Plus Plus Plus
April 12, 2016
By:
The Mogambo Guru
Lately, I am getting, you know, really scared.
Oh, not the ordinary kind of day-in, day-out kind of scared,
constantly dreading both the appearance of childish-yet-pointless
alliteration and the coming calamitous collapse of a catastrophic
cataclysm caused, pausing for breath, by the completely insane
overproduction of cash and credit by the (you guessed it!) evil Federal
Reserve, and then winding up, as we see, with both.
At least back in those olden, golden days, a modicum of blessed comfort
was once provided by having gold, silver, and sheer firepower at hand,
backed up by 911 on the phone.
Except this is a new!improved!vitamin-enriched! kind of scared. A lot more
than, shall we say, was usual over the last 35 years of watching, in
mounting horror and disbelief, the growing monetary excesses of the evil
Federal Reserve, knowing that Never Before In Freaking History (MBIFH)
have such insane creations of cash, credit and the attendant backbreaking
debt, and this is the salient point, NOT ended very, very badly! Very,
very badly, indeed!!
It’s obviously the stuff of nightmares and double exclamation points. At
least for me, anyway, usually replete with vampires sucking my blood,
howling banshees noisily chewing my legs off, kids borrowing my car and
returning it all banged up and out of gas, etc.
All this escalation of tensions was, I assume, caused by considering that
37% of households have over $15,000 in credit card debt, which, making a
minimum payment of 2% of the outstanding balance, means a cool $300 a
month of after-tax income disappears out of their pockets, every month for
years and years to come. Poof!
Plus they mostly all pay a mortgage or rent every month, plus a car
payment and insurance, plus food and energy bills, plus a phone bill, plus
connectivity expenses, plus, plus, plus, plus, plus, plus, plus.
That last repetitive-yet-stupid use of “plus, plus, plus, plus, plus” is
obviously a clever literary device we writers use to make you quizzically
scratch your chin and think to yourself “Hmmm! Either this is just another
example of gratuitous repetitive Mogambo gibberish that is so indicative
of some kind of bizarre mental disorder, just like his wife and kids
always said, or maybe - just maybe! - he really IS a great big giant
genius, just like HE always said!”
And so now comes the bad part, which is inflation in prices for all of
this plus, plus, plus, plus, plus, plus stuff. This is the sad, sorry
state of being where the majority of people in the USA are living on
nominal incomes that haven’t risen for years (especially those on Social
Security), and whose real (inflation-adjusted) incomes have done even
worse, even when calculated using laughable government statistics of price
inflation, which are seriously understated for obvious political reasons.
This means, proved by direct observation just looking around at price
tags, for crying out loud, that Things Cost More (TCM), and that actual,
in-your-face price inflation for the plus, plus, plus, plus, plus things
that you buy is a lot higher than is popularly advertised!
And, thusly, the dismal fact: Mostly nobody has been receiving more
dollars as more income, but every dollar they DO have has been losing
buying power, experienced as higher prices. Double whammy time! Big time!
The whole time!!
Because you are not only good-looking but also the charmingly curious
sort, I can see that you are wondering “What is the significance of two
exclamation points ending the last sentence, and what is the point of all
this boring less-income/higher-prices crap?”
Let me answer your incisive question by asking another question. Namely,
“How come so few people buy gold and silver, even though The Wonderful
Mogambo (TWM) so graciously, generously and gently motivates them to do so
by deliberately sneering at them in cold contempt and rudely insulting
their intelligence when they don’t?”
So, why is nobody buying gold and silver as protection and profit from the
obvious on-rushing economic calamity caused by the evil Federal Reserve
creating such oceans of debt for so, so, so many years? The answer is:
Nobody has any spare cash!
Prices have risen until they now consume everything! Plus, plus, plus,
plus and all!
Like most people everywhere, every freaking dime is used by my family to
pay for their frivolities, like (as a recent example) going to the
dentist, which, like everything else these days, seems hideously
expensive, and now I am supposed to just cough up The Big Bucks (TBB),
when the whole thing could have been easily prevented if the stupid kid
had just brushed his teeth more. He screws up, but I gotta pay!
So, my Mighty Mogambo Brain (MMB) ingeniously devised a clever plan of
self-sufficiency to save a pile of the aforementioned TBB, with which I
could use to buy gold and silver: I cheerfully and generously volunteered
to take care of his aching tooth, a project easily effected with a pair of
ordinary pliers from the garage, and which will - at no additional cost! -
provide him with a handy mental reminder in the futureabout the vital
importance of preventive dental hygiene!
I admit that putting him in a headlock and dragging him kicking and
screaming towards the garage was a little over-the-top, but you can
understand my rage at the injustice here, can’t you?
In the end, though, no dice.
So now, to buy an ounce of gold, on top of this, I have to come up with
more than $1,200? Are you freaking kidding me? Talk to the dentist! That’s
where my money is!
Sadly, this is just one, lonely, measly example of how all this new debt
literally created the cash and credit/debt to do many, many things. And,
because everything is ultimately connected to everything, this means that
the new debt and spending of all this new money did inflationary new
things to everything, one thing or another, such as the government
borrowing it to spend on one foolish thing or another, or entrepreneurs
capitalizing on one foolish idiocy legislated by Congress or another, all
designed to stimulate some industry or other.
And mostly by offering tremendous tax-related incentives of one kind or
another, or outright transfer payments of one kind or another, to one
group or another, at one time or another, inexorably and eventually mostly
going to everybody All The Freaking Time (ATFT)!
Inflation everywhere! No
wonder I don’t have any freaking money!
I know you feel my pain. And this one heartbreaking tale of the woes of
inflation in the money supply leading to inflation in prices should be
enough to get you to ask, with a trembling voice and maybe a couple of
bucks in your hand, “What, what, what is going to happen, Exalted Mogambo
Guru (EMG), whose very name is like music in our ears?”
Having dispensed with the tawdry preliminaries of worshipping at my
Mogambo Aromatic Feet (MAF), I would answer “What is going to happen,
inquisitive one, is inflation in consumer prices, manifested by you
getting screwed in one of three main ways. Or in two of three main ways.
But probably in all three main ways at once.
“Firstly, the direct approach,
which is to sell the same-sized portions but charge a higher price.
“Secondly, sell smaller portions but charge the same price.
“Lastly, or, if you prefer, ‘thirdly’, sell an inferior, watered-down
product made with crappy, low-grade, cheaper ingredients, but with the
same size and price.”
And with prices going up, incomes stagnating, then the economy collapses,
bit by bit.
And if you DON’T think that the ruination of price inflation will happen
to you and your stagnant income, then hahahaha!
I laugh with customary scorn and derision!
While the damnable Federal Reserve and the damnable Congress can levitate
some markets, suppress other markets, bail out political liabilities and
give more money to more people, they cannot control the resultant
inflation in consumer prices caused by all this new cash and credit,
which, because there is not more money pay all the higher prices, means
that aggregate consumption must fall, and then everything falls down.
By this time, I can hear you pleading “Stop! Stop! I cannot bear being
scorned so cruelly, nor my woeful lack of comprehension of even the
rudimentary basics of economics so mercilessly mocked! What, what, what
must I do?”
Do? Simplicity itself! Do what everybody else in history who succeeded in
weathering such economic storms ended up doing: Convert assets into gold
and silver bullion.
I mean, it’s so obvious from 2,500 years of history! And that one, teensy
bit of glorious historical fact should be interpreted as “Whee! This
investing stuff is easy!”