Things are getting so, so, so weird that I was locked inside the Mogambo Bunker Of Panic (MBOP), looking through the periscope to keep a vigilant watch for the social explosion outside that was coming, I figured, so, so soon, with my finger on the trigger of something fully loaded and reassuringly .45 caliber, and a slice of yummy pizza in my one free hand to keep my energy level up via the universal Magic Of The Pepperoni (MOTP).
To show you that I am not over-reacting like the hyper-excitable, gun-nut, gold-bug, Austrian school of economics kind of weird guy that I actually am, here is an example of the corrupt, game-playing crap going on with the Federal Reserve and the Treasury: On Wednesday, 9/29/10, the national debt was $13.466 trillion. The next day, 9/30, it goes to $13.561 trillion. Again, “the next day,” 10/1, the start of the new federal fiscal year, it rises to $13.610 trillion!
This $144 billion is a staggering lot of borrowing that, somehow, happened in Two Freaking Days (TFD)! This is $72 billion per day! This is the government borrowing – per day! – almost $240 for every man, woman and child in the Whole Freaking Country (WFC)! Gaaaahhhh!
The scream at the end of the previous paragraph is Secret Mogambo Code (SMC) to alert all Junior Mogambo Rangers (JMRs) to buy more gold, silver and oil as fast as they can, because of this kind of monstrous liquidity injection by governmental deficit-spending, made possible by a crazily irresponsible Federal Reserve literally creating the money necessary, and then, committing a central-banking sin known as “monetizing the debt,” the Fed used the money to buy the debt that the government wanted to sell!! Gaaaahhhh!
As many have deciphered by now, the concluding “Gaaaahhh!” of the previous paragraph, combined with the double exclamation points of the previous sentence, is surely more Secret Mogambo Code (SMC), available only to Junior Mogambo Rangers (JMRs), although you can probably figure out what is Freaking Me Out (FMO), which is always the same thing FMO, making that whole Secret Mogambo Code (SMC) thing just another piece of Stupid Mogambo Crap (SMC), as implied by their identical acronyms.
Anyway, this $144 billion in additional federal debt, accumulated in Two Freaking Days (TFD), is, annualized at this astounding rate for each of the government’s roughly 250 working days per year, an outrageous $18 trillion a year! This incomprehensible sum is about $5 trillion more than the entire GDP of America! And more than half of GDP is already composed of government spending right now! We’re Freaking Doomed (WFD)!
We are doomed for allowing the Federal Reserve to create so much more fiat money, which creates inflation in prices, which is why I probably noticed, in Barron’s, that the new Gross Domestic Product Deflator for the second quarter of 2010 is a laughably-low 1.9%, which is almost double the previous quarter’s also-laughably-low 1.0% inflation!
By this rude disrespect and outright loathing I mean inflation – by the most conservative of estimates of inflation that can be cooked up – is still growing by 90% in one quarter! Inflation is growing at 1,303% a year, compounded? Yikes! Yikes! Yikes!
Okay, I admit I am being stupidly simplistic, overly dramatic and acting irresponsibly in every sense of the word, in that I am writing this Stupid Mogambo Crap (SMC) at my desk when I should be working, but I am surely going to get fired anyway, so what’s the point, ya know what I mean?
Obviously I am wasting my time, and your time, in being silly, especially in light of everyone else thinking that 2% inflation is OK, it certainly seems OK with Congress and with most egghead academic economists, while I am the only guy who is freaked out by it.
And I haven’t heard much of a gasp from any of them about Ben Bernanke, chairman of the Federal Reserve, now “targeting” monetary policy to achieve a suicidal 5% inflation in prices! Insane!
So, here at the end, here at the “bust” part of the boom-bust cycle, it looks like it will be a race! How exciting!
So which will it be? Will the price of gold go so high so quickly that I can tell my boss that I quit, and how I am thrilled to wash my hands of this stupid company, its stupid employees and stupid customers always calling me hurtful names like “incompetent bonehead,” with which I totally disagree, and “lazy, gold-bug moron,” which is a little nearer the truth.
And as a lazy, gold-bug moron, all I do is simply buy gold, silver and oil when the Federal Reserve is acting so insanely irresponsible, especially so that the federal government can desperately deficit-spend, and doubly-especially when the money concerned is around 10% of GDP!
With horrifying facts like that screaming at you, “We’re freaking doomed!” buying gold, silver and oil is, “Whee! This investing stuff is easy!” in all its glorious action! Whee!
The Mogambo Gurufor The Daily Reckoning
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 used to think that a target of 2% inflation was a half-assed goal. That is like my goal to get 50% of my customer’s orders correct at MickeyDees. But now the new Fed goal is 5% inflation. Do you think I can get by with a goal of getting only 20% of my customer’s orders correct?
“…everyone else thinking that 2% inflation is OK, it certainly seems OK with Congress and with most egghead academic economists, while I am the only guy who is freaked out by it.”
You are not alone in being freaked out over 2% inflation Mogambo Guru, and not ‘everyone’ thinks it is no big deal since-
-Those on fixed incomes will see their standard of living fall as inflation rises, even if inflation is only 2% and their fixed incomes don’t rise, that is 2% less money they have to pay for food and utilities.
-Those of us who may get a raise this year (if they are lucky) will see a raise of less than 2%, meaning the yearly raise they might possibly get would be wiped out by inflation.
-Food inflation, the in-your-face inflation, is well over 2% per year in spite of the lies, lying lies and absolute untruths the gang in DC cooks up.
-Health insurance premiums are going up for many in spite of the healthcare for all act passed recently, and no, the rate hikes are not a mere 2% increase.
If you are not buying gold, silver and/or oil, you have no one but yourself to blame.
All Hail Mogambo!
Utterly enjoyable reading, aside from how it makes me scream at everybody “friend or foe!” as they approach me in my bunker, dodging warning shots, until I realize it’s the Pizza Delivery Guy (PDG) bringing me some of that hot and frest MOTP, or one of my disheveled children begging for food or money or some other such nonsense.
All your stuff is good, but you were quite on a roll in this one. Well done.
Hyperinflating the dollar to zero is a smart move to default on the national debt without officially defaulting. It is all calculated: what you see as catastrophic events taken in isolation will compensate nicely. Nothing to worry about: the game will reset with new notes with pics of Bernanke inflating balloons, and the ponzis will start again.
Where from did you get that piece of data about the US debt? Thanks
The data about the debt can be obtained from the Treasury Departments website
Enter the beginning date and the end date to see the daily totals.
The story missed the point completely. The debt went up dramatically between the end of September and early October for one reason only. Obama and company wanted to show that they were making progress on reducing the deficit. New fiscal year began on 01OCT10. What is the big mystery here-Guru?
Does being halfway handsom give you the right to be Mogambo Guru Freakin Clown?
(MGFC) Maybe the red nose is just too much Scotch?
Ha! I finally get a laugh out of this disaster.
What scares me the most is that everyone on the FOMC is smarter than I am. They know how this ends. They simply have no answer. Oh my poor kids…
With the pain of the 2008 financial crisis squarely in America's rear-view mirror, consumer credit and US debt are steadily on the rise. My how quickly we forget... Today, Matt Insley explains why you should not be sleeping on the severity of the US's debt load, and how you can avoid the coming crunch. Read on...
Perhaps the most astounding technology to emerge in the 21st century is that of 3-D printing. It's given humans the ability to create virtually anything out of practically nothing. But as Josh Grasmick explains, 3-D printing is just a stepping stone to the next great leap in technology: 4-D printing. Read on...
With so many areas of the market taking losses to start the month of August, it seems the market correction that many pundits have been hinting at may be right around the corner. Today, Greg Guenthner details three sectors that are getting hit right now, and why you'll want to get out while you still can...
Most U.S. citizens subscribe to an idea called the American dream - working hard on a level playing field so you can "get ahead" in life. But that's not what the original "American dream" was all about. As Chris Mayer explains, that term originally referred to a completely different, yet equally important goal. Read on...
The world is awash with data. All these data will shape the future, helping people make smarter decisions and act faster. But to realize this vision, there has to be a way to crunch the data. And with such a huge amount of it, that could be a problem. Luckily, there's a unique solution on the horizon. Sam Volkering explains...