Or, it turns out, even in small amounts, as I prove each week when the kids, over whom I have absolute, awesome power right up until the exact moment when the social workers and/or cops come roaring up, bursting into the house and are literally standing between me and the whining kids to face me down, so I have to explain to them, too, how “The foul Federal Reserve is creating so unbelievably much money (so that the loathsome Obama administration can borrow and spend it) that inflation in consumer prices is going to destroy the buying power of the dollar, and that is why this week, just like last week, I don’t want to give these whining kids their paltry allowance, let them eat anything that is not on sale at the grocery store, or drive them anywhere, except maybe to a military recruiter or a bus out of town, but especially not to see their hoodlum friends!”

I suddenly realize, to my horror, that I am standing there drinking coffee out of one of my many “World’s Worst Father” coffee mugs that the kids always give me as a present for every Father’s Day, and I instantly knew that explaining the essence of the Austrian theory of economics as a rationale for being stingy and cruel by withholding money and benefits from my own kids was certainly not going to fix this mess.

So, I decided to appeal to the innate greedy investor that is in all of us, and I said, “I’m going to take this little bit of money, see, that still has some buying power left in it, although less and less each day which is why prices go up and up each day to make up for it, and I am going to add it to the little bit of money I have already accumulated and secretly squirreled away so that none of these little leeches can get their hands on it, and I realize that leeches don’t have hands, so don’t bother pointing it out to me that the metaphor is not entirely apt, but you get the gist of it, and then I am going to use the money to buy some more silver, which is so seriously under-priced that the opportunity thus afforded to the astute investor far outweighs the whining demands of, ugh, children.”

There was a kind of stunned silence in the room when I had finished, and so, eager to get the conversational ball rolling again, I said, “And anyway, the whole thing started out as just another Angry Mogambo Tirade (AMT) about, this time, the International Monetary Fund (IMF), which invented their own money, the Special Drawing Right, which had the effect of expanding the world money supply so as to prop up idiot countries that have bankrupted themselves and who mostly deserved to be destroyed, and it does so at the cost of permanent inflation in prices so that poor people, around the world, suffered more and more as prices constantly went up faster than their incomes, and who suffer a lot more than these stupid, whining kids here and their so-called ‘psychological trauma’!”

Well, it got ugly from there, it’s all over now, and there is nothing more about it except planning my revenge, court appearance dates, and attending some stupid “Good Parenting Course” being taught by some nitwit “counselor” half my age, whom I exposed in the very first class as a low-IQ loser when I asked him, “Have you told your children to buy gold, silver and oil to protect themselves against the inflationary horror caused by the Federal Reserve creating so impossibly much money so as to allow the lowlife Congress and the idiot Obama administration to deficit-spend us into the hellish oblivion that is, in two words, our future?”

He replied, real intelligent-like, “Huh?” which told me, loud and clear, that this guy was an idiot, which was soon proved when he instructed us to (get this!) “listen” to our children, like I haven’t heard them crying and whining and saying, “Gimme, gimme, gimme!” and, “I hate you!” their entire lives, seemingly every freaking minute of every freaking day of my life, sometimes even when I am – horrors! – completely sober, which makes it all much, much worse. Moron.

But as far as bad ideas like the IMF goes, it just gets worse until you are screaming, “No! No! No!” in your nightmares because TheDailyBell.com noted that the German finance minister, Wolfgang Schäuble, “floated the idea of a European Monetary Fund (EMF) to act as a lender of last resort to euro-zone countries that could not raise funds in capital markets on tolerable terms. He offered few details about how an EMF would be financed or how it would operate.”

Creating more money out of thin air, so as to increase the worlds’ money supply, to bail out more corrupt, incompetent deadbeats, at a cost of higher prices for everybody? Yikes!

See what I mean? We’re freaking doomed!

Knowing that, I wonder what the little counselor thinks about gold, silver and oil now! Hahaha! I wonder if he is saying, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

The IMF, the EMF and All the Worthless Money In Between originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Perhaps Mr. Bonner won’t need any testimony from me, and people will accept the things that he says as facts because they trust him. But when I say something like that, even with facts aplenty at my very fingertips, they want to argue with me like, for example, just the other day when I was taking a little walk in the morning and I ran across a group of kids waiting for the school bus, which was just pulling up as I got there.

So I am telling the kids, “You brats might as well quit school right now because there is no future for you since your own federal government has borrowed and spent this country into the ground, made possible by the loathsome Federal Reserve creating all the wildly excessive amounts of dollars that made it all freaking possible, which became, because it is, an inflation in the money supply, which is what will cause terrifying inflations in prices as all this money is used to bid for a relatively static supply of goods and services so that prices will always be going up and up, all your miserable lives, and at the rate that the idiot Leftist Obama government is deficit-spending money by the trillions of dollars, and the rate at which the foul Federal Reserve is creating new money by the trillions of dollars to finance it,  prices will rise so high that this Whole Freaking Country (WFC) is doomed to suffer catastrophic inflation! We’re freaking doomed!”

So, instead of everyone just accepting what I said, like they do Mr. Bonner, and maybe patting me on the back and saying something cheery like, “Masterfully said, Brilliant Mogambo Maven (BMM)! Thank you for the good education in bad economic governance!” the school bus driver is yelling at me to shut up and for the cheering kids to get on the bus and quit listening to “that damned crazy man”, but the kids are hesitating, and the driver is frantically calling 9-1-1 on her cell phone to report me to the police as some kind of deviant weirdo, and the kids are dancing around, chanting, “We’re freaking doomed! We’re freaking doomed” and the bus driver is yelling, “No, you’re not! Now get on the bus, kids!” and pretty soon some parents come up to see what all the fuss is about, and they start arguing with me, too!

To the adults who can appreciate adult-level conversation, I say, “If you are not concerned about the destruction of the buying power of the dollar because of the insane trillion-dollar increases in the money supply by the Federal Reserve or the ludicrous Obama deficit-spending trillions of dollars that necessitated it, then you’re an idiot!”

And then, out of nowhere, they start arguing with me about THAT, too!

So you can see the kind of crap I have to put up with all the time around here every time I open my mouth, and I imagine even Mr. Bonner would have trouble with these losers, too.

Apparently, Mr. Bonner has heard my sad, Cassandra-like tale of woe, and has decided not to press his luck in this neighborhood of what appear to be, in a word, idiots, and safely quotes some guys named “Professors Rogoff and Reinhart” who “show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both.”

At this point, most of us have stopped reading because we have had our fill – “up to here!” – of egghead professors finding some relationships between the horrendous condition of the US and impending calamity, as that is the continual state of the US today, and indeed the world, in terms of increasing human suffering, a terrible economy, a travesty of a monetary policy and flagrant, bizarre irresponsibility in fiscal policy.

And after a full day of reinforcing the Mogambo Bunker Of Desperate Refuge (MBODR) with another layer of aluminum foil just because of the terrors of these kinds of things, I am too tired for more horror, as if I could be more, you know, horrified at this point.

I mean, this is nothing new for a real Junior Mogambo Ranger (JMR), who knows that it is the same impending calamity that has impended every other time in human history after these idiotic kinds of expansionary monetary and fiscal insanities are rampant, and now we JMRs have, with heroic stoicism and serenity, moved away from constantly thinking of certain disaster and have started, instead, thinking about lunch. Or weekend plans. Or, if it is the weekend, lunch.

Fortunately, I was not too far immersed in plan making (other than I was already sure that it was going to involve bacon in some capacity), and so I was taken aback when these two professors said that “IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.”

I was hoping that someone would raise his or her hand (especially the adorable Peggy who said she would never, ever even be in the same room with me ever again, and now there she is – in the front row! – which only shows what a deceitful, lying, heart-breaking little tramp she is), and ask why we didn’t get “default, hyperinflation or both” when external debt passed 73% of GDP on its way to the current 96%, or after passing the point of 239% of exports growing to today’s 748%.

That way, I could spring to my feet, noisily interrupting, and state my own version of how it is easily possible that the largest economy on the planet, that for decades consumed the majority of the industrial output of the planet so that, at its zenith, our trade deficit was almost a trillion dollars a freaking year, was able to continue such stupidity by being financed, for a long while, by scared vendors frightened of their biggest customers not buying more stuff, all so that the USA could indulge its gluttony, its imperialism and its most far-fetched socialist dreams by being financed by the very people who made the stuff that we bought, using the money that the Federal Reserve created, that we gave them as a minimum monthly payment for the last batch of stuff that we bought from them on credit! It’s recycling, dude! Hahahaha!

Of course, this would lead me directly to a long harangue about how “You would have to be an absolute idiot not to buy gold, silver and energy stocks as an iron-clad defense against the aforementioned ‘default, hyperinflation, or both’, which, in this case, will be ‘both’ because the whole financial enchilada is a big leveraged bet where every little change is magnified many-fold into losses, losses, losses as far as the eye can see, growing bigger and bigger, and that our only hope is to riot in the streets, overthrow the current regime and install me – The Mogambo!  – as Wonderful Emperor Mogambo (WEM), where I will wage a never-ending battle for truth, justice and the American way, which is (now that you asked), the glories of free enterprise coupled with a fixed money supply.

Before I could even make a pitch for everyone stocking up on Mogambo Enterprises Riot Gear And Supplies (MERGAS) that they will need in their glorious popular rebellion to oust the government and put The Mogambo on the throne of absolute power, or even give me a lousy minute to hand out some brochures, Mr. Bonner, apparently embarrassed to have his presentation hijacked by a megalomaniacal power-hungry lunatic hawking insurrection, shoddy pitchforks and flaming torches, obviously alludes to it and says, “The rioters can go home, in other words. The system will collapse on its own.”

Well, if it is going to collapse on its own, then, like everyone else, I sigh, and figure, “Why bother?” So, instead, I take the easy way out because the easy way out is The Real Mogambo Way (TRMW), which, in this case, is to just buy gold, silver and oil because with the ugly, inflationary-collapse way that things are going, and which cannot be stopped, it makes you Giggle With Glee (GWG), “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

US Economic Outlook: Default, Hyperinflation or Both originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

It is actually a horror that the level of private debt peaked last year at about $36 trillion, which is certainly a lot of money, especially since total GDP of the Whole Freaking Country (WFC) is only $14 trillion (and falling!).

In some kind of bizarre “good news/bad news” joke, total private debt has now actually fallen by a couple of trillion dollars to $34 trillion, which is bad news for an economy that depends on consumption, but is good news in that people have lighter debt burdens.

David Stevenson of the Money Morning newsletter at moneyweek.com notes that it’s not just us, but “private borrowing is slowing everywhere” and that “US consumer credit has shrunk for a record 11 months in a row.”

The interesting thing is that the Bianco chart goes back to 1952, and there has never, ever been a time when private credit market debt fell by as much as a dime! Although it, sometimes, did not go up for short periods, nevertheless, it has never gone down. Never!

Until now. Oops!

Note that the soundtrack has gotten all gloomy, which makes sense, because if total private debt has – gasp! – gone down, then the money supply is not expanding because people are not borrowing to buy and invest. Oops!

Parenthetically, the money supply is not actually shrinking that much, as you would expect, because the asinine neo-Keynesian theory says that the government should replace private spending with deficit-spending, which they do, thanks to the Federal Reserve creating the money, which is another whole subject about which usually results in a loud Mogambo Scream Of Outrage (MSOO), which is, I think, more of a wail of anguish and crushing despair than a scream, although it usually concludes with me howling, wolf-like, “We’re freaking doooooooooommmmed!”

That’s, unfortunately, the bad thing that happens at the end of long booms produced by constant monetary stupidity, especially of the kind of stupidity found at the Federal Reserve, which explains why I say, with a loud, irritating repetitiveness that makes people run screaming from the room every time I open my mouth, to buy gold, silver and oil as your only defense against rampant government stupidity and insane levels of monetary over-creation of money and credit, as redundant as that actually is because of how incestuous they are.

I assume that you now understand the depth of the ignorance, stupidity and depravity of the government and the Federal Reserve (and, indeed, all the central governments and central banks of the world), and you are saying to yourself, “Hey! The Loud Mogambo Idiot (LMI) is right! Maybe he is not as stupid as everyone says!”

Fortunately, that knowledge is all that is required to be a Junior Mogambo Ranger (JMR), and now that you have begun on your path to economic enlightenment, I can let you in on a little secret; it’s going to get worse. Much worse. Much, much worse. Worse than anything, even that time when your First True Love (FTL) dumped you and started going out with that jerk from the baseball team, and how you still hate him for it, even after all this time, and you still love her in spite of it, even after all this time.

But you are not here to listen to my tale of love gone wrong, desperately loving someone who doesn’t love you, and rejects your aching heart over and over, and when you call her on the phone, her father answers and says, “My daughter says you are a creepy little rat-faced creep, so why don’t you just give up, kid?”

And so I did, on the spot, saying a final goodbye to her, through him, and with a tearful, heart-broken voice, and I told him to tell that scheming little lying two-faced cheating slut he calls his daughter, as a parting gift of wisdom from me, to “Buy gold, silver and oil when your idiotic government allows unrestrained creating of money and credit, and especially when the government deficit-spends said money to expand itself”, thinking, you know, that I would leave her with a fabulous piece of advice by which she could always remember me fondly.

Instead of him saying, “Well said, intelligent young man! I shall be honored to relay your wise advice to my daughter, and I shall act upon it at once myself!” he said, “What in the hell is that supposed to mean, you little punk?”

So I told him that he was obviously a moron about monetary policy, fiscal policy and raising demonic daughters and, judging by his reaction, burned another bridge behind me.

But I won’t need it! Hahaha! I have gold, silver and oil, and with them I can build all the new bridges I want, with riches untold, when his precious dollars and dollar-denominated assets turn into the crap that fiat currencies always become.

And his daughter, the tramp Carol? Now it shall be I who says, “Scram! Ya creep me out, loser weirdo!” Hahahaha!

The Mogambo Guru
for The Daily Reckoning

Private Debt Decline: Good For US Bad for the Economy originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

This simple fact has given me the idea to make some Award-Winning films (“Worthless trash!” says The Chicago Sun) using the plots (but without paying for them) of some scenes from Sylvester Stallone movies, such as John Rambo bursting up out of the water with that snarl on his lips and an AK-47 in each hand, who immediately starts blasting away, the whole scene shot in slow-motion, Rambo blowing the hell out of everything in a cacophonous hail of fiery gunfire and spent cartridge shells, things catching on fire, things exploding, bodies flying through the air, people screaming, and it is all one (pause for breath) one hell of a mess.

That’s inflation for you! Okay, maybe except for the part about real bullets, and things catching on fire, and things exploding, and bodies of people flying through the air, but it is exactly true of people screaming and it is (again pause for breath) one hell of a mess.

Now, think again about adding to your home video library your own copy of a terrific action flick of Rambo jumping up and shooting bad guys and everything to smithereens, only re-cast Rambo with the Federal Reserve, change his weapons into Fed Credit that have infinite dollars as “bullets”, and change “bad guys” into you as the “smithereens.”

Not interested? How about if I add in a few long, long scenes of pretty, scantily-clad ladies prancing around for no particular reason, a short exciting car chase ending with a crash, and some more scantily-clad ladies (but different from the first ones)? Are we suddenly talking box-office gold? Whee!

But this is not about a hypothetical career change, going from angry and paranoid hothead cowering in some stinking bunker and writing Stupid Mogambo Crap (SMC) about fiscal and monetary policy and the idiots who are screwing it up, to blossom into a Famous Hollywood Producer (FHP) and infamous starlet-interviewer, but about inflation in prices, and why it is so bad, and I’ll venture a guess that this “inflation in the money supply causes inflation in prices” is lurking somewhere behind the new Labor Department news release that wholesale prices jumped 1.4% in January, the JOC-ECRI Industrial Price Index jumped 2.5% in One Freaking Month (OFM), and is now 78.17% higher than this time 12 short months ago! Yikes!

The mind screams, “We are freaking doomed!” and if you are like me, your throat clenched in primal fear, also screams, “We’re freaking doomed!” And if you are, again, like me, people turn around and yell at you for your timely warning, saying things like, “Shut up! We’re trying to get some work done here, you moron!” and, “Everybody shut up! I’m on the phone here, you idiots!” and then there is a big brouhaha and everyone is shouting, “You shut up! Who are you calling an idiot! You’re the idiot!” and, “You talking to me? You calling me an idiot, you moron?” back and forth and back and forth.

So I know what you are going through, but at least you know that you should put your money into gold, silver and oil, and thus you can just smile to yourself knowing that, one day soon enough, these morons are going to be busted out by the inflation in prices that will come from the inflation in the money supply that came from the Federal Reserve creating the money so that the government can borrow the money and spend the money, and that the inflation will ruin them utterly, although you will probably never learn of it out on your yacht, or at the country club.

The pleasure will come from the money, and the money will come from investing in gold, silver and oil, with the secret pleasure of Schadenfreude thrown in free!

The Mogambo Guru
for The Daily Reckoning

Inflation Explosions in a Financial Action Film originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Like today, for example, when I am told that it is “essential” that I curtail my frenzied buying of gold, silver and oil this month so that one of the whining kids can go to the doctor (or dentist, I forget which) for some real or imagined discomfort, ache, pain, open wound, bloody discharge, festering sore, oozing abscess or gangrenous limb, like I am made out of money or something.

Normally, I would explain, with the patience of a saint, for the thousandth time, how the Federal Reserve is creating waaaaAAAAAaaaay too much money and credit so that the federal government can borrow and spend waaaaAAAAaaaay too much money, which is this selfsame “waaaaAAAAAaaaay too much money and credit” created by the Federal Reserve in the first place, which is a kind of strange circular logic, I admit, but which I think only serves to prove the bizarre, incestuous nature of the whole thing, but without any bodily fluids being exchanged.

And I told them, “If you don’t think so, just wait until the inflation in food and energy prices really gets here, good and hard, and when you look at the horrors this will create, you can tell me again how you don’t believe that inflation in the money supply leads to inflation in prices when all this new money enters into the marketplace, like a flood, adding massive amounts of money to the bidding for goods and services, which makes prices rise”, but they just kept whining, “No, daddy! I need to go to the doctor now, not when inflation is raging so that the cost will be higher and you will not want to pay those higher prices! So you want to send me now, when prices are lower!”

So you can see that there are two sides to every story; on the one hand this whole incident with crybaby kids and their whining, and complaining, and blacking out, and getting blood all over everything, and on the other hand there are “essentials” in the world, as in “essential insights”, which, in the case of Money Morning, is apparently true, as we note with surprise that David Stevenson writes in the newsletter that, in the United States, “Prices of commercial property – real estate – are down by 43% overall since the October 2007 top, says Moody’s Investors Service. Retail rents have plunged by a third from the peak. For offices, rents are down 40% and vacancy rates are as high as 18%.”

Now, most people, like me, and maybe like you, too, look at that paragraph and say, “Whew! That seems like a lot of numbers, which are already confusing by their very presence, which explains why I don’t understand!”

Being the peach of a guy that I am, I am going to show you – free! – the essential information in there, which is: If you own commercial property, you are screwed, and if you do not own commercial property, then it is getting cheaper and cheaper.

In the meantime, just keep buying gold, silver and oil stocks, not because I say so, which I do, and you should, too, but because we have no other choice, because if we did, I am sure that I would have read about, or heard about, someone buying it to successfully protect themselves against governmental stupidity at least one (pause) freaking (pause) time (pause) in the last 4,500 years of the economic history of the Whole Freaking World (WFW), especially since the whole thing seems to be about economic stupidities that flow from continual, ever-worsening government fiscal malfeasance, just like we have all over the world today and all over the world in all of the rest of history, but, in a word, I ain’t.

And, so, investing doesn’t get easier than that! Whee!

The Mogambo Guru
for The Daily Reckoning

Gold, Silver and Oil: Buying the Essentials in Tough Markets originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

I needed this kind of mental break to take my mind off of, for one thing, the sheer horror of today’s economic situation and how we are So Freaking Doomed (SFD).

Finally, I happened to catch a moment on CNBC just where Larry Kudlow was correctly making fun of Greece for saying that it will raise taxes and cut spending in an effort to get its ludicrous deficits and preposterous budget under control, and he had a deliciously snotty, supercilious, sarcastic attitude (the True Mogambo Way!) towards the idea of raising taxes and reducing spending as an economic stimulus of some kind! Hahaha!

I was with him all the way, too! And I had a few choice things that I wanted to say to Greece, too! Most of my complaints about Greece are about how Greek salads always seem to come with a damned oil and vinegar dressing that is terrible until you add some sugar, then it’s pretty good, so why in the hell don’t they add sugar to start with, the lazy bastards? God knows they had the money!

And then to add sour ripe olives to the mix – which is more of the same, only worse! – makes me want to jump to my feet and shout, “What is the matter with Greeks that they would they would do such a terrible thing to an otherwise delicious salad?”

So with Mr. Kudlow on the case to make sure that Greece gets its act together, I am sure that their deficit problem will soon be resolved, and this salad dressing thing will soon be a thing of the past, too, which may be part of the reason why I thought he was really good for about, oh, three seconds, which is about as long as the average period of time that I usually agree with Mr. Kudlow, or my wife, or my kids, or my boss, about anything.

The aforementioned three seconds during which I agreed with Mr. Kudlow is because he said something scornful in a rapier-like rebuttal, something like “Raising taxes and cutting spending is not the answer!” which is true.

But it is only true because there IS no answer! To even ridiculously assume that someone can come up with a plan to dissolve consumers’ debt and simultaneously pay off their creditors – the fabled “win-win” situation! – is ludicrous! Hahaha! Beyond ludicrous! Hahaha!

Mr. Kudlow and his little panel of “experts”, however, ignore my scornful laughter and the way that Icky Mogambo Spittle (IMS) shot from my lips, and implied that there really is a solution to this problem out there, somewhere, anywhere, maybe over here, maybe over here, which would marvelously, and magically, enable debtors to get rid of their debts without paying anybody anything, and creditors to get all their money back without being paid anything by anybody! Hahahaha!

But I understand that it’s Mr. Kudlow’s job to take positions on monetary, fiscal and economic policy that are the opposite of mine, because my job is to stay away from the majority, and his job is to get people to join the majority.

My position is so antagonistic because in these three cases, “the majority is always wrong.”

The majority is wrong in encouraging monetary insanity by always yammering for more and more monstrous Federal Reserve money-creation to buy the fiscal insanity of Congress’s avalanche of new government debt to fund Obama’s spendthrift imbecilities, which will cause inflation in prices, which is The One Big Freaking Thing (TOBFT) that you don’t ever, ever, ever want to have, which means that you can never, never, never allow excessive amounts of money to be created in the first place.

The majority is wrong on economics because they still, laughably, believe in the proverbial “free lunch”, a childish fiction where somebody gets something and nobody has to pay for it, and the majority are willing to bankrupt themselves, and destroy their own country, by letting Congress try to provide a free lunch to anyone and everyone who walks up with a hand out or a sad story.

And the biggest reason to go against the majority is in investing, because it’s less than a zero-sum game, and thus the majority must lose money and be bled dry by a ghoulish financial services industry (that is so large that it makes up 70% of all profits made in the country, and thus pays most of the taxes, which are actually paid by the “investors”) so that a minority of people (hopefully, me!) can make money despite being bled dry by the financial services industry and despite paying taxes on the gains. “Investing for the long term!” Hahahaha! I snort with derision! Snort!

So you can see why my natural anti-establishment makes me pound the table for gold and silver simply because the majority ignores them!

Okay, the real reason is that today’s dire economic condition, due to a staggeringly incompetent government and incompetent citizenry, has been played out thousands of times in the last 4,500 years, and in each case, the only thing that saved anyone’s butt was gold and silver.

There are those, of course, who say, “That explains why you are buying gold and silver, but it does not explain why you are always screaming at people to invest in oil, as well as in gold and silver.”

Well, since you asked, I say invest in oil because it has the most energy per cubic centimeter, and now that it is used in practically everything everywhere, nobody in the industrialized world can live without lots and lots of it, with guaranteed continual rising demand, but it is being rapidly depleted. Rising demand and falling supply? Who could ask for more in an investment?

As for those who go on to say, “Well, that is pretty convincing, alright, but it doesn’t explain why you are such a hateful, disrespectful, little creep”, I admit that, no, it doesn’t.

The Mogambo Guru
for The Daily Reckoning

Bet Against the Majority. Buy Gold. originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Turning to the old tried and true, I soon learned that I had started too late, and I was not nearly drunk enough to have properly anesthetized my nerves when I chanced to read Agora Financial’s 5- Minute Forecast report that “The CBO’s latest numbers reveal that President Obama’s proposed fiscal 2011 budget would add $9.7 trillion to the national debt over the next 10 years.”

My hands shook and my guts churned at the horrific prospect of adding $9.7 trillion to the money supply, which means (I gulp in horror at the prospect) inflation in pieces like you never saw! Yikes!

I mean, (my voice rising in pitch and volume) the entire GDP of the USA is about $14 trillion, and the government wants to increase, over ten years, government spending by 70% of everything that this country currently makes!

Apparently eager to change the subject since I seem to be getting worked up about this and could, possibly, probably, almost certainly, damned near guaranteed, erupt into some loud Mogambo Hysterical Tirade (MHT) and make a shambles of everything, The 5 says, “Further, the CBO projects the national debt will be 90% of GDP by the end of this decade”, which I guess they thought would calm me down or something, but it didn’t, which was bad enough to cause me to have chest pains accompanied by loud howls of pain and outrage in another tiresome Screaming Mogambo Fit (SMF), but then went on to make it all worse by saying that debt will equal 90% of GDP, which is “higher than the 83.4% recorded at the end of fiscal 2009 last fall.”

Suddenly, there was an uproar as I jumped to my feet and shouted “What kind of bizarre crap is that? The national debt is already $12.5 trillion in a $14 trillion economy, and somehow you add $9.7 trillion to $12.5 trillion to get 90% of the economy which means that …that…that…”

Well, I knew what I meant to say, but did not have a calculator handy, and the security guards had me by the arms and were hustling me out of the room pretty quick.

I later found out that what I meant to say, but did not have the figures handy, is that this means that the CBO thinks that, unbelievably, in ten short years, a staggering $22 trillion of national debt will be 90% of the economy, which means that the CBO thinks that the economy in ten years will be, I gulp to report, $24 trillion, which is a whopping 71% higher than today! I am stunned!

What can one say but, “We are freaking doomed!”

Perhaps hearing my plaintive voice with its unmistakable undertone of angry paranoia and wanting me to calm down, The 5 says, “We’re 100% certain this comment will elicit the customary response: ‘Look at Japan, its debt is 170% of GDP…and it’s been running massive deficits for years!’”

I think to myself, “Okay, they just take time to raise the blade of the guillotine higher and higher, but the end result will be the same, and if anyone thinks that Japan proves otherwise, then I laugh the Mogambo Laugh Of Scorn (MLOS) at them and turn around to wave my buttocks in their faces in a final fillip of disrespect!”

The 5, in what I imagine is said with a deliciously snotty tone, says, “To which we can only sigh and respond: ‘Exactly.’”

Well, I can do more than that, because I am, after all, The Loudmouth Mogambo (TLM)! And I say that if all prices doubled, today, GDP (which measures spending) would instantly double, too! Hahahaha! Everything costs twice as much, but the economy looks like it boomed! Hahahaha! Welcome to Inflationary Hell!

I often marvel that it’s a good thing that the poor are usually ignorant or stupid, because if they could, or would, comprehend how this huge explosion of money is going to make prices rise and make them enormously poorer and more miserable, worse and worse, and probably for the rest of their lives, they would go freaking berserk.

As for the middle class, they are supposed to be smart and educated enough to know this stuff, but they don’t, and so they don’t understand the sheer enormity of how much poorer and miserable they will be for decades to come, either, and they will suffer, too.

Then there are those of us who are buying gold, silver and oil to protect ourselves against the ruinous, crushing, cataclysmic inflation in prices that this inflation in the money supply, and debt, will cause, because then, for us, it all becomes idle dilettantism and pleasure, which is, once you boil it down, the whole point of investing, isn’t it?

And could anything be easier? Whee! This investing stuff is easy!

The Mogambo Guru
for The Daily Reckoning

CBO Budget Projections and the Horrors of Inflation originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

His story starts off that “The FDIC is even more broke than it was three months ago” to which most people rudely say, “Welcome to the club! Waddya think, we got some kind of picnic at the beach going on out here in the real world while you pretty-face hotshots talk about who is smarter and about some idiot named Mogambo who must be an idiot because otherwise he would not have such a stupid name!”

Mr. Wiggin goes on undaunted, perhaps buoyed by the knowledge that no matter what happens, he’ll still be better looking than The Mogambo. And smarter, too. And younger.

Maybe that’s why he did not seem to be registering horror at the news of the bankruptcy of the FDIC, and, as if to underscore my suspicions, you can almost hear the confidence in his voice as he explains, “The fund the FDIC uses to ‘insure’ your bank account went $20.9 billion in the red during the fourth quarter of 2009. That’s more than twice the deficit reported when the fund first entered negative territory in the previous quarter.”

Naturally, if these were the old days when the money supply was more-or-less constant, this would cause panic: “Our bank deposits are uninsured! Yikes! The Mogambo said we’d be wiped out and here it is, and he said to buy gold, silver and oil, and we didn’t, and now look at us! Oh, woe!”

But nowadays? Relax! We have a fiat currency that the Federal Reserve can, literally, create at will, at a stroke, all the money necessary to make sure that every Last Freaking Dollar (LFD) dollar in your account is fully protected against actual nominal loss; you had an electronic or paper buck, you will still have and electronic or paper buck!

Unfortunately (and you can tell there is a “catch” by the way the soundtrack suddenly turns gloomy and there seems to be the sound of somebody, in the distance, throwing up into a toilet) this huge, sustained increase in the money supply guarantees – guarantees! – that you will lose buying power in every one of your precious dollars, so you are kind of screwed, either way, when you stop and think about it, by Federal Reserve policies.

My Sensitive Mogambo Nose (SMN) detects (sniff, sniff, sniff!) detects panic. So, desperate for money, I look to prey on the superstitious, and suggest that maybe you should just send all of your “tainted” money to me so that my hoodlum friends and I can have a big ol’ party, where we will raise our glasses in a long series of toasts to you, to your health, and to your good luck because – hey! – attracting the attention of deities, paranormal powers, transcendental influences and cosmic forces could, conceivably, work!

Mr. Wiggin is not enthusiastic about my latest rip-off scam, which I suggest only because I am out of ideas and I am desperate for money. He suggests a perfectly legal and good way to get some money, which is, “As long as banks can continue to borrow from the Fed at 0.25% and park it in 10-year Treasuries for nearly 3.7% (and leverage it up, of course), we don’t see this changing”!

He’s right, of course, but before you rush out to start a bank and get your piece of this Federal Reserve stupidity, perhaps you should consider something along the lines of buying gold, silver and oil in some kind of wild, paranoid, knee-jerk reflex as a small, small part of a whole constellation of symptoms known collectively as Screaming Fear Of Outrage (SFOO) of the inflation that will be caused by such massive increases in the money supply, now additionally caused by the needs of the FDIC, but he goes on that it will get worse than that, as, “On top of that, the FDIC’s list of ‘problem banks’ grew during the fourth quarter from 552 to 702” he says! Yikes!

A long, haunting howl of dismay escapes my lips, perhaps not unlike the sound of ravenous, starving wolves howling, “oooOOOOOOooooooooh!” as they close in on your bloody trail as you crawl along, dressed in rags, wounded, bleeding, in the snow, at night, in the mountains, in a snow storm, with freezing sleet, and you realize that you can’t buy them off with your paper fiat money, but with a flash of True Mogambo Enlightenment (TME) that has come tragically too late, you realize that with the heft of a kilogram of gold in your hand, you can beat the living hell out of anything that comes near you that is metaphorically wolf-like in economic nature, or, with literal wolves, something spewing out .45 caliber bullets in a semi-auto fashion, putting us one more leg-up (as if we needed it!) on wolves of the literal kind, with politicians being of the metaphorical kind of ravenous wolves, thus mixing up literal with figurative, back and forth, up and down until you are in a panic, all confused and bewildered, wondering what’s real and what’s not, and your first instinct is to just start blasting, blasting, blasting until your trigger finger is bloody and cramped, and you manage to clear out a “Mogambo Dead Zone Of Safety (MDZOS)” all around you.

And you probably would have, too, if you had not remembered that you bought a lot of gold, silver and oil just to take care of situations like this! And it’s working perfectly! Ahhh!

But this thing about the “FDIC’s list of ‘problem banks’ grew during the fourth quarter from 552 to 702” is, as I notice with alarm, not only a number that is a huge (almost) 50% higher in just one quarter, a statistic which sets my Sensitive Mogambo Senses (SMS) tingling, as with two data points, a desperate-yet-handsome man like myself can quickly, and easily, discern some kind of Trend Of The Ugly Kind (TOTUK), to which I am particularly alert ever since I noticed that the entire freaking course of human history in the world, a world you call Earth, is the sad, stupid story of one stupid country after another borrowing money and getting into debt that they can’t repay, which is always resolved with inflation in prices, a bankruptcy of assets, and a ruinous war with somebody as we attempt to shift the cost of victim-hood from ourselves to foreigners so that there is, indeed, a free lunch for us.

Mr. Wiggin is not impressed with my penetrating analysis, which is in line with what everyone else agrees is pretty stupid and not worth reading or even admitting that they had even read, even in part, but I notice that he immediately takes up on my idea of “trend” that just I mentioned, and – surprise! – he finds, “Hmmm, let’s see. The number grew 27% in just one quarter. At this pace, every bank in the country will be on the problem list by the fourth quarter of 2012.”

An involuntary “Yikes!” escapes my lips. That’s a trend!

I, as are most normal people who understand how this “economics thing” works, am horrified by all of this, and the only saving graces were that I had gold, I had silver, I had oil, and I had enough firepower – within reach! – to provide calming relief to an otherwise paranoid, screaming, hysterical man, such as myself, pumping adrenaline from every pore in his primal outrage at the sheer terror that is being created by the Federal Reserve.

For some reason, I can actually feel your scorn, as you deride what you think is just another paranoid gold-bug gun nut Loonie-Tunes weirdo since the Federal Reserve can just create all the money and credit that the FDIC needs, so why don’t I, as I asked my kids, just shut up?

With that, I thought it was all over, until he went on, “Another tidbit from the FDIC’s report: Bank lending last year dropped at the biggest clip since 1942”, which was the year after we entered World War II, which seems important, but was a long time ago, and we don’t get to watch watching terrific war footage with things blowing up and – blam blam blam blam! – guns are firing! Things are on fire! It’s all exciting as hell!

Instead, we will note, much more soberly, that this is today we are talking about, not some ancient yesterday, and Americans are not the “good guys” bravely freeing Europe by destroying it all so that our industrial advantages are completely spared, but are, instead, the biggest bunch of feel-good, hyper-leftist morons that the world has ever seen where, despite a national emphasis on education, ample historical evidence, and the Constitution of the United States requiring that money be only of gold and silver, the citizens have allowed a pure fiat money and every kind of slimy flimflammery that such unbridled money supply would allow, which was, as you would guess, anything you could imagine.

The bad news is actually beyond that of mere bank lending being down, since nobody (except governments) wants to borrow money, since nobody has the money to buy anything anybody makes, so why invest money to make something that nobody will buy. The worse news is that bank lending is how money is created.

Money is, by definition, being destroyed, so that there is less money around with which to pay debts.

You know, without me telling you, that all this ain’t good! And these are the times when you are glad that you are safely invested in gold, silver and oil, and the only thing you have to worry about is, for instance, the usual stuff of keeping an eye out for party-killing suspicious strangers who may know your wife or boss, checking for suspicious pods growing near where you sleep, and protecting yourself against vampires, werewolves, and other blood-suckers, which leads us back to politicians deficit-spending, which leads us back to the Federal Reserve creating more money, which leads us back to buying gold, silver and oil in fearful response, which leads me back to, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Using Gold to Fend Off the FDIC and Its “Problem Banks” originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Instead, it is actually true that demand created its own supply, like the “supply” of new “neighbors” at the storage place are demanding (“demand”) that I get that stinking, festering fecal mess out of there or they are going to sue me or something, to which I said “Great! I’ll pay you off with some of these ashtrays, which will make wonderful gifts for your friends and family!”

I bring this up not, as is often rumored, as a last minute appeal to you, the American consumer, to buy a bunch of these dog-poo ashtrays with their “keepsake quality”, and take them off my, literally, stinking hands, but to show you that one of the reasons why the economy is doing badly is that the latest unemployment numbers are Bad News Aplenty (BNA), as people do not buy as much stuff (demand) when they don’t make as much as much money, and the people who make stuff (supply) are then laid off, proving, once again, that supply follows demand.

And, since we are talking about it, people are not buying as much stuff, which I cleverly conclude from the fact that consumer installment debt has been going down since September 2008 as the American consumer is gradually, slowly, ever so slowly, almost glacially, paying down some of their super-sized, staggering $2.5 trillion in consumer installment debt.

How much? Consumers have, in a year and a half, paid down a measly $135 billion! Hahaha!

At this rate, one wonders, at 20% interest on the unpaid balance, how many freaking lifetimes will it take just for consumers to pay off their $2.5 trillion in existing debt, which doesn’t even count the debt they are going to incur in the future, just trying to buy the basics, as the inflation in prices from the insane inflation in the money supply makes things so costly that they get to the choice of debt or starvation, and even then, most people will buy food instead of gold, silver and oil.

Hoping to gently motivate them, and to provide the apparently necessary motivation delivered in a non-threatening, person-centric, positive way, I say, “Hey! You could stand to lose a few pounds there, chubby! Stop eating for a couple of days and use the ‘found’ money to buy yourself some gold, silver and oil, you moron!” but even then, they always act upset, like I said something wrong! See the kind of stupid crap I have to put up with around here all the damned time?

Anyway, their only hope is that everything survives a massive inflation, so that $135 billion dollars is, in terms of buying power, less than a week’s average minimum wage or something like that! Hahaha! Problem solved! Hahahaha!

In case you were curious, I put a lot of it down to the unholy combination of moronic do-gooders trying to save my life and greedy governments trying to drain my blood, as they, all over the place, raised cigarette taxes by several dollars per pack, so that the quarter of adults (54 million) who smoke a theoretical carton a week, have $40, $50, $60 sometimes more than $70 a week less money to spend on everything else, which comes to, at an average of $6 per pack, $3.24 billion per week, or a tidy $168 billion a year in lost spending power!

In short, tobacco addicts stopped buying other things so as to afford one thing that has become so expensive.

If they were smart, smokers would be spending their money on gold, silver and oil, waiting a little while until their prices soar as the government deficit-spends the massive, monstrous amounts of money that the Federal Reserve creates, and THEN taking up smoking when they could easily afford cigarettes at any price, the higher price for insurance, and the needed medical treatments, also at any price!

It’s enough to make you say, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Consumer Debt and the Supply-Demand Dynamic originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

But the surprising gunfire was not my fault, as I had just read that the Federal Reserve is being as dangerously incompetent as ever by continuing to massively increase the money supply (which is so horrible because it causes inflation in prices) so that they can buy up (monetize) at least a part of the massive, monstrous, mega-moolah Treasury debt issuance that will be necessary to fund the unbelievable sum of, as I understand it, $1.9 trillion in government deficit-spending in the upcoming One Freaking Year (OFY) as a result of the massive spending of the terrible, awful, worse-than-I-had-feared, demon-from-hell Obama administration, plus trillions more for the needs of the private sector, and a trillion or so in Congressional “supplemental appropriations” throughout the year as Congress periodically, almost ritually in a Satanic kind of way, “discovers” that their original estimate of their borrowing needs was inadequate, and – surprise! – that these slimy, lying bastards need LOTS and lots more money!

I can see by rereading that paragraph that I was so wrapped up in heaping Massive Mogambo Scorn (MMS) on the arrogant, radical-Left Obama, on every sniveling Democrat in the place, most of the Republicans, and on the despicable, guilty-as-charged, incompetent Federal Reserve that I never actually got around to telling you how much money and credit the Fed created last week, which was the original point I was going to make for some reason other than decrying such irresponsible expansions of the money supply that will guarantee horrific, economy-destroying, dollar-destroying, soul-destroying inflation in prices, but I forgot what I was planning to say about it, to tell you the truth, but with or without it, the increase in Fed Credit last week was another $5.2 billion, which (although terrifying), is less than his usual increase, and at $5.2 billion, is merely twice the usual weekly rate of money and credit creation by the monster Alan Greenspan, former chairman of the Federal Reserve, who – single-handedly! – created all the economic mess of the world by merely creating $10 billion-or-so per month of new Federal Reserve money and credit!

Now, Fed chairman Ben Bernanke, a clueless academic, still stubbornly hews to that same, tired, insipid-yet-stupid neo-Keynesian econometric theory that has now been shown to be not only wrong, wrong, wrong, but also stupidly and catastrophically wrong, which doesn’t say anything at all about the morons, like Ben Bernanke and Alan Blinder, who are themselves mere representative examples of the neo-Keynesian econometric bozos rampant in the world today, all of whom believe in such imbecilities as their precious economic theories in the face of, literally, overwhelming evidence to the contrary! It is absurd on its face! Ya gotta laugh! Hahahaha!

Interestingly, a crucial part of the stupid Keynesian nonsense holds that the government can, by virtue of borrowing the money, replace any perceived lost “consumer demand”, in any economic downturn, by merely borrowing and spending money, even if borrowing and spending money was the cause of the original downturn, and that there are no repercussions that cannot be solved by more borrowing and spending, and that inflation in prices has nothing to do with the money supply but with irrational exuberance! Which doesn’t even make any sense! Hahahah! It doesn’t even freaking make sense!!

Sharp-eyed Junior Mogambo Rangers (JMRs) will recognize the two exclamation points as indicators of something, usually the preceding sentence (as in this case), as being very important, as, now that I notice, it is, in this case, in that it is Beyond Freaking Crazy (BFC)!!!

Horrors! The punctuation using the rare triple exclamation point! You can tell I am on a roll here! I suggest you go to someplace safe in your house where your enemies would have to attempt a painful frontal assault against you, and as you wait, you think to yourself, “Obviously, this is extremely important! As indeed it is, now that I think about it after it has been drawn to my attention, thanks to the Magnificent Mogambo (MM), because you do not get anything except total, unmitigated disaster from inept management by people who cannot be controlled and who are Beyond Freaking Crazy (BFC)!”

I am very proud of you for thinking this, as it shows that it has all become clear: The preponderance of people on this planet, and in our universities, and in our media, and in our governments, and in our central banks are BFC lunatics if they think that borrowing (racking up debt) and spending money will “cure” the bust of the boom produced by borrowing (racking up debt) and spending the money! Hahahaha!

I immediately think of the joke, “Doctor! I’ve been gorging myself, but I never lose any weight!” but it doesn’t seem to fit the conversation, somehow, and it doesn’t really seem to have anything to do with anything I was talking about, which makes me think that maybe my subconscious is telling me that I SHOULD have been talking about it, which doesn’t make any sense, either, because I don’t think anyone needs advice on how to gorge themselves, and in fact, people seem quite disgusted when I do it, although it makes their kids laugh, meaning that the kids like me better than they like their own parents, which is a small victory for me and, although small, is a victory.

So I say to the kids, who just showed how much they love me, “Hey, kids! Tell your parents that they are idiots unless they buy gold, silver and oil right now, because unless they do, they are going to be poor when excessive government deficit-spending and excessive Federal Reserve over-creation of money and credit make prices soar as the buying power of the dollar falls, which means that you will be poor, and you tell them how you don’t want to be poor, and how you have been thinking about, in an idle sort of economic self-defense way, the many, many advantages of being too young to be charged with a capital crime should they fail to acquire the aforesaid gold, silver and oil!”

This is where the parents turned around and gave me this “dirty look”, which I interpreted to mean, “I surrender, under protest, to your magnificent, powerful presentation of the case for gold, silver and oil, enhanced by the paranoid notion that my own children are threatening to kill me in some bizarre extortion racket involving gold, silver and oil that you have planted in my head, which I realize is all for my own good because I now see that only an idiot would not buy gold, silver and oil when the government and the banks are acting so despicably! Thank you, handsome stranger!”

The name’s Mogambo, ma’am. It’s my job.

The Mogambo Guru
for The Daily Reckoning

Borrow and Spend Economics to Pay for Borrowing and Spending originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."