05/17/10 Tampa, Florida – A recent email blared, “The National Inflation Association says there is reason for grave concern”, to which I thought to myself, “Well, welcome to my world, chumps, because all I do is bewail the horrors of the coming inflation in prices that will follow such huge inflations in the money supply!”
With such a dismissive attitude, you can tell that I was going to trash the email without reading it when, suddenly, I noticed that they used the word “grave”, as in a hole in the ground where cemetery workers dump what is left of dead, emaciated bodies after the terrifying rise in prices, caused by massive creation of money by the Federal Reserve and jammed into the economy by the massive deficit-spending of the deplorable Obama administration, forcing people to live in abandoned buildings and eat various rodents and local flora, perhaps snacking on the occasional corpse, whereupon these people turn into raging zombies who hide by day and come out at night to kill people, splitting open the heads of their victims and eating their brains, walking mechanically and stiffly down the street, arms held akimbo, hollowly intoning, “Brains! Must have brains to eat!” and it’s a real scary mess until somebody, at the last minute, gets the good idea to get some flame throwers, a successful tactic that seems to elude the typical zombie mind, even as they are being incinerated.
Well, as bad as this doomsday scenario is, it could get scarier, like if the zombies started using flame throwers, too, or even scarier, like the actual news, which is that “US food prices jumped by 2.4 percent in March 2010 in the largest monthly leap in more than 26 years, and the sixth consecutive monthly increase.” Yikes!
A 2.4% monthly leap! That’s a 28% annualized increase in the price of food! In One Freaking Year (OFY)! Yikes!
By this time, alarms are going off in my head, and, like the terrific husband and father that I am, I shout protectively to the family, “This is it! The inflationary collapse that comes from the Federal Reserve creating too much money and the idiotic Congress deficit spending too much money has started, just like I said! To the bunkers, morons! Hup! Hup! Let’s go!” expecting, you know, that they would immediately jump up, their eyes shining with pride as they obediently follow me into the Mogambo Bunker Of Paranoid Seclusion (MBOPS) where they could make themselves useful by, perhaps, zapping up some microwave pizza, or at least just shut up and stand attentively by to help with reloading something, just in case.
Alas, it was not to be, and among the hooting and jeering from my family, my wife even insulted me by asking, “Will you be back in time for dinner?” like this economic calamity is just a stroll down to the beach and back!
So I say to her, as I am sweeping by her on my way to the MBOPS and trying to keep a tone of incredulousness out of my voice, “Do you realize that the National Inflation Association says that fresh and dry vegetables are up 56.1% in price in the last year? How about that fresh fruits and melons are up 28.8% in price in that selfsame last year? How about eggs ‘for fresh use’ being up 33.6%, or beef and veal up 10.7%, or dairy products being up 9.7%? Does any of this inflationary horror mean anything to you?”
As I did not stop to listen, I missed most of her reply, and I was soon out the door and out of earshot, but I remember that it started out with the usual muttering under her breath, which means I assume she went on to wail about how she has wasted her life marrying me and blah, blah, blah.
And so I missed whatever it was she had to say, although I am sure I have heard it before.
And speaking of missing something, I missed it myself, but Dan Amoss here at The Daily Reckoning reported, “Already we’re seeing very high producer prices. The Wall Street Journal described this phenomenon in a recent article entitled ‘The High Cost of Raw Materials.’”
The Journal reported that “Data on producer prices released by the Bureau of Labor Statistics on Thursday shows how rapidly the pressure on corporate America is mounting. The producer-price index showed that crude goods such as iron ore, construction sand and pulp shot up 44.5% year-over-year, the fastest rate since 1974. Including energy and food costs, crude goods prices rose 33.4%.”
He goes on to report that “The ISM’s Prices Paid Index is telling a similar story”, which is that “the ISM announced that its Prices Paid Index registered the largest year-over-year increase since the 1970s.”
And what does this mean to the average guy, like you and me, who is just looking for a way to make a lot of money without working? It’s easy: buy gold, silver and oil! It’s so easy that I sometimes say, “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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2.4 X 12 = 28.8%
sheesh!
BTW, over the last two years I have seen many of the items in my weekly grocery basket of goods double. I even cornered the regional manager for Wallie World, along with the Store Manager and gave them fifteen degrees of hell about it.
They pointed out that their prices were lower than everybody else, and pointed to the clothing section. I pointed out, candidly and perhaps harshly, that consumer discretionary items weren’t at all what I was calling to their attention. I was talking about what people NEEDED, not what they wanted. I then began to posit the difference between must have stuff and other stuff. I went on a bit much I suppose, and included the notion that they (meaning the corporate squids) were hurting the poor and the old, and small dogs and large farm animals; and they had gy God better start getting the consumer (most notably ME) to love them instead of hate them, since they would be the first place the angry mobs would appear.
The store manager looked at me like I was speaking Russian, the regional manager responded as if he had just been released from some sort of training where they teach their minions to placate the peasants while ignoring them otherwise. Of course, I ended the conversation on my terms, since I quit talking when the security folks dragged me through the automatic doors, one on each arm, me looking back at the small crowd that had gathered.
But I had the last word! Just before the doors slid shut I shouted defiantly, “I’m snaking out with a whole bunch of stuff!”
wouldn’t it be nice if we could edit spelling errs
Yes, it is grave concern. Then, how to go about it?
If you ask an attacking player to adopt a defensive strategy or a defensive player to play an attacking game, it totals up to disaster. To rein in nor rein “out” those money supply would not be that simple an answer.
How did Napolean’s embattled army turn the tide? Do or abandon mean the same thing – death. For Napolean, a sudden upsurge of instinct rekindled his spirit, gave a new lease of life to his empiry and furthered his world hegemony to an even greater height.
Should Kasparov be acquired to continue the game?
Three recent examples of significant price inflation i experienced shock over: 1) Last year i purchased a 12-pack of mach 3 razors at walmart for a little more than $19. Six months later i came to ‘stock up’ on more, sensing that prices on such items were probably due to rise alot (which occurred to me after reading an article about how the chinese are trading in their dollars for stockpiles of commodities, mines, etc. around the world – which is kind of a sneaky way, actually, for the intelligent chinese to ‘dump’ their dollars, but which indirectly is causing price inflation around the globe but especially in the U.S….) Anyway, i also became upset when i got to the razor section at this particular walmart in Hornell, NY, and discovered that ‘now’ (then) an 8-pack of the same triple-edged razors was around $19. It soon dawned on me that in a little less than six months, my so-called dollars had lost approx. 33% purchasing power with regards to this one item; 2) In mid-February of this year, i wenht food shopping at Genessee Natural Foods in Genessee, PA, and purchased a five-pound jar of REALLY RAW Honey. Price: $35.91. I returned there on May 14th and discovered the identical item was now offered at $39.12, a nearly 9% increase in three months! ; The next one (3)), that happened today really got me squawkin to any and every body i happened to bump into, esp the folks at the store i was at today. The store is Belmont Hardware in Belmont, NY, and the item is Portland Cement. 94 pound bags. Three weeks ago (we’re rebuilding the foundation of our home) i paid $9.59 a bag. Today, the price was $11.99!!! Yikes?!!?!!! That’s exactly a Twenty-Five Freaking Percent Increase (T-FFPI) In Less Than One Freaking Month!!! (ILTOFM!!!) I suppose with the Chinese cornering the cement market (as a concrete principle), we’ll be paying something close to a 400% increase by year’s end. Yikes, looks like the Mogambo’s gonna have a corner on Concrete Mogambo Bunkers of Zombie-Free Enjoyment (CMBOZ-F)!!
As I recall the republicans in the Bush admin has massive deficit spending to pay for 2 illegal wars. Why point fingers at Obama?
Banks? Hillbilly? Who is the most knowledgeable? Where do you want to put your MONEY?
A Redneck from Cynthiana, KY walked into a bank in New York City and asked for the loan officer. He told the loan officer that he was going to Paris on an international redneck festival for two weeks and needed to borrow $5,000 and that he was not a depositor of the bank.
The bank officer told him that the bank would need some form of security for
the loan, so the Redneck handed over the keys to a new Ferrari. The car was
parked on the street in front of the bank. The Redneck produced the title and everything checked out. The loan officer agreed to hold the car as collateral for the loan and apologized for having to charge 12% interest.
Later, the bank’s president and its officers all enjoyed a good laugh at the Redneck from the south for using a $250,000 Ferrari as collateral for a $5,000 loan. An employee of the bank then drove the Ferrari into the bank’s private underground garage and parked it….
Two weeks later, the Redneck returned, repaid the $5,000 and the interest of $23.07.
The loan officer said, ‘Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out on Dunn & Bradstreet and found that you are a highly sophisticated investor and multimillionaire with
real estate and financial interests all over the world. What puzzles us is, why would you bother to borrow $5,000″?
The good ‘ole Kentucky boy replied, ‘Where else in New York City can I park my car for two weeks for only $23.07 and expect it to be there when I return?’
His name was Steveodore ; Gotta love them hillbillies!
Dear Mogambo Guru, first, I Love yr. articles!
I only wanted to comment on one part, the inflation is obvious if “you have eyes to see”.I’m sure you know yr. wifes attitude is the prevailing one<sadly, everyone seems to want "la-la land". I have been trying for 3 yrs. to get certain people to prepare. If they don't laugh their heads off, they say they cannot afford to "put up" anything, no matter what tactics I used.I have done w/o Everything not absolutely neccessary to survival for 3 yrs. to make preparations, and I am one of the poorest people I know. My aunt can go out to family dinner at $125 a pop, but can't put anything up. The saddest example of refusal to see was a friend who would literally put her fingers in her ears and sing …la, la la. Now they have lost pretty much everything and Now they want to put things up! I guess we will be seeing a lot of that. I have eaten a lot of ridicule over the years, and then, some one of my "places" said it was time to Stop talking and start laying low. Tells me, as you say, that the time is very near.
I want to thank you again for your articles, in these dire times, you can crack me up, a much needed reprieve from horror. Keep 'em coming.
whatever……but in regard to fruits/vegetables,how come the severe and wet weather,which resulted in a poor “harvest” isn’t taken into account for those bizarre prices which have come down as their produce is rotting on the shelves.– ?
Shawn: Surely you jest. First of all, the Bush vs Obama thing has nothing whatsoever to do with this article. But since you went there…..The Bush deficits for the eight years he was in office amounted to about $1.8 trillion dollars. The Obama deficit for his first 16 months in office was…..wait for it…..$1.8 trillion dollars. THese are the CBO’s own figures. And the CBO is projecting an average of $1 trillion dollar deficits every year for the next ten years under the current spending plan. Which probably has something to do with why this article is saying that precious metals are a pretty safe bet for the forseeable future.
By the way, congress spends the money, not the president. The president can encourage, cajole, threaten, intimidate, etc, but ultimately it is the decision of congress how much money to spend and on what.
I recommend you Google Ludwig Von Mises and then do some remedial reading. Cheers!
George True said
+1