The Mogambo Speaketh!

August 30, 2012

Mogambo Guru

 

I noticed that I don't laugh as much as I used to, but I curse a lot more.  I figure it's because things economic are so serious and insistently suicidal lately.  

I still laugh at funny jokes, however, like the classic "Knock knock. Who's there? Mogambo Guru.  Mogambo Guru who? That's what everybody says!"   Hahahaha!

Well, I am embarrassed to see that you are not laughing at what, I admit, is kind of an "inside joke", referring, as it does, to the fact that I am so unknown, despite having delivered the best investment advice (which is to buy gold, silver and oil) for the last 20 Years In A Row (YIAR), and I remain unknown despite being the most paranoid, angry, cynical, suspicious, trigger-happy, gold-bug, Democrat-hating and completely wonderful guy that I (or anyone else) have ever known.

And to tell you the truth, I am not sure the joke is actually funny at all, but I really get a kick out of the stupid looks on people's faces when I tell them that stupid joke.

Then, after waiting for them to ask "Who is this Mogambo Guru, obviously a fellow of intelligence, education and wit, of whom you speak?"  I take a deep, sweeping bow as I proudly say "I am The Mogambo Guru!"

Then I raise my head to give them a raised-eyebrow look, like I am waiting for them to finally -- finally! -- recognize who I am, and realize that they should know me, and love me, and stop calling me "annoying pinhead", because I am famous or something.

If they at least fake some insincere reply, perhaps something along the lines of at least smiling kindly to the crazy old man calling himself Mogambo Guru standing in line at the supermarket, then I will gently say to them "Yes, I am The Mogambo Guru! Live, and in person!  Yes, The Mogambo, sent to Earth from a planet far, far away to tirelessly yammer, yammer, yammer his big, fat mouth to Earthlings such as yourself about the Gospel Of The Mogambo (GOTM), which specifically dictates the buying of gold, silver and oil when the money supply is being increased rapidly, and to build elaborate underground fortresses as a defense against the raging and looting by hordes of desperate, zombie-like leftist morons who think that 'There is such a thing as a free lunch if the government borrows and spends enough money to fund enough government programs,' and who are thus deservedly bankrupted and destroyed by inflation in prices, suffering mightily in the general destruction of the whole stinking, stupid, bloated, cancerously mal-invested economy, based, as it is, on massive government deficit-spending to force American will down the throats of  the rest of the world, and to require universal equality of outcomes, per the completely-discredited Marxist idiocy by leftist morons who believe such ridiculous commie crap, and all financed by the foul Federal Reserve blithely creating the outrageously huge amounts money and credit out of, literally, thin air."

Usually at this point, for reasons that I don't fully understand, they are not in the mood for conversation, being too busy gathering up their children and herding their precious tots around behind them, like protective barnyard chickens, their pleading eyes searching wildly for somebody to protect them or (with a little gratuitous disrespect) maybe score a nice, juicy worm to eat.

Being distracted like they are, this is when I cleverly add the caveats that always surface sooner or later. "And yes," I say to them, "I have noticed that the Gospel Of The Mogambo (GOTM) is a direct rip-off of my vague-yet-superficial understanding of the Austrian School of Economics, which I do purely in my quest for higher efficiency and efficacy, and which has nothing to do with my not being very bright and hence cannot come up with anything even vaguely original of my own, even though I have tried and failed so many times that I don't even like to think about it anymore, and I am certainly not going to admit to it to some dumb-ass like you in the check-out line at some damned grocery store!"

By this time, someone is usually crying and bleating "Please don't hurt me or my kids, mister!" and the cashier, who has usually completely misunderstood the whole situation, is repeatedly pressing some stupid "panic button" to summon the manager, or somebody has called 9-1-1, or something. It's always something.

The point is that I know, by experience, that my time to help these people is growing short. 

So I quickly finish up by adding "And the indelible lesson of history is to buy gold, silver and oil, today, and every day, as much as you can, and for as long as you can when so much money and credit is being created! And then you, too, will happily say 'Whee! This investing stuff is easy!', as all else around you is going to hell!"

But if they are NOT -- at least! -- polite to me, then I simply tell them "Go to hell, moron!  You are obviously too stupid to understand the importance of buying gold, silver and oil when your own stupid government is allowing the evil Federal Reserve to create so insanely much money that We're Freaking Doomed (WFD) to be destroyed by inflation in prices and total bankruptcy when interest rates rise! Go to hell! To hell with thee, I say, and thy Fruit Loops, too!  HELL!"

You have probably noticed two distinctly different references to hell. The reason for that is, of course, simplicity itself: Once the inflationary depression caused by all this new money being created by central banks really starts hitting, it will be truly hellish for everybody who does not own gold, silver and oil.

For those who do own them, however, life will be much, much more pleasant.  So much so, in fact, that they will be known to periodically smile enigmatically and softly say, for no particular reason, "Whee!"

Ultra-Famous Mogambo (UFM

August 17 2012   Mogambo Guru

 

 

Because I really am, personally, the Ultra-Famous Mogambo (UFM) who thinks he's famous, who thinks he knows everything about everything economic, and is quite arrogant about it in an unpleasant, sneering way, people think they can ask me questions about things I know nothing about, yet get a correct answer. Weird.

 

Sometimes, though, they luck out by asking me a question where I, for some unknown reason, actually know the answer!

 

Like, just this morning at breakfast, when my wife asked me "Okay, UFM who thinks he's so hot, do you know that you are supposed to eat with your damned mouth closed so it doesn't disgust the other people around you?", and I correctly answered "Yes."

 

I am suddenly and proudly hitting one-for-one when my son immediately asked me the question "And did you know that, besides eating like a pig with your mouth open, you are insane about how the Federal Reserve and the other central banks of the world are creating so much excess money that it will destroy the world with inflation and ruination, just like it has destroyed every other currency and economy in the history of the world that had a government so abysmally stupid that it actually allows the Federal Reserve to do this kind of suicidal crap?"

 

I gotta tell ya, I was impressed!  Astonished!  So, I said to him "Yes and yes! Very, very good, my darling son!"  His face beamed in self-satisfaction.  I was the proud father at last!

 

Of course, the cynical, suspicious part of me wanted to ask him "Did you just extemporize that because you really understand it, or did you memorize it so as to impress me for some nefarious reason, you sneaky little bastard?"

 

On the other hand, I get questions that I can't answer, such as those about technical analysis, and I admit that I am no longer a trader, zooming in and out of investment positions, long or short, to make a profit. 

 

Now showing so little interest in it, and handicapped by being naturally stupid, I am, admittedly, not up-to-speed on any of these newfangled analyses, using calculus on obscure derived equations and running in a computer language that I do not understand.

 

Or even recognize what in the hell they are talking about, for that matter! Hahaha!

 

My current blah attitude towards charting the markets is because I discovered that it is virtually impossible to consistently make money, or make any money at all, trading any market, especially using just yesterday's price and volume data, as per the usual technical analysis. 

 

It was a memorable lesson that I learned The Hard Way (THW), which seems to be the only way I ever learn anything, usually with painful, deep emotional scars, a seething, angry bitterness, an unhealthy fixation on revenge with muttering under my breath, and (in this case) tax-loss carry-forwards.

 

The revelation (to me, anyway) was made obvious when, one day, I suddenly said "Hey! Where did all my money go?" and realized, in a moment of transcendent enlightenment, that traders, like me, have no chance. Alas.

 

The market-makers, and the exchanges themselves, are allowed to make a guaranteed profit (with government assistance, if need be!).  Governments make "profits" with taxes and fees. A lot of middlemen make a profit just passing things along.

 

And the buy-and-hold investors make a profit when they are on the right side of a long trend, although they, too, will be, alas, wiped out in The Long Run (TLR) by the inflation in consumer prices and the deflation in asset prices caused by such insanity in expanding the money supply.

 

Then, there, standing alone and frightened, abandoned out in the cold wilderness, feeling helpless and angry at being lied to, manipulated and cheated, are the only people left to pay all of these people. The traders.  Me. Maybe you.

 

I realized that since investing is, in the macro sense, a zero-sum game, traders' nominal losses will exactly equal the nominal gains made by all those other people, and the profits made by many more people, too, when considering all the people I did not even count, such as, oh, I dunno, back-office people. Consultants. Advisors. Banks. Crooks. The usual opportunists who swarm wherever money is located. You know; other people.  Lots of them.

 

But sometimes the enticement to trade seems too much to resist. The bond market, for instance! 

 

Bonds, thanks to all the money being pumped out by the Federal Reserve et al, are now priced at astronomical price levels to produce yields that are at ludicrous, laughable, historical lows! It's just So Freaking Obvious (SFO) that THIS ain't a-gonna last!

 

I can see that you are suspicious of my analysis, so I will postpone asking you for $5,000,000 in start-up money, in cash, in small unmarked, non-sequential bills, to, you know, kind of "get the ball rolling", and instead provide you with an illuminating example of why I am entranced by the idea of shorting bonds.

 

Suppose that interest rates are 6%. The theoretical market price for a $1,000 bond paying 6% is therefore $1,000.

 

So what is the theoretical price of a $1,000 bond with a 6% coupon when interest rates are 0.1%, which is close to zero (the result of massive, monstrous monetary inflation running at an astronomical 9% of GDP while actual, non-manipulated consumer-price inflation is running at over 10%, which is the very, VERY weird and scary situation today, meaning that bonds are ridiculously mis-priced)?  

 

The bond is worth, almost unbelievably, $60,000. Big difference, huh?

 

So what is the theoretical price for that same $1,000 bond yielding 6% when interest rates are at 10%?  A paltry $600.

 

With my usual aplomb and Supreme Mogambo Arrogance (SMA), I am 100% certain that I am perfectly, absolutely correct that price inflation will soar because of all of this over-creation of money and credit by the damnable banks.

 

I am likewise 100% certain, with quarts of SMA oozing from every pore of my body, that interest rates will soar, too, and thus the prices of the bonds will collapse as their yields are forced higher to make them more attractive to reluctant bond buyers who will be horrified to see roaring price inflation everywhere.

 

If bonds behave classically, as they usually do (until now) and things go exactly to plan, as they usually don't, traders should now sell-short a bond, getting the whopping $60,000, paying out that meager $60 per year interest payment, and then a year later, when interest rates have soared to 10% -- and probably more! --  like they should, acting in response to the horrible monetary and price inflations all around him or her, the trader would close the short position by buying the bond for $600, making gross nominal profit of $59,400, less expenses. Nice work!

 

On the other hand, this entails a lot of risk, which I hate because I am a gutless little coward who remembers, with each precious dollar laid out, how I had to earn each and every dollar of that money by slaving as a lowly lickspittle piece of employee crap whose bosses were all morons for not recognizing my obvious genius, and (judging by my annual employee evaluations) for expecting too much of me in the first place, morons.

 

At least things got better when I got to be a lowly lickspittle piece of self-employed crap, where things were a lot better because I was never again suffered daily stress because of threats to fire me just because of being barely qualified, my obvious incompetence or my lazy, worthless attitude, which I think comes from my natural stupidity.

 

And the risk with bonds is very, very real, too, as the Federal Reserve has repeatedly demonstrated the power, and they repeatedly demonstrated the odious inclination, to keep pounding interest rates down and down by creating more and more money and credit, regardless of the inflation in consumer prices it caused!

 

In the movie, if there is one, this is where the camera cuts to a close-up of my face as I, McCauley Culkin-like, slap my own cheek in disbelief, my mouth and eyes open wide and my eyebrows rise in terrible surprise, and I say "Un-freaking-believable!" or "We're Freaking Doomed (WFD)!", I haven't decided which.

 

And actually, unbelievably, despicably and tragically, the Federal Reserve, under the dysfunctional thrall of the satanic Ben Bernanke, is trying, for the first time in history, to literally create inflation in prices to achieve some "target "rate of price inflation of more than 2% a year!  Gaaahhhh!

 

No wonder I say "Un-freaking-believable!" or "We're Freaking Doomed (WFD)!", I haven't decided which!

 

And where does the money go? To buy the flood of new Treasury bonds, of course! And so bond prices go up and up, simply by the Federal Reserve creating a LOT of new money which the despicable and treacherous Obama administration desperately needs for its suicidal deficit-spending madness), driving bond prices up and the yield down.

 

In which case a short-seller of a bond would get financially slaughtered as each halving of the interest rate, under the deluge of a flood of money, doubles the market price of the shorted bond. Yikes!

 

And there is no telling (as in thick, choking smoke is blinding you, everything is burning in a searing fire, and people are running around in flames, screaming into your disoriented ears) what will happen if the Federal Reserve, as is rumored, actually achieves negative interest rates! Wow!

 

So, assuming that you are, like me, a Gutless Cringing Coward (GCC), you prefer investments that succeed over the long-term, like gold and silver, as evidenced by 4,500 years (or more!) of history, instead of investments that have always failed, which is mostly everything else over the long-haul, but especially things such as government promises of real, inflation-adjusted repayment of a loan ( a BIG loser!), and partial ownership of, or be owed money by, some dumb-ass, highly-indebted mis-managed company totally dependent upon dumb-ass, highly-indebted people who have no jobs and are underwater on their mortgages watching food and energy prices continually going up and up, faster and faster, all to finance a huge excess of inflated final demand for goods and/or services.

 

If you are a GCC who also is, like me, just in it for the money and you are looking for Big Beautiful Real Profits (BBRP) without doing any work, doing any thinking or taking any risk, then I suggest that you merely get into your car, take a drive to some place that sells gold and silver, and buy some of each.

 

Then, do the same thing next week. Then the week after that.  Over and over, week after week.

 

So what could be (by virtue of 4,500 years of history) more obvious? And what (by virtue of taking a pleasant drive with the radio playing and honking the horn at pretty girls) could be so easy? 

 

And so what can one say except "Whee! This investing stuff is easy! And obvious! Whee again!"?

 

The Only True Economic Theory (OTET),

  I know now, with the huge benefit of hindsight and a lot time spent with drunken friends explaining it all to me, how all my problems are somebody else's fault. 

I know that they are just being kind, of course, as there were a lot of the places where I personally went wrong along the worrisome, winding way of my worthless, wasted life, none of which, unfortunately, explains my bizarre use of such gratuitous alliteration that even I am embarrassed about it. Sorry.

Anyway, I thus see crystal-clear that if I had made even one correct decision anywhere along the way, then today I would be rich, handsome, popular, happy, loving, respected and trusting, instead of, well, you know, this.

Of course, there are the obvious benefits of being a paranoid, cynical, hateful old man following the Austrian school of economics.

Thus educated in The Only True Economic Theory (OTET),  I am looking forward to being happily and embarrassingly wealthy, at least in a relative sense, when gold and silver shoot to the moon in price and everything else turns into (as they say in Spanish ) El Crapola.

This is as it must be because the horrid Federal Reserve, the incompetent European Central Bank, and the corrupt International Monetary Fund are creating so much money, so impossibly-much money, so horribly much money that burning inflation in consumer prices must necessarily result.

I can see the skeptical look on your face, questioning my statement that "burning inflation in consumer prices must result" from so much money-creation. 

So, before you say "Are you sure?", or "I think that is debatable, Mr. Mogambo", or "You filthy, lying, pig bastard!", let me explain that it is because -- and this is the Very Telling Point (VTP) of the whole thing! -- prices have always risen when the money supply was expanded! Always! Over thousands of years!

I bring this up, not just because the current, fashionable-yet-stupid, new-age, neo-Keynesian econometric monetary inflation crap ("Central banks gone wild!") scares the hell out of me, and scares all educated people, too, but because of a little blurb in an article in Bloomberg Businessweek magazine.

The article is about Ben Bernanke, a guy for whom I grudgingly put aside my disdain for him and his stupid brand of economics so as to act professionally in my role as Big Chief Editor Mogambo (BCEM), I have conservatively and professionally classified him as a raving neo-Keynesian econometric academic nitwit, and who is disastrously the current chairman of the evil Federal Reserve.  

About his policies, Peter Coy writes "Take this little quiz to see how much you know about Bernanke's monetary policy derring-do. Have the central bank's asset purchases since August 2008 increased banks' lendable reserves by a) 25 percent, b) 50 percent, or c) 100 percent?"

He could probably tell by the way my eyes glazed over that I did not know the exact figure, and never even thought about it, to tell you the truth. 

Thankfully Mr. Coy did not immediately launch into the usual taunting I usually get, mostly along the lines of "So, The Great Mogambo (TGM), for once in his arrogant, overbearing life, doesn't know the answer to a simple question?"

If I don't take action to stop them right there, the average person will continue "Is this TGM, the snotty guy who thinks he knows everything about everything, especially how the horrid Federal Reserve creating so unbelievably much excess money and credit over the last 25 years has destroyed the economy, is still destroying the country by, and by extension the world, with horrendous inflation in prices, monstrous un-payable debts, an economy riddled with cancerous, ruinous mal-investment and an adversarial regulatory government?"

About this time, I have found that the best way to end this rude line of questioning is to graciously interrupt by saying "Shut up!", then saying it over and over until they, you know, shut up.

Then I gently answer their probing questions with "Yes, it's me, TGM, the blowhard who is constantly shouting how one would have to be an idiot NOT to buy gold, silver and oil when faced with such an economic calamity, and thus I call you 'moron', as I am sure that you have not bought them, else you would not address me in such a rude manner instead of falling to your knees to worship me, loudly singing my praises, including about how handsome I am and how wonderfully my darling blue eyes twinkle with a kind of inner light, and thanking, thanking, thanking me repeatedly for the wisdom of True Mogambo Enlightenment (TME) that I have given you!"

Mr. Coy obviously does not want to get dragged into that whole weird scene, and so instead of him saying "You tell 'em, Mogambo!", he goes immediately on to write, surprisingly with not an exclamation point in sight, "It's a trick question. The correct answer is d) 80,000 percent, from less than $2 billion before the financial crisis to around $1.5 trillion now."

80,000 percent! Yikes! Alas, economies will be destroyed, currencies will be destroyed and everyone will suffer! Notice all the exclamation points!!

At that rate, that's when relatives and miscellaneous people will come wandering in, staggering as if in a daze, over to my house, carefully standing outside the clearly demarcated fire-control zone perimeter around the Mogambo Ultimate Dual-Mode Offensive And Defensive Bunker (MUDMOADB), where they are tearfully shouting out to me that they want to "borrow" some money that I know, that they know, that we all know, they can never pay back.

They will finally ask the question "Do you enjoy seeing us suffer?"

Well, wondering what I think about people getting what they deserve is a good question!

And here's a good question for them! "Why do you cluster in a small group like that, out in the open, where a short burst could take you all out at once, instead of taking cover and dispersing yourselves around me in a pincer-movement flanking maneuver, which shows at least a minimum of competence?"

Another good question for them is "Why do you want to borrow money from me when you could just cash in some of your own gold, silver and oil stocks that you have accumulated over the years, like to told you to do all through those selfsame years?"

They will have an answer for that, though:  They will say they "forgot" to buy gold, silver and oil! Hahaha! They forgot!

It's like they think I never heard them talking about me behind my back, saying things like "Mogambo is a stupid-head gold bug!" and "Why is he always ragging on the Federal Reserve?" and "Does he always smell like that?"

Well, thanks to the inflation in prices that follows an inflation in the money supply, they will be standing at my door, their savings gone, or almost gone, after always paying higher and higher prices to maintain their standard of living as long as they could.

And they kept it up the whole time that prices were rising, their incomes not increasing (assuming they still had jobs!), taxes were rising, and returns on assets lagged, assuming they hadn't already fallen to their real-world, and drastically lower, value, wiping them out. 

Their few remaining paper dollars almost worthless in terms of buying power, reflected in the terrible inflation in prices, and they are hungry, and desperate, and they have nowhere else to turn, and blah blah blah.

Little do they know that, if they had read history, they should cheer up, as this is only the start of the fun part of currency debasement by over-issuance.  Hahahaha! 

Believe me, it gets much, MUCH worse from here! And for a long time, too!

I am sure you noticed how I bravely laugh in the face of such impending misery and deprivation, which I bravely do because prospering in such apocalyptic times is as easy as buying gold, silver and oil! 

And how can you NOT be carefree and bravely laugh when you are busily saying "Whee! This investing stuff is easy!"? Whee!

Hysterical Mogambo Analogy (HMA)

With all of the monetary and fiscal insanity running rampant in the world, you can be sure that I am, more than ever, 100% against almost everything and everybody, but especially annuities.

For those who are not familiar with annuities, it's a steady stream of regular payments from an insurance company paid to you, for as long as you live, which you purchase in advance by giving an insurance company a big wad of money now. When you die, they keep what's left.

My reason for steering clear of annuities and insurances is because, at the beginning of the Weimar inflation in Germany, 1921-1924, a 1,000 Deutschmark per year annuity was, so they say, a satisfactory retirement income.

At the end of the inflation, just a few years later, nobody in the whole country received an annuity check, but nobody even cared.  This is because the cost of the postage stamp, with which to send the 1,000-mark annuity check to the happy recipient, cost more than 100,000 marks by 1924!

Now THAT'S some inflation! The stamp cost 100 times more than the benefit itself!

So I have never given annuities any thought, other than to haughtily disdain them in this day and age of rampant money creation, and thus disdain them in this day and age of continual price inflation, which makes a mockery of annuities and fixed income streams of any kind.

I was reminded of them, however, by the essay "The staggering costs of Bernankeism" by Martin Hutchinson at his Bear's Lair column at PrudentBear.com.

He writes that "Baby boomers who are approaching their relatively late retirement at 67 with $500,000 no doubt feel they are in pretty good shape. They will awaken from their reverie when they discover that one typical insurance company quotes that amount as purchasing an annuity of only $2,966 per month ($2,755 for women) with no pension for the surviving spouse or guaranteed minimum payout period."

In short, it's a bare-bones annuity contract where, at age 67, you must live another 14 years to "break even" on the cost of the annuity.  Whenever you die, remember, the insurance company keeps whatever is left.

The problem is, according to the Hysterical Mogambo Analogy (HMA) between the USA of today compared to Weimar Germany 90 years ago, in a few years your monthly annuity check will still be $2,966 per month, as per the contract, but the price of a postage stamp will be around $3,559,200!

Actually, since I have obviously been drinking, I will drunkenly confide in you, my best buddy, my best bud, my BFF, my bestest budderoo in the whole world. So listen closely, ignoring my stinking breath because, just between you and me, see, I've been thinking that the current situation resembles not Weimar Germany, but ancient Rome, which is 10 times worse. Maybe 11 times worse! Or 12! Who knows how much worse it will be?

So remember to keep that "Germany or Rome?" thing under your hat, especially since it is clear that Mr. Hutchinson does not want to get drawn into a stupid-yet-pointless debate, and instead of rendering an opinion one way or the other, writes, with a delicious kind of dry, dark humor that seems so in keeping with the current situation, "Doubtless, most baby boomers faced with this shock will opt not to annuitize, hoping that between 67 and 74 or so, when their money runs out, they will graduate from feeling 15 years younger than their actual age to being dead, solving the problem." 

At this witty joke, I laughed!  And it felt good to laugh!  Laughing again after years and years of screaming in fear, screaming at family, screaming at neighbors and complete strangers about the painful inflation in consumer prices that follow, and that must always necessarily follow, from the huge increases in the money supply for the last quarter of a century by the damned Federal Reserve, and now into the foreseeable future, too.

And when they cried out "Begone, crazy man! Vex us no more with your silly theories!", I would reply "Crazy, am I? Is not the Entire Freaking Record (EFR) of history the same, sad, stupid story of one idiotic/corrupt government after another borrowing itself into bankrupting debt, and the currency debasement/inflationary horrors that always followed?"

In fact, the little inflation-calculator provided by the Bureau of Labor Statistics, which is the lowest, low-ball, government-massaged "Move along. Nothin' to see here" estimate of inflation found anywhere, still calculates that it takes $2.02 in 2012 to equal the buying power of $1 in 1987!

Prices have, at least, doubled in the last 25 years!

The salient point is that the buying power of anyone's monthly annuity begun in 1987 (when the average annual family income was $24,350) has, after 25 years, been cut almost exactly in half. Half!  Ugh! 

And if you think that was bad, consider the catastrophic price inflation coming at us from over the horizon, like a wave of ravenous wolves, that will surely follow the astounding increases in the money supply by the Federal Reserve, the ECB, and the IMF, which is to name only 3 central-bank scumbags doing that disastrous crap!

Arrgghh!  I am screaming in fear! And then, in mid-howl of outrage, I realized that I admired Mr. Hutchinson's sunny optimism of people hoping to die soon, because if a postage stamp goes from 44 cents to $3,559,200, then that now-adequate $2,966 monthly annuity payment will soon cease being anything of value.

But it is all academic anyway, as I figure that "most baby boomers" will not have $500,000 to pay for the annuity in the first place, as estimated by the fact that the average retirement accounts of working people over 50 is around $50,000, and by the additional fact that $500,000 is more than TWICE as much as the entire NET WORTH of most people in the Whole Freaking Country (WFC), especially now that their incomes have not increased, their taxes have increased, their retirement investment accounts have gone down and their houses have deteriorated in value, all dragging down their net worth, making it all worse and worse.

At this ugly point I am exhausted and drained, with barely the energy to thank the heavens that simply buying gold, silver and oil is so easy, and so seemingly guaranteed successful by 4,500 years of statistical proof.

With my last ounce of strength, I lift my head from the barroom floor, smile and weakly say "Whee!"

Moment Of Exquisite Mogambo Revenge (MOEMR)!

August 3, 2012 Mogambo Guru

I'm obviously the kind of guy who trusts no one, and for good reasons and for bad reasons. But reasons. Lots of them. Thousands of reasons!

Like those phone calls where I merrily answer "Hello?" and they, mysteriously, hang up. 

Or when I answer a phone call by saying, "Hello? Is this the idiot who called, and then hung up when I said 'hello'?", and then the caller says, "No! You're an idiot!"   THEN they hang up! Weird!

I mean, how do you make sense of ANY of that, except by first assuming that everybody is out to get you, then it all falls into place?

In fact, every time I turn around, there more corruption, more theft, and always someone else not to trust, which is, I am sorry to say, always "par for the course" at the end of long monetary booms, where a continual flood of new government money, year after year, enticed more and more greedy people to commit corruption upon corruption, deal after deal, decade after decade, until the misshapen economy evolved into a big, nasty spider's web of debt, lies, thefts, blackmail and worse.

I am sure that you will agree that this is truly an ugly part of expanding the money supply with fiat currency multiplied by insane levels of fractional banking, so that massive amounts of money can be created -- out of thin air!  -- by the banks for each dollar of new deposits, which, in this case, was the Federal Reserve creating the new dollar of new deposits in the first place.  Insane!

And that is, as they say, just for starters!  You can tell by the way my eyes are bugging out and my voice rises to a loud, shrill crescendo that it gets insanely worse with the damnable Federal Reserve actually monetizing government debt!  Creating money to buy government debt! Arrggghhh!

And then the acrid smell (sniff, sniff) of brain neurons frying and sizzling is One Sure Sign (OSS) that it gets unbelievably, incomprehensibly, mind-bogglingly, staggeringly, into-the-depths-of-hell worse when you realize that, over the decades, government deficit-spending has grown to actually BE the American economy! 

Thus, any miniscule, grudging growth in the bloated, cancerous, mal-invested, debt-besotted, government-centric economy must come as a result of massively more and more amounts of governmental deficit-spending, with everyone participating in it because they HAVE to, which is because they owe So Freaking Much (SFM) money.

As a case in point, I particularly remember a scene from the old Perry Mason television series, where, at the end of the episode, Perry has (as usual) completely shredded the guilty party's alibi, who is currently on the witness stand, where we find Denver Pyle confessing to the murder, saying that a complicated financial scheme had gone awry and his creditors were pressing for repayment, which he did not have.

He explains "I just needed a little more time!"

Then he leaned forward in the witness stand and explained that this -- this! -- was his justification for murder.  "I HAD to kill him!", he said. "Can't you see that?"

You can probably tell I am stupidly distrustful and paranoid by the odd assortment of things I remember from old TV shows, or maybe you can tell by the way I'm very nervous, almost rat-like, in the way my eyelids are narrowed to mere slits, my bloodshot eyes darting quickly back and forth, seeking out enemies and deadly traps, and seeing them everywhere. Mostly because they ARE everywhere! Look out behind you!

And it is that exact kind of unreasoning paranoid hysteria that explains why there is a large bulge under my jacket, obviously doing a poor job of concealing some kind of oversized pistol, rifle, bazooka, rocket-propelled grenade, machine gun, anti-aircraft cannon and/or flame thrower, depending on my mood and ability to remain standing under all that weight.

Since this is something you don't see everyday, then obviously, I am the only clear-thinking dude for miles around.

I think it started when I realized that neo-Keynesian econometrics was mostly a Huge Load Of Crap (HLOC), mostly as a result of finding and then studying the Austrian school of economics, with thanks to mises.org, which is the educational equivalent of taking the red pill and seeing the Matrix.

This revelation theoretically caused my brain to explode in outrage and fear, overwhelmed by panic, terrified at finding out that We're Freaking Doomed (WFD) because the Federal Reserve is an evil institution that created, and is still creating, so much excess money and credit that terrifying inflation in prices -- and economic collapse! -- must necessarily result.

All of this made me, as you would expect, bitter and angry, a condition not made any better by also being a guy who is absolutely sure, beyond any doubt whatsoever, that inflation in prices is going to rage out of control because of the monetary insanity of the Federal Reserve, the European Central Bank, the International Monetary Fund, et al, still conspiring to create unbelievable, shocking, disastrous amounts of new money, on top of the other mountains of new money and debt they have been creating for literally decades that have led to the economic disaster of the world today.

If you are one of those who laugh at those who are frantically buying gold, silver and oil to protect themselves from these certain perils, and hopefully even to prosper as all other suffer, then "Hahahaha!"

I have just cut-and-pasted that "Hahahaha!" laugh, and will carefully store it away until the day (coming soon to a theater near you!) when I am sure that you realize that those buying gold, silver and oil were Absolutely Freaking Right (AFR), and you were disastrously wrong.

And that is when I shall have my Moment Of Exquisite Mogambo Revenge (MOEMR)!  I shall bring this archived laugh out of storage, display it proudly, and thus I will be, literally, the one who laughs last, and thus the one who laughs best!

Whee!  I mean, Hahahaha! This investing stuff is as easy as fulfilling old sayings!