Monday, May 10, 2010

Fifi Fiat, A Monetary Allegory - Part I

Some weeks ago Mr. and Mrs. Fiat's young daughter Fifi fell ill.  She sneezed and she caughed and she ran a slight temperature, but her parents were not overly concerned.  After all, it was normal for children her age to catch colds and other mild viruses at school.  It will go away soon on its own, they reasonably reasoned.

But Fifi kept getting worse and her parents soon started worrying.

Let's pause for a minute to examine Fifi's world.  Some seventy years ago a new religion became all the rage throughout the nations and everyone converted to a new god they called FIAT.  According to the high priests, it was His wish that everyone should adopt the last name Fiat and their children be given four-letter first names constructed of just two letters, "f" and "i".  This simplistic approach to the needs of individuals quickly lead to names like Iffi, Ifif, Fiif and, of course, Fifi, thus making it difficult to distiguish between persons and leading to all sorts of practical difficulties.  But no matter, religions are, by definition, at least partly irrational and FIATism was no exception.

One of the basic tenets of the new religion was More Is Better, which sharply distinguished it from the previous official religion which preached that Better Is Best.  No wonder, then, that FIAT quickly became such a popular god.  Why toil and scrape to make a Better Whatever, when one could simply have More?, ran the argument.  This philosophy permeated every aspect of life - medicine included, unfortunately for poor Fifi as we shall soon see.

For as Fifi's illness steadily grew worse her parents simply kept plying her with more aspirin, more cold compresses and, of course, more of her usual diet of ready-made fatty foods and sugary drinks.  The family doctor recommended a specialist who, having been properly consulted and pocketed his More Hefty fee, nodded his head sagely and prescribed..  More Of More!

But it didn't work.  Mr. and Mrs. Fiat were soon scared for Fifi's life and, since medical science did not work, they turned to religion.  Candles, incense, genuflections and alms were all generously offered at the altar of FIAT. And then, of course, More candles, More incense, More genuflections and More alms...

But nothing worked.  Fifi just got worse.  More worse, as Mrs. Fiat wryly remarked late one night, when desperation got the best of her.

One evening Mr. Fiat got a phone call from a stranger.  "I hear your child is sick and nothing you have tried is working", said the stranger.  "I can help, but you must be willing to listen with an open mind."  Fifi's father had nothing to lose so he let the man go on.

To be continued..




8 comments:

abless said...

Hey maybe more "faith" in each other will do it. Why should we not trust the Fed and the large banks and the paid-off politicians. Oh yea, evidence of reality. Maybe more Kool Aid acid mix will work.

OkieLawyer said...

Off topic:

Since we sometimes discuss alternative energy, I am curious to what you think of this:

Blue Energy solar-wind

marcus said...

Thanks for that Okie, looks great. So much prettier than the alternatives.

With a little bit of German ingenuity we might get through this crisis.

Thai said...

Agree it is a cool link Okie

How about if we build a Space Based Solar systems?

So Hell, here is my question:

If the ECB is doing what Krugman suggests in announcement #2, does this mean there will be a property bubble in Germany?

I thought I read Germany had been relatively immune to the global real estate bubble.

Are there German Real Estate ETFs?

Or does one need to buy German banks and suppliers to the German construction industry?

Hellasious said...

I think the asset bubble model is finished, world-wide.

Thai said...

A la this

Thai said...

Trust me, there are a lot of us who would love to get off it.

So much wasted energy trying to protect one's backside from people we have every reason to fear.

Thai said...

Okie, I think you might find this interesting