03/22/10 Tampa, Florida – The recent weird action in gold, namely that its price has not risen despite every reason to rise, has people angrily writing to me and saying, “Dear Worthless Mogambo Moron (WMM), You are always telling us that we are stupid unless we own a lot of gold, silver and oil; so I bought some, just like you said to do, but they are not going straight up in a zooming price rise like I want, and so what else do you recommend so that I can make some real money, real fast, besides this gold-silver-oil loser idea of yours that ain’t doing me much good and now I am wondering who the stupid one really is? (signed) Disgruntled in Canada.”
Firstly, I would recommend that Mr./Ms. Disgruntled stop reading my Stupid Mogambo Crapo (SMC) immediately, firstly because it indicates a woeful lack of sophistication in choice of reading material, because if they think that I can, or could, come up with something new that nobody else in the last 4,500 years has thought of, instead of just gold, silver and energy, I sure as hell would!
And I’d tell everyone else how to do it, too! I’d get a Nobel Prize for sure! And then I’d be famous as we all became rich, rich, rich on my new, wonderful investment idea!
And I would be on TV, making the rounds of the talk shows and hobnobbing with Oprah, or Ellen, or Dave, Jay, or Regis, or maybe even Kelly Ripa, especially Kelly Ripa, who would be there with those high heels and a short skirt, all beautiful smiles and legs, and she would ask me a question about how insane levels of government deficit-spending and insane levels of money-creation by the Federal Reserve will produce horrendous price inflation that will destroy us, perhaps something along the lines of, “What do you see in the future, oh Grand And Wonderful Mogambo (GAWM)? And do not hesitate to tell me the truth just because you sense danger to your male ego because you are so near me like this, and you are overwhelmed by my throbbing, consuming sexuality that would dwarf and overpower anything you could muster, even on your best day!”
I would, of course, reply, “Kelly, I say this not as a guy who is perpetually ‘hot’ for you and actually has secret fantasies about you wherein you do bad, naughty things that I want you to do, and you end up wanting to do them, too, and then asking to do them, then panting to do them, then demanding to do them and, in the end, down on your hands and knees begging to do them, but, instead, I will answer you as a professional economist of international renown whose expertise and brilliance has never been questioned – never! – without a response from me (e.g. ‘You’re an idiot, Mogambo!’ and I reply ‘Yeah? Well, screw you!’). So it is with that kind of towering authority that I tell you to buy gold, silver and oil stocks, Kelly, because the truth is that there is no way to make debt disappear except to pay it or default on it!”
Whether or not you can tell from looking at me, I am kind of disgruntled myself, in that I would love to be able to find a way to make debt disappear without paying or defaulting, and then everyone would love me, and I would love to be idolized by an adoring public, but that ain’t going to happen, either, and in fact the only thing I have going for me is that I have gold, silver and oil, because whereas everybody hates me and things seem to be so hard because hateful people sabotage my every move while stabbing me in the back like the treacherous vipers I always knew they were, “Whee! This investing stuff is easy!”
The Mogambo Guru
for The Daily Reckoning
The Mogambo Guru
Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning , and other fine publications. For podcasts featuring the Mogambo, click here.
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Great post as always Mighty Mogambo Guru.
What this Canadian clodhopper fails to realize is that if gold or silver or oil go up too fast too soon then we get the following-
1. A bubble in gold, silver and oil prices. When anything bubbles, it eventually bursts leaving investors financially hurt or ruined (real estate or dot com stocks bear witness to this.)
Contrary to the claim of the gold bears, gold is not in a bubble, since gold has risen in price roughly $92 per year since 2001. $92 a year average, that is hardly a bubble by any standards.
2. Prices go too high too soon means the buyers of gold/silver/oil can buy less, meaning less gold/silver/oil to hold to protect buyers from inflation.
3. Gold, silver and oil going up slowly means more time to buy and more quantity to buy, which benerfits buyers nicely.
4. Lastly, no investment ever skyrockets in price, unless there is inflation or hyperinflation raging, in which case a rising tide raises all boats, including boats (investments) that are so awful they should have remained as shipwrecks (CDS, MBOs junk bonds, etc.)
No share of stock that had true value ever went up every day, dot com stocks might have but look where they and their buyers are now.
Gold and silver may be shining now compared to their prices of 2001, but they will shine brilliantly when inflation hits in full force, after all, with the US Deficit of twelve trillion six hundred billion freaking dollars, not including the fifty trillion freaking dollars of unfunded liabilities, the US will outdo Zimbabwe at the rate it is going.
All Hail Mogambo!
Dear Mogambo Guru,
Please ignore jmr 777.
sincerely,
JMR bayou bobby
Great Mogambo!!!!
Hey,jmr 777!, I agree with JMR bayou bobby even though I am only an JMR apprentice in training. CanadaNorth
Dear Mogambo Guru,
would it be not logical for the Canadian buyers you mentioned to first wait for some Mogambo Asset Deflation (MAD) and only then, as the Fed starts printing money faster than bankrupt banks and government lose them, buy such Indispensable Mogambo Assets (IMA) as gold, silver and oil?
My take on it is that the economy pretty much runs on confidence now, and the importance of low gold & silver prices to maintaining what’s left of that *cannot* be overestimated.
I think that Gold & Silver will remain cheap until the last. After that, they will become the most valuable things in the world.
And if I’m lucky, people will think that I’m a mate of the new Emperor cos of my initials, as in “We have heard that the current Troubles were predicted by the SMC”…
Mogambo Mogambo, Thank you so very much for allowing me to Laugh My Ass Off for a brief moment of respite in these amazingly deluded times
Thanks Mighty Mogambo Guru for the casual reminder that gold, silver and oil may buy plenty of tacos as we continue to evolve into a banana republic. I think silver eagles are the smartest exchange for lousy dollars–the upcoming black market will love them as REAL money. I dunno about storing a barrel of oil or receiving change by the bucketful…
Yeah, Kelly is soooo hot; wonder if she likes silver!
With Obama’s signature, the noose is now wrapped snugly around 1/6th of the productive output of the nation’s citizens. It also encircles maybe 50% of the citizens themselves. I think this calls for an obligatory, “We are freaking doomed!” right about now.
yeah what 777 said, canadians jeez. wait a minute don’t they have a lot of gold and silver? i think they just don’t know what it’s worth yet do they? they sell medication cheap there to .thats it i’m moving.thanks for your wisdom oh great one
Umm… I’m not sure I quite get this.
Obama and his cronies just sold the US economy down the river and silver and gold didn’t even make a tiny ripple. Whaaaaaaat just happened?
Dear Mogambo Guru,
Please explain to our Canadian neighbor how noble investments like gold silver and oil do not have to follow the Austrian school of economics business cycle..
If the dissatisfied Canadian wants to see something go up every day,he should visit the head ED office in Canada. Otherwise, man-up and relax and watch. Anyone who cannot figure that gold and silver are going to dramatically increase once the massive short selling ends, does not have both oars in the water anyway. The Commodity Futures Trading Comm. meets 3/25/10. Hopefully this illegal shorting will stop.