Ya Gotta Have A Plan
February 2, 2016
By:
The Mogambo Guru
Having a little time on my hands lately, I had generously offered my
Valuable Mogambo Time (VMT) to provide a little free economic education to
neighbors and the media. Alas,
as it turned out, my sweet disposition again mislead me to mistake their
natural stupidity for mere ignorance and sloth.
In making the glorious announcement, I even took the time to happily go
house to house, banging on doors and loudly proclaiming the glad tidings
that “I’m back, you morons! Now, get out here! I want to tell you, right
to your stupid faces, how stupid you are! Hup! Hup! Let’s go!”
Naturally, as I always do, I expected that they would happily fling open
their doors, excitedly begging me to enlighten them as to their various
stupidities, such as electing treacherous monetary and fiscal morons who
allowed, and encouraged, an always-expanding fiat-money supply via the
evil Federal Reserve always creating the wildly excessive dollars and
debt.
And, since we are speaking about it, and because I am so angry about it
that I seize on any opportunity to wail like a wounded banshee, get this:
Now the Federal Reserve is even literally committing the unforgivable,
supreme sin of creating credit with which to buy government debt and
private equity FOR ITSELF, thus increasing the money supply and removing
whole chunks of debt and equity from the markets, so as to make prices of
the remaining debt and equity rise under the onslaught of all the new cash
pouring into the market!
You can probably see the absolute fear in my eyes, and the way I actually
seem to be gagging up blood, that this type of monetary insanity has, in
2,500 years of history, failed Every Freaking Time (EFT) it has been
tried, and with horrendous consequences.
It’s insane, I tells ya, with emphasis cleverly indicated by the
conspicuous use of three exclamation points!!! Which I now follow with
four exclamation points to validate the three exclamation points, upping
the ante, so to speak, using an ill-conceived poker metaphor that goes
absolutely nowhere, just to show you how crazy things are!!!!
The Big Freaking Problem (BFP) is, of course, that We’re Freaking Doomed
(WFD), a dismal fact undoubtedly noticed by Junior Mogambo Rangers (JMRs)
around the world and through the cosmos, whose keen eyes doubtlessly noted
two acronyms of the Bad New Variety (BNV) -- now three! -- in the same
sentence, with significance perhaps akin to a Jedi knight sensing,
ominously, “a disturbance in The Force.”
But one person who DID come out in response to my generous offer of a free
education in economics was the old lady down the street who had actually
followed my good advice to invest in gold, but who has lost money the last
couple of years as a result, because gold, like all other markets these
days, is now a rigged market in the grasp of a dying and desperate
government and their horrible, heinous henchmen, the evil Federal Reserve.
So there I am, standing in the street, trying to explain all this to her,
and how it is not my fault, and how nothing is ever my fault, regardless
of what my vengeful wife (“I’ll get you for this, you bastard!) and kids
(“We’ll be her alibi!”) say.
Anyway, old lady Simpson is hitting me in the head with a broom and
yelling that I “don’t know squat” about gold, investing, economics, or
anything, and that I am the most horrible and hateful man she has ever
known, like I don’t get enough of that at home, thanks.
Worse, the neighbors are all leaning out of their windows, lustily
cheering her on (“Hit him in the groin!”).
But I soon mollified them with by saying “Stop acting like morons and stop
hitting me with that damned broom! Instead, I bring frabjous news, so take
cheer! If you, and you, and
you will accept economic solutions that are Completely Freaking Insane
(CFI), then I am here to save you!
And along those lines, I have devised a truly wondrous CFI plan!
I call it Ultimate Keynesian Insanity Plan (UKIP), whereby all your
economic problems can vanish in an instant!”
To wit: Consumers having inadequate income?
Easy to fix! Do like Finland and Switzerland propose, which is to
pay everybody a guaranteed minimum annual income!
The evil Federal Reserve merely creates the cash and credit, and
bingo! Thousands of dollars of new, gloriously spendable cash for
everyone, every month! Problem solved!
And are you worried about the problems of incipient deflation in the
market prices of stocks, bonds and houses, taking your retirement plan
down with them? Easy, too!
Just allow the Federal Reserve to create more cash and credit so it can
buy up stocks, bonds and houses, literally removing them from the market,
creating a shortage of equities and debt at the same time as trillions of
new dollars pour into the markets looking for a home, every month! How
clever!
Instantly, the stock markets, the bond markets, the housing markets and
the whole consumerism-besotted, gimme-gimme-gimme economy would explode
gloriously up, up, upward! Soaring to wondrously preposterous valuations
under the deluge of all these new dollars! Dow 36,000 here we come! An
economic miracle!
Insane? Yes. CFI-level insane?
Oh, yes!
Oh, I can hear you saying “No, YOU’RE the one who is insane!” and I
cleverly reply “No, YOU’RE insane!”, and then you dully riposte “No,
you’re insane!” whereupon I again brilliantly disagree “No, YOU’RE
insane!”, back and forth until our wives have to come out and make us come
back into the house to “settle down” before the cops come.
So, being rudely distracted as I was, I never got to, firstly, educate
anyone about the proven historical imperative to buy gold and silver at
dangerous times like these.
Look it up! For instance, it’s on practically every page of the classic
book Economica Mogambo, along with plenty of friendly, helpful reminders
about how stupid you are if you do NOT buy gold and silver.
Nor did I get to tell them the “good news” about how easily the government
can, using a fiat currency and total command of the whole banking system,
generate a rising stock market, debt market, housing market and boost
consumer spending -- an economic miracle of Biblical proportions! --
anytime it wants to.
Anytime. It. Wants. To.
Of course, if the government tried such monetary stupidity on such a
scale, prices of everything would go up, including the prices of food,
shelter and energy. Then, for the resultant mobs of hungry, wet and/or
cold people, it would be time for flaming torches and pitchforks, riots in
the streets, starving hordes of angry peasants storming government
buildings, revenge-of-the-sheep kind of thing.
So the lesson is NOT that flooding an economy with fiat currency will
always generate economic activity, nor that it will end in total disaster,
but that you should never underestimate how low a desperate, degenerate
government can sink, especially when there is no way out, and this
Ultimate Keynesian Insanity Plan (UKIP) stuff is the only thing they can
still do.
And WILL do, when the political pressure is high enough (“Do something to
save us, even if it is
Completely Freaking Insane (CFI)!”)
Of course, the real lesson for you is to instantly (if not sooner!)
convert fiat-money wealth into gold and silver, but without attracting any
attention or showing any outward panic. Just act normal. Just an ordinary
day, strolling along, maybe buying a little gold and, you know, picking up
some milk on the way home kind of day.
But people don’t buy gold, and I can see you are getting pretty bored with
it, too.
Oddly enough, this is good news for those who DO listen and heed this
Excellent Mogambo Advice (EMA) to buy gold and silver bullion!
Why? It temporarily keeps their prices down, sort of buckling under
the onslaught of low demand. Hahaha!
Sorry about the bad joke, but to illustrate how low demand for gold (in
dollars or ounces) can go, as a ratio to the monetary base it has never
been lower in history! Ever! Or never! I mean ever!
Wait! Never!
Either way, it’s good news because if everybody listened to Excellent
Mogambo Advice (EMA), the prices of gold and silver would already be
astronomical, and where’s the profit in that? And that’s the point of the
whole investing thing, right?
So remember: The majority of investors being wrong makes it possible for
the minority of investors to be right, over the long term. It’s an
inviolable mathematical imperative.
And as regards gold and silver, the majority is wrong big-time.
Big time. Big, BIG-time!