Bloomberg.com reports that Janet Yellen, president of the San Francisco Fed bank, says, to my complete disbelief, “For some time to come, disinflation, and even deflation, will represent greater risks than inflation.”
Of course, none of the media morons, even Fox with their vaunted “fair and balanced” reporting, made mention of my press release that read, “The Mogambo, visitor from another world with strange powers and abilities beyond those of mortal men, such as the ability to see pure, unadulterated, low-IQ, moronic lying crap when he sees it (which is pretty much all the time these days), says he is laughing his butt off at such stupidity in general, and Janet Yellen in particular, as she is the same incompetent yahoo that aided and abetted Alan Greenspan, former chairman of the satanic Federal Reserve, to get us into this mess to start with! And now she is trying to arrange a ‘less bad’ result for the USA to suffer, which is roaring inflation? Hahaha! This is insane as she is incompetent!”
To further prove that they don’t care what I think, Bloomberg goes right on and delivers “The Excuse” as to why it is “OK” that so much money is being created by the Fed and spent by the Congress, which is that “At the root of that concern is substantial and growing slack in the economy, which, according to White House chief economist Christina Romer, is operating 5 percent to 10 percent below potential.” Hahahaha!
We are in a recession, and have been for 16 months, and the economy is “operating 5 percent to 10 percent below potential”? Hahaha! No kidding? Hahahaha! Ya think so?
But the last laugh is on me, as they are clever and devious enough that they figure that this means “the economy will have to grow a percentage point above trend – reckoned by the administration to be about 2.5 percent annually – for five or more years before the slack is used up.”
Reflexively, the thought of that much inflation in prices and the sheer economic suicide as a result of deliberately overbuilding, over-producing and over-consuming, much less “for five or more years” to bizarrely try to remove all slack from the economy through heightened demand, makes me leap (“boing!”) to my feet, as I frantically shout, “Get out of my way, you ugly little trolls!” and run pell-mell to the safety of the Mogambo Bunker Of Safety (MBOS), which was kind of unfortunate in that I had to knock a couple of children out of my way to do it.
And even though I shouted back to them, “Sorry, kids!” I thought to myself that it was really their own stupid faults for standing in front of an exit when there was a grown man running at them, shouting, “Get out of my way, you ugly little trolls!”
And besides, a couple of stupid kids being knocked around a little is but an unfortunate inconsequence, a mere trifle, hardly worth talking about, compared to the continual suffering that they, their families, their parents, their friends and everyone they know is going to suffer during the coming Hell Of Price Inflation (HOPI), a tragedy of misery that will be limited in scope and ferocity only by the imagination and vengeful anger of people whose children are starving to death, sort of like the depths of the French Revolution, or the Russian Revolution, only this time in English and without any of those pesky subtitles where if you are looking at some girl’s boobs and neglect to read the dialog, you lose track of what is going on!
I know what you are thinking. You are thinking, “Why am I wasting my time reading this Stupid Mogambo Crap (SMC)?” and, “What in the hell kind of justification can there be for this kind of monetary stupidity?”
Well, it’s funny that you should ask, as I have always wondered why anyone would waste their time reading SMC, and the very next sentence from the Bloomberg.com article contains the argument for destroying us with more money and credit! How handy!
The justification is that the economy will grow faster than “trend” for a long time, which means exponentially-increasing growth, so that all slack in the economy is, magically, used up, prices rise, thus deflation is averted and we are destroyed by inflation, instead! Hahaha!
Well, they don’t put it like that, but they do say, “The Phillips curve – developed by economist A.W. Phillips using Keynesian concepts – posits that such excess will reduce inflation as firms stuck with idle capacity cut prices and workers facing layoffs accept smaller wage hikes.” Gaaahhh! Insane!
Let’s see: The money supply is increasing by an annual doubling, and yet firms are stuck with idle capacity, and workers are accepting lower wages, because they are too damned stupid to see that the economy is growing thanks to all of this unholy mountain of money inundating the world? Hahaha! Businesses and workers are stupider than I thought! Hahaha!
The fact that anyone would believe such crap makes me scream with Predictable Mogambo Outrage (PMO), which (for the first time ever!) must have done some good, because a short time later, Bloomberg followed that up with, “Not everyone at the Fed buys into that argument.”
To be fair to the Federal Reserve, even though they are just a bunch of scummy, incompetent private bankers operating as government henchmen (and acting like it, too!) who do not deserve such consideration, Richmond Fed President Jeffrey Lacker says that he would be “cautious about relying on this correlation”, which I figure he said instead of saying the more direct “That’s stupid and you’re stupid!”
And to be more fair, Laurence Meyer, a former Fed governor (and so he ought to know) admitted to Bloomberg that the Federal Reserve “is ‘running a laboratory experiment’ on what drives inflation: the money supply or the output gap.”
The fact that we already know the answer to this experiment is what makes me stand at the window and shout at passersby that they should “Buy gold, silver and oil right now, you pedestrian morons, because your Congress is spending the ‘too much money’ that is being created by the Federal Reserve just for that sinister purpose, and which will burn you alive in the painful fires of inflationary hell!
“And yes, that includes you, Jimmy, your stupid parents and your whole stupid family, too! And all your little mutant friends in second grade are doomed, too! Hahaha!
“So forget school, but instead go home and say, ‘Thanks for nothing, mom and dad, for voting for the Leftist morons all these years who have now spent us into economic destruction with the help of the evil Federal Reserve creating the excess of money and credit’, and tell them how the Nice Mogambo Man (NMM) told you that if they do not buy lots and lots of gold, silver and oil to save you all from the horrifying inflation in prices that will engulf us as a result of all of this new Federal Reserve money sloshing into the economy via government deficit-spending, then it proves that your parents hate you, and for them to remember that you are still too young to be tried as an adult!”
I hope it does some good!
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.
You don’t even understand the basics of what happened. The Bushies told the SEC to stop enforcing the rules. The formed a committee to ‘hear’ any violations, and then ignore them.
Leftists??? The “Rightists” caused this you fool! The SEC/Bushies let it happen. You truly have no clue at all.
What does the SEC
whose job is to keep an eye on Wall Street and stocks,
have to do with the Federal Reserve
Which has no connections whatsoever to the SEC?
This post is about the Federal Reserve printing up Billions of dollars over YEARS, not recently, but over years and years and years, Decades in fact!
Talk about someone who has no clue
It’s a conspiracy!!!
There’s not a dime’s worth of difference between D’s and R’s or cons or libs.
Keep in mind the most important and also most salient fact: The success of any fiat system relies on the CONfidence of the participants. Get it? I didn’t think so.
Side note: Hey, King, shut up. Leave my Mogambo alone. You are dismissed.
And that goes for your stupid cat too.
Inflation AND lower wages?! Recipe for disaster… did a Keynesian REALLY come up with that? It figures.
Mr King: Do you know what a Keynesian is? Do you still attribute economic policy to politicians? Sophomoric.
As for anyone with a brain: Whiskey, gold, silver, cigarettes. Where you can see it!!!
The “Messiah” has spoken, don’t you understand? Everything must be on the up and up, because the “Messiah” says so, right? Nope. I don’t agree with a word of it either, in fact, if the “Messiah” says something, I figure it must be the exact opposite. Hmmph! Can’t wait until 2010 then 2012. Maybe there is someone out there with a little bit of sense.
I don’t see the price of gold, oil, silver going up.
The FED is increasing the money supply, but the money is just going into banks to cover their loan losses. It’s not circulating.
The FED is buying the banks toxic assets and once things recover, they plan to sell them back. If this works out (I doubt it will), it won’t be inflationary. The money will move from FED vaults to bank vaults back to FED vaults.
Mogambu fails to recognize that inflation is entirely caused by supply and demand, not by the money supply. Right now, demand for everything is falling off a cliff, so prices won’t go up. If banks resume their loose lending practices and money goes back into consumers pockets, this may increase demand, but I just don’t see it happening any time soon.
The time to hold gold, oil, silver, etc… is when the employment picture is improving, not when it’s getting worse.
I believe inflation is going to be fierce and swift but why it isn’t happening quite yet:
1- VELOCITY of money is low. People aren’t spending or borrowing like we’re used to so even with more money in existance it is being squirreled away for the time being.
2- DELEVERAGING which begain at the end of last summer still isn’t done. Toxic assets still need to be removed and bad loans still need to be written off. Furthermore, indivudals are now beginning to reduce credit card and other debt while increasing savings.
3- TRADE SLOW domestically and internationally.. until this picks up there won’t be the increase in Demand that will spark the unholy inflation to come
4- UNEMPLOYMENT needs to stabilize and begin to recover. If you have no job you won’t spend. You’ll even, after enough time, opt for a lower paying job just to get by. This will keep inflation in check at least for a while but once it’s out of its cage you will see wages lagging far below the inflation… yikes!
I agree inflation is going to be fierce, but the question is when will it start to get out of hand?
Milton Friedman stated that that inflation is always and everywhere a monetary phenomenon.
The supply and demand for goods and services factor into inflation, but the supply and demand for money are also part of the equation.
The money sitting at the banks is like a sleeeping lion. It was put there to re-stimulate the economy. It will not sit there forever. The government will take it and spend it if the private sector doesn’t. Either way, it will be lent, spent and serve to increase the money supply.
More money and less goods (due to a sputtering economy) equals rising prices.
Unlike the mainstream media, Mogambo is telling you what to buy before its overbought and too expensive.
The Fed and the government work very hard to make people comfortable with inflation.
This obviates the self-fulling run on hard asets. It has worked well for a long time, but what happens when we have rising prices and recession? Impossible? Not theoretically (as Keynes promised) or empirically (1970’s).
What will they do when we have both yet again?
In theory, they can stop inflating if they choose(like Volcker), but at what cost? Obviously not a cost they have been willing to bear thus far.
Inflation has nothing to do with the money supply? Well, then, I bet the sun has NOTHING to do with global warming!
Inflation is DEFINED as an expansion of the money supply. Take your Keynesian/collectivist “economics” elsewhere.
The clock is ticking down to April 15th. TaxBot founder, Sandy Botkin, outlines the five big tax changes for 2015 you need know before you file...
Look, we're not contrarian just for the sake of being contrarian. Only idiots are. And yes, the market will eventually drop. But the charts will tell us when it's time to sell. And right now, they're screaming "BUY". There's simply no other way to put it.
The trouble with money printing, explains David Stockman, is that it's responsible for Tesla. Armed with earnings figures, he shreds the company’s visage to pieces...
This year, we expect China to reveal just how much gold it owns. Today, our friend, Frank Holmes, gives his insight on how China could buy even more gold in the near future. And we’ve got every reason to believe it could upset the gold markets any day now, with great results for gold investors…
Where can you reasonably expect to make 50% in the next six months… and in the oil-patch, no less? The best way to play this short-term opportunity is with a handful of well-positioned refiners. Jody Chudley tells all...
Oil isn't magically jumping to $100 anytime soon. As I said, it could fluctuate around $50 for the foreseeable future. That's great news for businesses using a lot of fuel. Operating costs are way down, which means higher profits. And higher stock prices.