01/03/11 Tampa, Florida – I was intrigued that a guy named David Thurtell, of Citigroup, surprisingly said, “The liquidity pumped out by central banks means that there is a lot of money sloshing around that needs to find a home.”
I was so intrigued that I was tempted to use it as the basis for my first report to the new supervisor for this quadrant of the galaxy, Karpus Klegg the Implacable, at his new office at Intergalactic Headquarters after the “palace coup” and interstellar personnel shake-up that I just found out about.
However, I did not want to start off a relationship with some guy I never met named Karpus Klegg the Implacable by saying that people on this planet believe that money can find a home, as it sounds so stupid.
After a little checking, I learned that I just needed to say that the people on this planet had evolved to the point where they seek pleasure all the time, and just send him some porno films of earthlings, which he will like better than anything else I could send him.
So, with that feather in my cap, I turn my attention to denizens of this planet, singling out for Mr. Thurtell of Citigroup to receive the Hot Mogambo News (HMN) that money never finds a home! Never!
Money never “finds a home” because money, once created, is always being exchanged for an asset, and then the asset seller has to exchange the newly-acquired money for another asset, and then that asset seller has to exchange the newly-acquired money for another asset, and then that asset seller, and then another, and another, around and around, up and down, back and forth, with all the new money constantly being used to add to the money already bidding on goods and services, causing higher prices, higher and higher prices, even as the money is being nibbled away, bit by bit and piece by piece, by relentless and total government taxation at each exchange.
And yet, even then, as soon as any of the money is taxed away out of the private economy, it immediately reappears! It is reborn as higher government spending, and becoming “new money” that needs to “find a home,” too!
So the idea of money ever “finding a home” makes me laugh the cruel Mogambo Laugh Of Scorn (MLOS) at such a benign-sounding phrase, as all this new money does is to increase prices!
And, if you want to know my opinion, deliberately increasing prices is a cruel, mean-spirited, despotic and despicable thing to do to people.
However, cruelty of an elitist government towards the population is nothing new, and it is a little known fact that the Elvis Presley hit, “Don’t Be Cruel”, originally had the lyrics:
“Don’t be cruel,
“To the currency of a guy who trusted you Fed bastards to maintain the purchasing power of the dollar.
“Don’t be cruel,
“To the currency of a guy who trusted you Fed bastards to maintain the purchasing power of the dollar.
“I don’t want no other cash!
“But the dollar’s turned to trash!
“Don’t be cruel!”
Firstly, thank you, thank you, thank you for your kind applause of appreciation for my fabulous impersonation of Elvis Presley! Thank you! Thank you!
Secondly, there is a moral about the purchasing power of money in there, probably in the second verse where he had a leash around his neck and being led around, which is now unfortunately lost, so you have to take my word for it, where Elvis himself – The King! – was advising you to buy gold and silver when the Federal Reserve was creating so much money, which it was doing at the time of his death in 1977, all because Nixon severed the dollar’s convertibility to gold in 1971.
If you don’t believe that Elvis was a gold-bug and Austrian-school of economics kind of “cool guy,” and/or that these are the original lyrics, then perhaps you will start to believe me when I say that the Federal Reserve creating trillions of dollars per year is going to make Elvis look more visionary than ever when gold soars to the moon in the terrifying inflation in consumer prices and the destruction of the economy!
And to think you can prevent all that by just buying, as suggested by Elvis Presley himself, gold and silver! Don’t be cruel, indeed! 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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I believe you meant thank you, thank you very much. As any impersonation of Elvis would implore.
Ha! Well done CC, now even the Great Mogambo will suffer abject remorse at missing a clever opportunity!
What is even more clever is to find out where those gigantic derivatives are hiding; somewhere around 500-700 trillion dollars worth? If they slosh out of the sky even Chicken Little will get squashed.
Mogambo,
You keep talking about the FED being responsible for maintaining the spending power of the dollar. How is it that a banking system can do this when it relies on the ability to create money out of nothing (by signing up anyone and his dog for debt) to keep turning a profit. The bank’s very existence depends entirely on its need to keep increasing the amount of debt or bank credit as an expanding asset on its balance sheet. It collects compounded interest on it, which amounts to more credit that must also be continuously issued by the bank as new debt, with even more compounded interest on that interest, and so on and so. P is always less than P + I. And since that is what a bank does, it charges interest, its very existence relies on inflation. So why are we supposed to think that we should be entrusting a bank to maintain the spending power of the dollar.
Now granted, not all of that created bank credit actually manifests itself in a dollar for dollar increase in the money supply. Most of it just sits on the banks balance sheet. But that compounding interest does a great job of milking us for every ounce of blood we have so that the banker can keep enjoying his bonuses.
They suck our blood and I notice that Hollywood has been very in our faces about this with all of these stupid vampire movies an TV shows. What is with that?
Ladies and Gentlemen-
Elvis has left the building-
But Mogambo Preseley is here to stay!
You ain’t nothing but a gold bug,
buyin all the time-
You ain’t nothing but a gold bug
buyin all the time
You never bothered with fiat
And Keynes was worthless slime
Bravo bravo, encore!
MG
You are shameless.
GMG,
Didn’t the King purchase a customized gold fitted 1960 Series 75 Fleetwood Limousine? I seen him drive by the other day.