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

Junior Mogambo Ranger (JMR) Rick K. thinks that I am being too critical of the Dow Jones Industrials when I snort in derision at that index sporting the unheard-of price-to-earnings ratio of 87, as “almost all of the insanity comes from just one company: General Motors (NYSE:GM).”He explains that “GM lost $74.29 per share over the last year (on a stock priced at only about $17 per share), compared to earnings for the rest of the Dow of $92.37 per share. So GM alone lost 80% of what the rest of the Dow companies made over last year! If GM’s loss was excluded from the Dow’s earnings, its P/E would be around 16 rather than over 80.”

Naturally, I figure that, as the old saying goes, “What’s good for GM is good for the country,” and so it reflects what is actually going on in the country. And besides, it really makes no difference anymore, anyway, since accounting itself has gone to “the dark side of the Force”, like everything else.

And to show you what I mean, Bloomberg.com reports that regulatory filings show that “Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets.”

And so everything is lies, lies, lies! Hahaha! We’re freaking doomed!

This saved me from having to mention that the other indexes are just as weird, as the historical average for a Price-to-Earnings ratio is 14, with a P/E of 20 being near the extreme of “overvaluation”, and while currently the P/E of the DJ Industrials is 86, the DJ Transportation Index has a P/E of 24, the DJ Utility has a P/E of 16, the S&P500 has a P/E of 23, and the S&P Industrial Index has one at 22! Hahahaha! Apparently meaningless, as the prices of these stocks are actually rising! Hahahaha!

And the reason is that nobody is buying, because nobody has any money! I say this as a way of introducing this week’s episode of “What is wrong with this picture?” The scene opens with the Commerce Department reporting that consumer spending rose 0.2% in April, which is down from the 0.4% increase in March.

The more stupid of us are busily trying to multiply this 0.2% increase for April by 12 months (to get an annual figure), and screwing it all up pretty badly, and we keep re-entering the data over and over and making stupid mistakes until we are so frustrated that we are jamming the calculator’s keys with murderous force, and our fingers hurt.

Coincidentally, the Commerce Department also said that incomes grew 0.2%, which even included the $134 billion in the government’s tax rebates that are only half sent out! Hahaha!

If you are like me, you are suddenly realizing that your income did not go up by 0.2%, or any percent, because if it did, it seems like you would have remembered it. And anyway, if my income DID go up, then where in the hell is all of this money?

In fact (and I think I speak for everyone), we’re slaving away at our stupid jobs like the caged, workaholic rats we are, and all we ever get is an ungrateful boss, an ungrateful spouse and ungrateful children whining, whining, whining that you don’t give them enough money, and how I “owe” them money just because they were born and how they didn’t “ask to be born”, even though I sure as hell did not ask them to be born, and pretty soon we are yelling about who is responsible for their being born at all, but everyone knows it’s about the money.

In fact, everything is about the money these days. Mostly the lack of it. But mostly, mostly because of businesses and governments lying about it. Ugh.

P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed.

Editor’s Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter – an avocational exercise to heap disrespect on those who desperately deserve it.

Source: A Phantom Increase in Income

As for the questions of punctuation, the answer is no, as multiple question marks indicate the appropriate level of complete freaking befuddlement at such a bizarre statistic; leasing gold at less than zero percent interest!

This is oddly in line with a clever satire at epi.org, sent to me by JMR Mikael, titled “Fed lowers benchmark interest rate by 50 points (a satire…)” in which Jared Bernstein proposes the same thing as regards the Federal Reserve! His humorous fiction starts out, “In a surprise move aimed at stimulating moribund financial markets and the larger economy, the Federal Reserve surprised markets with an unprecedented 50 point rate cut, taking their target rate down to -47%.” Hahaha! An interest rate of a negative 47 percent! Hahahaha!

This reminds me of the last episode of the old TV show Barney Miller when the precinct was being closed down. The rumor was that the old police station was going to be torn down and replaced by “low-income luxury housing”, which was a really funny line at the time, but in subsequent years “low-income luxury housing” actually came to pass in some places, and so maybe a negative 47% interest rate is not as absurd as it seems, either!

Anyway, the next paragraph of the satire was, “The statement accompanying the surprise cut was also unusual, employing bolder language than is typically the case. For example, the phrase ‘the committee judges inflationary and growth risks to be roughly balanced’ was changed to read, ‘Screw it! We’re going nuts over here! You got a financial problem? Need some fast cash? We’ll pay you – that’s right, you heard us – to borrow money from our bank.”

But this biting satire and raw sarcasm has given me the idea for a new television game show of my own. Thus, I proudly announce the latest television hit show, Mogambo’s Let’s Make A Deal (MLMAD). The essence of the 30-minute show is that I say to a randomly-picked audience member who is dressed in some ridiculous garb, “If you think that a negative lease rate for gold is weird, and if you think that the banks reporting total reserves of $44 billion while at the same time non-borrowed reserves are an astonishing negative $61 billion is weird, and if you think that banks’ ‘free reserves’ are a sudden, staggering negative $75 billion is weird, or if you think that borrowed reserves in the banks are a sudden, terrifying $80 billion is weird, and if you think that private-sector investment banks borrowing from the Federal Reserve itself for the first time in history is weird, then you are not only 100% correct, but you win! You are a winner! You have won the chance to choose between the two Mogambo Doors Of Mystery (MDOM) and claim the fabulous prize that is waiting there for you!”

The camera pans down to two mysterious doors on stage as I say, “Step right up and pick which door you wish to open, and discover the surprise behind that door! And why don’t you tell us what is behind the two doors, Bob?” at which point Bob the Announcer says, “Right you are, Mogambo! Behind one door is a government that will grant you seven wishes, making all your dreams come true! Behind the other door is the economic death from the government making someone else’s seven wishes come true.”

Waiting for the applause from the audience at the prospect of being granted seven wishes to die down, I say, “And there you have it! Which door will it be?”

The audience chants rhythmically, “Which door? Which door? Which door?” louder and louder and louder, like some demonic jungle voodoo rhythm, until the contestant finally, and excitedly, chooses a door!

If he guesses right, he gets seven wishes and he goes off to enjoy them. If he chooses wrong and chooses the door behind which waits “economic death from making someone else’s seven wishes come true”, then thugs rush out to strip the surprised contestant naked before dragging them out to throw them into the cold, filthy gutter while our audience watches in air-conditioned comfort as our lawyers loot the contestant’s house, their bank accounts, retirement plans, brokerage accounts, their safe-deposit box at the bank and then burn their house to the ground. All gone!

Well, all the network people, all of the money people and everybody who heard of my new show said it was the worst idea they had ever heard, which I cleverly counter by saying, “The moronic population of this country loves this game already, even though nobody has ever had to pick the wrong door until now! Where in the hell did you think all this government spending was going?”

And if you think, like everybody else seems to think, that this is an ugly, vicious and stupid idea, then get used to it, because you are going to see all kinds of weird things from now on, as the governments – not just American but everybody’s – are now realizing, too late and to their horror, that we are all freaking doomed by the vast expansions of fiat currencies and indebting taxpayers to fund massive amounts of government growth and government spending, and now they are going to do every slimy monetary, fiscal and legal trick that they can think of.

And with the awesome, unlimited power of a fiat currency that can be increased in volume literally at will, all fiscal and monetary plans are, suddenly, possible! Negative interest rates, tax rebates, tax cuts and increased government spending all at the same time! It’s literally possible, and without end! Ask Zimbabwe!

But it is, alas, impossible that they will succeed in alleviating the problems. As Clyde C. Harrison at Brookshire Raw Materials correctly said, “Governments and central banks are completely incapable of keeping tomorrow from coming”, which is too bad, which in turn reminds me of the funny line, “Tomorrow is the greatest labor-saving device today”, which seems oddly and chillingly apropos, considering what the government and the Fed are doing is merely fighting for another day of economic reprieve!

Until next week,

The Mogambo Guru
for The Daily Reckoning