The most popular question that I get asked these days is still the perennial favorite, “Is there something wrong with you that makes you sound stupid?” (Answer: yes), but the second most popular question is, “What’s next?” to which I reply, “Time for dessert! And if not, then time for a snack of high sugar and low nutritional value of some sort! And ditto a beverage!”
Well, actually I know it is not time for dessert, and if I have a snack I will have to listen to my wife complain about how it is so close to breakfast, lunch or dinner that I will “ruin my appetite.”
So, in anticipation of getting neither a dessert nor a snack, I have been giving this “What’s next?” question some additional thought.
Thus, I have now decided that “what’s next?” is that bonds will fall in price as interest rates rise a lot, because inflation in prices will rise a lot, because the money supply will rise a lot, because the ridiculously childish and simplistic Obama administration and Democratic Congress is promising to deficit-spend a couple of trillion dollars this year, which is a lot, almost all of which will be a lot of new money created by the despicable failure known as the Federal Reserve, and just for the purpose.
Of course, nobody is listening to me, as it is nothing new, and I have been whining and complaining about this same stuff since 1991 and I have been really screaming my guts out in fear about it since 1997 when that creepy little bastard Alan Greenspan made the Federal Reserve start creating money and credit with what some could call “reckless abandon”, but which I officially refer to as “suicidal insanity that you can see by just standing up and looking around, and so how do you like your benign-sounding ‘reckless abandon’ now?”
So instead of my usual method of tightly-reasoned argument (screaming in the face of anyone who disagrees with me to silence them under an onslaught of sheer decibels, bad breath and musky bodily odors), I will save myself the trouble of such tiring histrionics and merely show them the article in the Wall Street Journal titled “Fed Treasury Purchases Debated” by Min Zeng, where we read “Treasury investors, time to fasten your seat belts.”
Now, there are many times in my life where it was good advice to fasten a seat belt, and it sounds like good advice now, too, because “With interest rates already near zero, policy makers are likely to focus their debate on unconventional measures – so-called quantitative easing – to increase the nation’s money supply and jolt the economy out of recession”!!!!
Perhaps you are one of the people who noticed the four exclamation points that I added at the end of that sentence, which are there to correctly indicate to you that this idea to increase the money supply by printing money is the Single Stupidest Idea (SSI) in the whole history of economics for the last 4,500 years, and the reason that no nation does it is because it shows a serious mental defect in that nation’s leaders, its universities, its news media, and the people themselves because it is truly, truly stupid because it is truly, truly catastrophically ruinous every time anyone has tried it.
And this is not to even mention the sheer, staggering stupidity of the term “unconventional measures”, which would seem obvious that, since they are unconventional, they don’t work, because if they worked, they would be conventional!
For example, it is like when I was not having any luck getting a job and, in what seemed to be a stroke of marketing genius, I tried the “unconventional” approach, which was that I dressed for interviews like a beaver, wearing this big stupid beaver costume, to show that I was an “eager beaver” and by hiring me, they would get an industrious worker! Get it? It’s unconventional! “How could it miss?” I figured!
Well, I will not get into all the sorrowful details, but wearing a beaver suit is still unconventional because it was a total flop, and I dribbled taco juice down the front of the costume and I had to pay to have it cleaned, and there was that unpleasant incident with the receptionist who wouldn’t let me in and who kept screaming at me, “Is this some cruel joking reference to my big beaver?” for some reason. So I snort with scorn at “unconventional.”
And as for unconventional child-rearing, as another example, I have learned that no matter how many times you explain that you are providing a warm, safe, cozy, dark, womb-like, zero-stress environment for nap time, they still call it “locking the kids in the closet all afternoon” which it is, I suppose, technically, but the point is not the wording of the indictment, but the fact that the law says you can’t lock them in there, which I did not know, and such information should have been posted on the closet door when I moved into this crap-hole apartment with the damned kids in the first place, and now I was being required to waste a lot of my Precious Mogambo Time (PMT) attending Parenting Skills Class because it wasn’t.
Sharp-eyed Junior Mogambo Rangers (JMRs), are like everybody else and could not give a crap about my life, but are different from most folks as they are attuned to four exclamation points at the end of the aforementioned famous quote, “With interest rates already near zero, policy makers are likely to focus their debate on unconventional measures – so-called quantitative easing – to increase the nation’s money supply and jolt the economy out of recession”!!!!
Adjusting Junior Mogambo Ranger Decoder Rings (JMRDR) to the correct setting, this phrase is revealed to be a coded message that, when properly decoded, instructs you to “Buy more gold, silver and oil, because this deficit-spending around the world means that inflation in consumer prices is going to go freaking ballistic as a result of all of this money being created, not only from $2 trillion in deficit-spending here in America, but desperation-induced deficit-spending around the world, all horribly financed by central banks acting despicably, merrily making the money and credit to add to the money supply to carry out the despicable, deficit-spending wishes of despicable governments, and thus this whole thing is just a dinner bell going ‘Gong! Gong! Gong!’ alerting us greedy pigs to come waddling up and gobble up gold, silver and oil at prices that are so absurdly low that it makes us squeal in delight ‘Oink! Oink! Ooooooink!” which is, thankfully, not a reference to that whole beaver thing.”
And to prove that there are a lot of JMRs out there to whom this inflation news is not news but is, rather, exactly what we have been expecting since the Austrian school of economics (Austrian Business Cycle Theory) has been fearlessly predicting exactly what we now have, Reuters.com reports that “Mints around the world say demand for gold coins has risen sharply as interest in the precious metal soars on the back of financial instability and concerns over the inflation outlook.”
In fact, even we stupid Americans seem to be getting into the act, as “The United States Mint said sales of its one-ounce American Eagle gold bullion coins rocketed to 710,000 ounces in 2008, from 140,000 ounces a year before.”
Whee! This investing stuff is easy!
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.
I’m still missing how this money begins chasing goods if:
1. Jobs are not created
2. People don’t borrow more
This seems more like an attempt to fix collapsed sewer pipes by using a giant plunger. They can keep filling the bowl and using bigger plungers but until they abandon the theory of ‘clogged’ credit and start direct give-aways to consumers they will fail to cause the inflation they so desperately pursue.
They will soon create a reason to dramatically increase foreign aid to spur simultaneous inflation globally.
Only then will the direct cash transfers to US citizens begin. This is the only way I see for inflation to happen…and it WILL happen. That is the only sure ting in any of this.
-Jahfre Fire Eater
…..”my big beaver?”…God MG you are one sick puppy, but man I do love reading your stuff…..YOU ARE ONE CRAZY DUDE! (YAOCD)……….And, and… you are also right on the money (pun intended). Keep smoking or drinking whatever it is that makes you attain a level of clarity most of us can only dream of. MJR
I want one of those goddamned junior mogambo decoding rings now! *STOMPS FEET* But then I remembered about all that gold I bought and my temper is soothed… or something like that…
I recently enjoyed a delicious dinner at a five star restaurant, complete with dessert of flambe of bananas with sour cream cheese cake and triple fudge death by chocolate cake. Of course I had to have several wines of various tint and vintage along with the repast. Imagine my post prandial horror when I was presented a bill for almost a thousand dollars (c’mon, it’s a story, work with me).
Not having enough money, and after all my credit cards had been declined (one I even got on the phone with and after several minutes of heated exchange the Maitre ‘d insisted I stop it as I was scaring the children of a large family midst their meal), I jammed my hands into my pockets in order not to be too threatening toward the uppity master of his domain.
That’s when I discovered that I was in possession of a few gold and silver coins! I offered to settle the debt with this and, much to my surprise, was offered 51% ownership in the restaurant and allowed to take home an almost full bottle of French champagne and my doggie bag.
Hey Mogambo! I love your articles, which I find entertaining and informative. I only wish you could resist the urge to show your partisanship by only bashing the Democrats. I agree that they are a bunch of idiots, but come on, so are most of the Republicans! Besides Ron Paul, how many Republicans have shown any kind of fiscal responsibility?
Again, I love what you do, but please bash ALL those stupid, big spending politicians. They mostly ALL deserve our utter contempt.
Roger in Studio City (at Peets Coffee – where else?)
C’mon Mogambo, tell us what you really think!
All this coin demand has me in limbo? Buy? Hmph. No can do. Sell? NO WAY. MINE!
Whiskey and cigars too. Taxes will make them luxurious. And they’re great with tacos.
I went upstairs to the Deli and attempted to pay for my coffee with a nice pretty pink Monopoly bill that had a face value of a whole lot more than the $1.30 they asked and when they looked at me funny, i told them it was called “Quantitative Easing” and that the U.S. Treasury was doing it and they should be patriotic and get with it. The Itralian behind the counter must not be an economist because he got really ugly and said something like “mama mia gabidosta” before throwing me out . I don’t understand it.
710,000 ounces in 2008 – just think, it would still take 300 years (plus or minus)at this rate to get one ounce of gold into each US citizen’s hand (or 155 years into each worker’s hand). And, I wonder, how many ounces are left ? …
Everyone knows how comically terrible government accounting is, but few people may realize just how bad it's gotten... This infographic shows how trillions of dollars of government money has gone missing money over the last several years. And what's worse... that no one seems to care where it went...
It's amazing what some people will do out of sheer boredom. Investors, for example, will often throw money around, simply because they have nothing better to do - as if making MORE moves automatically translates to MORE money. Today, Chris Mayer explains why this emotion is so dangerous and how staving it off can save you a ton of money...
When a big company IPOs, investors can hardly contain their excitement. In a flash of exuberance, they throw money at a company they've already decided is worth something... even if the market hasn't made up its mind yet. Today, Jonas Elmerraji explains how one simple word can change the fate of every IPO investor. Read on...
Think it's impossible to escape the throes of Obamacare? Think again. Today, Chris Campbell relays the story of one man was able to get out from under the (un)Affordable Care Act, and how you can do it too. Don't see another doctor, take another pill, or shop around for better medical insurance until you read his story...
For the last few days, the market has been buzzing with excitement over the Alibaba IPO. Well, the day is finally here. And while some investors line up with their lotto tickets, ready to snatch it up no matter what the price, Greg Guenthner suggests a slightly more restrained approach. Read on...