MAD!!! Credits in a swirl of insanity
By The Mogambo Guru
If you want to know why historically people always turn to gold when
government/central bank mismanagement ruins everything, and the currency and
the economy "circle the bowl" down the old crapper, it is revealed in the
statement by Jacqueline Doherty in her "Streetwise" column in Barron's. She
writes, "There are fewer places to hide." And she also notes that "For a while,
stocks in the energy, basic-material, consumer-non-cyclical and utility sectors
kept rising. But even those have begun to stumble."
And that is the reason that people eventually go into gold; it will be the last
place to hide, as everything else goes into the aforementioned crapper, which
is the second time I mentioned the word "crapper", which is a literary device I
use to convey a feeling of filth and disgust, which is so appropriate to an
abused fiat currency used to maintain a creaky, corrupt megalith government
desperate for tax revenue, which eventually resorts to confiscation,
police-state control and economic re-distribution, such as the report that the
twin idiots in Congress, Christopher Dodd and Barney Frank, are actually
proposing a tax credit for buyers of particular houses to prevent foreclosure!
I am stunned!
This is not some puny tax deduction, where you don't have to pay income taxes
on part of the money you spent, but an actual tax credit, where you get back a
part or all of the money you spent! Hahahaha! You spend it, the government
gives it back to you, and you spend it again! This is the government's plan!
This is end-stage insane!
This is actually beyond insane, even for lunatic liberal Leftist morons like
Dodd and Frank! I can't believe what I am reading. The government is giving
taxpayer money to people to buy houses that are too expensive for them to buy
because the banks lent them too much money compared with their income, and now
the busted homeowners need to be bailed out so that the banks don't foreclose,
thus saving the banks!
And don't hand me any of that crap about "helping people own their own home as
part of the hallowed American Dream", because if Congress actually wanted to do
that, they would simply pass some laws preventing the banks from pursuing these
walk-away-from-the-mortgage people, and then enact some more laws to prevent
future lenders from even considering the fact that these deadbeats walked away
the last time they bought a house, and they stuck the banks (and eventually the
taxpayers, after the inevitable bailouts) with huge losses.
And this is not to mention that Senator Dodd was the go-along-to-get-along,
see-no-evil chairman of the banking committee for the last couple of years that
the banks were doing this crap, and a senator the whole time the banks were
doing this! And more! And without complaint from Dodd! Hahaha! And now this!
Hahaha! This is beyond lunacy! This is freaking surreal!
I go to the window and I shout, "I'm as mad as hell, and I am not going to take
this anymore, and the people of Connecticut owe me, our children and the United
States a huge, huge, HUGE apology for electing the egregious Christopher Dodd!"
I know that this loud tirade is not going to do any good because it never does.
Making myself feel suddenly better, I happily find that I can disparage whole
countries full of people by making cruel fun of them, by which I mean that I
laughed out loud to find that the people of India are turning stupid, too, as
the Barron's Commodities Corner column reports that "Gold's star is on the wane
in India, the world's biggest consumer of the precious metal, as record prices
finally take their toll on demand." Hahaha!
So, if I understand this correctly, demand for gold is so high that it has
driven the price up, so Indians are not buying gold every freaking day of their
lives as part of some elaborate rupee-cost-averaging scheme, even though they
can pick up a freaking newspaper any freaking day of the week to see that money
supplies of the world are rising every freaking day of their lives, now at
somewhere around 20% or more a freaking year, which means that inflation is
going to freaking roar every day of their lives for decades? Hahaha! Morons!
Sure enough, the figures from May 2007 to May 2008 show that "Indian gold
imports were down 52%", while local prices are up a by a third in the same
time! Hahaha! Demand went down so much that prices went up? Hahaha! Morons!
The Economist magazine shows that India has 7.8% inflation in consumer prices,
and rising fast, and so Indians are choosing now, of all times, to stop buying
gold? Hahahaha! Morons!
Of course, there are no morons like American morons, who own so little gold per
capita that it makes me laugh in Rude Mogambo Scorn (RMS), and say, "Hahahaha!
Morons!", which probably does not make the Indians feel better about being
morons, but it makes Americans feel worse about finding that they are morons, I
hope. Morons!
Perhaps I can rub a little salt in the wound by pointing out that the Lipper
Mutual Fund Performance Averages and Fund Performance Indexes show that almost
every category of financial asset that can be made into a mutual fund is down
big-time since the beginning of the year, except gold (up 4.8%), natural
resources and (bizarrely) Latin American funds.
And for the entire last 12 months, gold mutual funds are up 29.12%, trailing
only natural resources at 34.32%, while stocks were down about (on average)
about 12%, although the S&P 500 is down about 14% in the last year.
Even bonds are down, although it is hard getting any real idea of the loss. I
think it's a plot by extra-terrestrial beings or, possibly, cannibals. Or
bankers, who are both at once.
But since oil is included in this natural resource category, then anyone
investing 100% in gold, silver and oil, as so stridently recommended by the
Mogambo Monetary Paranoia Portfolio (MMPP), is making out Like A Freaking Champ
(LAFC), and all others are, to use the classically correct and precise economic
term, "biting the big one".
I bring this up for two reasons. For one, I like being rude and sarcastic when
I am making a lot of money while all others are losing their stupid butts, and
I get to laugh at them and be rude, saying things like, "Hahahaha! Morons! I
told you to buy gold when your stupid government let the corrupt Federal
Reserve start creating all that money and credit, which means that inflation in
prices will soar in direct relation to the excess of money created, which is
freaking massive! Hahaha! But did you? No! You called the police and had them
come over here to make me shut up just because it was 2am and you wanted to
sleep like a stupid little baby through the catastrophe that IS the damned
economy! Hahaha! I loathe you all!"
As fun as that is, the other minor reason is that we have reached the halfway
point of the year, and that means that account statements are going to be
mailed out pretty soon. When people who do NOT own gold and gold-oriented
investments open those envelopes, they are going to be angry as hell because
they have lost a lot of money. A LOT of money!
Unless they owned only gold and oil, which they, unfortunately, do not, since
only a plucky, lucky lunatic would invest according to the strictures of the
Mogambo Monetary Paranoia Portfolio (MMPP). Right? Hahahaha!
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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