George V P was the first to send me to
Sprott.com, in which the entire commentary
contained only two words. On arriving at the site,
on the first page, in very large typeface, is
written the word "BUY".
I kept looking at
it expecting, you know, something to happen. So I
sat and waited, patiently staring at the word
"BUY", and I waited and looked at this word some
more, and nothing happened, and after a while I
started thinking that it looked pretty weird.
Maybe it should be pronounced "boo-ee"! What an
insight! And so I call my
wife
over to look at it, and naturally she doesn't
think it looks like "boo-ee" at all. So we get
into a big fight about it, and about who is REALLY
the "weirdest, most stupid lunatic jerk in the
whole freaking world" around here, and pretty soon
everybody in the office is agreeing with her!
And then they'll turn around this December
and wonder why I don't give them a Christmas bonus
this year!
So I'm naturally thinking,
"Eric Sprott and Sasha Solunac are telling me that
they also think that 'buy' is a weird word, and
that it really IS pronounced 'boo-ee', and
everybody has been pronouncing it wrong all this
time?
"Or are they telling me to buy
something? Buy what?" And then I start thinking of
all the things we could buy, like pizza! And then
I am thinking, "And if we could buy a pizza, and
if they were going to buy pizza, how about, you
know, getting with the program?"
So I
decide to help things along by stealing their
identities and one of their credit card numbers,
and use it to order a pizza, charging the whole
thing to them, which was only fair since it was
their idea to have pizza in the first damned
place!
So I grab the mouse to start my
Internet search, and as I do so, the screen
flipped to the second page, whereupon I saw what
they wanted me to buy! "GOLD", it read, in big,
gold-colored letters, and punctuated by a big,
black exclamation point!
Gold!
This is apparently not news to Mark
Lundeen, who disdainfully says, "For your
information, the Barron's Gold Mining Index (BGMI)
hit a new all time high last week." Which it did
in spite of the fact that, "In 1980 when the BGMI
last hit its all time high, all the world was
paying attention," although "in 2007 no one cares
- yet", which includes "the staff of Barron's who
published the new all time high of their own gold
and silver mining index with no comment".
And the reason that "no one cares" is
that, "In 2007 the reality is that very few
professional money managers bother with the gold
mining shares."
He thinks that it "is
unfortunate that one of the greatest bull trends
since 2000 has been gold and silver mining and the
general public is unaware of this fact." I laugh!
I don't! I don't think it is unfortunate at all! I
think it is the natural order of things, which is
that for me (the minority of investors) to make a
lot of money, the majority (the ignorant bozos he
is talking about) must NOT be buying gold while I
am buying gold! The majority must always be wrong!
Therefore, it is crucial that they remain clueless
at this stage of the coming gold, silver, oil and
commodities boom, while the Wily, Scheming, Greedy
Pigs (WSGP) of us buy gold, silver and oil at
bargain rates!
Greg Grillot at Whiskey and
Gunpowder senses my greed and gluttony for gold,
and suddenly asks, "if America has 8,180 tons - or
nearly 261.7 million ounces - of gold in reserve
... how many dollars does that buy?"
Immediately I thought of my calculator,
mostly wondering where it was. Then he said "The
answer will shock you," which was shocking enough
in itself, as I don't remember taking my
calculator to anyplace shocking, and I find that I
don't like it when people say "This will shock
you" because it is always Really Bad News (RBN)
for one reason or another, and usually shocking.
Thankfully, Mr Grillot decided to offer an
introductory preamble, giving me a chance to
fasten my seat belt and bite down on a rubber dog
toy (which tasted like dog hair for some reason).
He said that following Nixon's severing the tie of
the dollar to gold in 1971, "When dollars became
unhinged from gold, the printing presses at the
Fed cranked up. By 1980, for every ounce of gold
in America, the financial system carried $6,966 in
cash. That's $1.8 trillion total. But get this, by
the end of 2005, the total real money supply shot
to over $10 trillion," and that means that there
is "$38,349 in circulation for every ounce of gold
in reserve!"
And that probably assumes
that all the gold held by the Fed is still there
and still owned free-and-clear, which is the
preposterous, barefaced lie that the Gold Anti
Trust Action Committee is having so much fun
exposing. So, if half the gold has been sold or
leased out, as they postulate, then there is
$76,698 of money supply for every ounce of gold!
And gold is selling for less than $800 an
ounce right now? Wow! What a bargain, huh?
The ignorant will, one day, without fail,
be desperately buying gold and driving the price
to unheard-of levels, and I will be much, much
richer when they do, and they will be wiser, much
wiser, though poorer, and there is nothing
"unfortunate" in that at all from my perspective!
Hahaha! Chumps! Or, from their perspective, "Ugh."
Mogambo sez: Ah! Another day, another load
of money created, and more inflation to produce a
coming windfall in gold, silver and oil, which the
central banks and governments of the world will
try to forestall by manipulating it away, keeping
prices unnaturally and temporarily low so that we
can buy more. Could life get any better?
Richard Daughty is general
partner and COO for Smith Consultant Group,
serving the financial and medical communities, and
the editor of The Mogambo Guru economic newsletter
- an avocational exercise to heap disrespect on
those who desperately deserve
it.
Republished with permission from The Daily Reckoning.
Copyright 2007, The Daily Reckoning.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
