The Philosophy of Ambiguity

FOR THOSE WHO LOVE THE PHILOSOPHY OF AMBIGUITY, AS WELL AS THE IDIOSYNCRASIES OF ENGLISH

1. DON'T SWEAT THE PETTY THINGS AND DON'T PET THE SWEATY THINGS

2. ONE TEQUILA, TWO TEQUILA, THREE TEQUILA, FLOOR

3. ATHEISM IS A NON-PROPHET ORGANIZATION

4. IF MAN EVOLVED FROM MONKEYS AND APES, WHY DO WE STILL HAVE MONKEYS AND APES?

5. CAN AN ATHEIST GET INSURANCE AGAINST ACTS OF GOD ?

6. I WENT TO A BOOKSTORE AND ASKED THE SALESWOMAN, "WHERE'S THE SELF- HELP SECTION?" SHE SAID IF SHE TOLD ME, IT WOULD DEFEAT THE PURPOSE.

7. WHAT IF THERE WERE NO HYPOTHETICAL QUESTIONS?

8. IF A DEAF CHILD SIGNS SWEAR WORDS, DOES HIS MOTHER WASH HIS HANDS WITH SOAP?

9. IF YOU SPIN AN ORIENTAL PERSON IN A CIRCLE THREE TIMES, DO THEY BECOME DISORIENTED?

10. IS THERE ANOTHER WORD FOR SYNONYM?

11. WHERE DO FOREST RANGERS GO TO "GET AWAY FROM IT ALL?"

12. WHAT DO YOU DO WHEN YOU SEE AN ENDANGERED ANIMAL EATING AN ENDANGERED PLANT?

13. IF A PARSLEY FARMER IS SUED, CAN THEY GARNISH HIS WAGES?

14. WOULD A FLY WITHOUT WINGS BE CALLED A WALK?

15. WHY DO THEY LOCK GAS STATION BATHROOMS? ARE THEY AFRAID SOMEONE WILL CLEAN THEM?

16. IF A TURTLE DOESN'T HAVE A SHELL, IS HE HOMELESS OR NAKED?

17. CAN VEGETARIANS EAT ANIMAL CRACKERS?

18. IF THE POLICE ARREST A MIME, DO THEY TELL HIM HE HAS THE RIGHT TO REMAIN SILENT?

19. WHY DO THEY PUT BRAILLE ON THE DRIVE-THROUGH BANK MACHINES?

20. HOW DO THEY GET DEER TO CROSS THE ROAD ONLY AT THOSE YELLOW ROAD SIGNS?

21. WHAT WAS THE BEST THING BEFORE SLICED BREAD?

22. ONE NICE THING ABOUT EGOTISTS: THEY DON'T TALK ABOUT OTHER PEOPLE.

23. DOES THE LITTLE MERMAID WEAR AN ALGEBRA?

24. WHY DO DOCTORS CALL WHAT THEY DO FOR A LIVING, THEIR PRACTICE?

25. HOW IS IT POSSIBLE TO HAVE A CIVIL WAR?

26. IF ONE SYNCHRONIZED SWIMMER DROWNS, DO THE REST DROWN TOO?

27. IF YOU ATE BOTH PASTA AND ANTIPASTO, WOULD YOU STILL BE HUNGRY?

28. IF YOU TRY TO FAIL, AND SUCCEED, WHICH HAVE YOU DONE?

29. WHOSE CRUEL IDEA WAS IT FOR THE WORD 'LISP' TO HAVE 'S' IN IT?

30. WHY ARE HEMORRHOIDS CALLED "HEMORRHOIDS" INSTEAD OF "ASSTEROIDS"?

31. WHY IS IT CALLED TOURIST SEASON IF WE CAN'T SHOOT AT THEM?

32. WHY IS THERE AN EXPIRATION DATE ON SOUR CREAM?

33. IF YOU SAY TO ME "LET ME BE HONEST WITH YOU", DOES THAT MEAN THAT YOU'RE LYING TO ME THE OTHER TIMES?

34. WHAT HAPPENS TO SOMEONE IF THEY ARE SCARED HALF TO DEATH, TWO TIMES?

DR. BERNANKE GETS A PHONE CALL

Zhou Xiaochuan is the Governor of the People's Bank ofChina. Imagine that the following phone call were to takeplace.
Zhou: Hello. Dr. Bernanke?
Bernanke: Yes.
Zhou: I wanted to let you know about the decision that ourboard has taken, after consulting with the Premier and thePolitburo's Standing Committee. We hope you are sittingdown.
Bernanke: I get it. A little Oriental humor.
Zhou: You could say that.
Bernakne: What can I do for you?
Zhou: You can abandon your plan to purchase $600 billion ofTreasury bonds.
Bernanke: The Federal Open Market Committee voted ten to 1for this policy. I cannot change it now.
Zhou: We think it is an unwise policy. It will lower thevalue of the dollar. Americans will then buy fewer goodsfrom China.
Bernanke: That is not how we see it. We think the policyis required to put Americans back to work. They will buymore goods from China and everywhere else when they areonce again working.
Zhou: You will increase the supply of dollars, which willlower the dollar's price internationally. Imported goodswill cost Americans more. An increased supply of dollarswill mean a lower price for dollars. It's supply anddemand.
Bernanke: That is the old economics. That is the logic ofAdam Smith and Milton Friedman and those kooks from Vienna.We are committed to the new economics.
Zhou: Who teaches it? Where?
Bernanke: I taught it for years at Princeton.
Zhou: Where Paul Krugman also teaches?Bernanke: Yes.
Zhou: We see it differently here. We prefer the oldereconomics.
Bernanke: Adam Smith's economics?
Zhou: No, even older.
Bernanke: Mercantilism?
Zhou: That is what you call it. We call it the export-driven Asian miracle.
Bernanke: But mercantilist governments wanted to hoardgold. Your nation does not hoard gold. Your bank holdsU.S. Treasury debt.
Zhou: That is the purpose of my call. Bernanke: Gold?
Zhou: No. U.S. Treasury debt.Bernanke: What about it?
Zhou: There is too much of it.
Bernanke: You sound like Ron Paul.
Zhou: Ah, yes. Congressman Paul. I understand that he islikely to be the next chairman of the Monetary Policy Subcommittee. You and he should have some interesting discussions.
Bernanke: I prefer to talk about Treasury debt.
Zhou: We have determined that an increase of $600 billionin your purchases of Treasury debt will lower the rate of interest on the debt.
Bernanke: That is our thought, too.
Zhou: We hold almost $1 trillion in Treasury debt.
Bernanke: You ought to buy more.
Zhou: We will be losing money on our holdings if ratesfall.
Bernanke: You ought to buy more.
Zhou: The value of the dollar will fall. That will lowerthe value of our holdings.
Bernanke: Nevertheless, you ought to buy more.
Zhou: We have decided to own less.
Bernanke: How much less?
Zhou: $600 billion less.
Bernanke:
Zhou: Dr. Bernanke?
Bernanke:
Zhou: Are you still there?
Bernanke: I am still here.
Zhou: We have decided that every time the Federal Reservepurchases its monthly total of $75 billion, we will sell $75 billion.
Bernanke: Are you serious?
Zhou: You sound like Nancy Pelosi.
Bernanke: But that would raise interest rates on Treasurydebt.
Zhou: That is our conclusion, too. But remember: we own lots of Treasury debt. We could use a better rate of return.
Bernanke: But higher rates might cause a recession in theUnited States.
Zhou: That is our conclusion, too.
Bernanke: But that will mean fewer imports from China.
Zhou: We think it will mean more bankrupt manufacturingfacilities in the United States. Then Americans will comeback to our manufacturers.
Bernanke: But this could cause unemployment in China if youare wrong.
Zhou: We are willing to risk that.
Bernanke: That is a big risk on your part.
Zhou: No bigger than the risk on your part by inflating themonetary base by 30%. That could raise prices in the United States.
Bernanke: We don't think so.
Zhou: Why not?
Bernanke: Because our bankers are so frightened of recession in 2011 that they are not lending. They just turn the money over to the FED.
Zhou: Then you do not expect inflation?
Bernanke: Only a little. Maybe 2% to 3%.
Zhou: You sound like Milton Friedman.
Bernanke: Around here, we say, "Better 2% inflation than 9.6% unemployment."
Zhou: We think it is better for us not to hold onto Treasury debt that cannot be paid off.
Bernanke. Don't worry. We owe it to ourselves.
Zhou: On the contrary, you owe it to us.
Bernanke: It's only a figure of speech.
Zhou: We can figure. We are going to be left holding thebag, as you say. All we have is a pile of IOUs.
Bernanke: They're as good as gold.
Zhou: Since they pay zero interest, we think gold isbetter.
Bernanke: It's only a figure of speech.
Zhou: We can figure. Gold is over $1,350 an ounce. The dollar has been falling. We think the older mercantilism was right. We want to own more gold.
Bernanke: You can't eat gold!
Zhou: We can't eat T-bonds, either.
Bernanke: But if you sell dollars, their price will fall.
Zhou: Why?
Bernanke: It's supply and demand.
Zhou: Gotcha!
Bernanke: You speak English very well.
Zhou: You see, I was educated in your country at UCRA.
Bernanke: Really?
Zhou: Not really. But I love those old Richard Loo World War II movies. He made a great Japanese officer.
Bernanke: But if you sell Treasury debt, that could start afire sale. Central banks all over the world might startselling T-bonds.
Zhou: That is a possibility.
Bernanke: But that would make your holdings worth evenless.
Zhou: That is true. So, if Japan starts selling, we will dump all of our holdings in one shot. We might as well get out before the rush.
Bernanke: But that could crash the dollar!
Zhou: That is a possibility.
Bernanke: You're bluffing!
Zhou: That is a possibility.
Bernanke: But this is not the way that central banks operate.
Zhou: How do they operate?
Bernanke: They inflate.
Zhou: Always?
Bernanke: Of course always. That is the only policy tool we have.
Zhou: You could deflate.
Bernanke: Are you serious?
Zhou: You really have Nancy Pelosi down pat.
Bernanke: There is no way we can deflate.
Zhou: What about your exit strategy? That is deflation.
Bernanke: In theory, yes. But we don't intend to executeit.
Zhou: That is not what you told Congress. You told Congress you have an exit strategy. Several, in fact.
Bernanke: We do have them. We just don't intend to implement them.
Zhou: Do you think you can fool Congress?
: Are you serious? Congress doesn't know horseapples from apple butter.
Zhou: You mistake Barney Frank for Ron Paul. You will now have to deal with Ron Paul.
Berrnanke:
Zhou: Hello.
Bernanke:
Zhou: Are you still there?
Bernanke: Yes, I'm still here.
Zhou: We are not asking you to deflate. We are asking younot to inflate.
Bernanke: But we must inflate.
Zhou: Why?
Bernanke: Because we have 9.6% unemployment.
Zhou: What has that got to do with your decision toinflate?
Bernanke: We must lower interest rates.
Zhou: For Treasury bonds.
Bernanke: Yes.
Zhou: What does that have to do with unemployment?
Bernanke: When mid-term rates are lower, businesses will start new projects and hire people.
Zhou: Mid-maturity T-bond interest rates are the lowest ever since what you call the Great Depression and what we call the old normal.
Bernanke: You can never have low enough T-bond rates.
Zhou: But, as Treasury bond investors, we don't like lowrates. We like high rates. We hold lots of T-bonds. If we get very low rates, we might as well own gold.
Bernanke: But you will like all that increased demand for made-in-China goods when all those unemployed Americans go back to work.
Zhou: But rates are lower than they have been in 80 years. You still have 9.6% unemployment.
Bernanke: But if the 10-year T-bond rate goes from 2.6% to1%, American businessmen will hire millions of workers.
Zhou: Do you have evidence for this in one of those dozen Federal Reserve bank monthly bulletins? Or maybe in the"Federal Reserve Bulletin"?
Barnanke: Not really. But it's the thought that counts.
Zhou: I don't think we are getting anywhere. So, just to remind you. We will sell enough Treasury debt each monthto match any net increase in the amount you buy.Bernanke: Dollar for dollar?
Zhou: Dollar for dollar. But, I'll tell you what. Buy them from us, and we'll give you a discount for volume purchases.
Bernanke: You guys never miss a trick, do you?
Zhou: We're really not inscrutable. We just offer discounts for volume purchases.
Bernanke: I will discuss this with the FOMC.
Zhou: Do that. Shalom!
Bernanke: That's my middle name.
Zhou: You Americans have a saying for everything.
Bernanke: No. I mean it. That really is my middle name.
Zhou: If you start buying Treasury debt, you'll have an honorary middle name over here.
Bernanke: What's that?
Zhou: Paper Tiger.