05/18/10 Tampa, Florida – In my darker moments, usually just before I go freaking berserk and start yelling and screaming about how “We’re freaking doomed!” from the idiotic Obama administration deficit-spending So Freaking Much (SFM) money and the idiocy of the Federal Reserve creating So Freaking Much (SFM) money, all of which is guaranteed – guaranteed! – to make consumer prices rise in a terrifying, catastrophic, ruinous inflationary spiral that will destroy us all, I sometimes get myself in the mood for a nice, long, loud Mogambo Banshee Wail Of Outrage (MBWOO) by merely mulling over the term “dynamic stochastic general equilibrium.”
This incomprehensible term reveals itself, as the term itself implies, as laughably worthless, but, even worse, it is the name of the stupid economic theory to which the moronic Federal Reserve hews so strongly and which has failed so, so miserably.
But if the Fed did not create the money that creates inflation in prices, then the Obama administration’s insane deficit-spending would mean that the government would have to borrow the money in the private market, sucking up a huge $2 trillion a year out of the accounts of people and agents who saved money, which is impossible because all of the savings accounts in the whole USA amount to a lot less than that!
How things have gotten to this point is made clear in The Free Market newsletter from the Ludwig von Mises Institute, where Jonathan M. Finegold Catalan writes, “The current situation is not unprecedented. High public and private debt has been the bane of large governments for the entirety of written history.”
It is, he notes, what Ludwig von Mises described as the “crisis of interventionism”, which Mr. Mises himself describes as “Intervention aims at confiscating the ‘surplus’ of one part of the population and giving it to the other part. Once this surplus is exhausted by total confiscation, a further continuation of the policy is impossible” which Mr. Catalan notes is made simpler with the immortal quote, “The problem with socialism is that eventually you run out of other people’s money.”
Of course, I had many, many questions, like, “Is your name really Finegold, or is that some kind of coded message signifying that The Marvelous Mogambo (TMM) was right when he said to buy gold, silver and oil?” and I wanted to know, “Are you saying, that we ought to run out and buy gold right now?” and, of course, “What does the ‘M’ stand for in your name?”
But of course Mr. Mises was writing when money was gold and gold was money, and thus they did not realized that with a fiat currency, the government can never run out of money because they can always just print more.
More correctly, the problem with socialism is that eventually the money runs out of buying power, which is another whole problem, but one which will not be a problem to those who have looked at the problem and bought gold, silver and oil instead of dollar-denominated assets! “Whee!”, I say. “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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There was a knock on the front door. Not a gentle rap like the school kids make when they come begging for money for cookie dough to support some useless educational effort. Not the rap, rap, rap, the Mormons make right before I answer the door naked, speaking German, either.
This time it was a resounding thunk, thunk, followed by a voice that said, “Open up.”
Being a good American, I answered the door in my shorts confronted by several uniformed men toting long rifles and badges.
I asked what they wanted and they said, “We’re here for the rest of it.”
“The rest of what?”. I asked incredulously, accompanied by a growing sense of dread.
“We’ll just be a minute.” And with that, they were in. The cat sprang for the underside of the bed. The dog bit the smallest one and was frustrated by his substantial boot. Then he kicked my little Scruffy.
That did it.
Most of what happened after that is pretty much a blur, but they did release me after a brief question and answer session; during which I behaved like a sixteen year old on her first date–feet and knees on the floor and my mouth shut. They didn’t seem to be pleased with my recalcitrance.
Fortunately, my neighbor called my Italian lawyer who showed up just in time to wrangle my release. He made me apologize. Apologize!!!
What a load. All they took was the collection of hand knotted Persian rugs and a couple very, very old Japanese silk screens, signed by an 18th century master.
Fortunately, they didn’t pry up the floor boards where the really good stuff is stashed.
After putting in a call to my bookie, I managed to acquire sufficient dollars to recover my stuff. Of course, I suppose I was just lucky to cash in on the long shot claimer with the same name as my favorite aunt.
Oh, well.
Hey, is there a way to buy papergold from a trustworthy source which will still be there when hell breaks loose?
and I thought what I posted was clever
Yes there is but the repository doesn’t come to mind right now.
Listen to Jim Puplava’s Financial Sense Online (it’s a podcast or just listen at his site). There was a guest on in the past two months that has big vaults to hide your wealth and you don’t have to take physical possession (but you can if needed/wanted if I recall correctly).
Yes JMR, clever. Now feel better and put back the floorboards.
Hey Bobby, how can you hide your wealth in big vaults?
No doubt, buy gold and silver. Gold and silver protect our wealth. Absolutely no doubt.
But, you tend to associate ‘money printing’ with socialism. As though, ‘money printing’ is the sole responsibility, prerogative, irreponsible act on the part of socialism. Past tells us that socialists lacked US dollars, cashflow, or paper money. I disagree with this point of view.
Have a good day.
The People’s Republic of Rich America.
Government of the rich, by the rich, for the rich.
Long live democracy!
Just to point out that some counterinformation economic sites are actively censored by Italian providers. As an example, I cannot connect from here ith GATA.ORG or the website of Richard Cook…This can point to the fact that the situation is drammatically worse than we think.
Well they are printing the money allright, and running huge deficits too, but the rest of this is not happening. Yet. Prices are dropping! Oil started the month near $90 and is near $70 today. Gold & silver seem to have peaked. Most other commodities are dropping with exceptions in foods. World stock markets are all lower than this time last month. CPI is down! The “greater depression” is destroying digidollars and killing demand faster than the wizards can “print” them. Will printing kill the dollar eventually? Probably, but not for awhile. It might just be the last paper currency standing.