Commodities benefit from
megaforces By The Mogambo Guru
Martin Weiss of MoneyandMarkets.com says
that the whole unfolding mess is turning into an
inflection point in history. "We are witnessing,"
he says, "the greatest wealth shift of all time -
from industry to mining and agriculture … from the
traditional industrial power centers in the West
to new power centers in the East and South ...
from paper assets to hard assets."
I think
to myself that this is very interesting, but
obviously too complicated for a low-IQ guy like me
to, you know, grasp, even sober. Fortunately, I
was saved from having to do any thinking as
he
boils it down to Four Forces, which I was going to
contrast with the Four Noble Truths of the Buddha,
but I can see the comparison would have been
inappropriate because these are not merely forces
he is talking about, but megaforces, like some
huge, murderous juggernaut viciously stomping
across the economic landscape and squashing things
into puddles of mush under its huge feet, which is
not entirely characteristic of the Buddha as I
understand it.
Megaforce number one, he
says, is that "The global population explosion is
fueling a parallel explosion in the demand for
resources", which I say is bullish (B) for
commodities, like gold.
Megaforce number
two is that "global warming now threatens to
destroy a larger portion of the world's crops with
floods, droughts and other disasters", which I
also say is also Very Bullish (VB) for
commodities, like gold.
The third force,
megaforce number three, is that the "housing bust,
mortgage meltdown, and credit crunch guarantee a
US recession", which is, I say, Very, Very Bullish
(VVB) for commodities, like gold.
And
while all of those are bad enough, strap on your
crash helmet when he adds that megaforce number
four is, "massive money-pumping by the US Federal
Reserve", which means that there is a megaforce
number five, which is going to be rising civil
unrest in response to consumer prices that are
rising like never before, and everybody is all
pissed off that they don't have any money to get
new golf clubs, and everybody is all grumpy all
the time because I won't give them any money, like
this lousy economy is all my fault or something,
even though I have enough money to give them
because I have been buying gold, silver and oil
all along, but I am too stingy to part with any of
it, and all of which is Very, Very, Very Bullish
(VVVB) for commodities, like gold.
Puru
Saxena of Purusaxena.com doesn't want to comment
on my apparent fixation on gold, but actually
hints at it by writing, "even if I tried, I could
not possibly imagine a more bullish environment
for all types of commodities (energy, metals, food
and water). The classic ingredients of rising
demand, tight supplies and monetary inflation have
all come together at once."
But everybody
wants to know, "What about gold? What will happen
to gold in all of this economic mess caused by
idiotic governments? Mogambo said we'd all be rich
from owning gold!" Well, you apparently know what
I would say, but you don't know what a liar I am,
so let's turn, instead, to Junior Mogambo Ranger
(JMR) Juan O, who lives in Venezuela, and who is
very familiar with the macroeconomic idiocy of
governments, and writes, "This has to be some type
of record I think. Hugo Chavez had his
inauguration as president on February 2, 1999. The
price of gold in Venezuelan currency that day was
Bs144,275. Today, Halloween 2007, it costs
Bs5,244,322."
Normally, I would have
discarded the email because it appears that
further calculations are in order, and I was
frantically hitting the "Delete" button to escape
this math quiz. With a sigh of relief, I notice
that he has already performed them! In fact, he
calculates that gold has become, "more than 36
times more expensive" in eight lousy years!
And as an aside, he notes that the
government of Venezuela is playing fast and loose
with inflation statistics, just like everybody
else, as "Things down here are pretty crazy when
it comes to money matters, but I suppose it's a
global trend to the power of n. For example I
haven't found any milk for a few months, but
according to government figures, it hasn't gone up
in price for the last two years"! Hahaha!
Government at its finest these days!
And
that is why you should be buying gold right now,
instead of reading my stupid Mogambo crap (SMC).
And I should be, instead of writing it!
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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