10/05/10 Tampa, Florida – Every time I see some government “official” pronouncement of inflation, I am always reminded of John Williams at shadowstats.com, who calculates inflation the pre-Clinton way, and as such, routinely finds that actual inflation is actually running 3 or 4 times as much as the government says, and sometimes more, probably!
Now, he writes that because so many things are going so wrong, and so much money is involved, that he has reached the terrifying conclusion that “The intensifying economic and solvency crises, and the responses to both by the US government and the Federal Reserve in the last two years, have exacerbated the government’s solvency issues and moved forward my timing estimation for the hyperinflation to the next five years.”
Hyperinflation in five years! Yikes!
Naturally, my heart is instantly fibrillating and my blood pressure has dropped to zero as my brain explodes at the sheer horror of such bad news, and the last thing I remember was, as I was blacking out from the aforementioned brain explosion, that maybe, maybe, maybe there is some reasonable explanation! Sure! That’s it! There’s a reasonable explanation!
As if in a dream, I clawed my way back, back, back to The Light, and I gradually regained consciousness, whereupon I ran quickly to see how Mr. Williams defines hyperinflation!
I am, alas, sorry I did. “Hyperinflation,” he writes, is “Extreme inflation, minimally in excess of four-digit annual percent change, where the involved currency becomes worthless.”
My blood congealing in my brain, I nonetheless concentrate enough to see that if inflation is 4-digit, then the minimum annual rate of inflation would be 1,000%, which means that a loaf of bread, or a tasty taco, or, sadly, a fabulous Grande Carnivore Supremo Extravaganza Deluxe pizza, groaning under the weight of every luscious meat product you can think of, would cost 10 times as much at the end of the year as it did at the beginning of the year! Yikes!
And then the year after that, their prices would be 10 times as much again! Yow! We’re freaking doomed!
And if inflation was going to be 1,000% by the 5th year, just remember that this means that the prior year, the 4th year, saw inflation of 999%, which is almost as bad! Gaaahhhh!
Forgive me for the abrupt Mogambo Scream Of Terror (MSOT), but this inflation stuff, and the sight of it gathering strength, getting bigger and bigger, growing into some gigantic, monstrous, creature bent on destruction that will be sweeping down on me in a seemingly few hours, makes me Absolutely Crazy With Fear (ACWF)! Crazy, I tells ya!
And it is not just here, but they must be screaming in Britain, too, as Merryn Somerset Webb, Editor-in-chief of MoneyWeek and writing in the Money Morning newsletter, reports that “if you calculate US Consumer Price Index (CPI) inflation using European methods it isn’t much lower than UK CPI (currently 3.1%).”
She surmises that “All this means that we should hang on to our gold: as all governments work to erode the value of their own currencies via inflation or outright intervention, it is still pretty much the only safe place to be.”
Well, she has pretty much revealed the contents of the Mogambo Fabulous Investment Portfolio (MFIP), which is no big secret or anything, as it consists solely of gold, silver and oil.
And with guarantees of gold, silver and oil going higher, higher and higher in price, for years, years and years, thanks to the stupidity, stupidity, stupidity of the monetary excesses of the foul Federal Reserve that will create hyperinflation in prices, what can one reasonably do EXCEPT buy gold, silver and oil, and say to oneself, “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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Greg Kadajski? Who the heck is Greg Kadajski? And, how do you pronounce Kadajski?
Only one man alive writes the phrase, “Grande Carnivore Supremo Extravaganza Deluxe pizza.” And his name ain’t Kaskdgouieroidfulgsn.
I am ordering my pizzas now, while I can still afford them!
must be a senior mogambo ranger
Maybe there is nothing to worry about: it is just more funny paper which is going to be added to the sh*tpile. It is part and parcel of their ponzi scheme-scam. When it will blow up (it is not a bug, is a feature of ponzis), they will just change names and pictures on their monopoly notes (I suggest a contest for Mogambo fans to design the new notes) and start anew inflating bubbles around the world-economy. Just relax and keep close your heavy metals.
The economic climatic condition has changed drastically for the last decade.
Same is happening now in Europe. In euro area, only Germany is generating cashflow whereas the rest are busy concluding paper document deals. In complete reminiscence of the U-boat sinking Ally’s
surface ships faster than they could be built.
Guru is giving me the impression that fueled by multitude of fiat money, gold and silver are just about to lift off instead of touching down after 1300 miles of journey. I share the same feeling. Maybe after decades of peace, human beings are on the verge of spearheading yet another great world conflict, another big world war. Everything seem to have gotten out of control – scam, fruad, cheat..you name it. Jumping zombies on the streets are against the wisdom of the entire human civilisation. Smartees are proving Newton’s theory to the contrary and they are marching to prove Eistein is wrong too. So much so that, everybody is ready for the final showdown – the ultimate battle on the planet. It is high time and it is just timely.
Actually, No one is to be blamed. All figures point at Adam and Eve. Here, we prove economics is such an important topic. The duo should have refrained from eating the forbidden fruit that spelled impending long lasting trouble.
For that sensational moment of seeking rain and cloud which I evaluate to be no more than 30 minutes, the duo has brought to the world centuries upon centuries of endless misery, suffering and torturing.
Rain and cloud then subsided and the blue Pacific ocean continue beating the shores timelessly in its solid solitude.
If the duo ever has an economic brain .. if they were smart enough to convert the
30 minute sensation to the present free market value .. surely they would have abandoned the staunch march to glory.
I agree about investing in Gold and Silver in hard times.
I am not convinced the world prices of oil, in particular, if we go through hard times, where unemployemnt and demand is eroded significantly. Look at the market response to this latest sub-prime crisis.
If the US economy goes into tailspin, in the event that there is a race to the bottom for de-valuing the currency to lessen the value of the Chinese loans and to increase the probability of domestic manufacturing at lower wages in the future, demand goes down a great deal for quite a while before it ramps up again. So real prices of oil relative to USD-EURO-CAD-AUD-GBP goes down too with the flood of supply or anticipation of the flood of supply.