THE
MOGAMBO GURU Franken Berry needs
an inflation-free diet By The
Mogambo Guru
From the back page of the
business section of the St Petersburg Times comes
the chilling news that "Beer prices are likely to
climb and ingredients are in short supply." A
local brewmaster says that he estimates that beer
prices will rise 10% in the next six weeks, "at a
minimum".
Aubie Baltin, writing in
gold-eagle.com, asks, "Is there anyone out there
who still believes that inflation is only 2%? I
have recently
been
cleaning up my files and in throwing out my 1999
Income Tax Files, I started looking through my
bills and I noticed that everything had at least
doubled."
Doubled! Naturally, I think this
is a perfect opportunity to show off my skills by
calculating the inflation rate that it takes to
double in seven years. So I am frantically
scrambling to find my HP12C calculator on my desk,
and I can't find it, and I figure that someone
stole it (the thieving bastards!) and I am getting
more and more agitated and angry about how
everybody around here is always stealing my stuff,
and how I have about had it up to freaking HERE
with that thieving crap, and now that I think
about it, retaliating by stealing their lunches
and ruining their credit is no longer adequate
compensation!
You can tell by the way the
veins are bulging out in my neck where this
heading, but an Unfortunate Mogambo Incident (UMI)
was avoided when Mr Baltin quickly volunteered
that my calculations were appreciated, but
unnecessary, as the answer is "10% compounded
annual inflation rate".
And the
manufacturers are doing what they can to disguise
inflation in prices, as revealed by JMR Dave E,
who says that he is noticing some "sharp food
price increases", like "For instance, just the
other day at the grocery store, while daydreaming
of a voluptuous lass, I grabbed a 'family size'
box of cereal but suddenly I felt like I had
grabbed a handful of supermodel. Immediately
sensing something was wrong with the package, I
inspected the weight, which was 19 ounces. When I
got home I examined another 'family size' box of
the same cereal that I had bought recently. Sure
enough, it was 21 ounces."
Demonstrating
that he has math skills far and away above the
abilities of The Mogambo, he announces, "So just
like that, they dropped the quantity by 10% while
keeping the price the same."
My Feeble
Mogambo Mind (FMM) jumps to overload at such
terrifying inflation, and my eyes glaze over in
confusion as I am thinking to myself "Is keeping
the price the same, but getting 10% less, the
equivalent of charging 10% more for the same
amount?" And then the realist in me says, "You are
too stupid to understand it even if someone told
you the answer, doofus, so why don't you open up a
new bag of Fritos, watch some TV and just forget
about it?"
But even as I mindlessly stuff
Fritos into my mouth and use the TV remote to surf
the dial, the Zen-Master Mogambo (ZMM) reminds us
of the existential nature of the universe with the
immortal koan, "What is the sound of one hand
clapping while the other hand reaches for a box of
breakfast cereal and then having to pay more for
it in dollars-per-ounce, which means having less
money for everything else, including going to a
bar and getting hammered, just pathetically trying
to get away from the cold, ugly reality of a
soul-killing family, for a lousy couple of hours,
which means I will be spending more nights at
home, and then you begin to laugh morbidly 'Oh,
Death, where is thy sting?'"
Then I had a
thought! Suppose I ration the kids to a box of
cereal a week! Then, if they run out of cereal
before next week, I can accuse them of being
gluttonous pigs who could certainly stand to lose
a few pounds in ugly weight, and lose a few tons
in bad attitude, too! So sit down and shut up,
Porky!
I decided I needed more data. Again
I turn to JMR Dave, who says that it appears that,
"The 'family size' box is 19 ounces, while the
'regular' size is 16 ounces." I'm suddenly
thinking that this could work!
And it is
not just inflation in stuff that we buy at the
store, or the kids whining about being hungry, or
about how we don't have any more Fritos, but
inflation in prices. And thus we are not surprised
to learn that inflation in the prices of raw
materials has been around longer than the
government says, too, as in Barron's this week,
the Weekday Trader quotes the CEO of Whirlpool as
saying that the company is paying a "fourth year
of incredibly high raw-material inflation".
A shiver went up my spine at the thought
of "incredibly high" inflation, and I remember
that I sat down. I guess I went blank at the
horror. I woke up here. That's all I know.
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,
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