He noted that “These people who were often truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the aristocracy,” he says, “only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.”

This goes along with an article in the St. Petersburg Times about Tom James, chairman and chief executive of Raymond, James Financial, who had “some tough words for the wizards of Washington, DC who oversaw the $700-billion bailout package”.

He reports, “The Brave And Wonderful Mogambo (BAWM) was right all along! Those government weenies are the biggest freaking morons you ever saw, and we as a country should be ashamed of ourselves for having elected such corrupt, half-witted, utter failures and congenital idiots!”

As you have probably guessed by now, he did not say those exact words, but he implied every syllable when he said, “Legislators were almost embarrassingly ignorant of how the financial system works”, which I figure explains how they don’t understand the linkage between their own Bad, Bad Performance (BBP) as legislators and the subsequent Bad, Bad Performance (BBP) of the economy, and he says that only 3 of 16 legislators that he talked to actually understood what was going on in the “credit crisis.” Less than 20%! Hahaha! We’re doomed!

Well, maybe these Congressional losers will understand the unfolding economic slowdown, as evidenced by the Baltic Dry Index, which is an index of the cost to transport stuff by cargo ship, and which has fallen precipitously, which seems very important to me, and to Junior Mogambo Ranger (JMR) Riccardo, too, who is also alarmed by this like – as I previously said – me.

It’s actually beyond scary, in a terrifying kind of “ain’t nobody buying nothing in a consumer economy” kind of way, which means that without the consumer buying stuff as his or her contribution to the famous statistic of “the consumer is 70% of the economy”, we are, in case you ain’t heard, freaking doomed!

Well, maybe not all buying is drying up, as silver market analyst, Ted Butler, reports that in the last 10 months, “some 150 million ounces of silver can easily be documented to have been bought by investors. Undocumented purchases would add tens of millions more ounces.”

In fact, when you add it all up, “Investment demand for silver this year is running at a full 25% of world mine production and over 20% of total production (including recycling). This is a remarkable historical turnabout.”

Thus, it is easy to see why Mr. Butler is “bullish beyond belief for silver”, since this kind of demand means that “In silver, the documented 150 million ounces bought in the first ten months of this year is equal to 15% of all the silver bullion equivalent thought to exist!” Wow!

More than one-seventh of all the silver bullion “thought to exist” in the whole world was suddenly bought up in less than a year, and yet the price of silver has been pounded down to less than 10 bucks an ounce? No wonder I am so bullish on silver!

He also notes that the gold/silver ratio is at more than 80, which is “one of the biggest differences in history.”

And not only that, but since there are 4 to 5 billion ounces of gold in the world versus only 1 billion ounces of silver, that means that “the total dollar value of all the gold in the world is worth 300 to 400 times more than all the silver in the world (80 times 4 or 5)”.

Talk about undervalued! Hey! This investing stuff is easy! Whee!

Until next time,

The Mogambo Guru

Source: A Bull in a Silver Shop

Well, to be fair, it is not capitalism that condemns millions to poverty, but instead the poor are doomed by the destruction of the purchasing power of the little bit of money that they get and things cost too much for the poor to afford them, and which is deliberately caused by a government so stupid (audience shouts out “How stupid, Wonderful And Wise Mogambo (WAWM)?”) that it deficit-spends money on the poor to alleviate their poverty by allowing the Federal Reserve to produce large, persistent expansions in the money supply with which to buy up the government debt, an expansion of the money supply which erodes the purchasing power of the money, so that the little bit of money owned by the poor doesn’t buy as much!

If the education system of the USA were not so egregiously bad, he would know that fact, and everybody would know that fact, and so when he went to some producers and said he wanted them to finance a new documentary about how capitalism is evil and (I assume) communism is good, they would have laughed in his face and said, “Hahahaha! Where did you get such a stupid idea? Are you some kind of moron?”

Or, alternatively, he could have saved a lot of time and just come to me and asked me and I could have told him, “Hahahaha! Where did you get such a stupid idea? Are you some kind of moron?”

Unfortunately, he did not learn anything from all of that, and actually has the movie concluding that, unbelievably, “Capitalism is an evil, and you cannot regulate evil. You have to eliminate it and replace it with something that is good for all people, and that something is democracy.” Hahahahahaha!

The use of the extra-long “Hahahahahaha!” is my clever way of indicating that this is where a Junior Mogambo Ranger (JMR) who has achieved even a glimmer of True Mogambo Enlightenment (TME) starts laughing in Sublime Mogambo Scorn (SMS)! Hahahahahaha! Just like that! SMS! Hahahahaha!

I thought I was calmed down and was reaching for a bottle of something alcoholic so as to deaden the pain of my stomach hurting from so much laughing when I started laughing all over again when my eyes again fell across the idea that democracy replaces capitalism! Hahahahahaha! I never heard anything so stupid! Hahahahaha!

The first thing that comes to mind, of course, is “Did democracy finance his stupid documentary, or some capitalist?” Hahahaha!

Beyond that, the mind reels! While we are at it, why not replace the production of expensive gasoline not with democracy, but with a super-majority voting system? And we could heat our houses with gang rule! And we can replace expensive food with some dictatorship! Wow! There’s no end of what you can do if you are willing to be ridiculous! Hahaha!

The dismal fact is, in case you were wondering, that capitalism in free enterprise is the only hope that the poor have, if not by sheer dint of theoretical argument that creating jobs is vastly superior to government handouts, then by the complete lack of any successful enrichment of the poor by any other method, mostly because they involve the government creating more and more money which destroys the purchasing power of the little bit of money that the poor had.

But since we Americans have decided, with a stupidity that absolutely staggers the imagination, to prove, once again, that exact same, sad, sorry lesson repeated and repeated over 4,500 years of history, then investing becomes easy when another lesson from that same 4,500 years of history is to own gold!

In fact, it becomes so easy that you can’t help but giggle, “Whee!”

Source: Fighting Capitalism with Capitalism

And remember… This is the Federal Reserve! This is a lousy private bank operating irresponsibly, at the behest of the Congress, and whose shadowy owners include, to one degree or another, foreigners and foreign central banks that are operating by the grace of their own governments which are just as corrupt and desperate as our own, but it was the Fed that created enough money to buy a trillion dollar’s worth of US government bonds for itself! A trillion!

It’s called “monetizing the debt”, which Ben Bernanke said, in response to a direct question about it recently, that the Fed would “never” do! “Never” has now been re-defined to mean “continually?” Hahaha! Too much!

As an astute observer, you figure this must be pretty bad, gauging by the way I make a Very Loud Mogambo Fuss (VLMF) about it and droplets of spittle are flying from my flapping lips at supersonic speed as a throbbing vein is bulging out on my forehead.

And since a lot of this money was spent to buy government debt, how big was the federal budget deficit? You will be sorry you asked, and if you want to know the actual size of the actual federal deficit for the actual last year because you are pretty sure that the government is lying to you about the real size of their deficit-spending, then you have also come to the right place, because Treasury Public Debt is, as of last Friday, $11.797 trillion, whereas 12 lousy months ago it was $9.667 trillion, meaning that even if you are not sober enough to get this damned calculator to work or see those tiny little numbers, you can do the subtraction in your head!

The actual, in-your-face federal deficit was $2.130 trillion in the last 12 months! The deficit-spending by Congress is a whopping 15.2% of GDP, for crying out loud!

And if you are collecting unemployment, then you will be interested to know that the federal contribution to your check could have been painlessly almost doubled, as, according to Wikipedia, the 2009 federal budget had $360 billion for “Unemployment/Welfare/Other”, while the budget also had another $260 billion that could be used to help you out, but had to be spent for “Interest on National Debt.”

In short, if the damned government did not borrow and spend us into the poorhouse, causing your unemployment and impoverishment, the government would have had another $260 billion to help you and the other unemployed instead of only being able to budget $350 billion!

And this brings up the interesting point that since the national debt is $11,790 billion and this “interest on the national debt” is $260 billion, this means that the government is paying an average of 2.2% interest! Wow!

And remember that this $2.130 trillion increase in the national debt is just the deficit in Congressional spending, which doesn’t even include the $2.6 trillion in the budget that was “paid for” by offsetting revenues!

So, being the cantankerous sort that I am, suspecting treachery at every turn and disaster at the hands of the corrupt, the ignorant and the stupid that we lovingly call “Congress”, let me note that the morons of Congress have spent $2.6 trillion, plus $2.1 trillion equals $4.7 trillion, which they spent in a $14 trillion economy! The government is spending the equivalent of 34% of GDP! Gaaahh!

And it is going to get worse and worse because the Fed is doing the more and more of the same thing that created the economic problem in the first place! Gaaahhh! We’re freaking doomed!

But this time, instead of over-reacting, I sigh in relief – aaaaaahhhhhh! – as I remember the last 4,500 years of history when governments acted monetarily and fiscally irresponsible, and how owners of gold, silver and energy did very, very well, which is the whole point of this investing stuff!

And the fact that it is so easy makes you say, “Whee!”

Source: Never Say Never to Monetization

As weird as that is, it gets weirder later in the article when Peter Orzag of the White House’s Office of Management and Budget (OMB), whom the article called “Mr. Obama’s top budget man”, has “tried to put a positive spin on the situation. By 2019, he argued on his blog, America’s primary deficit (the difference between revenue and spending excluding interest payments) would be only 0.6% of GDP.”

Excluding interest payments? Hahaha! Why in the hell would you exclude interest payments? Hahaha! You shake your head in amazement that this is the kind of Silly, Stupid Crap (SSC) that is everywhere these days! “Excluding interest payments”! Hahahaha!

Immediately I realized that, again, I was too hasty, and this brilliant little stratagem could solve my problems at work! My main problem is that money comes hard these days, customers don’t buy as much these days, and they don’t want to spend what little money they have with (and I quote) “a disagreeable moron” like me these days, which makes me fear for my job and the bankruptcy of the company these days.

However, with this new ploy in hand, now we’ll see who the moron is when I cleverly arrange for the company to borrow money with an interest-only/ balloon-payment-at-the-end loan, that comes due after I retire, so that it looks in the meantime like money is coming in but no money is going out because I “exclude interest payments”! It’s like free money! Hahaha!

I know there is an obvious flaw in the plan, and it gets even weirder when you learn that this same Mr. Orzag and this same OMB, for some bizarre reason that I assume only makes sense if you are mentally ill or taking drugs, or both, presupposes that “the average interest rate on government debt in 2019 is the same as the rate of economic growth.” What? Hahaha!

Of course, The Economist gets it wrong when the say, “Federal debt will read 77% of GDP in 2019, up from 41% in 2008”, in that they are only counting the federal debt held by the public, and conveniently ignoring that whole freaking giant glob of debt held by the Social Security Trust Fund and dozens and dozens of other places where public money has been “invested” by buying government bonds and thus giving the cash to Congress to spend, a fact that is so obvious that it makes me laugh in Utter, Utter Contempt (UUC) at such a rookie mistake, which makes you wonder what kind of boneheads they are hiring at The Economist magazine since the actual debt is almost $12 trillion and the GDP is $14 trillion, making the debt-to-GDP ratio 86% already!

But before I get too hard on The Economist magazine, I will note that they are exactly right when they say that the reappointment of Ben Bernanke as chairman of the Federal Reserve “ignores the fact that Mr. Bernanke was complicit in creating the loose monetary conditions which fuelled the financial frenzy in the first place. As a governor of the Fed earlier this decade, he was even more convinced than Alan Greenspan that central banks had no business raising interest rates to head off asset bubbles.”

The good news in the article is that polls show that Americans are waking up the fact that the Federal Reserve is a disastrous failure and it has ruined the dollar and America, which I interpret from the news that “Americans think less of the Fed than of the Internal Revenue Service.”

And since the smart play is to buy gold, silver and oil when the government is behaving so badly, the best news was not in the article at all, but for us greedy money-grubbers who want to make a lot of money without working and think that gold, silver and oil is the way to do that because that is what seems to be the lesson of the last 4,500 years, it is wonderful news that the majority of investors are not yet buying gold, silver and oil, which makes sense because it is mathematically impossible for the majority of investors in anything to make a profit, and only a minority betting against the crowd can, by mathematical imperative, make a profit!

You cannot see the Utter Mogambo Sincerity (UMS) in my eyes, and so you will just have to take my word for it that this is only one – one! – of the many, many reasons why I say, when buying gold, silver and oil, “Whee! This investing stuff is easy!”

Source: Clairvoyant Economists Still Pessimistic

So I say, “I was just wondering, because it looks like the economic slowdown has shown up in the Dow Jones Transportation Average, which has made so little money in shuffling goods hither and thither that a share of all the companies in the index earned a total of 82 cents, which is down from the $170.63 they earned at this time last year.”

He looks at me and asks, “Who cares? And what in the hell is a hither and thither?”

So I grab him by the arm and say, “Well, as a self-employed person yourself, and as any self-employed person can tell you, there have always been times when earnings drop to 82 cents! Sometimes less! Like that time when ‘word of mouth’ got around about me and nobody would engage my professional services because everybody had heard that I was incompetent and pretty stupid, and there were long, long stretches where I did not make even 82 cents because I was, like they said, incompetent and stupid.”

Then he says, “You saying I’m stupid? You looking for trouble?”

Suddenly, being the professional that I am, I could see that we were not going anywhere with this conversation, probably because he was prejudiced against smelly, drunken old men coming up out of the smoky darkness of a low-class strip club and grabbing his arm, yammering about economics.

Thus forewarned, I cleverly I reply, “Do I think you are stupid? Is that what you are asking me? Well, answer me this… Do you think that it is Beyond Freaking Insane (BFI) that the Federal Reserve is creating so much money and credit so that the federal government can borrow and spend the money, plunging us even farther into debt so that the total national debt, now at a terrifying 80% of GDP, will rise to 100% of GDP and then so horribly, terribly much more? Is this, in your trucking opinion, the Totally Wrong Thing (TWT) to do, and that the only Smart Thing To Do (STTD) would be to buy gold, silver and oil as protection against the complete ruination of the buying power of the dollar thanks to such oversupply of dollars and crushing debt?”

I figured he was going to say “Huh?” so when he looks at me quizzically and says “Huh?” I shout, “Exactly! And normally I would not even remark upon it except to seize the opportunity to ridicule the morons who own the stocks in the transportation index because, as I write this, they have bid the index up to a closing price of $3,705.92, making the price-to-earnings ratio soar to an unheard-of, laughable, impossible, ludicrous 4,493! Hahahaha! A P/E of 4,493! Hahaha! The normal range of P/E ratios is from about 4 or 5 up to 21, with the average being about 12 to 14! But the Transports are at 4,493! Hahaha!”

Again, he looked at me and said, “Huh?”

Before I could tell him that after due consideration, yes, I think he is an idiot who should be buying gold, silver and oil, both our attentions were diverted as the beautiful Miss Angela Divine began taking the stage.

As she slithered her hip-grinding way to the pole, gyrating to the beat of pulsating rhythm of the primal music, I noticed that she was wearing a gold G-string bikini! That’s my girl!

Source: A Truckload of Bad Data

He reminds us that “in 1933 the US government banned the ownership of gold by US citizens and purchased all but rare gold coins from the US public. They did this, at $20 an ounce. Two years later they revalued gold to $35 an ounce, a 75% revaluation” which instantly gave the government a lot of new, but still 100% gold-backed money to spend!

What a blatant, brazen theft! And nobody says anything! But let me take a few bucks out of the employee pension fund, petty cash drawer or the coffee jar, then it is some kind of “big deal” around here and everyone wants me to get fired! What kind of crap is that, huh?

Anyway, so how much gold are we talking about? Well, the total amount of gold above ground that you can put your hands on is estimated to be about 140,000 tonnes, which is approximately 90% of all of the gold that has ever been mined, which is estimated to be 160,000 tonnes.

Added to that, there is an annual mine production of roughly 2,500 tonnes of gold, but which is becoming harder and more costly to find and mine.

Perhaps it is all this talk of confiscation of gold that has Doug Hornig of Casey Research’s Gold & Resource Report commenting that when FDR made private ownership of gold illegal in 1933, the dollar was on the gold standard and thus 100% backed by gold.

The difference between then and now is that “we have long since abandoned the gold standard, and Obama doesn’t face FDR’s constraints on monetary inflation” which is (insert sound of trumpet fanfare) the winner of the coveted Mogambo Award For The Understatement Of The Week (MAFTUOTW).

It wins for two reasons, the first being that is so terrifyingly true! There are no constraints on the government getting the Federal Reserve to create as many dollars as it, or anyone, needs or wants, and thus it is beyond ludicrous to even compare the 1933 gold-backed dollar against the pathetic piece of almost-worthless fiat money that the dollar has become, to which Mr. Hornig alludes when he says that Obama has it easy, as “However much money is needed to finance his New Deal Redux, he can have it. All he has to do is rev up the printing press or turn an unlimited number of bits and bytes into electronic cash.”

And he is, alas, absolutely right. Unlimited amounts of money can be created just by asking for it. In fact, no one has ever disputed that fact, as it is the whole reason behind having a fiat currency! Hahaha!

In relation to the prospects for a confiscation of gold, he asks, “Given this kind of clout, what does he need gold for?” which is exactly right! If you can print money to spend, why do you need gold to sell to get money to spend? Hahaha!

Unfortunately for Mr. Hornig, he does not go on to the Mogambo Bonus Round (MBR) because I must deduct points from his score since he is grammatically incorrect to end a sentence with “for”, as in his “need gold for?”

Instead the sentence should have properly read, “Given this kind of clout, for what does he need gold?” which IS grammatically correct, so you can see the crucial difference!

And perhaps it is this “correct grammar” thing that makes the colossal incompetence of the Federal Reserve even more terrifying when adding that undertone of grammatical precision to the nightmare that the Fed created so much money and credit that it allowed the dollar to lose so much purchasing power since 1933 that gold is now almost $1,000 per ounce, up from the $20-to-$35 per ounce rip-off that financed the whole New Deal for a decade! Grrrr!

Of course, I would love to go on and on from there, waxing evermore contemptuously lyrical and angrily ever-louder about why I despise the un-Constitutional, un-holy Federal Reserve and everything it stands for, which is summed up in the Mogambo Big Book Of Economic Stuff (MBBOES) as “Purposeful inflation in money and credit by a central bank to create unprecedented amounts of debt for unbelievable of amounts of consumption that inevitably leads to ruinous inflation in consumer prices and ruinous deflation in asset prices such that it destroys the entire economy, which will soon lead to many, many poignant stories of ordinary men and women who, along with their doomed children, are wandering around, dazed and lost, living under bridges and overpasses, calling themselves Lost Children Of The Mogambo (LCOTM), forever bleating for pity that they did not listen when he told them to buy gold because their government was acting so insanely with fiscal and monetary policy, and now they are being cruelly punished by persistent price increases against which these people can only offer falling or stagnant nominal wages and collapsing real, inflation-adjusted wages, devalued assets, vanished wealth and disappearing jobs, which means a drastically falling standard of living until they are finally reduced to eating lawn clippings and miscellaneous bugs while screaming for revenge, whereupon the world then devolves into a dreary, post-Apocalyptic, dog-eat-dog world where, once again, for the umpteenth time in history, we learn that the dogs that eat well are going to be the ones who switched to gold when their governments started wallowing in such fiscal and monetary lunacy, which is why you ought to be out buying some more gold right now.”

I would probably end the Predictable Mogambo Tirade (PMT) with something in the vein of drawing an eerie parallel between the Fed creating too much money and credit, which leads to disastrous, ruinous, murderous inflation in prices, and the fact that the American government once gave smallpox-infected blankets to the Indians, which seems so, so apropos, which deliciously rhymes so you know it must be true.

Or maybe I would angrily relate how I, a normal, tax-paying citizen, call the CIA and demand to know under the Freedom Of Information Act if they are spying on me, or if any other jackbooted, government-Gestapo thugs are spying on me or tampering with my stuff, such as messing with my dishwasher which, after about 12 years of perfect performance, is now making this strange intermittent groaning noise, like a belt slipping or something that goes rrrrRRRrrrrrRRRrrrrrr, and then they put me on hold, and then they come back on the line and tell me that nobody is spying on me, but you can tell from their voices that they are lying.

Mr. Hornig is not sure that the CIA is out to get more or that a confiscation of gold is in the cards, although “An argument can be made that the yellow metal is still useful. It runs like this: Creating money out of thin air is inflationary, and a large stash of gold, even if it doesn’t officially back anything, serves as a sort of counterweight. People around the world will have greater confidence in your currency knowing that, as a last resort, you can pay your bills in gold. And the more gold you have, the better.”

Nevertheless, Mr. Hornig speaks for both of us when he says, “all things considered, a modern-day gold confiscation is not high on our list of financial worries”, although he adds the caveat that “Never say never where government stupidity is involved”, which sums it up perfectly, making it almost unnecessary that I jump up and yell, “Buy gold, silver and oil to save your worthless butt whenever your own government is acting with fiscal and monetary stupidity, which they are doing right now, which means” (insert musical soundtrack with heavy backbeat) “you should be buying these things RIGHT NOW because investing is easy when you KNOW HOW!”

Source: Why the Government Doesn’t Need Your Gold

An interesting new wrinkle in the new agreement that it will “allow the International Monetary Fund to join as a signatory if it wishes”, which it already desperately wishes so that the IMF can aggrandize more power by being a “player” with all the fiat currencies it will collect and then be able to wield like a bludgeon.

And this 400 tons of gold per year certainly sounds like a lot, but in reality, how much gold is there?

Well, the article notes that the “gold holdings of the 10 largest signatories total more than 11,000 tons, valued at $350 billion”, and I remember writing down somewhere that the US has about 8,000 tons of gold and the IMF has 3,217 tonnes.

In case you were wondering, I casually mix up “ton” and “tonne” all the time, probably because they are almost the same, so I never bother to try to keep them straight because I am lazy and I don’t care anymore.

For the record, though, one metric tonne contains 32,150.72 Troy ounces, so 11,000 tonnes is 353.661 million ounces of central bank signatory holdings which, at almost $1,000 per ounce, is where I assume they get the valuation of $350 billion.

This, in case you were wondering why I said the words “Central Bank Gold Agreement” with such a sneering tone of scorn and loathing disrespect, is because this is another slimy, five-year, corrupt deal whereby the gold that governments accumulated over the centuries, by committing a continuous series of outrageous, murderous atrocities to acquire, are now selling the gold to get a little “spending money”, to save a little money by not having to pay the expenses of storing the gold, and to happily drive down the market price of gold.

I know what you are thinking! You are thinking to yourself, “Why in the world would the central banks be selling their gold, which drives down the price of gold, which plays right into the hands of The Mogambo, who is happy to buy gold at these bargain prices because he knows that the price of gold will rise meteorically as inflation in the prices of consumer goods rise meteorically in response to the money supply rising meteorically thanks to the Federal Reserve creating it and the federal government borrowing it and then immediately spending it in meteorically-rising amounts for years and years and years, which makes buying gold such a no-brainer that he is known to squeal with girlish delight, ‘Whee! This investing stuff is easy!’”

Well, obviously, since I know that governments send their secret agents to spy on me all the time and sabotage my life, we can be sure that they are not keeping the price of gold down for my benefit! Hahahaha!

No, what they want to do is drive the price of gold down so that the price of gold does not rise against their currencies, which is what you would normally expect from the inflation in prices that would result from these selfsame repellent, dishonorable, corrupt, thieving governments creating additional excessive amounts of paper, fiat money to try to buy their way out of the national inflationary bankruptcy they caused with their prior years of creating and spending excessive amounts of paper, fiat money! Hahaha!

Puru Saxena of Saxena Wealth Management notes, “It is interesting to note that only 160,000 tons of gold has ever been mined from the face of this planet and at US$950 per ounce, it is worth US$4.9 trillion. Now, consider that the total amount of paper money in circulation (currencies, savings, deposits, money-markets and CDs) is worth US$60 trillion, or approximately twelve times the value of the gold in existence.” Wow! Twelve times!

The way I am screaming hysterically that everyone should buy gold reminds me that gold rises in price because its value remains relatively constant, because of all of its valuable inherent properties, while the purchasing power of the paper money used to bid for gold goes down and down, each unit of money buying less and less gold and each unit of gold buying more and more money, which tips everyone off that “That Screaming Mogambo Weirdo (SMW) was right! We’re freaking doomed by inflation! We gotta buy gold, silver and oil right away!” which, naturally, makes their prices rise even further! Whee!

But by flooding the market with government gold, this short-circuits this “canary in a coal mine” (or more properly “Mogambo in a raging snit”) inflation alarm so that us proletariat chumps don’t panic at the horror of huge inflations in prices that are usually reflected in the price of gold which, unfortunately, always follow a huge inflation in the money supply.

This time, because it involves a commodity, I figure that it has the added benefit that slimy insiders/bullion banks can now do all kinds of slimy arbitrage tricks by buying government gold at a (theoretically) falling market price as 400 tons a year come barreling into the market to swamp demand with a deluge of supply, as well as leasing government gold at almost zero percent rates, maybe somehow running it through some Exchange Traded Funds that are shorted for some reason that I don’t understand, maybe hedging risk in the futures and options markets, perhaps bundling together a few derivatives to “lay off risk”, and making money, money, money with which to pay taxes, taxes, taxes, which I figure is the whole point, from the government’s perspective.

It’s like a license to print money while driving down the market price of gold to help disguise the inflationary horrors of, for example, a federal government deficit of 13% of GDP!

The federal budget deficit is almost 1 out of every 8 dollars of national economic activity, and the total amount of government spending will sure be, when including the inevitable future Supplemental Appropriations, over $5 trillion this year, which means that federal government spending – by itself! – is 35.7% of America’s $14 trillion GDP!

Now if you can get me to shut up my screaming, screaming, screaming in horror at such fiscal insanity for one lousy minute, I will add in another $1.5 trillion for the spending by the states and another half trillion by local governments and school boards, and suddenly we are looking at (ignoring double counting the federal aid to the states which is included in the state’s budgets) a potential of $7 trillion in total governmental spending, which is HALF OF GDP!!

I am sure that you noticed the two exclamation points, the way my voice is now screeching at full volume and revolting specks of spittle are flying through the air as I stomp around the room, cursing loudly and incoherently, that I am upset that governments now spend half of the entire economic output of the Entire Freaking Country (EFC)!

If you are a true Junior Mogambo Ranger (JMR), your blood suddenly turned cold and a sense of doom fell upon you.

Now, imagine the horror of those who are NOT, alas, Junior Mogambo Rangers (JMRs), and thus who probably do not buy gold, silver and oil because they do not know that they should be doing that when their government is acting fiscally and monetarily insane!

When you do know, however, investing is easy! Whee!

Source: Canary in a Gold Mine

By this time I am losing interest, as I suspected as much, and would have been surprised if things had turned out otherwise. I say this with a certain haughty-yet-snotty attitude because the Austrian school of economics is so easy to grasp, so intuitively correct and now so provably correct, that it is easy to anticipate the long-term when a central bank is creating excessive amounts of money and credit, especially when the majority of it is used to expand government spending. Child’s play!

So seeing the future clearly in economics is easy, unlike forecasting other social institutions, like marriage, which I thought meant that I would be happy for the rest of my life, but which meant that I did not remotely understand the full ramifications of such an arrangement that was not, and I emphasize NOT, even hinted at when we were dating, which should be grounds for some kind of legal action so that I can get my life back, instead of having it wasted by her, and the stupid kids, and the stupid relatives, and the stupid neighbors, and the stupid job, and all the stupid stuff you have to do as a result of being so stupid as to say “Goodbye!” to a life of mindless, selfish hedonism in the first place where, with any luck, you would be dead by now, lying in some gutter with a big smile on your stupid face, instead of putting up with spouses, children, neighbors, et al who are all so stupid that they don’t buy gold, silver and oil even after I always deliberately end the “Happy Birthday” song with, “And if you’re not buying gold, silver and oil, then you are not going to get your wish because the Wish Fairy knows that you are too stupid to know what to do with that kinky stuff for which you are secretly wishing.”

But this is not about any of that, but about the way that the government has now “changed the way it accounts for natural disasters, such as Hurricane Katrina,” which ought to make you suspicious, especially as it was done for “eliminating much of the prior volatility in income calculations”, whatever in the hell that means.

I imagine that the government could use it as an excuse to “find” more money to spend by reducing accrued costs or disguise the fact that government is incompetent. Either one.

I personally think it is the latter, and not just because I am a suspicious and paranoid little rat who thinks that the government is an expensive, disastrous, giant dead-weight loss that is out to get me, but because another interesting change is that “Personal income was revised up over the last decade, after the government boosted its adjustments for the underreporting and non-reporting of income using more recent data from the Internal Revenue Service.”

Of course, I think this is so the government can now say, “Hey! Income was up over the last decade, so shut up about how we are a bunch of incompetent and dangerous bunch of arrogant pinheads who actually believe the stupid stuff we say, like how we say that continual government deficit-spending and continual expansions of money and credit by the Federal Reserve are some kind of blessing and not the most stupid things that we could have possibly done!”

The “found money”, in case you were wondering, apparently comes from income increases as a result of the housing boom, and “in the most recent years reflect gains from rents, interest and proprietors’ income”, as if that distorted boost to income is now “the new norm” or something! Hahaha!.

Finally, the Commerce Department “shifted food services, which include meals purchased at restaurants or served in schools, out of the food category.”

Paradoxically, “As a result, the Fed’s preferred inflation gauge – which tracks consumer spending and excludes food and fuel – was pushed up by 0.2 percentage points for the three-year period from 2006 to 2008.”

Later, they explained that “The reason for this is that costs of meals away from home are not as volatile as fresh food, the government said, and therefore services should be included in the measure commonly known as the core index.”

They now compute inflation in “meals away from home” by disregarding the cost of the food, which is going up, and look only at the cost of the labor in preparing the food, which is going up, but not by as much right now because unemployed people are willing to work for peanuts? Hahaha!

If blatant corruption to disguise inflation and incompetence is not enough to convince you to buy gold, then there is nothing I can say to change your mind.

Fortunately, that means more for me, and at lower costs, until the day when you say “Oops! Oh, woe is me for not having listened to the Wonderful And Wise Mogambo (WAWM) when he said to buy gold, silver and oil, and now I rue that fateful day, just as he said I would, and I see that he was right when he said to buy gold, silver and oil, which would have made me, too, say, ‘Whee! This investing stuff is easy!’”

Until next time,

The Mogambo Guru

Source: How Do You Like Your Books Cooked?

By “shows signs of improvement”, I suppose he means things like another extension in unemployment benefits, which he admits “is something that the administration and Congress are going to look very carefully at as we get closer to the end of this year.”

Naturally, I take points off his grade and I note that “look very carefully at” is a prepositional phrase, and he should have more correctly said that extending unemployment benefits “is something at which the administration and Congress are going to look very carefully” but either way it means that it is a “done deal” since there is going to be almost $3 trillion in deficit-spending money ($1.84 trillion in budgeted deficit and the usual $2 trillion in Supplemental Appropriations that will appear in the next year), all seemingly just sitting there! Hahaha!

The 5-Minute Forecast took a look at the specifics, and found that “Congress is under pressure to extend benefits again. Emergency legislation has already bumped unemployment programs to 79 weeks in half the states, about triple the norm and the longest since its 1930 inception (the rest of the states have programs ranging from 46-72 weeks).”

Yikes! We’re already at records of unemployment never even seen before! Nevertheless, they continue “Word on the street is that Congress will tack on another 13 weeks for states with unemployment rates over 9%… at a cost of $70 billion”, which seems like such chump change when next year’s federal budget deficit is, by itself, $2 trillion!

Blomberg says that Larry Summers, director of the White House National Economic Council, glossing over the fact that he has not been right about the economy or raised a peep about the rampant “creating excess money and credit” crap that Alan Greenspan and his loathsome Federal Reserve were doing for the last 15 years, says that he is now sure, sure, sure that the economy will resume growth in the second half of the year, although the job picture “will be serious for some time to come.”

Naturally, one wonders how economic growth can resume when more and more people are unemployed, with no viable options, and staggering under the biggest debt loads in the history of America, but even when you send him an email asking “What kind of stupid thing is that to say, you ignorant, loudmouth neo-Keynesian halfwit lowlife?” he never explains!

Just in time, The 5-Minute Forecast sort of obliquely answers my question when they reported that “both Larry Summers and Tim Geithner refused to rule out a middle-class tax hike.” Hahaha!

Oh! Growth in government taxation! Hahahaha!

Ignoring my rude laughter, Bloomberg continues with the insight that has Mr. Summers saying, “the Obama administration will work with Congress to ‘do what’s necessary to make sure appropriate unemployment benefits are available.’”

And working with Congress ought to be a snap, as Congressman Charles Rangel, chairman of the House Ways and Means Committee, said he “supports extending unemployment insurance benefits for another 13 weeks” because there is “no question” that the unemployed “deserve it”, because the are the “the true victims of this fiscal disaster.” Hahahaha!

The truth is that everyone is a victim of the abject stupidity of government morons like Congressman Rangel, who happily voted to deficit-spend monstrous amounts of money year after year after year, plus pledging a hundred trillion dollars in future benefits, and encouraged the Federal Reserve to create massive amounts of excess money and credit so that people could go into crushing debt by borrowing Too Much Money (TMM) to buy, among other things, the gobs of new government debt, all of which cemented into place a bloated, dysfunctional, corrupt, government-centric economy! Hahaha! We’re freaking doomed!

And now – unbelievably! – Congressman Rangel thinks that increasing federal government deficit-spending, via expansions of the money supply by the Federal Reserve to promise another 13 weeks of unemployment benefits to the victims, is going to fix things? Hahahahahahackahackahaha!

The extended “Hahahahahahackahackahaha!” is to cleverly denote that I am laughing and laughing until my sides are starting to hurt, and I am coughing and hacking up what appears to be pieces of lung at such preposterously and overwhelmingly funny Theater of the Absurd stupidity! Hahahaha!

In such a giddy state, I obviously cannot continue to the inevitable climax where I demand that you buy gold, silver and oil immediately as protection against the best intentions of government or suffer my contempt and scorn, which admittedly seems so far away from my current fit of laughing and coughing! Hahahahahackahackahaha!

Anyway, I could never say, “Buy gold, silver and oil because your own government is destroying your money and you!” better than when Mr. Rangel says it for me with “Victims deserve more of what they got!”

Whee! This investing stuff is easy!

Source: The True Victims of Government Stupidity

In fact, not only is the world not getting hotter, but neither is New York, which is not actually a part of the World As We Know It (given the people they elect), but which is still affected by the weather, and in this case, “The average temperature for the month in Central Park so far is 72.6, 3.9 degrees below normal, putting it in a tie for sixth place on the list of coolest Julys, along with 1895” whereas “The coolest July on record was 1888, with an average temperature of 70.7.”

And arctic.atmos.uiuc.edu has a chart that shows that “Current Southern Hemisphere Sea Ice Area” has expanded by a huge 14 million square miles, up from 2 million square miles, in the last 6 months! Wow! It takes a lot of cold to make 14 million square miles of sea ice!

And this is exactly what you would expect from the strange disappearance of spots on the sun that has made me crazy with fear in the last year or so as it developed, which is admittedly not the only thing that has made me crazy in the last year or years or decades, but the sun is the source of the earth’s energy, and when something happens to the sun, it is Important Freaking Stuff (IFS) in that all-important weather way that, Chaos Theory-wise, affects everything.

In fact, Prisonplanet.com had the headline which summarizes it all: “Artic Ice Grows 30 Per Cent in a Year”, and from that deduces that “A general cooling trend across the planet is now clearly apparent as sunspot activity, the main driver of climate change, dwindles to almost nothing.”

The facts are that there have not been any sun spots for over 400 straight days, and the evidence of measuring sun cycles and sun spots for the last 200 years leads to the prediction that “global temperatures will drop by two degrees over the next two decades as solar activity grinds to a halt and the planet drastically cools down, potentially heralding the onset of a new ice age.”

In fact, it must be worse than that, as we later find out that temperatures have already fallen by about 0.5 degrees Centigrade over the past 12 months, which seems like a hell of a lot to me if it is going to take 20 years to drop 2 degrees, which is enough to be another Maunder Minimum, like the kind that lasted from 1645 to 1715 and during which “sunspots became exceedingly rare and contributed to the onset of the Little Ice Age during which Europe and North America were hit by bitterly cold winters and the Thames river in London completely froze.”

I cannot pass up the opportunity to proclaim that you should be heeding the Loud Voice Of The Mogambo (LVOTM), the introductory overture of which predictably begins “We’re Freaking Doomed (WFD), you morons! Your money is dead and you will be economically dead, if not actually dead, all because you turned your backs on your own Constitution and its requirement that money be only of gold and silver coin, and instead embraced a stupid fiat currency, unleashing torrents of new money (inflation in the money supply) that produced bankrupting, inflationary booms in stocks, bonds, houses, consumer debt, derivatives and size of government, all of which that selfsame government is trying to keep from imploding by printing and spending more money, which caused the problems in the first place, which means huge, huge HUGE inflation in consumer prices, even without this scary sun spot thing and the horrendous, unthinkable possibility of years and years of persistent crop failures and famines during a mini ice-age, all of which mean that you should be buying gold, silver and oil with both hands, and indeed all commodities, because their prices, like all prices, are determined by the dynamic of demand versus supply, of which there ain’t a-gonna be any.”

And I say this not because I am an insufferable, arrogant and horrid little man who knows a little bit about some things and now he thinks he knows everything about everything, but instead I say this because things that we eat don’t grow very well or much during ice ages.

All of which make me squeal with childish glee, “Whee! This investing stuff is easy!”

Source: Economy Mimics Global Climate Change