I keep seeing things, scary things, terrifying things characterized as "for the
first time ever", such as Tyler Durden of zerohedge.com writing that "As per
the August 31 DTS statement, the US ended the month with a new all-time record
of $13.45 trillion in debt, an increase of $210 billion from the beginning of
the month (or $225 billion in public debt, net of intragovernmental holdings).
With just 30 days left in fiscal year 2010, the US has added $1.54 trillion in
the 11 months ended August 31, a monthly average increase of $140 billion. As a
point of reference, the US has received $1.53 trillion in withheld income tax
over the same period, confirming that the US continues to issue more than one
dollar in debt for every dollar it receives via
income tax revenue," all of which are new records of one kind or another!
Gaaaah! I am screaming in outrage and fear!
Martin Hutchinson of the Bear's Lair lays it right out there, too, with
"Combining the Worst" in that "both new home sales and existing home sales for
July dropped by double-digit percentages to levels never seen in the history of
the series."
The worst ever! Even my little pea-brain can see the significance in this! Wow!
Then, perhaps trying to calm me down, he admits that maybe "ever" is kind of a
relative term, in that "While for existing homes the series dates back only to
1999, for new homes it dates back to 1959."
It worked! I realized that new houses have always gone up in price for the last
half century because inflation was a fact-of-life for half a century because
the government deficit-spent for half a century and the Federal Reserve created
the money needed for a half a century, which only proves that Alan Greenspan,
chairman of the Federal Reserve from 1987 to 2006, is a malevolent demon from
hell who has destroyed us by creating So, So Much Money (SSMM), and we ought to
track this man down and punish him relentlessly!
Well, you can see that Mr Hutchinson does not want to get into a weird,
hate-filled discussion about tracking people down and exacting vengeance with
mob-rule mentality, and he tries to bring the discussion back around to home
sales by saying that the result is that "the decline in new homes sales tells
us that 50 years of growth has been wiped out in that market"!
Wow! A half-century, gone!
And all of this misery, and people owing more on the house than their house is
worth, is at a time that the "Case-Shiller 20-city house price index" is still
47% above the January 2000 value! In fact, "house prices are still about 5-8%
above their long-term average in terms of incomes," which seems surprising in
light of all the negative press of the decline in house prices over the last
few years!
With a sense of horror, I realize that, sure enough, this 47% increase in house
prices "matches the consumer price rise during the period"! Gaaahhh! 47%
inflation in consumer prices over 10 years!
This means, to my Sheer Mogambo Outrage (SMO), that all things cost about 47%
more than they did in 2000, which is a compounded 3.9% inflation per year,
which is not only historically horrifying, but is about half of the real
inflation rate Right Freaking Now (RFN), which is above 8%, as calculated by
John Williams at shadowstats.com!
In short, We're Freaking Doomed (WFD), and the only way I can find to be
"un-doomed" is to buy gold, silver and oil with every penny you can scrape up
before that penny loses most, or all, of its purchasing power.
And I say this not because I am a smug, know-it-all loudmouth who loves the
sound of his own voice and tricking people into believing that I know what I am
talking about, but because if there was another way to preserve wealth against
governmental debasement of the currency in the last 4,500 years of history of
governments debasing currencies, I would have probably heard about it.
But just mindlessly buying gold, silver and oil makes investing so easy that
you say, "Whee! This investing stuff is easy!"
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 2010, The Daily Reckoning.
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