He should have left it to the ship-breakers. We almost feel sorry for him; Sisyphus had it easier. But Sisyphus was doing honest work. Besides, when Geithner’s tour of duty is finished, the public will pay for his jackass bamboozles for decades, while he moves on to a cushy job at Goldman Sachs…or maybe AIG itself, if it is still in business.

Of course, we are out of harmony with mainstream opinion; but we are always out of harmony. When the USS Bubble was steaming along we fretted and warned: it was too heavily laden with debt; it was off course; the captain and his mates were all morons. Then, when it washed up, we switched to a more cheerful song, with the sound of blowtorches cutting her up…and the furnaces melting her down…as background music. Finally, capitalism was doing its job and happily whistling our tune.

But now that we are jolly, the rest of the world is full of doom and gloom. Thomas L. Friedman, writing in the New York Times, tells us that we have a “once in a century financial crisis on our hands…” We can’t let capitalism do her work, he says; we have to get this wreck out of the mud and back on the cruise circuit!

So far, America’s efforts to borrow its way out of debt have not gone well. The scum gets dredged up from the bottom on Wall Street. But when it is dumped onto the ship, the whole thing just sinks lower. Henry Paulson began the digging with his TARP program in September of last year. Then came TALF. Not to mention various trillion-dollar salvage operations from the Fed. How much do all these rescue efforts cost? The last number we saw – in Barron’s – was $14 trillion.

Last week, Mr. Ben Bernanke announced to the whole world that he was doing the sort of thing that people used to be ashamed of. Instead of dredging out the mud, he was going to blow hot air into the rusty hull. And on Wednesday, he began following in the footsteps of pioneers at the Bank of England, the Bank of Japan, and most importantly, the Bank of Zimbabwe. Buying U.S. Treasury debt directly, he will add trillions to the U.S. money supply. Last year, before Lehman Brothers dove in the water and never came up; the entire monetary base of the United States of America measured $850 billion. With so much gas being pumped, it will soon rise to 5 times that amount – or more than $4 trillion.

Daily Reckoning readers may be having as hard a time keeping up with the bailouts as we are. Here, we attempt a simplification:

America still sinks under the weight of more than twice as much debt as usual. The collateral behind that debt has lost about 20% of its value – or about $10 trillion. Normally, those losses should be born by the capitalists – the reckless lenders and investors who extended loans to people who couldn’t pay them back. But all of the bailouts have one thing in common: they aim to shift the losses from the people who deserve them to the people who don’t…from the culpable to the gullible. Which is why they are so popular. After such a remarkable excursion, many are those who deserve to lose money – from those who bought doublewide trailers they couldn’t afford…to those who lent them the money…to those who securitized the debt and passed it out all over town. That’s why the biggest problem confronting the salvage workers has been to find some other group of innocents dumb enough and rich enough to pay the bills.

Mr. Bernanke’s focused on shifting the burden onto dollar holders worldwide – notably the Chinese – by inflating the currency. But the Bank of China is also America’s biggest creditor and has threatened to get upset if the dollar loses too much value. Besides, inflation is no sure thing. As James Ferguson points out, Japan has been trying to incite inflation for many years – with no success.

Until now, Geithner and his boss targeted the taxpayers. Private losses became public losses…as toxic assets were bought up, or backed up, by the government. But when the public got a look at what the bailouts actually paid for – million dollar bonuses, for example – it was outraged. The mob called for Geithner’s head; the stingers themselves got stung.

This latest plan has a fairer sound to it, but it is a bigger fraud. “The solution depends on getting private money funds to team up with the government to buy up toxic assets” wrote Mr. Friedman, anticipating the Geithner plan by only a few hours and the truth by an eternity. “The president’s comprehensive plan to remove the toxic assets from our ailing banks…is the key to our economic recovery…” he continued.

Geithner has invited investors up to the trough. His plan leaves the government with 90% of the risk; investors will quickly figure out how to get 100% of the profits. The latest estimate tells us that all this salvage work will add $9.5 trillion to the U.S. national debt over the next 10 years. At the current rate, it would still take 20 years to pay it off, even if every dime of savings of every American were applied to the task. Necessarily, the debt sludge will be dumped on the next generation – who don’t vote…and won’t notice the smell for years.

Source: Born Biddable

For one, in the photo he is looking directly into the camera, point-blank, which I know that he did on purpose so that I would see it and I could – using my Extraordinary Mogambo Powers (EMP) – look deep into his eyes and thus know exactly what he is thinking.

I can tell that he is thinking, “I know you are out there, Mogambo! I know that you know, and now you know that I know that you know, that I am a weird little guy who has no idea what in the hell economics has to do with anything, and that I am, provably, a total failure if someone takes the time to get up off his or her fat, stupid, trusting butt and walk over to the window and look out at the world that I helped fashion when I was Governor of the Fed bank of New York.”

I gotta give him credit, as he knows my opinion of him to a freaking T! When you consider how the Federal Reserve, which is responsible for the creation of all the money and credit that provided the financing for Huge Freaking Bubbles (HFB) in the stock market, the bond market, the housing market, and in the size of government, it is obvious that the Federal Reserve is a total failure, the Congress ought to disband them and get the United States back to a gold-as-money financial system, presumably with zero leverage, and put all of the Fed Governors and their henchmen, past and present, on trial in a Mogambo Kangaroo Court Of Vengeance (MKCOV) for a quickie “guilty” verdict and appropriate sentencing.

Instead, the Congress confirmed this guy as the next Secretary of the Treasury!

If that is not scary enough, the photograph of Mr. Geithner is worrisome in others ways, such as the way he was handling his microphone, sending the clear message “You see this microphone, Mogambo? Well, if you keep telling people about me, my corruption, my ignorance, and my total failure as a Governor of the Federal Reserve so that the USA and the purchasing power of the dollar are both destroyed, then one of these days a goon squad dressed in black is going to show up at your house and beat you with clubs that are a lot bigger than this stupid little microphone! Hahaha! And anyway, even if what you say is true, you are still a terrible father and husband, and everybody hates you!”

Stung at the cruel, although accurate, comment, my eyes filled with bitter tears and I looked away from the photo, and I am sorry that I did, because my eyes fell upon the terrifying headline that accompanied the photo: “Geithner Vows Credit Action On ‘Dramatic Scale”! Yikes!

In the article, he says that he is going to destroy the credibility of the USA, the purchasing power of the dollar and the economy itself by creating so much, much, much more money and credit so that it will “get risk premia down, interest rates down and get that basic mechanism of credit market going again”!!

Junior Mogambo Rangers (JMRs) around the world (one in America and one in Canada, as far as I can tell) are alerted to my ending that sentence with two exclamation points, indicating special emphasis, which, in this case, is obviously shorthand for, “This guy is a freaking idiot if he thinks that creating money and credit on a ‘dramatic scale’ will solve the problems caused by the creation of money and credit on a lesser-although-still-dramatic scale without producing catastrophic inflation! It’s freaking insane, I tells ya, and it’s enough to cause insanity in anyone hearing it, too, as is proved by my inserting Rude Editorial Comments (REC) in the middle of a freaking explanation of a couple of damned exclamation points!”

I keep looking at the prospects of a trillion dollars of new debt coming our way, and compare that to the measly 100 million non-government jobs in the country, and I wonder how any of these morons can think that anything good can come of the government spending $10,000 for each of them?

And if the Treasury sells $2 trillion in new debt, then that is an astounding $20,000 in federal government deficit spending for everybody who has a non-government job! In one year!

And if, after all of this monetary and fiscal insanity you are not buying gold, silver and oil (and indeed all commodities), then you are made of sterner stuff than I!

And a lot less paralyzed with fear, for which I envy you!

Source: Money Creation, Tim Geithner and the Thin Air in Between