SilverForecaster.com announces that "silver has done well" recently, as far as
its price is concerned, which is almost certainly explained by the old
demand-versus-supply market-clearing pricing mechanism, which means that since
the price went up, then demand must be up, too, and more than supply is up; or
it means that supply is down more than demand is down; or it means something
else entirely, maybe, since I have seemingly confused myself.
But since the recent moves in price are not that spectacular, my attention
wavered and I casually looked around the press room, e
and I noticed that there was a pretty new reporter who was young and cute,
which is such a depressingly stark contrast with my being, you know, old and
ugly.
I sighed and began to daydream when I suddenly realized the cosmic universality
that demand and supply applied even to pretty girls! We testosterone-besotted
males of the species ensure a constant high demand for them, yet with a low
supply of the little cuties, the price is high! Hahaha!
And, to balance things out, I realized that pretty young girls constantly
demonstrate that there is no demand for creepy old men, but yet since we exist
in such huge supply, we have zero value, or perhaps even negative value,
considering the phrase, "I would rather eat poison and die a horrible painful
death rather than even feel your bad breath touching my skin, or even
acknowledge your foul existence, Old Mogambo Creep (OMC)!"
But, as with silver and pretty girls, it is this selfsame mechanism of
balancing supply with demand that determines the prices of everything else in
the Whole Freaking Universe (WFU), so why not this, too?
So, I was about to interrupt to lecture GoldForecaster.com about my little
revelation, perhaps to garner a little of the attention that I so desperately
crave, when I realized that they had anticipated my observation that silver
going up in price meant that demand is greater than supply when they verified
it by saying, "Investment demand for silver leapt a huge 309 tonnes last week,
a tonnage we have never seen before in such a short time!"
I notice the phrase "never before!" which includes an exclamation point to
indicate special emphasis, as seems befitting of "never before", not only
because of this sudden huge demand for silver, but the cute little reporter had
just coincidentally used that very phrase when she said to me, "Begone,
Mogambo! Never before have I felt such revulsion! I feel soiled and sickened
just from being in the same room with you!" which, alas, also contains an
exclamation point.
Mr Phillips and Mr Spina both pretend that they did not hear me get insulted,
and go on to suggest that despite being completely humiliated by this conceited
girl, if I buy silver now, I will soon be rich as hell and I will have
beautiful ladies hanging all over me all the time, every one of them so
beautiful that they will make this little bit of fluff look like a pig, as they
conclude from the data that "heavy investment demand is flowing into silver
[and gold] in quantities sufficient to ensure this trend is long-term."
And I agree with them, as inflation in prices is going to be roaring soon, and
for the long-term, as the laughable Barack Obama administration is firmly
united in announcing grand plans for years and years of huge amounts of new
spending and huge amounts of new debt that is supposed to save us (pardon me
for laughing right in your face "hahahaha!") from the collapse caused by the
preceding "too much new debt, too much new money and too much new spending"
over the past few decades that produced the inflationary booms in the prices of
stocks, bonds, houses and size of government that are now going, predictably,
bust and causing all the headaches
That is why it is so alarming that Total Fed Credit last week actually went
down by a gigantic $149.1 billion in ONE FREAKING WEEK (OFW), instead of
increasing in the same OFW, which it must do if all of this deficit-spending is
going to be accomplished!
And as if this $149 billion in OFW was not enough to make your heart start
fibrillating and make you start puking your bloody guts out in fear, this is, I
remind you, Total Fed Credit, which is that magical, out-of-thin-air money that
appears, thanks to the Fed arbitrarily creating it in the accounts of the
banks, ready for lending to somebody at huge multiples of the amount of
additional credit originally deposited in the banks.
In short, we’re talking HUGE amounts of money! HUGE! Huger than huge! FREAKING
HUGE!
And what makes it all the scarier is that this TFC, even with this $149.1
billion drawdown, still totals a hefty $1.84 trillion, which is DOUBLE what it
was last year, which demonstrates a huge, huge, HUGE increase in the monetary
base, which is now at $1.7 trillion, which is ALSO double what it was last
year! Yikes! We’re freaking doomed!
If you buy gold, silver and oil, then you will not personally be doomed,
understand, but everyone else soon will be. Bummer for them, huh?
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 2009, 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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