty pounds since the last time I saw you”

“Thanks for noticing,” I beamed.

He frowned.  “I remember now.  You’re the guy on the diet designed to make you grow.  What’s that called again?”

“The Keynesian Plan.”

“Is that the one where you eat bacon and cheese, but not vegetables?”

“No,” I replied, “But I have incorporated some elements of that plan” (I don’t like vegetables).

“And how’s this whole Keynesian thing working out?” he asked.

“I’ll admit I’m a little disappointed.  I’ve only grown and inch and a half so far, but..”

“No you haven’t,” he interrupted, pointing, “You’ve just got those stupid elevator wedges in your shoes to make you look taller.”

“They’re to get me acclimated to being taller.”

“Which you’re not,” he declared.  “I told you, you’re fully grown.  The only thing you’ve succeeded in doing is collapsing you arches and giving yourself  Type 2 Diabetes.”

“We Keynesians call things like that “unintended consequences” (I used finger-quotes to let him know it was a technical term).  And trust me, Doc, I’m no happier about them than you.  Can I see that height-weight chart of yours again?”

He handed me the chart. After a moment, I sighed, “Looks like I’ll have to do more QE.”


“Quantitative eating.  It’s how you stimulate growth, Doc.  It’s technical.”

“Oh,” he said.  “Because it sounds an awful lot like what we in the medical profession call “stuffing your fat face”  (giving me finger-quotes, but in a condescending, not-at-all-helpful kind of way).”

I tried to stay calm and empathize.  “Doc, it’s not your fault you haven’t been educated about Keynesian principles.  They only teach it at top-notch schools like M.I.T. and Harvard.  I don’t know about you, Doc, but I feel better knowing that no matter what happens on election day, the White House will be occupied by someone who attended Harvard.”

“As did the Unabomber,” he added.

“Still better than the bumblefuck medical school you went to!”  I snapped.

“Johns Hopkins?” he queried, thrusting his eyebrows up.

“John Hopkins.” I corrected (Friggin’ Idiot!)

“Tell me, how are you paying for all this stimulus?”

“Food Stamps…and my ex-wife’s credit card.”  (I just knew he wasn’t going to understand this part…)

He looked at me with a curious mixture of confusion and utter disgust.  “What….Does she even know?”

“I’m no Dr. Bernanke, but I know one of the most important aspects of Keynesian stimulus is sticking someone else with the bill. It works out better for everyone if the victim, er , stimulus provider is unaware.  She’ll be OK.  I’m going to make it all up to her.”

“Really?  How?”  

“Look at your damn chart, Doc!”  I bellowed.  “I’m going to be taller than Shaq when all this stimulus kicks in!  Can you say NBA contract?

“No,” he said, unimpressed, “just over-sized casket.”

(I could tell he was about to launch into another one of his “austerity” sermons.  You know, “Consume less, do more, stop spending other people’s money, blah-blah-blah.”  Pinhead.  Obviously Dr. Quackenstein was beyond all hope.)

“No offense Doc, but I need help from people with a better understanding of these things.  Any chance you can refer me to the Mayo clinic?”

“Is that where they treat illness with mayonnaise?”

“Yes,” I said.

“No,” he said, and walked out.

As I sat down to rest in the lobby on the way back to my car, I remembered that the key ingredient to the Keynesian system is confidence and realized that what I was feeling, beside the tingling sensation in my left arm, was nothing more than the sting of rejection felt by true visionaries like Jon Corzine and the Octomom.

So if anyone asks, I’m at the grocery store.

Shhhh…It’s Even Worse Than The Great Depression

In Open Thread on Sunday, August 19, 2012 at 12:25 pm

According to Wikipedia, Narcissistic personality disorder (NPD) affects one percent of the population and has little to do with looking at yourself in the mirror.  It has a lot to do with unrealistic fantasies of success, power and intelligence.   Some NPD sufferers become cult leaders or mass murderers, the rest become  economists and policy-makers.   Despite having a highly elevated sense of self-worth,  narcissists have fragile self-esteem and  handle criticism unpredictably, so let’s keep this to ourselves….

 Velocity of money is the  frequency with which a unit of money is spent on new goods and services.   It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling).  In a healthy economy, the same dollar is collected as payment and subsequently spent many times over.  In a depression, the velocity of money goes catatonic.  Velocity of money is calculated by simply dividing GDP by a given money supply.  This VoM chart using monetary base  should end any discussion of what “this” is and whether or not anybody should be using the word “recovery” with a straight face:

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.  Hard to believe, but the guy who made a career out of Monday-morning quarterbacking the Great Depression has already proven himself a bigger idiot than all of his predecessors (and in less than half the time!!).  During the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive  (here’s a graph) .  They waited until the forest was ablaze before breaking out the hoses, and for that they’ve been rightly criticized.  Our “proactive”  Fed elected to hose down a forest that wasn’t actually on fire, with gasoline, and the results speak for themselves.  With the IMF recently  lowering its 2012 US GDP growth forecast to 2%, while  the monetary base is expanding at about a 5% clip, know that velocity of money is grinding lower every time you breathe.

The Fed’s refusal to recognize the importance of velocity of money quickly goes from idiotic to insidious.  Here’s a question:  If I give you 50¢ and as a result of that transaction, you owe me $1.00, what interest rate have I charged you?  Obviously, I’ve charged you 100% interest and I don’t give a rat’s ass about you or your kids.  I’m pure evil and you’re pure stupid.  But believe it or not, this kind of master-slave  arrangement isn’t enough to satisfy a true narcissist.   The narcissist needs to be exalted for his actions, no matter how unjust. 

He likes to be thought of as “accommodative.”

In 2011, every dollar of GDP growth created $2.08 in debt.  In real life, that’s 108% interest plus the nominal rate, and our twisted leaders want  you say, “Thank you sir, may I have another!”

2011 wasn’t an anomaly either; it’s the new normal.  Since the Bush deficit increases (to call a spade a spade) went into effect,  the rise in debt has exceeded the rise in GDP 6 of the last 10 years (the four years of positive GDP-minus-Debt can be directly attributed to the housing bubble).  That never happened in the U.S. during Great Depression/WWII era.  One place where it did happen was in the Weimar Republic (which shortly thereafter became known as Nazi Germany) .  No one’s ever done a better job of explaining how quickly things unraveled there than Art Cashin (this is an absolute MUST read):

In 1920, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion. By mid month it was $100 billion. Then it all collapsed.

 ….In 1913, the total currency of Germany was a grand total of 6 billion marks. In November of 1923 that loaf of bread we just talked about cost 428 billion marks.

So I’ve got a whole bag of “Fuck You!” for anyone who still thinks nothing could be worse than another Great Depression.  The path we’re on ends with mountains of corpses when the great experiment fails. 

America’s most prestigious education institutions have become grooming salons for malignant narcissists.  Men and women high on their own self-important sense of entitlement, but short on any sense of honor or duty (like passing a budget or arresting someone who stole a billion dollars) and devoid of any real insight or achievement.  So far it’s working out quite nicely for them:

Fun fact:  Washington DC now boasts, by far, the highest and fastest growing income per capita in America.

No matter what color Kool-aid you prefer, a Harvard Law School graduate who wipes his ass with the constitution will occupy the White House  until 2016.   Any flavor difference you think you detect is artificial.  Neither party has any intention of balancing the budget or stopping the generational rape of America.  They exist only to give you the illusion of choice.

There’s another reason nobody wants you thinking about velocity of money and triple-digit principle-based interest rates.  When you get comfortable with the idea that the same dollar gets spent over and over in the economy,  you’ll begin to reconcile that notion with the fact that total government spending (Federal, State and Local) accounted for over 40% of GDP  in 2011.  Then it becomes clear that you are already living in on of those countries where the government controls everything (call it whatever -ism you want).   Next thing you know,  you’ll start connecting the dots between the nation’s skyrocketing public debt and the private fortunes amassed by a select few, and no one who’s in on the fix wants that.

Better than one in seven Americans are now on food stamps thanks to Washington’s disastrous policies, but narcissists refuse to recognize the consequences of their own actions.  That’s how they sleep at night.  They see themselves as saviours, feeding the inferior huddled masses too stupid to fend for themselves, so of course they deserve more money.  The only thing they learn from shitty results is that they need more power, more control and more money.  

The so-called “fiscal cliff” represents nothing more than a return to policies proven far less dysfunctional than the current ones, but Washington doesn’t see it that way. Instead they want you to beg them to save you from this horrific monster and adore them when they double down on policies that serve to increase your dependency on them.

By any and all reasonable measures, it’s worse than the Great Depression, and still deteriorating.  Just remember that truth is the narcissist natural enemy before you speak.


 Notes for nerds:

 The Fed calculates and publishes M1 velocity, M2 velocity (currently at all-time lows) and MZM velocity (also at all-time lows), however velocity of monetary base (which has data back to 1918) must be calculated manually by dividing GDP by monetary base.   Here’s the link to that chart with downloadable data:

William T. Gavins Fed paper on understanding recent changes to the monetary base:

This chart, with downloadable data compares changes in National Debt vs.  Changes in GDP, so it shows how much bang for the buck you’re getting.  2002-2011, 9.3 Trillion in National Debt has produced 4.8 Trillion in GDP growth, making the effective interest rate (based on repaying principal only) 94%.

If you’re not familiar with malignant narcissism (I wasn’t until very recently): 

Art Cashin’s terrific piece on the Weimar collapse:

Foodstamp data:

2011 Total Government spending:

Yard Sale!!!

In Open Thread on Tuesday, August 7, 2012 at 1:44 am

File this under “unintended consequences.”

Producing anything that anyone might ever call “art” wasn’t on my bucket list.  When I started writing, images just started popping into my head.  This was the first:

I still think it sums up our nation’s folly better than any words I’ll ever write.  Since then, a lot of other strange pictures have fallen out of my head, and someday I’ll round them up and display them all together.  But this is not that day.

I quickly realized that making gag images was far more fun for me than fact-finding and writing.  Long story short: I’ve got some images to get rid of. 

I was saving this for QE3, but I’ve grown impatient.


I’m a huge Gary Larson fan.  When Draghi replaced Trichet, I looked him up and found he was an M.I.T. PhD,  just like Bernanke.  Then the vice president of the ECB (Lucas Papademos) appointed himself king of Greece.  Another MIT PhD!!!  Either nobody else noticed, or nobody else cared that the engineers of the Great Greek Tragedy were MIT fucktards (as is Paul Krugman).   M.I.T. has developed weapons-grade stupidity and the fallout is everywhere!!!  Israel’s Benjamin Netanyahu, Christina Romer, Larry Summers, John Thain, Carly Fiorina, just about everybody connected to LTCM.  Wherever there’s a financial trainwreck, I guarantee you there’s an M.I.T. douchenozzle nearby.  Of course M.I.T. is located in Cambridge, Mass., which is also home to Harvard.  Harvard, in case you didn’t know, is where the rest of the numbskulls the world would be better off without learned to cheat, lie and steal, including BOTH presidential candidates. 

Anyway, I was planning a piece called, “Where Do These Idiots Come From?”, but it was just too big a list for me to do justice to.  All you other bloggers out there, please, feel free.

My Super-Mario

….And sometimes all you’ve gotta do is crop it.  Since we don’t have Sarkozy to kick around any more, I decided to cut out Angela, and wait….

Never worked this one into a post.  Still can’t believe he said that out loud.  I should probably be a whole lot rougher on Geithner, but I can’t because he’s Barney-fuckin’-Fife to me.  Who could persecute Barney?

This is “super” Grover Nordquist, king of the pseudo-conservatives.   I pledge to never vote for one!

Fellow bloggers:  Please take ’em and use ’em.  And that goes for all of my original content.