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Dry guide to 'recovery'
By The Mogambo Guru
One of the most interesting news items I've found was on the cover of The
Financial Times, where I learned that a guy named Lahde "made tens of millions
of dollars from betting against the financial and property sectors during [the]
past two years", and he now wanted to thank "the low hanging fruit, ie idiots
whose parents paid for prep school, Yale, and then the Harvard MBA" who made it
all possible for him to find enough suckers.
He noted that "These people who were often truly not worthy of the education
they received (or supposedly received) rose to the top of companies such as
AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of
this behavior supporting the aristocracy," he says, "only ended up making it
easier for me to find people stupid enough to take the other side of my trades.
God bless America."
This goes along with an article in the St Petersburg Times about Tom James,
chairman and chief executive of Raymond, James Financial, who had "some tough
words for the wizards of Washington, DC who oversaw the US$700 billion bailout
package".
He reports, "The Brave And Wonderful Mogambo (BAWM) was right all along! Those
government weenies are the biggest freaking morons you ever saw, and we as a
country should be ashamed of ourselves for having elected such corrupt,
half-witted, utter failures and congenital idiots!"
As you have probably guessed by now, he did not say those exact words, but he
implied every syllable when he said, "Legislators were almost embarrassingly
ignorant of how the financial system works", which I figure explains how they
don't understand the linkage between their own Bad, Bad Performance (BBP) as
legislators and the subsequent Bad, Bad Performance (BBP) of the economy, and
he says that only three of 16 legislators that he talked to actually understood
what was going on in the "credit crisis". Less than 20%! Hahaha! We're doomed!
Well, maybe these congressional losers will understand the unfolding economic
slowdown, as evidenced by the Baltic Dry Index, which is an index of the cost
to transport stuff by cargo ship, and which has fallen precipitously, which
seems very important to me, and to Junior Mogambo Ranger (JMR) Riccardo, too,
who is also alarmed by this like - as I previously said - me.
It's actually beyond scary, in a terrifying kind of "ain't nobody buying
nothing in a consumer economy" kind of way, which means that without the
consumer buying stuff as his or her contribution to the famous statistic of
"the consumer is 70% of the economy", we are, in case you ain't heard, freaking
doomed!
Well, maybe not all buying is drying up, as silver market analyst, Ted Butler,
reports that in the last 10 months, "some 150 million ounces of silver can
easily be documented to have been bought by investors. Undocumented purchases
would add tens of millions more ounces."
In fact, when you add it all up, "Investment demand for silver this year is
running at a full 25% of world mine production and over 20% of total production
(including recycling). This is a remarkable historical turnabout."
Thus, it is easy to see why Mr Butler is "bullish beyond belief for silver",
since this kind of demand means that "In silver, the documented 150 million
ounces bought in the first 10 months of this year is equal to 15% of all the
silver bullion equivalent thought to exist!" Wow!
More than one-seventh of all the silver bullion "thought to exist" in the whole
world was suddenly bought up in less than a year, and yet the price of silver
has been pounded down to less than 10 bucks an ounce? No wonder I am so bullish
on silver!
He also notes that the gold/silver ratio is at more than 80, which is "one of
the biggest differences in history".
And not only that, but since there are 4 to 5 billion ounces of gold in the
world versus only 1 billion ounces of silver, that means that "the total dollar
value of all the gold in the world is worth 300 to 400 times more than all the
silver in the world (80 times 4 or 5)".
Talk about undervalued! Hey! This investing stuff is easy! 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 2009, The Daily Reckoning.)
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