02/18/10 Tampa Bay, Florida – I can tell you the exact date (Saturday, February 13, 2010) that I saw that TheDailyBell.com had a “guest Editorial” by Dr. Ron Paul, who I admire because he is the only Congressman whose economic philosophy is the Austrian school of economics, which, in fractured German, is “ein Austrian economischer”, which I purposely use to paraphrase John Kennedy, who famously said, “Ich bin ein Berliner”, which actually translates from German as “I am a cream-filled pastry”, but everybody knew what he meant, which was that he was just another clueless American Democrat who wanted to save the whole world by taking over the whole world so that they could change the whole world, and who had the majority of American voters and Congress behind him, all of whom have heads that, for all apparent intents and purposes, are cream-filled, and that is why Kennedy said that he, too, behaved as if he had a head filled with whipped cream.
Oh, I am sure that there are those who disagree with my interpretation of what a dead president meant when he said he was a “cream-filled pastry”, and there are those who dispute my understanding of the vital role of the taco (“The prefect snack, any time!”) and the candy bar (“Perfect for times between tacos!”) in today’s modern, health-conscious world, too, so go figure. Idiots!
Regardless, the state of my mental faculties or the fact that I sound, look and act exactly like an idiot is not the point. The point is about the importance of owning gold, silver and oil when the truly idiotic Federal Reserve keeps increasing the supply of credit and money, especially as it is used mainly to buy an avalanche of new government debt (monetizing the debt! Gaaaah! We’re freaking doomed!), and how the title of his article, “More Spending is Always the Answer”, is so ludicrously ridiculous that I could not believe my eyes that Congressman Ron Paul, of all the people in the world, is saying that “more spending is always the answer”, because nothing could be farther from the truth, and it is, instead, waaaAAAaaay out there past the outermost, frigid fringes of Truth, a place where we find “The promise of True Love” and “The check’s in the mail.”
It turns out that he was being sarcastic, as I should have known, and he says, “Continually increasing the debt is one of the logical outcomes of Keynesianism, since more government spending is always their answer. It is claimed that government must not stop spending when the economy is so fragile. Government must act.”
The problem is that “when times are good, government also increases in size and scope, because we can afford it, it is claimed.” Exactly!
In short, the blockheads in Congress, the Federal Reserve, the majority of the laughably-incompetent university economics professors in the country, the morons of the President’s council of economic advisors, and all Democrats, all believe that “There is never a good time to rein in government spending according to Keynesian economists and the proponents of big government.”
As a case in point, “Last week, the House approved another increase in the national debt ceiling”, he says, meaning that the idiotic American government can now legally borrow $1.9 trillion more, on top of the $12 trillion already borrowed and owed, “to stay afloat and avoid default”, although he did not mention that this monstrous new load of debt is only expected to last until just after the mid-term elections this year, at which point Congress will take us farther and farther into a deadly financial quicksand with another extension of the debt limit! Hahaha!
In this regard, Junior Mogambo Ranger (JMR) Alan L. writes, “Call one drop of water a dollar. Five drops equals one milliliter. Question: What is the volume of water of $14 trillion?”
Instantly, I am back in high school, feeling panicked and trapped because the teacher has asked me a question that not only do I NOT know the answer to, or how to figure it out, but I don’t even care, and I never WILL care about it because if I was ever actually on a train that was leaving Chicago towards Los Angeles, 2,000 miles away, going 60 miles an hour, and I knew that another train was leaving Los Angeles going to Chicago at 70 miles an hour, I wouldn’t get on the damn train! It’s that simple!
So I don’t freaking CARE how long it would be before they met and they crashed into each other with a big explosion and there are bodies everywhere and what a mess, because I won’t be there! I’ll read about it!
Apparently, JMR Alan saw the panic in my eyes, or perhaps it was the way I was reaching under my jacket preparing to shoot my way out of here if necessary, but either way, he was pretty quick coming up with the answer: “Twenty times the volume of the Great Lakes. That puts the entire area of the United States 50 meters underwater.”
Wow! I seem to remember some handsome rascal and clever bon vivant, with a twinkle in his dazzling blue eyes and a roughish grin on his boyish-yet-rugged face, say “We’re freaking doomed!” as a result of the abject stupidity of Congress and the Federal Reserve in the last 90 years or so since the Fed was created, and especially as a result of the stupidity of the last 40 years when Nixon refused to exchange dollars for gold, and doubly especially since 1997 when Alan Greenspan really started getting insane with monetary policy, and triply especially since 2008 when the unbelievably preposterous Ben Bernanke and his loathsome Federal Reserve doubled the money supply at a stroke! At A Freaking Stroke (AFS)! Doubled!
This – THIS! – is the worst thing that could happen for those of us whose fear of hyperinflation, which is guaranteed after a hyperinflation in the money supply, makes us buy gold, silver and oil with a fearful, frantic frenzy that precludes even thinking about spouses and children, except maybe about how they are a big, heavy weight around my aching neck and my only hope is to get more gold, silver and oil, which, when I do, make the whole problem worse and worse! I can’t win!
And don’t get me started on the hassles of having a few defensive fortifications in the backyard to further protect yourself against the massive social unrest that inflation causes. Neighbors are always whining about something, like maybe a couple of accidental shots, probably less than a hundred rounds all told, allegedly emanating from the Mogambo Bunker Of Trembling Terror (MBOTT), that didn’t even hit anybody, and the only real damage was Carl’s stupid barbeque grill, which was old, rusty and ugly to start with, and I didn’t think he would even mind, and there was some collateral damage to his stupid water heater, too, which was ditto on the old, rusty and ugly.
But the point is that the Federal Reserve is going to kill us with inflation in prices as a result of their relentless inflation in creation of money and credit as a result of the federal government deficit-spending so incredibly much money, and you should get some gold, silver and oil right away!
You will be glad you did, and you can fit a surprising lot of them in even the most modest-sized bunker, yet still have lots of room for supplies of ammunition, frozen pizzas and pornography. So, whee! This investing stuff is easy!
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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Hey, it’d be nice if Mr. Paul was a Senator, but, alas, he’s in the house – a congressman.
Uh, the whole great lakes water thing is a mess. The math about the US being 50 meters under water isn’t even close. More like a thin mist over the entire ground. Sorry to rain on the old parade, but by your analogy, that is 100 million cubic feet of water. The US is about 100 trillion square feet, so you can see that this depth of water would be about 0.000001 feet deep. Sorry…the debt is outrageous, but your example stinks.
I see the tequila is still having an effect on MG. We can wish Dr. Paul were a senator, but that doesn’t make it so.
I came up with 17,200 acre feet of water. A sh*t-load of piss no doubt, but still way off. I move that Alan be stripped of his JMR badge.
Cheers.
Don’t forget Peter Schiff is running as well , we may get a real conservative in the Senate.
Gint, you meant to say, “He’s a rep”…. they’re all congressmen (and women) since they meet in… Congress, just some are Reps and some are Senators and most are corrupt.
We got the point though.
So… if there’s only .0000001 more feet deep that we’re under water can we stop buying gold, guns and bullets?
I was reading something over at Naked Capitalism–it must have been the day they let a few professors out of the asylum–and there was this one prof ranting about Modern Monetary Theory (MMT, you’ll like THAT) and chartalism and how debts don’t matter (channeling guru Cheney). I get the Monopoly Guy analogy, fancy curves for overeducated math majors, and so forth, but don’t buy it. Any comments on MMT?
Glad someone did the math and sorted out the whole water/debt analogy. It seemed awfully high. Would 14 trillion drops of water even fill one of the Great Lakes?
If you called 5 drops a millilitre, 14 trillion would give you 2.8 trillion litres of Kool-Aid, or enough for everyone in the USA to have 8.75 litres of Kool-Aid. However, lace it with Arsenic and give everyone a small coffee cup….you could kill every human on the planet.
Gaaaah! We’re freaking doomed! The promise of True Love and The check’s in the mail. Whee! This investing stuff is easy!
Just to clarify the above comment that Dr. Paul is a ‘rep’ meaning ‘representative’. Just to avoid more confusion. He is also a republican but this is not what was meant. Dr. Paul’s son Rand Paul is running for Senate in Kentucky if I am not mistaken.
When I was in college, I actually failed economics. I couldn’t figure out what they were talking about. Now I know that it is gibberish intended to doom us all (GIDUA). Since gold and silver have been the only real money throughout the history of mankind, it really made a lot sense to remove them from backing the currency. These people think they are smarter than everyone that ever came before them in history. Just get some Zimbabwe money and you will see where the US is headed.
Fraidie cat doomsters. Pitiful
I used to say, “beans, bullets, and band-aids.”
Now, thanks to the Great Mogambo Guru, I can confidently say, “Beans, bullets, band-aids AND SILVER AND GOLD YOU FOOLS WHO NO LONGER REALIZE THE GOVERNMENT IS PARALYZING THE VALUE OF YOUR WORTHLESS PAPER MONEY.”
The “Jelly Donut” myth about Kennedy’s speech was actually started by a book by Len Deighton. Folks have been repeating the myth ever since.
Kennedy’s phrase ‘Ich bin ein Berliner,’ was hyperbolic but gramatically correct.
It amazes me that the Democrats are blamed for every mis-step in the economy since Mr. Republican Who Walked on Water Ronald Reagan declared that deficits don’t matter and who broke the air controllers union in the first punch in the gut to the working people who helped keep us from returning to the status of a slave-holding nation. The Republicans have held the power ever since RR. They hold the reins today, with their shadow government and their propaganda arm, FOX. They cater to the lowest instincts of the people who now live in fear of absolute poverty-brought to you by the R. legislators who said it was okay to send out jobs overseas. Democrats were cowed and attacked from all sides, leading to their giving in to the most basic anti-social plans of the R. Party. Dumb, weak, spineless maybe, not not anti-American and not the authors of our current desperate situation.
Japan has a 200% debt to GDP ratio and I don’t see any inflation there. Their near-zero interest rates suggest that deflation is a bigger issue there. The problem with increasing the money supply is the way in which it is done – to give it to the very richest people and having them re-inflate bubbles with it.
If, however, the government fails to spend, it will mean that the economy will contract permanently and there will be permanently high unemployment. Cut government spending and you cut the GDP. Your household finance analogy would be something like a household is in debt, so arrange for the breadwinner to cut his work hours!
The answer is for the government to set up major projects that employ millions of people and if they are to help the homeowners, they help them directly and freeze out the banks. Money should be sent to the poor and middle class, not to the rich.
Real Berliners would have said “Ich bin Berliner”. Austrians and Bavarians perhaps would have said “Ich bin ein”…
It should be ‘Mr. President’ Ron Paul, or at least SecTreas. But Americans are too lazy, apathetic, pathetic, corrupt, stupid, useful(?!) idiots, and soon to be utterly impoverished and enslaved versions of all of the above. Thanks Fed! Now it costs me $5 for 2 stinking rolls of Scotch tape, thanks to your massively inflationary policies. In a couple of years, it’ll be a c-note for a candy bar, thanks to you and your insane monetary policy. A jelly donut costs a freaking dollar right now! Ich bin ein pissed off!