One Economist To Another
July 27, 2015
By:
The Mogambo Guru
I have always had my philosophic differences with The Economist magazine,
starting with how they refuse (”Bah!”) to acknowledge that I, The Most
Magnificent Mogambo (TMMM), am not just another run-of-the-mill conceited
economic blowhard who is, alas, nowhere near as smart as he thinks he is.
To the contrary, I am a genuine hero, using contempt, scorn and vague
threats as weapons to bravely dissuade Earthlings from committing the
economic follies of expanding the money supply via fiat currencies and
fractional-reserve banking.
Of course, it is possible that the editors of The Economist are ignoring
me because people following my constant advice to buy gold and silver have
been getting hammered lately, and I look like an idiot and a failure,
which seems to delight everyone.
And when I laugh in their smug faces (“Hahaha!”) and hurl insults at them
(“Not buying gold and silver means you are a moron!”) they get all huffy
and pugnacious (“Who you calling a moron, you Irritating Mogambo Pipsqueak
(IMP)?”), like I had said something wrong to these, as previously alluded
to, morons.
In my defense, I remind them that they are ignoring the stark, inescapable
fact that in the last 2,500 years, thousands of governments, one dirtbag
government after another, some of them using fiat currencies, borrowed
themselves into bankruptcy.
Continuing with this sad tale, all of them went down, down, down the Big
Economic Crapper (BEC), despite their frantically flailing about, enacting
ruinous laws, regulations, tariffs and taxes, until the people got really,
really, REALLY tired of the inflation in consumer prices, and the
deflation of asset prices, and the inflation in the pain of governments
eating them alive.
Then, one historic, day (look it up!), they finally rose up in noisy
revolt, shouting things like “Sic semper tyrannous!” and “We should have
listened to The Mighty Mogambo (TMM)! Well, we would have listened, had he
been born yet, but whose immortal message of the Austrian school of
economics shines so brightly in the future that we thought it would have
traveled backwards in time, illuminating us ignorant savages here in the
past, and sparing us the horrors of the aforementioned Big Economic
Crapper (BEC)!”
The moral of the story? At the end of all of these episodes of monetary
sins, gold and silver reigned supreme, immediately stabilizing the money
supply. Reigned supreme! Which is not the same as a delicious pizza
supreme, heaped with yummy toppings, although both of them are exactly
what you want.
But who knew the government and the Fed were going to shockingly
manipulate the prices of things, especially gold and silver, and
unbelievably monetizing debt and assets? Who could have anticipated
extortion by the IRS and the Justice Department to punish those who didn’t
play ball? Who? Who?
And so when people come up to me and whine about how much money they have
lost as gold and silver have declined in price, thanks to all this
government corruption, I say “Me, too, so shut the hell up! I have
problems of my own because a corrupt, desperate government, a foul
desperate Keynesian central bank and slimy market insiders are
frantically, forcefully controlling every market.”
And they are particularly troublesome, in their controlling, fascist way,
in the gold and silver markets, where their expected rapidly rising prices
would be a tipoff of what we professional economists term Something Is
Very Wrong Here (SIVWH).
To calmingly inject a little sense of proportion, you will be happy to
know that it could be worse, and could be Something Is Very, VERY Wrong
Here (SIVVWH), such as you coming home and finding all your clothes and
stuff are thrown out onto the front lawn.
And she’s shouting “Your boss called and says you’re fired!” while she is
shooting at you with a .30-.30 deer rifle. Ping! Ping!
So relax. It’s not that bad. Yet.
And so the government, and the Fed, and banks, and the financial services
industry all desperately want to make sure that nothing bad happens to the
overpriced stock market, the overpriced bond market, the overpriced
housing market, the resultant gigantic debts and the incomprehensibly,
overwhelmingly huge derivatives market.
Yet, I, The Most Magnificent Mogambo (TMMM), am shunned by The Economist
magazine! I, whose every idle muttering is a real gem about Austrian
economics, and who waxes especially eloquent in my dour disdain and
disgust for fiat currencies (because the
money supply always gets over-expanded), and for fractional-reserve
banking (because it is always abused by the corrupt banking industry).
Doubtful? You, like most people, probably think “The reason The Economist
ignores you is because you are stupid, just as your stupid advice to buy
gold and silver has proved lately.
And The Economist is a classy magazine, whereas you are a lazy,
lowbrow, lay-about loser, just like your wife says.”
Lowbrow? In rebuttal, I ask “Could a lowbrow upstage Shakespeare with my
now-classic soliloquy that I just made up?”, which thunders forth “Hark!
What forfends, Horatio? Does thy heart dwell as the sickly sorrow sages,
befitting the bilious humours of a man such as yourself, of letters and
erudition, schooled well enough in middling matters of money to now gag up
blood, clotting dry and foul in thy parched mouth, at the evilness of the
satanic Federal Reserve?
Verily are thee vexed by the Federal Reserve, which cravenly
countenances grievous over-issue of a foul and fatal fiat currency,
outrageous fractional reserve banking and actual monetization of
government and private debt, so that (rising to a thunderous crescendo)
Thou Art Freaking Doomed (TAFD)?”
And as for profundity? Check this out: As befitting my colossal conceit in
calling myself The Great Mogambo (TGM), I am proud to say it don’t get no
mo’ profound than “The foul Federal Reserve is a detestable bunch of
blundering boneheads, piggishly wallowing in the completely discredited
Keynesian econometric nonsense, used to justify ‘replacing falling
consumer spending with increased government spending.’”
This matters crucially matters because the foul Federal Reserve is always
trying to constantly increase the money supply, which constantly increases
debt, and constantly increases consumer prices! That’s the problem in a
nutshell! Inflation!
It increases consumer prices, which gives the overwhelming majority of
people a chronic, constant fall in their standards of living, since they
can constantly only buy less and less with each dollar since things cost
more.
Okay, perhaps not so profound. Sorry. But it is, to my credit, nonetheless
true that this permanent inflation in the money supply, and in the
resultant increase in prices, is a stinking systematic and systemic
stupidity, which is highly alliterative, and thus self-proving to be true.
In short, it’s a repellent inbreeding of false economic signals with
corrupt stupidity, such that it can only, by the mathematical necessities
of an exponential function that must one day zoom asymptotic, end in the
grotesqueries of catastrophe and war, as far as the eye can see.
But in the meantime, you find that inflation in prices is constantly
squeezing you, a little bit more and more every month. And when you ask
your boss for a raise, she whines about how the company is suffering
because inputs cost more, and margins are down because customers are
balking at paying higher prices when faced with higher input prices of
their own.
And how the board of directors is getting a lot of heat from the
shareholders to increase sagging profits and dividends.
And she desperately needs to cut expenses, like saving money by
getting rid of some deadwood employees, and you know you are the biggest
deadwood loser in the whole company since all the ones worse than you have
been fired already. Yikes!
And to make inflation worse, year after year the kids are constantly
whining louder and louder about how I don’t give them more money, since
things always cost more, and how I am a stupid old man who doesn’t
understand how price inflation works, and about how they genuinely NEED
more money, and how they are perfectly justified in hating me for being
such a terrible, stingy father, and throwing food at me from across the
table when they think I can’t see them and blah, blah, blah.
And, sadly, it will continue to get worse and worse, as
TheBurningPlatform.com has the latest monthly report from the Bureau of
Labor Statistics (BLS) about the rate of inflation in prices, as measured
by the poor, tortured CPI.
Even with all their hedonic adjustments, redefinitions, ignoring facts,
segregation of data and outright lies, they admitted to an annualized rate
of 3.6% inflation! Yikes!
3.6% inflation is – and you may quote me! – terrible news!
So, already having a HUGE personal grudge against inflation, you can
understand how I am perfectly peeved that The Economist, over the years,
has spent a goodly amount of its time and pages of print screeching about
how the world needs more and more quantitative easing, to increase debt,
to increase the money supply, and thus to increase price inflation! I
bellowed in outrage the whole time!
Quantitative easing! Always more and more quantitative easing, which is a
euphemism for “driving the cost of debt down, making debt easy to acquire,
so as to increase the money supply which will, according to ridiculous
Keynesian economists, somehow make the problems of unbelievable loads of
bankrupting debt, the problems of assets selling at far more than their
real value, and the problems of cancerous government spending, somehow -
and follow me closely here - magically, wonderfully, disappear!”
Poof! And all things financial will, magically delicious, be perfectly
fab-u-lous!
Now (cue ominous music) they have gone off the deep end. They are actually
presenting the work of two World Bank jackasses who think that poor
countries should (wait for it…wait for it…wait for it…) increase taxes!
I know what you are thinking. You are thinking “What in the hell…?”
They say taxes should be raised because it “allows developing countries to
invest in education, health and infrastructure, and, hence, in promoting
growth”! Hence! Hahahah!
Hence!
They actually believe that “an additional dollar of public investment
increases (private investment) by two dollars”! Hahaha! Just like that!
Money comes rolling in! This must be the “hence”!
It’s freely admitted, right off the bat, that poor countries already
collect taxes at a whopping 13% of GDP. This is compared to the more
“normal” taxation at 34% of GDP in the rich world, which is, believe it or
not, deemed low. More than a
third of economic activity going to taxes is low? Wow!
And the reason that taxes are not higher in poor countries? It’s because
“lots of their citizens are penniless,” and yet they want to raise taxes
anyway! Wow! Levying taxes on the penniless! How low can a Keynesian
economist stoop, anyway?
Oddly enough, it doesn’t mention how much money the penniless would have
if 13% of the national income was not taxed away!
“So,” you are wearily asking, “does this relentless, and entirely boring,
tirade have a point?”
You bet it does! Regardless of what sneering contemporaries, disappointed
clients, rude neighbors, hateful children and The Economist magazine say,
take my advice and the advice of 2,500 years of history: Invest your money
in gold and silver.
And keep buying it because the legions of ludicrous Keynesians can, and
will, do many, many more stupid mistakes like increasing the money supply
and raising taxes on the poor.