To show you how much debts are rising
and how much government spending is rising, I
present a part of an advertisement for the new
movie, I.O.U.S.A., which just premiered at
the Sundance Film Festival, a snooty little
enclave of movie snots that always rejected my
entry, which is a cinematic tour de force where
The Mogambo contemplates his navel, as per the
rest of the introspective genre, but who finds
some lint in there! This clever plot twist, for
some unexplained reason, makes lots of
scantily-clad dancing girls suddenly appear out of
nowhere and prance around provocatively for about
an hour or so, which takes economic philosophy to
whole new levels of entertainment, everywhere
except the snooty Sundance Film Festival.
But this is not about how The Mogambo's
cinematic creative
output is cruelly censored,
but how the ad quotes filmmaker Patrick Creadon as
saying, "America's federal debt is $8.6 trillion
and growing at a frightening rate. In addition,
our major entitlement programs (Social Security,
Medicare and Medicaid) are dangerously unfunded.
As a country, we are slowly spending ourselves to
death."
Well, he couldn't be more right
about us spending ourselves to death, as the
national debt is actually $9.1 trillion, already
grown by $500 billion since he was interviewed for
a movie so new that it just premiered! Hahaha!
We're freaking doomed!
And this reminds me
of Junior Mogambo Ranger (JMR) Bob B, who says,
"Amazing huh? The United States created 18,000
jobs during November while 270,000 (9,000/day) of
the US population turned 62 years of age in the
same month and became eligible for Social Security
on January 1, 2008. Let me get my calculator. OK.
That's one new contributor (to Social Security)
for every 15 new beneficiaries. When is this going
to hit the fan?"
I am not sure that there
is anything "hitting the fan" in the movie
I.O.U.S.A., but there might be, as it could
be clever, and I assume that there are many, many
clever parts in this movie. For instance, one of
the most clever is the joke that is right out
there in plain sight; the title of the movie,
which is witty because this is a movie about
following, "US Comptroller General David Walker as
he crisscrosses the country explaining America's
unsustainable fiscal policies to its citizens",
which is the sad, sad story of a corrupt Congress
(except Ron Paul) letting the corrupt Federal
Reserve create the excess credit, which creates
the backbreaking debt, which creates the money
that the government wants to borrow, all of which
radically distorts the economy and expands the
money supply, which dooms us to suffer from
horrendous inflation in prices as a result of this
horrendous inflation in the money supply.
No, the really clever part was the
subtitle, which was, "It's a big budget movie"!
Hahahaha! Trust me when I say that there are parts
of the galaxy where creatures are cracking up even
as we speak because this is so, so funny, in so
many ways! So funny, in fact, that it makes me
smile even to read it again as I typed it!
Hahahaha!
The best part of the ad, from my
perspective, is the review by Mary Milliken of
Reuters, who said, "I.O.U.S.A. may not be
the sexiest film at the Sundance Film Festival,
but it could be the most timely." Not sexy! This
was the very point I was raising in the initial
planning sessions for the movie, where my terrific
unsolicited suggestion was to star me, The
Mogambo, running around in nothing but a Speedo
swimsuit and a big cigar, which would turn the
movie into box-office gold, as the unmistakable
symbolism of the cigar alone guaranteed boffo
reviews!
They ignored me and never
returned my calls, and now the movie is forced to
stand on its own merits, and my dreams of stardom
and celebrity are but dust. Or butt dust, which
sounds the same, but seems more descriptive.
But dust or butt dust, either way, the
fact is that the economy is ditto down the
crapper, as I can confidently say since the BLS
reported that inflation is already starting to
kill us as, "Consumer prices advanced at a
seasonally adjusted annual rate (SAAR) of 5.6% in
the fourth quarter of 2007. For the 12-month
period ended in December, the CPI-U rose 4.1%."
The worse news is that "The index for
energy turned back up in the fourth quarter,
advancing at a 37.1% annual rate. Overall energy
costs rose 17.4% in 2007. The food index, which
rose 2.1% in all of 2006, advanced 4.9% in 2007."
Brian Bloom of beyondneanderthal.com is my
kind of guy, and you can detect his concern and
fear when he writes that the Labor Department said
that not only are prices up according to the CPI,
but that it is actually worse than that, as, "From
January 2007 to December 2007 the US$ Index fell,
roughly, from 85 to 75. Thus, the price of an
imported article - if it was priced in a foreign
currency - would have risen from 100 to 113 or by
13%." Yikes! 13% inflation!"
He says, "Of
course, the 'poor' Chinese manufacturers would
have absorbed some of the impact because they
price in US dollars", which is certainly true as
far as contracts are concerned. But he thinks it
is worse than that, as for the Chinese
manufacturers, "their own input costs rose far
faster than their yuan rose relative to the US
dollar. It follows that they must have shared some
of the US's inflationary pain, but not enough to
have put a 4.1% cap on US inflation."
We
look at each other. I know what I am thinking, and
he knows what he is thinking. I'm thinking that he
agrees with me that anyone who thinks that
inflation in prices in the United States is only
4.1% is a Big Stupid Idiot (BSI).
After
examining a few clues related to the Chinese
economy, Mr Bloom comes to the conclusion that,
"the stated 4.1% inflation rate in the USA is a
crock". Then he is reminded that that is the same
opinion of The Mogambo, and did he really want to
be associated with "people like that"? His face
turns ashen and his hands tremble.
Hurriedly, he re-examines the inflationary
evidence, and again comes to the conclusion that
"the stated 4.1% inflation rate in the USA is a
crock". But his heart really isn't in it anymore.
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 2008, 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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