Funding the Bacchanalian excess By The Mogambo Guru
I could see that the audience of reporters and passers-by was getting nervous,
as I had just finished going through the explanation of how the US Federal
Reserve creates inflation in the money supply by creating too much money and
credit, which causes inflation in things as all of this money enters the
economy, and then eventually the inflations in stocks, bonds, houses and the
size of government becomes so great that further infusions of money must
increase in proportion to the increase in the aforementioned prices of the
stocks, bonds, houses and size of government if they are to maintain a static
percentage growth, and some of all that increasing avalanche of money starts
getting into bidding wars for commodities, increasing the prices of
commodities.
But they just weren't getting it. Even that cute little cub reporter
from the Daily Planet wasn't getting it. In my imagination, I had hoped that
she would immediately see the horror of what I was telling them; thus leaping,
whilst sobbing and trembling, into my Manly Mogambo Arms (MMA), she would say,
"Oh, save me from the horrors of such inflation in prices that comes from
inflation in the money supply, Mighty Magnificent Mogambo (MMM)! And by the
way, your Manly Mogambo Arms (MMA) get me hot! Take me! I'm yours!"
But they all just sat there with these stupid expressions on their faces. "Like
food and gasoline getting so highly priced that you can't buy them, you
freaking morons!" I exclaimed helpfully.
Then they all started yammering about how prices are so high and how the
government ought to do something and blah blah blah.
So I asked, "Do any of you morons know what will happen if the government slows
down its spending? Chaos! The government is so huge, and so many people now
depend upon it for everything, that the government cannot stop spending! And so
the Fed cannot stop creating excess money and credit, because there is nowhere
else from which the government can get that much money! Inflation will turn to
rioting in the streets!"
Well, they all thought that I was crazy, and that raising taxes on the rich and
adding a few more government programs would solve everything.
With a weary sigh of resignation, I showed them an interesting article in
Archeology magazine that refers to the Roman writer Seneca describing the
feasting excesses of Rome, who asks, "We have all heard about the decadence of
the ancient Romans, but how much of this is true?"
It turns out that researchers "are confirming the classical author's accounts
of the Roman taste for luxury. Banquets were extravagant feasts where patrons
competed to outdo and outspend each other".
So, intrigued about the possibility of this kind of thing becoming a fad again
(Oh, boy! Oh, boy!) and maybe somebody we know will host one of these
Bacchanalian excesses involving un-dreamt of depravity and gluttony and invite
us, we naturally want to know, "How much would one of these Roman feasts cost
today?"
The answer is "US$10,000 for a party of 15 revelers."
I know what you are thinking. You are thinking, "Is that all? At a lousy $667
per reveler? It almost costs that much to fill the gas tank on my damned car!
Hahahaha!"
Well, that's not exactly true, I admit, but $667 per day times 365 days a year
is $243,455 a year, which used to be a lot, but these days, thanks to the
rampant inflation of the last few decades, it is not all that much anymore, and
half of all government workers probably make that much when you add in the full
value of their overly-generous benefit packages.
And even half of that, or $334 a day, is $121,727 a year, which, if taxed as
income, would yield net-of-tax about what the full Social Security, Medicare,
Medicaid and welfare packages now deliver per recipient! Free food, free
medical care, free housing, and literally given cash to spend!
But this is not about how little it costs to stage a Roman feast, but about
what happens when people are used to getting free gluttony, and then suddenly
they are not. Perhaps a clue can be found when the Roman author Seneca "wrote
that his friend, the food writer Apicius, drank poison and committed suicide
rather than give up the gluttonous lifestyle he could no longer afford."
The bad news is that today's feasters, gorging themselves at the government
trough, are not going to commit suicide. They are going to riot and elect
politicians to continue the feast, regardless of the cost. Regardless of the
cost! Hahaha! We're freaking doomed!
The Mogambo Sez: Gold, silver and oil. That is all that one can say when asked
about investing in such a crazy world: gold, silver and oil.
And note how even the words are soothing; gold, silver and oil. Ahhh! I feel
better already! Get some, and you will, too!
Gold, silver and oil! Ahhhhhhhh!
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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