It is inflation that makes me crazy until I am crying like a baby in fear and
locking myself in the closet under the stairs where I whimper piteously.
Through the door I can hear my wife and kids saying, "Come out! It's not so
bad! It's worse in China!"
Naturally, I yell at them to go away or I'll come out there and kill them all,
which makes them slide under the door. Doug Noland at Prudentbear.com (see
Credit Bubble Bulletin Asia Times Online, July 29, 2008), referencing
an outfit called China Knowledge, reports that "Prices of major agricultural
products in China rose 22.9% year-on-year in the first six months of 2008, the
National Bureau of Statistics (NBS) of China announced. During the period,
producer prices of plantation products, forestry, animal husbandry
and fishing products increased 13.8%, 12.1%, 39.8% and 12.8% respectively."
Feeling a little better in a relative way, I was reaching for the doorknob when
I saw that thepracticalinvestor.com took a look at the latest report of durable
goods orders, and they noted that "Durable goods orders rose higher than
expected. Between the lines, however, inventories of consumer goods rose 2.3%
while 94% of the 1.6% rise in durable goods orders were to support the war
effort. Without Iraq, the economy would be in shambles."
Well, as far as I can tell, diving back into my dark little cubbyhole in
renewed fear, the economy is already in shambles because of inflation in
consumer prices, and my marriage, my life and my career are in shambles because
everybody hates me and is out to get me, and that is why I seem to be broke all
the damned time.
And it doesn't help that Bill Bonner here at The Daily Reckoning reminds me
that I am not the center of the universe like I think I am, and that "wages in
the United States have not gone up in a very long time. The latest figures on
the subject show no real increase since 1968. Since then, every penny of hourly
pay increase has been matched by a cent of consumer price inflation."
Well, to tell you the truth, as bad as "being at a standstill" may seem to
workers, the biggest impact of inflation in prices is felt by those who do not
have jobs, which means that they do not have wages or an income with which to
keep up with inflation in prices. In fact, they have no wages or income at all!
And they pay the full cost of deprivation-by-increasing-prices, as they had no
income and no buying power when the price was lower, and now everything is even
farther out of reach!
And when I am down-and-out, everybody says, "Well, why don't you get a job, you
worthless bum?" and I calmly explain, "Go to hell! Like I am soOOOOooo stupid
that I never thought of that, ya moron!"
But apparently Mr Bonner does not hang out with us unemployed and unemployable
types (the "undeserving poor" as so eloquently defined by Alfred Doolittle,
Liza's father in My Fair Lady), probably because some of us are, like
me, just lazy, worthless mental defectives who view work as a punishment, and
we prefer everyone to just give us stuff and wait on us hand and foot by
bringing stuff to us, for which we are grateful for awhile until it becomes
insufficient to assuage our greedy, self-absorbed natures, and then we want
more. More and more. Always more!
Again ignoring me and my peculiar grubby ilk here in the fetid dregs of
society, he goes on with that "we ain't ahead by a lousy dime" line of thought
when he says, "Only the rich made out well, we were told. They owned assets.
And asset prices have soared. But if you quote stock prices ... or housing
prices ... in terms of the number of gallons of gasoline they will buy, you
find that even 'the rich' aren't as rich as they think they are. The Dow would
get you about 2,200 gallons of gas in 1968. Today, at $4.10 a gallon, the Dow
is equal to about 2,200 gallons."
So what to do? Easy one: buy gold! And it appears that a lot of people are
doing that very thing, as the independent.co.uk site reports that Britons may
be getting smart, too, as, "Britons who still have any wealth to invest are
turning their backs on the property portfolios, stocks and shares, and sports
cars that have long constituted conventional investments, and pumping their
savings into old-fashioned gold bullion and coins."
How smart? Well, they say that "Last year saw an 81% increase in UK investment
in gold coins", and now, "Leading gold bullion suppliers BullionVault, ATS
Bullion and Baird & Co have all revealed record levels of investment in
gold bars, and the World Gold Council (WGC) has reported a big increase in the
number of gold coins being bought."
So this raises the question, "If the increase in buying was 81%, at what point
is it a bull market?", which in turn begs the question, "If I buy gold right
now, using every damned dime I can get my grubby little hands on, how freaking
much money will I make when gold and silver zoom, and will it be enough to just
disappear and start life over someplace far, far away?" Hahaha! Whee!
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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