I was watching the incredible economic catastrophe unfolding in front of my
eyes, my heart pounding, eyes glassy and staring, when I thought I heard the
sound of gunfire outside the Mogambo Big Beautiful Bunker (MBBB), signaling
that the oppressed masses were rising up in angry rebellion at the inflation in
prices that dooms them all.
Running to the periscope, I nervously peered out, but there was nothing.
Everything in the crosshairs looked normal. It later turned out that the
explosions I heard were actually the sound of my brain blowing individual
neurons to bits, as it refused to believe what my eyes were seeing.
Such as the news from Junior Mogambo Ranger (JMR) Stephen F, who says, "The
latest Federal Reserve H3 report shows
another giant leap in the monetary base, another 8.2% in the past 2 weeks, on
top of the 7.65% increase Sept 10-24."
This is Truly, Truly Staggering (TTS)! And to show you how staggering, perhaps
it is time for a Mogambo Pop Quiz. Answer this multiple-choice question:
"Inflation in the money supply is the precursor to: 1. Inflation in consumer
prices; 2. The ugly death of the economy, meaning the economic death of you and
everybody you know because rising prices will eat you alive; or 3. All of the
above, and plenty more things that are too ugly to even talk about."
And now inflation in the money supply as an "economic good" has, predictably,
failed again, and former Federal Reserve chairman Alan Greenspan is the filthy
bastard who did it to us this time, while his successor Ben Bernanke and his
odious, low-IQ "economics PhD"-ilk infesting the nation's universities share
the blame for their erroneous active participation and encouragement due to
their complete lack of any real insight or intelligence.
As a result of the latest failure of a fiat money that has resulted in
ruination, just like all the other experiments with a fiat money have ended in
failure for the last 2,000 years, the S&P 500 is now down to where it was
in 1997, which is 11 long years ago, which means that everybody who bought the
shares of the S&P500 since 1997 has lost money both in nominal terms (since
the price of the shares has gone down), but also more in real,
inflation-adjusted terms, because in the meantime the US dollar has declined in
value by about 60%, meaning that everybody who was stupid enough to think that
they would make a profit by "buying and holding" stocks over the long-term has
now lost 60% of their buying power! Hahaha! Morons!
Once again, the overwhelming majority of schools that teach economics, or any
other scientific discipline for that matter, never even noticed that it is
mathematically impossible for the majority of investors to make real,
inflation-adjusted money by investing! Everybody puts one dollar into the
market and then everybody takes two dollars out? It's insane!
It's so obvious, and yet almost nobody ever said, "Hey! This 'universal
investing for retirement' is the stupidest Ponzi-scheme crap I ever heard of,
at least for the majority of investors, and sometimes, like now, for all
investors! We must be morons!"
What can I do except laugh scornfully, "Hahaha! Yes, you are morons!"
And it is all because of a fiat money and credit, which gets created to excess
because government people are corrupt, and they are corrupt because of their
greed and short-sightedness, and they want free money to spend, which they get,
which increases the money supply so much that it causes prices to rise so much
that the economy is freaking destroyed, and not in a good way like Godzilla
stomping on Tokyo and, somehow, enabling them to control the world market
transistors and transistor-related markets from then on.
Since I could see that the line in front of me at the supermarket was very
long, and I could see that the stupid people around me were in sore need of
education, I generously started into a loud one-sided discussion about the
evils of a fiat currency, the demonic Federal Reserve and the despicable
Congress when, suddenly, Gail (whose name tag cheerily said, "Hi! My name is
Gail") thrust a piece of paper into my hands with a snarl.
Startled, I noticed it was an essay by Robert Singer, submitted to
OpEdNews.com, who notes, "Behind every foreclosure and American Dream there is
a fiat currency", which I not only agree with, but I said so by loudly
exclaiming, "Aha! Exactly!"
Stymied in my efforts to educate my fellow shoppers about a fiat currency, I
thought I would instead talk about precious metals, and how anybody who knows
anything about economics and fiat currencies - like my good friend Robert
Singer and I - knows that gold and silver is "the place to be" when a
government is acting so insane as regards money.
Gail, with an agility I found startling, jumped over the checkout counter,
snatched the essay from my hand, and, thrusting it back into my face, angrily
pointed out that Mr Singer had already covered that ground by quoting the
famous Ted Butler as saying, "Few know that, as a result of a structural
deficit that lasted for more than 60 years, world silver inventories have been
depleted to levels 90% less than what existed 65 years ago. Few know that, as a
result of this depletion caused by industrial consumption, there is actually
less investment silver in the world than there is gold, even though gold is
more than 50 times the price of silver. Few know that silver has the largest
concentrated short position in financial history." Yow!
Seeing that Mr Butler was getting all the attention, I interrupted and said,
"Hey! Ted! If gold is $840 an ounce and silver is about $11, then the
gold/silver ratio is 76, not 50!"
You could tell by the look on his face that that I had missed the point, but
before I could be embarrassed again, Gail had finished bagging my pitiful
little bag of groceries that, unfortunately, ate up my last remaining money,
and I only had time to say, "Silver! Buy silver! It's the most undervalued
commodity in the History Of The Freaking World (HOTFW)!"
She replied, "Just take your groceries and go home." And although I cannot be
certain that she followed that up by saying, "Creepy old man!" under her
breath, every video camera in the store will readily verify that I said, "Buy
silver and make a lot of money! Or buy gold, and not make so much money; or buy
neither and be stupid and broke, morons!"
Then I went home. Bought a little silver. I don't know what they did. Probably
nothing. Morons.
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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