Which To Choose?
March 17, 2015
By:
The Mogambo Guru
I would like to bring up a quote of Ernest Hemingway, a writer whom I
greatly admire, and to whom I have often been compared as a writer, as in
“You wrote this crap? You suck! And compared to Ernest Hemingway, you
REALLY suck!”
In my defense to such malicious attacks, I used to reply, with my usual
spluttering outrage, “Well, he was no economist, and he never said ‘We’re
freaking doomed!’, which is something I wrote, and which is some of the
finest writing in the whole stinking history of writing, in that it is
pithy, insightful and perfectly true!”
And this does not even count the crucial fact that, if Hemingway was alive
today, he would be 116 years old now, and I could easily beat him
arm-wrestling to prove who is the better writer.
Well, the truth is that I was always aware that Hemingway knew about
economics, as I had read where he wrote “The first panacea for a
mismanaged nation is inflation of the currency; the second is war. Both
bring a temporary prosperity; both bring a permanent ruin. Both are the
refuge of political and economic opportunists.”
Well, the first part is certainly true, despite whole armies of laughable
Keynesian blockheads infesting the Federal Reserve with the foul stench of
their conceited econ-calculus babble who say (to their everlasting shame)
otherwise, and whose glaring, catastrophic failure at monetary policy has
resulted in final-straw, last-ditch, do-or-die desperation moves like
outright monetizing (creating the money to buy) government debt,
monetizing equities, monetizing housing, monetizing commodities, and even
monetizing portions of people’s mortgages (HARP)! It goes on and on! Money
and debt are being created everywhere!
For instance, how to explain how, there I was, browsing at John Rubino’s
Dollarcollapse.com site, reading his essay with the intriguing title
“Lowest Interest Rates EVER.”
Of course, one naturally takes this all-caps “EVER” thing as mere
attention-grabbing hyperbole, sort of like advertisers proclaiming “New!”
and “Improved!” when referring to my laundry, teeth and toilet bowl, and
how, with their fine products, I could finally achieve the bliss of
Nirvana by getting everything whiter than white, brighter than bright,
cleaner than clean.
But, as far as interest rates go, it turn out to be true! He cites a chart
done by Myles Udland, of Business Insider, using data “drawn from research
by the Bank of England,” showing that -- indeed! --, long-term AND
short-term interest rates for the last 5,000 years at least, shows that
they have NEVER been lower! Never! In all of history!
Amazing! The evil Fed has created so much cash and credit that it has
driven the price of debt up (and thus the imputed interest rate down) to
Never Before In History (NBIH) levels. So can inflation in consumer prices
be far behind?
Well, Theburningplatform.com asks the question, “How’s that deflation
working out for you?” I was
hoping it would that back my theory, so that I could confidently cite it,
seizing another Golden Mogambo Moment (GMM) to be snotty, imperious,
sarcastic and completely insufferable to people gullible enough to believe
the government’s fairy-tale story, saying “Prices are rising all around
you, you morons! There ain’t no deflation in prices of food and housing
and insurance and all the rest of that crap you have to worry about, all
the time worry about, because you pay them all the time, and you know that
their prices are going up! Prices are always going up! All because the
evil Federal Reserve has created so much cash and credit so that you,
businesses and governments can all easily get up to your freaking ears in
debt and accrued obligations, creating new money the whole way.
And now you will be destroyed -- destroyed, I tells ya! -- utterly,
as in We’re Freaking Doomed (WFD), by prices that will increase
exponentially, as they must, because (and you might want to write this
down) that’s The Way Economics Freaking Works (TWEFW)!”
Whew! As for accrued obligations, that’s the big killer-diller.
It’s like, ummm, how many times have you said “Sure, kids! Relax! I
am saving for your hyper-expensive college educations, my darling
children. Trust me!”, when you actually mean that you are dead broke, with
a negative net worth, you spend every nickel you make, you are going
further into debt just to live another day, and you secretly have your eye
on a shiny new car.
“And why not?” you rationalize. “Theoretically, it’s possible that a
miracle could happen! All the
money we will need could just, you know, fall into our laps! Win a
lottery! A long-lost relative dies and leaves us millions! Hahaha!
Beautiful, beautiful money! Just in time to pay for college! And buy me a
fancy new car! With a snazzy paint job! And a great stereo system and
shiny mag wheels! Whee!”
Alas, I know that “one lousy chance in a million billion jillion” is
pretty slim. But it’s all some of us have.
And, happily, it COULD happen! One never knows!
On the other hand, I know a few things that WILL happen for sure, like how
We’re Freaking Doomed (WFD) from the insane multiplication of the money
supply to grow a national debt that is more than the entire GDP, a total
debt that is more than 400% of GDP, a monstrous derivative colossus that
dwarfs even THAT, a large, cancerous, devouring government with their
legions of dependents, a monstrous overload of crappy consumer goods made
of rotting plastic, and ludicrously overpriced, mal-invested assets
comprising the overwhelming bulk of everybody’s net worth.
Scary stuff. You should know this.
In fact, science has proven (according to the geniuses at the Mogambo
Institute Of Important Stuff (MIOIS)) that everybody actually DOES know
this because it is encoded in everyone’s DNA.
It’s not too surprising, since DNA is now shown to control behavior, and
thus acting stupidly is, from a Darwinian perspective, an evolutionary
dead end. That is why it turns out that newborn babies cry! They are upset
because they instantly and instinctively understand that ruinous inflation
in prices is guaranteed after the insane inflation that they are seeing,
for the first time, in the money supply! Weird, huh?
Anyway, sure enough, the article opens cheerily enough “The BLS put out
their monthly CPI lie last week. They issued the proclamation that
inflation is dead. Did you know your costs are 0.1% lower than they were
one year ago? They then used these
deflation numbers to proclaim your real wages soared last month.”
Then he went to the Bureau of Labor Statistics website
(bls.gov/cpi/cpid1501.pdf) to find the actual numbers.
They scared the hell out of me!
And here they are: Beef and veal +22.5%, Ground beef +21.0%,
Steaks +14.9%, Pork +7.4%, Ham +11.5%, Whole Chicken
+6.1%, Fresh Fish +3.5%, Eggs +8.2%, Cheese +7.8%, Fresh
Vegetables +4.3%, Lettuce +12.2%, Tomatoes +9.6%, Coffee
+6.7%, Butter +19.5%, Restaurant food +3.1%, Housing
+2.9%, Hotels +7.6%, Owners Equivalent Rent +2.6%, Homeowners
Insurance +5.6%, Electricity +2.5%, Water & Sewer +5.5%,
Home Repairs +4.4%, Footwear +2.6%, Car Insurance +5.0%,
Parking Fees & Tolls +2.3%, Medicinal Drugs +4.2%,
Prescription Drugs +5.6%, Hospital Services +4.3%,
Veterinarian Services +3.2%, Sporting Events +3.6%, Newspapers
& Magazines +4.6%, College Tuition +3.6%, Educational Books &
Supplies +6.5%, Grade School & High School Tuition +4.0%,
Childcare & Nursery School +3.0%, Postage +3.6%, Cigarettes
+2.5%, Financial Services +5.7%, and, to top it off, Tax Return Prep
+9.3%.
He did note that gasoline was substantially down, which is a good thing,
although “Furniture, appliances, computers and TVs are falling in price.”
As was apparel. Big deal all.
The funny (as in the aforementioned We’re Freaking Doomed (WFD)) part was
“And now for the BIGGEST LIE in the entire report,” which is that “health
insurance only makes up 0.753% of your entire annual budget and it has
FALLEN by 0.5% in the last year.”
So a guy making $50,000 a year pays only $376.50 a YEAR for health
insurance? Hahaha! Government statistics! Hahaha!
So, now that we have had a good laugh at how inflation in prices is
destroying us, how the government is lying to us about how badly we are
being destroyed, and how the Federal Reserve continues destroying us by
creating so much excess cash and credit, it is time to, sadly, move on.
I would be remiss in my duties as The Fabulous, Fabulous Mogambo (TFFM) if
I did not, in closing, use all of the foregoing monetary horror story as a
Very Good Reason (VGR) reason for you to buy gold and silver bullion right
away.
And if the terrifying monetary insanity is, somehow, not enough to give
you the screaming heebie-jeebies, then perhaps 2,500 years of history and
the terrifying tales of fiat currencies will prove instructive, in that
they all proved to be catastrophic disasters.
Flames everywhere. Riots. Starvation and suffering. Desperate people
running willy-nilly, shouting “Woe betides us! It is a grave misfortune
that the Austrian school of economics won’t be invented for hundreds or
thousands of years! If we had only known of our folly, we would not have
permitted the suicidal expansion of a fiat currency that has destroyed us!
Mogambo would save us by shaming us into buying gold and silver,
but he won’t be born for hundreds or thousands of years, either! Woe! Woe
and double woe!”
So, judging by this little bit of history lesson, you are indeed living at
a fortuitous nexus! Here and
now, at this space and time, the Austrian school of economics has been
invented (you can easily find it at Mises.org, and it’s free!), and The
Fabulous, Fabulous Mogambo (TFFM) is also alive and well, offering
congratulations to those who buy gold and silver (“Well done, Junior
Mogambo Ranger (JMR)!”), and scorn on those who don’t (“You moron!”).
Some will, by taking advantage of the knowledge and encouragement, buy
gold and silver, and they will one day, probably soon, be considered
geniuses who saved their families, and made fortunes, who will be legends,
immortals whose ancestors, for generations to come, will lovingly worship
their memory and sing their praises.
Most will not, however, and will suffer mightily, I shall cruelly laugh at
them.
Which to choose?