A Valuable, Valuable Clue As To What To Do

October 25, 2012

 

Mogambo Guru

 

Junior Mogambo Ranger (JMR) Philip S. kindly forwarded an entertaining email to me, containing a lot of facts about, of all things, the year 1910.  

 

Now, I gotta tell ya,  I can remember a lot of things, mostly as a result of living a lot of years and thus spending a lot of years finding out about a lot of stuff, but 1910 was not one of them.

 

Accordingly, on the Mogambo Hierarchy Of Interest (MHOI), it always rated a big, fat zero since I have never heard anything about 1910 that I could use.  For instance, maybe in 1910 there was some wonderful hair tonic to grow my hair back, only fuller and more luxuriant, or some glorious elixir to give me a powerful, studly physique with bulging biceps and washboard abs, but without exercising, preferably in an inexpensive pill, that works overnight, while I sleep, so that I wake up refreshed, strong as an ox and looking like a million Hollywood bucks.

 

Now THAT'S as a 1910 I could use!

 

So, perennially scoring the proverbial "none of the above", I thought I would be immediately bored to death with some doofus email about 1910.

 

It turns out I was wrong!  It was more interesting than that, from an economics standpoint, by which I mean from an inflation standpoint, by which I mean prices going up, by which I mean the inevitable result of creating too much money and credit, by which I mean that the evil Federal Reserve is creating massively too much money and credit so that the horrid Obama administration can deficit-spend roughly $1.5 trillion a year, by which I mean we're talking about annually adding national debt equal to ten percent of GDP, by which I mean This Is Too Freaking Insane For Words (TITFIFW).

 

For instance, from the email we learn that in 1910, "The average US wage in 1910 was 22 cents per hour."

 

We later learn that "The average US worker made between $200 and $400 per year."

 

Well, I immediately sense that this is the perfect opportunity to show off my skills in using a calculator, and so I start to look for mine, and I couldn’t find it, eventually gave up after a fruitless twenty seconds or so, and reluctantly did the long-division by hand, over and over, seemingly getting a different result every damned time, until my hand got a cramp and I was really grumpy.

 

In doing so, I found out two interesting things. 1) Doing long-division with paper and pencil is more confusing than I remember, and 2) The average US worker (working 52 weeks a year) worked somewhere between 909 hours per year (a lousy 17.5 hours per week) and 1,818 hours per year (a more respectable 35 hours per week).

 

Immediately, the nimble Analytical Mind Of The Mogambo (AMMTM) concluded "Seventeen hours a week working? What a bunch of lazy bastards they were!"

 

Of course, I am not going to call them "lazy bastards" out loud since that would cause, as it always does, those people who are merely standing nearby to perk up, happily start talking trash about me, and how I am the King of Lazy Bastards, and that I am, by consensus, the laziest bastard in town, no matter what town I am in, and definitely the laziest man any of THEM ever met. Ever!

 

And it's not like I don't patiently and clearly explain to them that "I am not here to do any work, you lowlife morons! I am only here to (insert variously 'Get a paycheck,' 'Sit on my fat ass,' or 'Eat like a pig')!" 

 

Yet, unbelievably, they look at me like I am the crazy one!  Me!  I mean, why ELSE would I even BE here, ya morons? For my health?

 

"So," I can hear you asking yourself, "what does any of this have to do with anything?  Is there a point? Will he ever get to the point? Why am I wasting my pathetic life reading such Stupid Mogambo Crap (SMC), anyway? What in the hell is WRONG with me?"

 

Well, since you are so impatient, I'll tell you the point: It has to do with inflation in prices, and how intelligent people fear inflation, especially the kind where people cannot afford to buy food, which is the big killer of economies and countries, and then there is usually a war with somebody, and the whole thing is a Big Freaking Bankrupted Mess (BFBM).

 

More to the point, in 1910 "Sugar cost four cents a pound."

Eggs were fourteen cents a dozen.

Crappy coffee was fifteen cents a pound.

 

That got me started thinking about how the prices we pay for these things are relatively low, according to the inflation calculator at the Bureau of Labor Statistics, as they calculate that it now takes $23.37 to buy what one dollar bought in 1913 (the farthest back the program can calculate). 

 

And even though 1913 is three full years after 1910, that's still a whopping 2,337% inflation!  And that staggering loss of buying power of the dollar comes from just 3.14 % inflation per year, compounding!

 

So anybody -- and I mean anybody! -- telling you that 5% inflation is a worthy goal, "to prevent deflation" in the prices of stocks, houses and overvalued things in general, is a complete and irredeemable moron, which I deftly prove by noting that this outrageous idiocy is the actual opinion of the horrible Ben Bernanke, lowlife loser chairman of the catastrophic failure known as the Federal Reserve, and whom I nominate as King of the Keynesian Econometric Nitwits.

 

Now, after that unsavory-yet-satisfying bit of completely gratuitous rudeness and scornful disrespect, I will now, at last, add that spicy, piquant bit of extra horror that is so traditional during the Halloween season.

 

In this case, the terror of John Williams of shadowstats.com still calculating inflation the correct, old-fashioned way, and finding the chilling, terrifying result that inflation in prices is now over 9% per year, compounding!

 

And by "compounding" we mean, of course, "growing exponentially", which is the problem with debt growing at an exponential rate: After all these years and decades of creating massive amounts of debt (and therefore new money) to both spend and to pay the interest due on an even more unbelievably colossal amount of existing debt, the upward-sloping curve of debt ("curve of death!") is getting pretty steep, the required amount of new money necessary to "keep on keeping on" becomes truly unbelievable, and soon, after that, things will really start getting completely irrational.

 

What to do? Beyond screaming in outrage and vowing to use the upcoming elections to wreak righteous revenge on the elected scumbags who caused all this mess, you mean? What to do?

 

That's a good question! Hundreds of millions of people in the last 4,500 years of world history, in millions of other countries and governments, have faced this Exact Same Question (ESQ) because their rulers were this same kind of Stupid Corrupt Scumbags (SCS).

 

So, pray tell, what did those hundreds of millions of people do? What Did they do? What did THEY do? What did they DO?

 

I mean, if we knew what they all did, and how it worked out for them, it could provide a valuable, valuable clue as to what to do!  

 

Hmmmm! "A valuable, valuable clue as to what to do"! Catchy!

 

Anyway, my fabulous bon mot aside, what history boils down to is that when the value of the currencies kept going down and down because the governments acted like they always do, the people who owned gold and silver (and got the hell out of town with it) did very well.

 

Those who owned all other things did, unfortunately, not.

 

So, I ask incredulously, how can this "investing thing" get easier when it is so glaringly, grotesquely obvious that the corrupt Federal Reserve is now, year after year, creating enough money equal to a tenth of GDP?

 

Causing massive price inflation? So that the insane federal government can borrow and deficit-spend that selfsame tenth of GDP? All because the US economy is now disgustingly distorted, monstrously malignant, twisted and totally, totally dependent upon massive, gagging amounts of government spending?

 

If you suddenly feel sick to your stomach, like me whenever I think of it, cheer up! I have good news at last!

 

What to do? It's not for nothing that Junior Mogambo Rangers (JMRs) around the world eagerly accumulate gold and silver bullion, and who say to themselves as they do, "Whee! This investing stuff is easy!"

 

And with 4,500 years of history backing their play, how can they lose? Easy and guaranteed!  Whee!

The Fabulous Mogambo Rational Dullard Portfolio (TFMRDP)

October 17, 2012

Mogambo Guru        

 

If I was a betting man, a hard-core gambling man, I mean a real long-shot kind of man greedily looking to make a ton of money in a hurry, using minimal investment, without doing any work, I would start accumulating out-of-the-money SP500 put options and/or short futures, starting right around in here someplace.

 

However, I am definitely NOT a betting man, because I really, really, really hate to lose money.  That's why I invest only in gold and silver: They are a sure-fire, can't miss, "a winner every time" kind of thing, as definitively proven by 4,500 years of history, compared to almost everything else being a guaranteed long-term loser, as evidenced by that selfsame 4,500 years of history.

 

Instead of opening old wounds ("You bet HOW much money doing WHAT, you lowlife, irresponsible, deadbeat moron?"), let me show you why I am thinking of making bets again.   As is Completely Freaking Obvious (CFO) from a cursory glance at the graph at multpl.com, the SP500 price/earnings ratio has been clearly rolling over since 2001, when the market made its last high, and is seemingly on its dismal way to plumb new lows, making suckers out of people who bought-and-held equities over the preceding 30-year bull market that began in 1980.

 

In short, just as it has done 4 times since 1870, or roughly averaging every 30+ years or so, the bull market is again falling apart, and people holding equities are again going to lose their money, as they sadly must, since it is mathematically impossible for everyone to take more out of the stock market than they put into it.

 

Thus, the majority of investors take long-term capital losses, which is the cruel punch line of the biggest swindle of all: putting your retirement money into the stock market.

 

And how about adding the additional pain of inflation-adjusting those big losses?  Don't ask! For God's sake, don't ask!

 

So, hating to lose is why I completely quit making bets of any kind.  And my wife didn't help matters when her "loving support" consisted of, at breakfast one morning, saying "It's only a lousy dollar on the stupid lottery, you whining jackass!  If you are so upset to lose One Stinking Dollar (OSD) a week, why do you buy the damned lottery ticket when you know you are going to lose? I mean, it's not like they didn't TELL you that the odds of winning are 18 million to one, you whining bonehead!"

 

Of course, the kids cheerfully chimed in "Whining bonehead! Whining bonehead!"  

 

I, to my dismay, had nothing to offer in my own defense, except to cleverly say "Shut up! All of you just shut up!"  Unsurprisingly, their uninspired, dull response was "No, YOU shut up!" to which I wittily replied "No, YOU shut up!"   I expected that the repetitious repartee would soon end, but it didn't, and instead went on and on.

 

I will spare you the ugly details, except to say that there was a lot of yelling and screaming and crying (mostly me), and someone stole one of my waffles when I wasn't looking,

probably when I was busy throwing a childish tantrum because I was, firstly, righteously upset about my own children causing the eternal question "How sharper than a serpent's tooth is an ungrateful child?" to spring to mind.

 

Secondly, I was upset that I was rudely rebuffed when I carefully explained to them, in calm, cool, soothing tones, as befits a tender, loving father, "I am playing the lottery because we are freaking desperate, you little morons! The foul Federal Reserve is destroying us with a horrifying exponential/ logarithmic over-creation of money and credit, which means prices will have to rise in a terrifying inflation to absorb all of that new money coursing through the economy forever, and the response to such an economic horror is that the evil Federal Reserve creates even MORE money and credit, making everything worse!"

 

They were not impressed with that answer, as the odds of my hitting the lottery are probably better than the odds of my making money in the stock market, especially using a stupid buy-and-hold strategy. The fact is, as I never tire of pointing out, it is mathematically impossible for the majority of investors to take more out of the stock market than they put into it, thus the majority of investors will always realize a cumulative long-term capital loss, with the last guy to buy stocks taking the biggest hit.

 

And now, scarily, the current bull market that began in 1980, when Reagan started the fiendish fad of slashing taxes and making up for it by deficit-spending untold billions and billions of dollars, is -- sure enough!  -- about 30 years old, the P/E line is predictably rolling over, private debt is at a maximum, and the cyclical, boom-bust nature seemingly inherent in the history of economics is, again seemingly, repeating itself.

 

In case you were wondering, the P/E ratio is currently a tad above 16, which is sort of on the high side.  If things run to form, the SP500 will, with fits and starts, bottom-out about ten or twenty years from now ("mark your calendars!") when the price/earnings ratio is about 5 or below.

 

"So," I hear you asking, "How low will the SP500 actually go, since you think you are so smart and you run around shooting your mouth off like you know everything?"   

 

Well, consulting the Mogambo Triad Of Awesome Prediction (MTOAP), consisting of 1) mystical chicken bones, 2) things I vaguely remember from a long time ago, and 3) making up the rest to "fill in the gaps," the resultant Official Stupid Mogambo Opinion (OSMO) is that the index will probably fall down to around 100 (assuming there are 500 companies left to make up the index!), or less (assuming there are not), whereupon everyone gets squat, or, if you prefer, in the original German, "Squatzumwalletgebangenschlag."

 

I am so gloomily pessimistic because I expect a complete, cataclysmic catastrophe to strike (checking my watch) any second now, partly because of this eerie "every 30-year cycle" thing,  but mostly because of the fact that everything and everyone is up to their ears in suffocating debt, and so the horrid Federal Reserve is always creating so much, so impossibly much, so unbelievably much, so terrifyingly overmuch money (and corresponding more debt) over the last Half Freaking Century (HFC), and never more than Right Freaking Now (RFN)!!!

 

I will not go into an elaborate, jargon-filled scientific explanation about the concluding three exclamation points at the end of that last sentence, but suffice it to say that it doesn't take a Junior Mogambo Ranger (JMR) to know one important thing: That much more new money means that much more new inflation in prices, and thus (extrapolating to the obvious, horrifying historical and theoretical conclusion) We're Freaking Doomed (WFD)!

 

And when you couple this P/E thing portending disaster, with the government's promise of higher taxes for years to come, wouldn't the rational investor sell before the December 31 cut-off, so as to realize taxable gains this year when taxes haven't gone up yet, as they must soon?

 

And when you combine all that with looming, dooming specter of inescapable trillion-dollar federal budget deficits for years and years to come, all requiring the Federal Reserve to create massively more money and credit to both absorb all that new Treasury debt and to pay the gigantic, growing, gagging interest payable on the massive, monumental mountains of existing public and private debt, all at terrifying levels never before seen in history, it seems, even to a complete dullard like me, that a really rational investor would be selling equities and loading up on gold, silver and oil.

 

Thus, we behold the genesis of The Fabulous Mogambo Rational Dullard Portfolio (TFMRDP), holding only physical gold, physical silver and oil stocks, and destined, as it surely is, to be the best investment advice that any paranoid, angry, cynical and hateful old man, who has studied the Austrian School of economics and thus "seen the light," ever gave.

 

And did I mention easy? Why, that's the best part! It's easy, too, as I prove by gleefully exulting "Whee! This investing stuff is easy!"

Mogambo Hunka Hunka Bunker (MHHB)

October 10, 2012

Mogambo Guru

 

I was hunkered down in the Mogambo Hunka Hunka Bunker (MHHB) after having worked myself into another panic about the inescapable inflationary terror that will surely follow the monstrous amounts of money being created by the corrupt Federal Reserve and other central banks, including the horrid International Monetary Fund.

 

I was trying desperately to calm down, hoping to feel safe behind triply-locked doors, armed to the teeth and surrounded by microwave burritos, gold, silver, oil stocks.  After awhile, and after a hastily-consumed burrito, I knew I was going to be "fine."

 

In fact, I will probably "a lot more than fine," with the wide sweep of possibilities ranging from the mundane "I'll be fine" to the classic "I'll be astronomically wealthy in terms of the sheer tonnage of neat stuff that I can buy, including enough money to pay off the wife and kids and finally shut them up about how I don't give them enough money to spend on their worthless trinkets, doodads, shoes, medical treatments and all that dental crap because I maniacally invest all our money in gold, silver and oil, demonstrating that I am smarter than all of them put together, entitling me to reap the rewards of a snazzy new car, maybe with some fancy mag wheels, in which to haul my worthless butt to the golf course, or just use the car to ride around looking for more things to buy, playing the radio and honking the horn at pretty girls walking down the street who are (as I am perfectly aware so I don't need to hear it again from you) young enough to be my granddaughters."

 

Finishing off a second burrito, mid-bite, out of the corner of my eye, I could see the Mogambo Monetary Seismographs (MMSs) going crazy, their inky needles wildly scritching and scratching frantically across the paper.   I thought to myself "That's odd!  How could such tinny sounds actually be the hoof beats of the Horsemen of the Apocalypse?" 

Well, that was entirely too melodramatic, I admit, but that's the kind of crappy mood I was in, detached, as if in a dream, and not the good kind of dream where beautiful ladies run their fingers through my hair, breathing huskily and saying "Oh, Mighty Manly Mogambo (MMM)!  I am thrilled by your raw, seething antipathy towards the evil Federal Reserve creating so much excess money and credit because it will destroy the dollar, destroy the economy and destroy us, and I am enthralled and entranced by your seething hatred of the corrupt, low-IQ Congress that lets them get away with, as you would charmingly call it, Monstrous Monetary Crap That Will Destroy Us All (MMCTWDUA)."

 

Normally, I am eager to fall into such a dream state and resist anyone rousing me from it, especially saying something like "Wake up! You are going to be late for work!" or "Wake up! The boss wants to see you in her office right now!"

 

But no such luck.  I was brought back to stark reality and the fullness of its ugliness by my eyes falling on the 5-Minute Forecast, written by Addison Wiggin. 

 

"As of Monday, Oct. 1," he writes, "the national debt stands at $16,159,487,013.300.35. This means the government racked up $1,369,146,684,743.20 in new liabilities last year."

 

If you are intimidated by incomprehensibly large numbers, or your brain refuses to understand what it sees, or you are like me and just too slow-witted to immediately comprehend what the hell is going on, then permit me to simplify.

 

To wit: The usurper Obama and his horrid, neo-Marxist administration overspent the government's revenues by a whopping $1.4 trillion dollars in the last twelve months! 

 

How much is $1.4 trillion?  This is more than all the individual and corporate income taxes paid to the federal government, combined!  In fact, it is more than half of the $2.3 trillion total federal tax receipts, including Social Security and Medicare taxes!

 

The $1.4 trillion deficit -- alone!  -- is a gigantic 9% of the Whole Freaking Economy (WFE) of the USA!  Choking on my outrage, I stammer out "Unbelievable! One out of eleven dollars of GDP is deficit-spent by the federal government!"

 

Of course, this always sets me off about the horrible Supreme Court, which made it all possible by ruling, over and over again, that the Constitution of the United States did not really, really, really mean it when it was stipulated that money "shall only" be silver and gold, which would have prevented any undue expansion of the money supply, and which would have prevented any of this bankruptcy crap from happening, and which was the whole purpose of the Founding Fathers writing into the Constitution the requirement that money be only gold and silver.

 

But it was the Congress that created the Federal Reserve, which is not federal and it has no reserves, yet it was given the power to completely control our money, despite it being owned and run by a large, shadowy bunch of greedy people, including foreigners.

 

So, who is to blame, Congress or the Federal Reserve?

 

Steve Saville of The Speculative Investor says that "We've speculated in TSI commentaries that unwavering devotion to bad economic theory (a type of stupidity) is the most likely reason for the Fed's introduction of a new inflation program at this time. There are other plausible explanations, but in general terms it boils down to this: the Fed is either stupid, or evil, or stupid and evil."

 

Later on, he admits "We'll go with evil and stupid."

 

And if the Federal Reserve is evil and stupid, and the Congress is corrupt and stupid, what is the smart thing to do?

 

I'm glad you asked!  Buy gold, silver and oil!  Gold and silver because that has always been the smart play for the last 4,500 years when governments behaved so despicably, and oil because it is now so completely vital, to so many people, that they must pay any price.

 

And with the insane overproduction of new money and credit by the filthy, foul Federal Reserve, the price of oil can go nowhere but up when the purchasing power of the dollar has nowhere to go but down.

 

And you need but look deep, deep into my bloodshot eyes to see the utter, utter sincerity there to believe me when I say, with the aforementioned utter, utter sincerity, that it doesn't get any easier, or smarter, than that. 

 

That's why I say "Whee! This investing stuff is easy!"

Too Much Money And Credit (TMMAC)

September 28, 2012

Mogambo Guru

 

I put it off as long as I could, and as distasteful as it was, I finally broke it to the family that I was, alas, being forced to cut expenses, mostly because I don't have a job anymore, and will almost surely never get another one. 

 

"Never get a job," I think, silently chortling to myself, "until they start advertising for 'Lazy old man to work, when he is in the mood, for premium pay and generous benefits for doing practically nothing, if anything, a couple of days per week or month."

 

Immediately, the members of the family unit were, as expected, hostile and defensive, obviously remembering the last time when I "cut expenses" so that I could, as they never tire of pointing out, buy something expensive and act really stupidly.  

 

And they no doubt remember, too, that they got exactly nothing from me that time, keeping all the money for myself, and I how I rudely laughed at their pleas for money, telling them, in a snide, snotty and sarcastic tone of voice, "Get a job, loser!", and they were, as I remember, really grumpy about it.

 

Naturally, the first thing out of each of their mouths was (distilling the essence of their lengthy, and loud, remarks) was "No!  Don't stop giving me money! Stop giving money to those other family-unit losers, but not me!"

 

The "family meeting," such as it was, immediately devolved into a weird, ugly fight about who could make my life more miserable, and thus, apparently, deserving of more money than the others.

 

Finally, as if at a signal, they turned to me and asked "So how much money AM I going to get from now on?"

 

I could see the fear and panic in their faces.  Being the considerate, loving father and darling husband that I am ("He's a real peach!"), I gently replied "None, you morons! You get nothing! Nothing! There is no more money! Exactly what part of 'bankruptcy' don't you understand, you lowlife Earthling halfwits who now get what they deserve because they would not buy gold, silver and oil with their miserable few pennies?"

 

Well, at the instant their deafening howls of protest rattled off the ceiling, I realized that this was the wrong way to say what was, actually, correct, and I should have said "I am so sorry, but I fear that you will get almost nothing, and it breaks my heart because I love you so much and I feel your pain." 

 

But the shrieking, cacophonous, angry, panicked result would be the same, no matter how I said it, as I am reminded by riots in Europe. This is also by angry mobs of panicky, busted-out people who are displeased about getting what they deserve for spending themselves, decade after decade, steadily into total bankruptcy, which every other idiot in history knows is a Very Bad Idea (VBI).

 

So it must be a kind of a karma thing, I guess.

 

Anyway, since "what goes around comes around," it will happen here, and everywhere else, too.  And all for the same reasons, too:  Imminent bankruptcy and utter ruination of a ridiculous, bloated, mal-invested, government-centric economy, financed by the evil Federal Reserve creating excess money and debt to finance it all.

 

To gauge how bad it will be in America, an article by Michael Tanner of the Cato Institute will perhaps prove instructive.  He writes "The federal government runs 126 separate anti-poverty programs. Altogether, seven different Cabinet departments and six independent agencies each administer at least one anti-poverty program."

 

Together, these federal anti-poverty programs "cost taxpayers more than $668 billion last year," but that "if one includes state and local welfare spending, government at all levels will spend more than $952 billion this year," or, if you prefer, a whopping 6% of GDP. Yikes!

 

That breaks down to the dismal statistic that "combined with state and local spending, government spends $20,610 for every poor person in America - or $61,830 per poor family of three."  Wow!

 

He continues without even a hint of the irony or the angry, screaming outrage that it deserves, and would have gotten in a scornful, screaming, spittle-spewing Mogambo Howl Of Complete Outrage (MHOCO) if I had written the article, which I did not, both because I don't have Mr. Tanner's talent writing or obvious intellect, and also because it looks like it took a lot of work, which doesn't interest me that much. At all.

 

In fact, I am actually repelled by the idea of work.

 

So, irony-less, angry-less, screaming-less and outrage-less, we are left to ourselves to calculate that this government giveaway of $61,830 per poor family of three is a Lot Of Money (LOM), especially "given that the poverty line for that family is just $18,530, we should have theoretically wiped out poverty in America many times over."

 

Hahaha! I laughed at the sheer, monumental incredulity of such a thing!  I am dumbfounded! Hahaha!

 

But there are a lot of weird things in a huge federal budget that includes a deficit that is already an unbelievable $1.4 trillion, which alone is an astounding, unbelievable, incredible 9% of the entire economy of the Whole Freaking Country (WFC)!  We're doomed!

 

And it's a deficit which will be - hold onto your hats!  -- higher next year, and the year after that, and then, apparently, forever after that ! Double doomed!

 

If your eyes are bugging out and you think to yourself "We're freaking doomed!", then you will be happy to know that you understand the situation perfectly. This explains why your gut is twisted into a knot, and why your primitive brainstem is itself sending the loud message to buy gold, silver and oil stocks continuously (dollar-cost averaging), and with a feverish tenacity.

 

As their prices rise through the years, this will allow you to laugh merrily and heartily -- Hahahaha! -- as you watch in rapt fascination at the weird, unbelievable things that the government, and the Federal Reserve, will do in  raw desperation and suicidal panic as the economy is destroyed by the inflation, deflation and misery caused by irresponsibly creating Too Much Money And Credit (TMMAC) on top of TMMAC on top of TMMAC of top of TMMAC.

 

If you do NOT buy gold, silver and oil, however, you won't have anything to laugh about.

 

And speaking, as I do, for all the stupid people in this world who prefer to watch TV, eat, drink, have fun, or simply stare off into space like some kind of brain-damaged mental-case rather than have to deal with boring investing stuff, we are very thankful that simply buying gold, silver and oil stocks is the smartest investment anyone can make when the money supply is being increased by so much, for so long.

 

That may explain why those who buy gold bullion, silver bullion and oil stocks, in a desperate, fearful response to the Federal Reserve creating so much excess money, are known to say "Whee! This investing thing is easy!"

$2 Trillion in New Money (TNM)

September 24, 2012

The Mogambo Guru

 

Ben Bernanke is the panicked and clueless chairman of the evil Federal Reserve, and he has just shocked the world to announce that, henceforth, the Federal Reserve will create enough money to buy $40 billion per month of mortgage-backed securities.

This comes to a cool $480 billion a year in new money right there.

And this does not even mention the additional $1 trillion or so that the Fed is going to have to create over the next year to buy the tons of new government bonds necessary to pay for what seems to a terrifying $1.4 trillion budget-deficit of the loathsome Obama administration.

So I figure that we are looking at close to $2 trillion in new money this year! That's a 20% increase in the money supply! In One Freaking Year (OFY)!  Gaaahhh!

Now, people who are even vaguely familiar with Austrian School economics, or Milton Friedman's famous quote that "Price inflation is always and everywhere a monetary phenomenon", are running around in fear, probably also shrieking "Gaaahhh!" when they should be buying gold, silver and oil with that same terrified abandon, horrified at the certain prospect of ruinous, calamitous inflation in prices that all this new money will cause.

Mr. Bernanke, for his part, has declared himself an expert on the Great Depression, and has concluded that it was caused by -- get this!  -- the Federal Reserve not burying America under an avalanche of new money and credit.

If it had, he solemnly pontificates, everything would have been, in a word, peachy.

Thus, it is easy to see how he would decide that he, armed only with this crazy idea and his arrogant conceit, can easily prevent the regrettable repeat of the Great Depression that is darkly descending upon us.

He would do this by the obvious, happy expedient of burying America under an avalanche of new money and credit!

Many of you, no doubt, have noticed that twice I used the exact same phrase "burying America under an avalanche of new money and credit", and you are saying hurtful things like "This is mere mindless redundancy, the same kind of Worthless Mogambo Crap (WMC) that I have come to expect, which handily explains why everyone thinks The Mogambo is stupid and has cooties, and why I am ashamed to be reading this WMC, and why I am angry with myself for wasting my time reading that selfsame WMC!"

Well, mister or miz smarty-pants critic, for your information, I have done that on purpose for Two Important Reasons (TIR).  Not one, but two! Two Important Reasons (TIR)!

The First Important Reason (FIR) is that I am not very bright, and could not immediately come up with anything new or original by virtue of my also being too lazy to even take a lousy second to think about it, and the Copy/Paste function was right there, begging me to use it, saying to me "Oh, so you're a real tough guy who's brave enough to write that the Federal Reserve creating so terrifyingly much new money and credit that is going to destroy us with an inflation in consumer prices, a roaring price inflation that will, percentage-wise, match the monstrous monetary inflation of the evil Federal Reserve, but you are too chicken to copy one lousy little phrase, which wasn't very good to start with?  Is it because you aren't very bright and you probably have cooties? Huh? Cootie-man?"

And then it Copy/Paste function made squawking noises at me, like a chicken, mocking me! How could I not rise to the challenge?

The Second Important Reason (SIR) is that it is my clever way of saying that the outcome of burying America under an avalanche of new money and credit is The One Damned Thing (TODT) that actually caused BOTH the Great Depression and the current inflationary "recession" that will soon, in case you were wondering, turn into a terrifying stagflationary depression.

So creating more money sure as hell will NOT be a cure! Hahaha!

Hey! Maybe I can turn this into a classic joke, and the people will say "The Mogambo isn't very bright, but he writes a funny joke!

The doctor says "The tests show that you have cancer" and you say, aghast, "How are you going to cure me, or am I going to die a horrible, lingering death while you and the healthcare system bleed me dry?"

The doctor says "No! I'm going to cure you! I'm going to cure you 'Federal Reserve Style', which is to give you MORE of the cancer that is killing you!  I am only sorry to say that I cannot bleed you dry, because that's not the way Medicare works, although if someone finds a way, I'm coming after you.

"I'll be coming for you because I know that you have a lot of gold, silver and oil, and thus you have a lot of money.  I know this because you have been coming into my office, year after year, lying to my face about how much you smoke, lying to me about how much you drink, lying to me about how much you exercise, and lying to me about how you eat only healthful food with lots of vegetables and fruits, but expecting me to cure whatever it is that you are whining about, or actually suffering from, by prescribing some magical pill or something."

Well, that sounds like me, alright, but what does any of this have to do with the joke? This was supposed to be a joke of some kind! My new career as a joke-writer is going down in flames!

Before I could say anything, the doctor goes on "And the part that irritates me the most is the way you were constantly telling me, with your irritating nasal voice, to invest in gold, silver and oil, like I am going to listen to some grumpy old man who is obviously an idiot and who lies to me all the time. And who probably has cooties, too."

Exasperated, I explode "That's not funny! None of this is funny! I thought this was supposed to be a joke, and jokes are supposed to be funny!"

And the doctor says "Yeah, well, drop dead then! Is your doctor telling you to 'drop dead' funny?"

I reply "No, it's really not. However, the idea of you actually knowing that you should be buying gold, silver and oil stocks because the Federal Reserve and other central banks are creating so much money, but you are not, makes me laugh.  Is that funny?"

The doctor says "No, I don't think so.  So, is there anything funny about this whole mess?"

That's when I say "Well, you can accumulate gold and silver so easily, and so cheaply, that it makes you squeal 'Whee!' with a kind of childish delight, which is kind of funny, coming, as it does, from an old, stupid man. Maybe with cooties!"

Alas, the punch line of the joke is that's about as funny as it gets.  If you don't have gold, silver and oil, however, you don't even get that.

And that's just sad.

Email from Junior Mogambo Ranger (JMR)

September 13, 2012

Mogambo Guru

 

I was immediately intrigued with a particular email I recently received when I noticed that it was, for a pleasant change of pace, not venom-spewing hate mail or a death threat, like, for example, this other one from this morning. 

It reads "Dear Stupid Mogambo Idiot (SMI), I think you should just shut up your stupid loud mouth, like your wonderful wife tells you.  And help out around the house sometimes, too, but you never do because you are just an irritating, lazy old man who spends his time complaining about the stupid Federal Reserve creating so much excess money that We're Freaking Doomed (WFD) to be destroyed by inflation in consumer prices, like I care about any of that monetary crap when I am up to here in laundry."

The writer, obviously a blubbering nutcase, continued "If I was your wife, what I would really want is for you to take the garbage out and wash the damned car, and maybe stop being such a distant, ineffective father and an annoying, worthless husband who only did one good thing in his whole life, which was to buy gold, silver and oil because the evil Federal Reserve was creating so much money, and the prices of gold, silver and oil zoomed just like you said they would, and they will surely continue to rise, just like you said they will, but which has nothing to do with your being such a lousy father and crappy husband.  (Signed) Anonymous Person."

You can see the kind of abuse I get from total strangers, which is, now that you mention it, highly reminiscent of the crap I take around here, too.

Instead, I am happy to say that the better email was from Junior Mogambo Ranger (JMR) Burt L., who sent some interesting news. 

Beginning with the standard salutation of groveling subservience "Magnificent Mogambo Master", he went on to write "I went to the Enterprise Florida web site and found the attached 2009 through 2011 chart of (primarily gold) exports to Switzerland," which he dutifully included so that I could see for myself.

Sure enough, the Florida-Origin Exports to Switzerland show that "Gold (Incl Plat Plated), Unwr, Semifr Or Powder" increased from $42.2 million in 2010, to $201.6 million in 2011, almost a five-fold increase in one year! One state to one country! And little ones, at that!

Now, $201.6 million in exports, of what appears to be gold, is certainly a lot of money, and it is just about enough to get me the through the weekend, anyway. I laugh at my own joke "Hahahaha!"

Perhaps you noticed that I am laughing through my tears, as, in fact, in no year did anyone ever give me $201.6 million, while almost every year nobody gave me anything but a hard time and/or a Royal Screw Job (RSJ), which is kind of like an ordinary "hard time," but with an additional punishment that you pay out lots of dollars, that you don't believe you needed to pay, but there is nothing that you can do about it, and nothing that you can prove.

All you can do is go down there, storming in, blabbering incoherently in an indignant rage and yell at the manager "Well, you gave me a Royal Screw Job (RSJ) that time! But the joke's on you! Hahaha!  All those dollars you choked out of me are losing purchasing power with each tick of the clock -- tick, tock, tick, tock! -- because the horrible Federal Reserve keeps creating so much excess money and credit, which dilutes each one of those dollars! Hahahaha! Chump!

"And," continuing in hysterical outrage, "the only satisfaction that I get from this whole disagreeable episode is the knowledge that you are obviously too stupid to understand the need to buy gold, silver and oil when the money supply is being so terrifyingly expanded by the foul Federal Reserve like this, and so you won't buy any, and you will end up broke and busted-out like all the other losers. Loser! Then I shall laugh at YOU! Hahahaha!"

As you can probably tell, after getting another Royal Screw Job (RSJ) in what seems to be a long line of RSJs, I could use $201.6 million right about now, but, unfortunately, we are not talking about me.

And we are not even talking about the $201.6 million in Florida gold exports to Switzerland, but we have moved on, and are now talking about the category of "Waste & Scrap of Prec Metal Or Other Cont Prec Mtl" which was #1 on the list of exports out of Florida to Switzerland.

I am not exactly sure what "Waste & Scrap of Prec Metal Or Other Cont Prec Mtl" is, but I figure it seems to be the "We Buy Gold" people registering a staggering $6,811 million ($6.811 billion!) in precious metals-related exports to Switzerland, which alone represent almost all the Florida 2011 exports to that country, which totaled $7,291.0 million ($7.291 billion).

And this $7,291.0 million in "2011 total Florida exports to Switzerland" was up massively from a paltry $5,011.6 million in 2010, and up more than double from the $3,244.0 million total exports in 2009, two years previous! Wow! What is going on here?

This chart from eFlorida.com is full of interesting stuff, like about silver, exports of which increased to $10 million in 2011, up from (according to the chart) literally zero dollars in 2010. 

This is all pretty amazing, as JMR Burt realizes, too, and says "Amazing, since Florida has no gold or silver mines."

"Well," I was tempted to say, "If you think THAT is amazing, then what do you make of exports of  'Silver (Incl Prec Plated), Unwr, Semimfr Or Powder' increasing from literally zero in 2010 to $10 million in 2011, yet which is, according to this report, an increase of an odd 45,494.4%?  You would think going from zero to 10 million would be an infinite increase, wouldn't you?  Not 45,494.4%!  Pretty odd, huh? Huh? Pretty odd, wouldn't you say?"

And this is not the only odd thing!  To prove such a provocative statement, listen as I say "Oddly enough, silver exports from Florida to Switzerland in 2009 show a dash ('-') instead of a zero! Oddly enough, a dash! What is a dash supposed to mean, except as some secret, coded message, probably from a sinister, secret government agency watching your every move, or maybe spies at the corrupt commodity exchanges are communicating with alien space creatures from beyond the solar system?"

And the next two biggest percentage-increases in Florida exports to Switzerland are chump change, being "Lifting, handling, Loading & Unload Machines" (although only $800,000 in 2011, but up an odd 1,755.5% from the zero exports in 2010) and "Screws, Bolts, Nuts, Washers Etc, Iron Or Steel" ($1.1 million in 2011, up 505.9% from 2010 and zero in 2009, which is pretty odd, too).

And oddly enough, Florida exports to Switzerland of "Citrus Fruit, Fresh Or Dried" was only $1.1 million, despite citrus products being The Thing for which Florida is supposedly known.

As a guy who is naturally paranoid and sees conspiracies everywhere, I am instantly on the nervous alert at these odd, and thus scary, goings-on.   I find myself constantly re-evaluating my situation in terms of the nearest exit and where to take cover in the event of a full-scale, all-out, guns blazing, urban-warfare, us-versus-them, dog-eat-dog shoot-out, if it comes to that, and it probably will, if any of those dark, Hollywood post-apocalyptic movies or invasions of space monsters are even REMOTELY true.

Fortunately, one thing I know --for a fact! -- to be true, and not odd, is that gold, silver and oil stocks are the place to be when the government is doing such massive deficit-spending and allowing the Federal Reserve to create so incredibly, impossibly, catastrophically much money and credit.

And, in light of that, for a last bit of "oddly enough" incidents, it is odd that very few people are buying gold, silver and oil at these absolute bargain prices, here at the beginning of the inflationary horror that awaits us.

But for those who do, however, it is "Whee! This investing stuff is easy! And not the least bit odd!"

 

Mogambo Nontraditional Policies (MNP)

September 6, 2012

Mogambo Guru

 

I was startled to read Reading Ben Bernanke's remarks, made at Jackson Hole, about using "nontraditional policies" at the Federal Reserve.   Nontraditional policies, indeed!

By "nontraditional policies" he no doubt means his current policies of 1) the inflationary horror of monetizing of debt by the simple expedient of simply creating the money to buy new government debt, and 2) the bizarre idea to purposely create inflation in consumer prices.

Apparently, Mr. Bernanke is unaware that both of these sublime idiocies have been consistently denounced as moronic and suicidal for thousands of years (usually after they have failed miserably), and exist nowhere in the economic literature except as bad examples of traditional economic policy.

He actually made this alarming admission in public, in front of witnesses, hundreds of them, in fact, while addressing the annual conclave of economic halfwits, lunatics, liars, hangers-on, goers-along, and mainstream media nitwits at Jackson Hole, Wyoming, all of which I rudely refer to as "The A-Holes at the J-Hole."

Suddenly, I realized that I may have been too harsh in condemning him and his moronic colleagues for this obvious insanity. I can use this!

Instantly energized, I nimbly hopped into the Mogambo-Mobile, started 'er up, screeched out of the driveway and, engine roaring, careened down the street with the radio blaring and a big ol' smile on my face, happily rolling through pesky traditional stop signs and blithely exceeding posted (and thus traditional) speed limits, which are so tragically traditional and thus at odds with the new "nontraditional policy."

I was soon at the grocery store, parking in an oh-so-handy Handicapped-Only parking space as further nontraditional policy, and then having a heated conversation with the store manager, where I was breathlessly telling him all about the new Mogambo Nontraditional Policies (MNP) now in effect.

I asked him, with mock earnestness, "Didn't you get the memo about nontraditional policies?" 

He replied, with a hint of exasperation in his voice, "What memo? You don't even work here! You're just that crazy old man who is always coming in here and upsetting the customers by telling them that We're Freaking Doomed (WFD) because of the inflation and ruination caused by the satanic Federal Reserve creating, and which is still creating, so much excess money and credit so as to fund the growing, bankrupting stupidities of a constantly enlarging, suffocating Marxist and thoroughly fascist government, over the last half-century, and the teeming hordes of government-dependent people that has now grown to over half the population."

Wow! I was surprised and delighted at this unexpected knowledge about things economic!  He must have listened to me, all these years, while spying on me with the security cameras! I was so proud of him that I excitedly and happily blurted out "Yeah! THAT memo!"

Then he says, obviously getting irritated and growing tired of dealing with me, sneeringly asked "What?"

I looked him straight in the eye, and as if speaking to some stupid Earthling child, earnestly said "Mogambo Nontraditional Policies (MNP) is what!  If you are looking for a definition of Mogambo Nontraditional Policies (MNP), it's just like the 'nontraditional policies' of the Federal Reserve!  

"Thus, MNP are also arbitrary actions of an especially nonsensical, stupid, or suicidal nature that are bizarrely contrary to every bit of experience, evidence and theory of the last 4,500 years, enacted entirely at my insane whim, so as to desperately try to reverse the horrible effects of my disastrous mishandling of traditional policies, but now with a new policy of pursuing A Huge Guaranteed Failure (AHGF), thus hopefully benefiting from two wrongs making a right!"

Again he said, with even greater exasperation in his voice, "What?"

By this time, he is looking at me with a really dumbfounded blank look on his stupid face.  So I impatiently, but gently, said "Enough theory, moron! In practice, henceforth MNP will include, but not be limited to, me marching in here like I own the place, taking all the groceries I want, any time I want, even if I have to call you at home in the middle of the night to make you come down here and open the store up especially for me.

"And a further huge, stinking load of Mogambo Nontraditional Policies (MNP) is that I do not have to pay for anything.  Everything is free to me.  You will make it up on increased volume."

At this, he is suddenly laughing at me, saying "You're trying that old joke in real life? What are you, some kind of crazy person?"

Naturally, I said "I'm The Mogambo Guru! You tell ME! Hahaha!"

Well, we both had a good laugh at that, him thinking that I was just trying to be funny, but could not be funny, like the time I tried to look handsome and could not, and like the time I tried to be intelligent and could not, and the time I tried to be romantic but could not, and the time I tried to raise an unstoppable army of undead brain-eating fiends to invade Washington, D.C., kill them all, and install me on a throne where I would be Omnipotent Emperor Mogambo (OEM), taking complete dictatorial control, putting the US dollar back on a strict gold standard and a banking system with no fractional banking.

Thus, the economy would always be fine, everything would be fine because the money would always be fine, and the poor would fine as they enjoy zero percent inflation in prices, and indeed they would probably pay only gently falling prices, thus receiving the fabled "more for less," along with rising quality as a result of dog-eat-dog producers and suppliers competing for a limited supply of consumer money in a Darwinian marketplace where the best survive and the worst are weeded out.

Verily, children would happily laugh and sing in their play, and puppies would wag their cute little tails all day, which I think rhymes this particular time, so you know it must be true, don't you?

Anyway, Bernanke told his colleagues, "I hate puppies, and I hate Darwin, and I hate The Mogambo for exposing me as the desperate, panicked, know-nothing little twit that I am!"

Okay, I admit that he did not say that, but he might as well have, as he actually DID say "it is also true that nontraditional policies are relatively more difficult to apply, at least given the present state of our knowledge."

Hahaha! This proves what a complete doofus he is!  Hahaha!  Applying nontraditional policies is the easiest thing in the world, dude! Nothing is as easy as effortlessly creating unlimited amounts of money out of thin air to buy unlimited amounts of new government debt!  Stupid and insanely suicidal, of course, but also very, very easy!

Well, it doesn't take a Junior Mogambo Ranger Decoder Ring (JMRDR) to figure out that this laughable comment of his proves that he is just making up this stupid crap out of his lunatic, neo-Keynesian econometric head. 

Following that, one can only shake one's head and truly wonder about Bernanke's mental state when he lets slip that he is completely ignorant of the effects of his disastrous "nontraditional policies" when he says "Estimates of the effects of nontraditional policies on economic activity and inflation are uncertain," which makes me laugh even more, laughing even as my Mighty Mogambo Heart (MMH) is breaking about the future of the dollar and America.

Well, memo to Ben Bernanke: The disastrous effects of creating too much money and credit are VERY well known, you dolt! And they have been very, VERY well known for thousands of years!  

Apparently Bernanke was stung by my rude remarks, and, realizing that they are true and that he really IS a lunatic neo-Keynesian econometric lowlife loser, tries to weasel around and give himself an out ("It wasn't my fault!") by lamely warning that "the use of nontraditional policies involves costs beyond those generally associated with more-standard policies."  Higher costs? No foolin'?  Hahahaha!

So he is creating (along with the European Central Bank and the International Monetary Fund (both run by socialists!) massive amounts of money so as to monetize massive amounts of government debt, thereby doing something that has failed every time it has been tried in all of history by whole economies collapsing as their money was devalued to worthlessness? Hahahaha again!           

Of course, this pales in comparison to terrifying reality of his actually, unbelievably, tragically, horribly, and nontraditionally using monetary policy to "target inflation" to be at least more than 2%, and with rumors of his wanting 5% price inflation, instead of the traditionally-desired zero percent (or less!) price inflation. Yikes! We're Freaking Doomed (WFD)!

And why is he doing this?  As Tyler Durden of zerohedge.com writes about Ben Bernanke and Alan Greenspan, they are "directly responsible for a crisis, which over the course of 30 years of 'great moderation' pulled over $30 trillion in future demand to the present (benefiting almost exclusively the banker class), and which will guarantee pain and suffering for generations of Joe Sixpacks."

Although Mr. Durden does not mention it because he is too polite, I will say that those selfsame Joe Sixpacks will suffer for generations because they consistently bought sixpacks of beer instead of consistently buying gold, silver and oil with that little bit of chump change.

Perhaps you will find it instructional that if they HAD bought gold, silver and oil instead of beer all these years, they are already able to buy beer by the case. By the truckload! By the trainload! And soon, thanks to their prices exploding thanks to the evil Federal Reserve continually creating So Freaking Much Money (SFMM), they will able to buy their own freaking brewery, for crying out loud!  Dozens of them!

That's when they would really, really, REALLY realize the full implications of "Whee! This investing stuff is easy!"