03/27/09 Tampa Bay, Florida Doug Noland of PrudentBear.com has found all kinds of interesting things this week, especially if you enjoy heart palpitations and crushing chest pains, which is what you get when you read Mr. Noland reporting that “The M2 (narrow) ‘money’ supply surged $39.8bn to a record $8.343 TN (week of 3/9)” which means, “Narrow ‘money’ has now inflated at an 18% rate over the past 25 weeks and $766bn over the past year, or 10.1%”! Yikes!
The “yikes!” comment at the end is chosen specifically to indicate that the preceding section is “Bad, but I’ve seen worse, and we will see a lot worse over time as the treacherous Federal Reserve will continue to be required to create more and more money so that the moronic, desperate Congress can borrow it so that they, their parasitic entitlement friends and more and more desperate people can merely survive at this point, and who are all more and more destitute from the huge inflation in the money supply, that produced the higher prices, that produced the bubbles in stocks, bubbles in bonds, bubbles in houses, bubbles in derivatives and bubbles in size of government, that has now produced the bursting of the aforementioned bubbles that were caused by the foul Alan Greenspan, insane chairman of the despicable Federal Reserve from 1987 to 2006, creating all the mountains of excess money and credit that made it all so, so horribly possible.”
Actually, this $766 billion increase in the M2 money supply, normally staggering and enough to send me dialing “9-1-1” on the phone while gobbling nitroglycerine pills so that when the police dispatcher answers “Nine one one, what is your emergency?” I say “Hebba ah uh mmmba!” – now seems quite mundane compared to the loathsome Obama administration and the despicable Congress plumbing the depths of stupidity born of desperation with their new $1.9 trillion budget deficit for next year!!!
Not surprisingly, then, the Economist magazine shows that our federal governmental budget balance, as a percentage of 2009 GDP, is already a NEGATIVE 13.7%, which can be interpreted to say that just the borrowing to finance the stunning deficit-spending by the federal government for the next year constitutes almost 1/7th of the total value of every good and service (GDP= $14 trillion) that this whole freaking country produces in a Whole Freaking Year (WFY)!
And this humongous 13.7% of GDP is just the BORROWED part of one year’s federal government spending!!! Astounding!
What can one say except “We’re freaking doomed to death by inflation, and that means that anyone not buying gold Right Freaking Now (RFN) either has something very, very wrong with them, or they are more victims of the Mealy-Mouth Mainstream Media (MMMM), who are not “reporters” or “investigative reporters” anymore, whose original purpose was to expose corrupt government and pursue justice, but they are now all girly “journalists” who wish to discover the painful emotional traumas suffered by tragic “victims” of various kinds, yet turning it into a heroic story of hope, renewal and redemption.
So, even more embarrassing, America used to strut around the world, scolding countries that got into this deficit-spending-gone-kaput mess, sanctimoniously preventing them from increasing their government deficit-spending as a condition of getting bailout loans from the U.S., the International Monetary Fund, the World Bank, miscellaneous secret government slush funds and terrorist goon-squads, and instead we insisted that they increase taxes and cut government spending! Hahaha!
Now, in a spate of irony, the tables are turned, and we smug Americans are doing what we tried to prevent other countries from doing when their economies fell apart after their stupid governments overspent, over-borrowed, over-leveraged, over-estimated and over-enacted a lot of overly-stupid legislation that forever changed the economy for the worse.
And not only are we doing what we wouldn’t let anyone else do, but we now have a much larger negative budget-deficit as a percentage of GDP than all the others in the list of top-30 major countries, by size, of the world! We’re the absolute worst! Hahaha!
And although I can hear you whining and complaining about how this is sure to make me launch a Screaming Mogambo Bellow Of Outrage (SMBOO), I am still going to make it all worse by noting, during the SMBOO, that industrial production around the world is getting hammered, too, being down 11% in the USA, down 11% in Britain, down 9% in Germany, down 4% in France, a terrifying 24% in Spain, (in the whole euro area, industrial production is down a hefty 12%), down a scary 31% in Japan, and down a terrifying 43% in Taiwan! Yikes!
It’s a good thing that we have gold, silver and oil to protect ourselves! Whee! This investing stuff is easy!
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Oh Great Mogambo, whom I’ve read every day for two years now … while all this cash and credit being injected into the economy some day will produce inflation, there is no real inflation to be found at present. House and commercial property prices, as well as car & furniture prices, continue to crash. Gasoline and natural gas prices are way down from summer 2008. There are so many 2 for 1 stickers at the Jewel food store, you can’t help but trip over them. Admittedly, the mid-level expenses (doctor bills, vet bills, car repair and fees & taxes) appear to be rising a bit. All that added cash and credit is sitting on account at the Fed because the banks don’t want to lend and no one can afford to borrow, which would increase the real money supply. Someday we will have your awful inflation, but not today, and maybe not for a long time. (P.S. bought gold, silver and oil, and they’ve gone nowhere)
Aww, my piece got removed. Guess the truth hurts, huh?
http://www.moneyweb.co.za/mw/view/mw/en/page66?oid=283166&sn=Detail
Dear Richard Daughty (Mogambo Guru)
Thanks for your as per usual insightful appraisal of the worlds financial state.
I took out an insurance policy in 1999 when our the chancer(lor) of the exchequer the lower jaw pushing one eyed scots imbicile gordon brown sold our gold to get goldman sachs off the hook.
I have just been reading all about the 2004 tsunami and one can definately draw parralels to the current economic climate.
What I have concluded is that it had its epicentre in the US and spread rapidily around the world well the sad news is that was the test pattern the true full force tsunami is yet to come.
But looking at the content of your essay and appreciating the full effects that it will have on gold and silver I thought I would enclose the above link to let you and others see what other commentators have to say.In addition to peter major the author of that link .I notice Peter Grandich and Peru Saxcena are among the market commentators that think its very safe to get back into the industrial markets.Getting back to the tsunami one of the things these guys must remember is not the calm waters in the middle of the tsunamis run its the devastation it causes when it hits land……..and this financial haulocast,tsunami call it what you like hasn’t hit the beach yet
Ahoy Me Matey; Cap’n Silver says It’s weird how the money supply is growing so fast and yet the prices of so many things are coming down. I’ll stick 1/2 way with the Mogambo. In 2002 with him pointing a musket at my head I bought Gold Doubloons and Silver Pieces of Eight and have been accumulating it ever since.
The best buy was the 1/10 oz ML @ $55.00 and asking price is now is $149.00.
When will I sell, never. I consider it the least I can do for my kids and grandkids given the mess in world we’re leaving them.
Now I do have paper Oil Gold and Silver that may get traded in and out of. And the other 1/2 is in Canadian Term Deposits getting ahhhhh 4.5%.
So what do I do with my free cash flow? Buy dryed food and stock up on any thing that won’t go bad. I think a bag of nails or a roll of copper tubing will be worth much more in the future.
Well we’ll see. I expect to see a one world government and also for Christ to return, so all this investment stuff is of little importance. Just for fun.
There are vile, black-hearted villainous dogs out there and a treasure chest of gold and silver, that you can bury may come in handy one day.
Fair winds to all you buccaneers !!
Oh and Mogambo, you did a lousy job of swabbing the deck, so next time you’ll walk the plank. Arrrrrr
Long John Silver and his Jolly Shipmates.
JMR,
If you bought Gold Silver and Oil and they went nowhere then you had a very good year didn’t you?
Most people are down 40+%.