November 11, 2013
By: The
Mogambo Guru
It’s surprising how many people rudely interrupt me to say “Hey! Shut up
for one minute about how the evil Federal Reserve is creating so much
currency and credit that we are doomed to a horrible inflationary
collapse, and just tell me if you want fries with your burger.”
On the other hand, none of them has ever asked me, “Okay, let’s see how
smart you are in solving the economic mess, Mister Know-It-All who thinks
he is so smart.”
Perhaps they never ask because they, somehow, know that it is, alas,
impossible, although that knowledge seems implausible from a teenage kid
who cannot remember that I do NOT want cheese on my burger, and who asks
me three freaking times “Do you want cheese with that?”, and each time I
tell him “No, I do NOT want cheese with that.”
And then when I get the damned burger, it has cheese on it!
And the truth is that solving the economic problem of bankrupting levels
of debt is something I would dearly love to do; gloriously discovering a
wonderful, wonderful way to bury oneself under mountains of unpayable debt
and then -- poof! -- the debt is all gone! Whee!
And then -- oh, frabjous day! -- with no debt, we can all take up
borrowing and consuming where we left off, with feckless, reckless abandon
springing yet anew, like the flowers in the Spring dripping with dew,
which is my phony-baloney poetic way of saying “like fat, gluttonous pigs,
usually with something greasy dribbling down our fingers and chins.”
Consumption without end! Ya gotta love it! You have to love it even more
than fantasizing about leaping over the counter and grabbing some
burger-flipping cook’s geeky little neck, drawing one clenched fist back
and screaming at him “Hey, punk! You want some CHEESE with your knuckle
sandwich?”
To calm myself down from what is now known as the Mogambo Cheese Incident
(MCI), as I pick the damned cheese off my damned burger, I force myself to
think about the more pleasant prospect of finding this Holy Grail of
economics, and I delightedly imagine the surprise on everyone’s stupid
faces when they learn that I, the person they know as Stupid Mogambo
Lowlife (SML), figured it out! The smartest guy who ever lived!
And if I am the smartest guy who ever lived, contrary to the expectations
of everyone who knows what an idiot I really am, then maybe it is also
time to re-examine some other misconceptions about me, like the
popular-yet-stinging falsehoods of me being the “World’s Worst Father”,
“World’s Worst Husband” and “World’s Worst Employee” just because hateful
people keeping giving me some stupid coffee mugs that say so, year after
year after year.
My sudden interest in achieving the heretofore thought-impossible was
kindled by an
interesting
graph by Andy Smith of LBMA Rome, which shows the decline in the US dollar
since Nixon in 1969 compared to the decline in the Roman denarius in 70
A.D, which, as you may have guessed, despite a difference of 1,900 years,
ended very badly, with the buying power of the Roman coins going down and
down and down in purchasing power until they abruptly disappeared.
However, the
thing that really caught my eye in the graph was the sharp rise in the
middle of the graph, which showed the value of the denarius, under Titus.
It went up! Wow!
Maybe, just
maybe, there WAS a way to reverse monetary debasement! Maybe this Titus
guy found it, and everyone else had always, somehow, missed it! It sure
looks like it!
Excitedly, I
quickly did a little research about this Emperor Titus guy, already
thinking of how I was going to use this information to solve this vexing
bankruptcy problem, and thus be famous and rich for having done so, and
happily thinking about all the fabulous cars and beachside mansions I was
going to buy, and all the hot-looking women that would always be prancing
around and bringing me tasty foods to eat (fried, chocolate or sweet),
and maybe how I was going to start my own band,
and embed my stream of hit songs (sample song: “Drag the Federal
Reserve into the Street and Spit On Them P-tui”) with secret, subliminal
messages like “Rise up and storm the evil Federal Reserve and put the USA
back on a gold standard! And buy more copies of this album! Lots more!”
Well, from the
initial Titus research, it just seemed to get better and better, as it
turns out that he was noted for “lavish public spending,” which made me
raise my eyebrows so high that I got a painful cramp in my forehead which
hurt so bad that, for a few seconds, I was able to forget my broken heart
pounding, pounding, pounding at the constant fear of imminent-yet-dire
doom and disaster that befalls any idiot country that tries this stupid
Keynesian/deficit-spending/debt crap like we have done.
And the world,
too, for that matter!
So, despite my
dead-bang certainty that this aforementioned stupid
Keynesian/deficit-spending crap cannot possibly work and that anybody who
thinks otherwise is an idiot, which doesn’t even address the fact that we
are Screwed Big Time (SBT) because of it, I was unexpectedly,
surprisingly, reservedly optimistic!
I mean, one
doesn’t often hear the phrases “lavish public spending” and “rising value
of the currency” spoken at the same time! Ever!
Growing more
and more excited and curious, I feverishly read on to find out how Titus
managed this heretofore thought-impossible feat! “How could everyone else
not seen this before now?” I thought to myself.
Only later on,
in a seemingly unrelated part of the biography, we find that he got
started when Emperor Vespasian “gave Titus charge of the Jewish war.
His campaign, in which 1,000,000 Jews were reputed to have died,
culminated in the capture and destruction of Jerusalem.”
So, the lesson
is that old standby of government: Rob your neighbors so you can pay off
your bills, prevent pesky lawsuits by killing the people you rob, use the
money pay some debts, which paradoxically makes your currency temporarily
strong, and then continue to debase the currency by creating more and more
of it.
The other lesson
is, unfortunately, that an inflationary price has to be inevitably paid
for increasing the money supply so drastically.
For instance,
an article in The Economist magazine notes that a study estimates that
around $400 million was paid to the Somali pirates, who hijack freighters
and demand ransom for them, between 2005 and 2012. This is an expansion of
about 40% of their GDP!
The result of
all that new money flooding into the Somali economy was, quoting a local,
“With piracy everything became more and more expensive.”
Having debased
the old Somali shilling to literal worthlessness by printing up so much of
it in the late ‘80s and early ‘90s, they stopped printing Somali shillings
in 1992, and several currencies now compete to be used for transactions.
Oddly enough,
and to prove that the buying power of a currency depends on the supply of
it, the money supply of those old shillings has obviously remained
constant, and they now have regained some buying power because of it!
Amazing!
Extrapolating,
with the American government still deficit-spending to pump, pump, pump
more and more currency and credit (which it got from the horrid Federal
Reserve creating the new currency and credit just for that purpose) into
the economy, horrible inflation in prices is our dire destiny of doom, as
the worthlessness of the dollar similarly destined.
And don’t get
me started on screeching about inflationary collapse, or how much burgers
cost me these days, which parallels McDonald’s scrapping its Dollar Menu,
as their costs are rising so high that they can no longer make a profit
selling anything for a dollar.
So my
delightful daydreams of solving the Big Economic Problem (BEP) were
dashed, I ate a lousy-yet-expensive hamburger, I wasted a whole glob of
gooey cheese, and inflation in prices continued because the evil Federal
Reserve kept creating currency and credit.
Happily, on the
other hand, now that I, again, am completely 100 percent sure that we are
doomed to an inflationary collapse, I can just go back to concentrating on
the One True Thing (OTT) that 2,500 years of history have proved: Buy gold
and silver bullion when your currency is being debased by over-issuance.
In fact, it has never failed!
And since that
is so easy and quick, one has a lot of extra time on one’s hands with
which to have fun (for instance, golf), whereby one achieves the pinnacle
of investing: Acquiring a fabulous future fortune on the cheap, while
doing no work whatsoever, at a beautiful, peaceful place where somebody
else mows the grass, pours the beer, cleans up afterward, and neither your
family, boss nor angry creditors can bother you (if you remember to turn
off your phone)!
Whee! This
investing stuff is easy!