Gold-flavored Napoleon
complex By The Mogambo Guru
I read somewhere that the money supply in
China is growing at 20%, which proves that the
Chinese government is every bit as stupid as
everybody else's governments, in that they allow
the central bank to allow the money supply to grow
at such a horrendously appalling rate. As part of
the money supply, Kenneth Gerbino at
kengerbino.com reports, "China now has more money
in circulation (M1) than the United States. $1.9
trillion vs. $1.4 trillion."
Okay, to be
fair, M1 is essentially just paper cash and coins,
($813 billion in the United States) and some
financial/banking stuff
that
operate as cash equivalents, but jeez! That's a
lot of money!
Mr Gerbino did not say, "If
you think that's something, get a load of this
crap!", but he should have, as the startling
enormity of what is happening is that, "the seven
largest countries in the world and Europe show
that they created $775 billion in new money in the
last year."
This fascinating "News about
Money from Around the World" thing brings up the
interesting article at Atimes.com, which has
Olivia Chung reporting that "rising inflation has
more Chinese putting their money into stocks,
investment funds and the traditional favorite,
gold, in an effort to get the most for their
money." Gold! See? It's everywhere!
So Mr
Gerbino says, "The supply of gold available for
investment, outside of jewelry and industrial
demand which would include bars, coins and bullion
funds was approximately $13 billion. This is a
ratio of 60 to 1 and does not include the money
creation by the other 175 countries in the world."
Naturally confused and impressed by such
large numbers, I am thinking, "Is there something
in there to tell me how to make a lot of money in
gold without working, and then I could take the
rest of the week off and maybe get some REAL work
done; catching up on sending hate mail to
everybody in Congress except Ron Paul, who is
hopefully the next president of the United States
and who will be the first one in living memory to
actual uphold and defend the constitution, which
all previous presidents swore to do on a Bible,
but they were lying, which means that when they
die, they all go to hell, so there is some small
satisfaction in that.
And why do I hate
Congress (except Ron Paul)? Because they are the
ones that borrowed and spent the $9 trillion
national debt! In fact, the $3 trillion federal
budget shows that this year we paid $430 billion
in interest payments on this huge, bankrupting
mountain of debt! Just the interest expense alone!
For the 100 million non-government workers
in this country, that comes out to $4,300 each!
Hahaha! This is how much each non-government
worker would pay in extra taxes, this year alone,
just to pay the interest on the national debt!
And don't get me started fixating about
the morons in Congress (except Ron Paul), because
then I won't get around to also writing hate mail
to the Federal Reserve, which created all the
money and credit that made all this bone-breaking
debt possible, and sending disrespectful hate mail
to the Supreme Court, which lets these weenies get
away with this un-constitutional crap, which means
that we are going to suffer the horror of
inflation in prices, which is the thing that
destroys civilizations (eg, the French Revolution)
and brings vengeful madmen like Napoleon and The
Mogambo to power, and if Napoleon were alive today
I would say, one tyrannical monarch to another,
"Nice hat, dude!"
Mr Gerbino is apparently
surprised at the weird direction that took, and
with an unsure, confused tone to his voice, says,
"The point is that there really is not much annual
gold supply around for investment purposes or
financial insurance or a money substitute. Sooner
or later the price will dramatically reflect this
imbalance."
Suddenly, across the room, a
hand went up, and I heard someone say, "You're
preaching to the choir here, sir. If you want to
impress us, tell us when! Otherwise, you're just
spouting more Stupid Mogambo Gibberish (SMG), but
with less drooling!"
Sadly, I choked on
bitter tears as the press conference erupted in
laughter at my expense, and I silently took
another Secret Oath Of Mogambo Revenge (SOOMR)
against all of them to make them pay for their
folly!
So as I was getting to my feet to
put a curse on them all, Mr Gerbino quickly heads
me off and says, "India has increased its money
supply 15.3% in the last year." Knowing that I can
be soothed by stories about the big fortunes that
will be made with gold, he says, "This is probably
why in the first eight months of 2006, gold
imports increased by 86%. India could be on track
to consume over 35% of 2007 global mine supply all
by itself."
Appended was "Editor's Note:
India is the world's largest buyer of gold."
From all of this, I assume that "when" is
"any time now"!
Douglas V Gnazzo of the
Honest Money Gold & Silver Report hears us
talking about gold and says in his essay "Gold
Shines vs All Fiat Paper Money" that, "When the
price of gold is rising against most major world
currencies it means that gold is in a powerful
bull market."
I admit that I immediately
started to doze off at this theoretical stuff, as
I had had a hard night, arguing with the wife and
kids about who REALLY pays all taxes and
inflations, namely the little guy, and seeing as
how they were all just a bunch of soul-sucking
parasites who had taken all the joy out of my life
except for those precious few hours where I could
spend some "quality time" planning my revenge
against all of them, then they were the littlest
of the little guys, and I was immediately cutting
their rations and allowances, which caused them to
howl in dismay about how I am "evil" and "cruel"
and "hateful", which makes me laugh because they
don't talk that way to the merchants, although the
raising of prices is exactly the same thing as
cutting an allowance; you buy less stuff.
And so, naturally, I helpfully and
politely point out to them what stinking little
hypocrites they are, and then they get all upset
at that, too! See the kind of crap I have to put
up with around here?
Well, Mr Gnazzo is
not interested in me, my stupid family, or how I
would like to borrow 50 bucks, and says that if I
would just look around, I would see that the
existence of a secular bull market in gold is
proved because, "this is exactly what gold is
doing - it is rising in price as denominated in
all major world currencies".
And why are
gold-bug, paranoid, psycho-whacko trash like me
buying gold with every penny we can borrow from
family members and by accosting strangers on the
street? He doesn't answer the question directly,
but allows that a global bull market in gold,
"means that gold is being sought out because it is
the currency that retains purchasing power better
than all other currencies - it is fulfilling its
role as the sovereign of sovereigns".
How
poetic! How true! How truly poetic and true!
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.
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Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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