October 15, 2013
By: The Mogambo Guru
I emphasize, for the record, that I was NOT at some common, sleazy bar, some dingy, smoky rat hole full of stinking drunks stumbling around saying hello to one another (“Hi, Bill!” “Go to hell, Mogambo!”).
It was, instead, a rather nice place, somewhat of a classy oasis where men of class and breeding meet to have a casual drink with friends, perhaps after work, in an atmosphere of comfortable camaraderie to stuff one-dollar bills into the G-strings of hoochie-coochie dancers, especially that leggy blonde babe over there by the bar, whose eyes say “Oooh, I want you, Mogambo! Take me in your manly arms and whip me into a frenzy!”, but whose lips said “Eww! Stay away from me, you creepy old man! And keep your dollar, too!”
And I take pains to emphasize that I was NOT there to lewdly ogle beautiful, lithe ladies wearing the minimum the law allows, while they sensuously oozed up and down a brass pole to the accompaniment of loud, driving beats of primitive, insistent, hypnotic rhythms, making men forget all about everything except how to get more dollar bills.
And that’s why I was there! To forget! To forget, for one blissful moment, about the lawsuit against the rigging of the silver market being thrown out of court because the government, through the creation of the Exchange Stabilization Fund, now has the legal power to rig all markets in secret.
So, there I was, to drink to forget about how Chris Powell of GATA was chillingly correct when he said “There are no markets anymore. Only interventions.”
And also to forget an also chilling breitbart.com report that "Total household debt, according to the Fed's flow of funds report, is at $13 trillion, nearly back to its pre-crisis level in 2007 and a shade below government debt of $15 trillion.”
Debt back to pre-crisis levels! Insane! Michael Pento, of Pento Portfolio Strategies, says of this, with what I imagine is some dry and wry voice dripping sarcasm and scorn, "We have learned nothing.”
Judging by the lengths I was willing to go to try and forget, you have probably guessed that this is very chilling stuff in itself, but when combined with a projection of a federal deficit of yet another $1.2 trillion or so next year, it all turns to horror because it means that the evil Federal Reserve will create most or all of that $1.2 trillion in new currency and credit, increasing the money supply more and more and more until I am screaming piteously “We’re freaking doomed to die of inflation and economic collapse!”
And with the horrid Janet Yellen, even more satanic than the nightmare that was arch-demon Alan Greenspan, and then Ben Bernanke, being apparently the next chairman of the Federal Reserve, we are Truly, Truly Screwed (TTS).
Alan Greenspan, you might recall, is The Only Reason (TOR) that we are in the trouble we are in, as it was he who outrageously created all the credit and currency that killed us!
Remember: It is one thing for Congress to vote to spend lavish sums of cash, but unless the Federal Reserve creates the currency and credit to absorb all this new government borrowing, the only other place the government can get spending cash is raising taxes! How many re-elections do you think Congresspersons could win, and how many Fed chairmen would be-re-appointed?
And now, with the terrifying Janet Yellen set to take over, it means you have Two Ways To Go (TWTG), investment-wise.
One option, which I will call “Option One”, is that you can go long, and ride the inevitable sick, twisted extensions of the booms in the stock and bond markets as all these insane amounts of cash (just the federal deficit for this year – alone! -- is almost $4,000 for every man, woman and child in the Whole Freaking Country (WFC)!), after cascading through the economy -- bing, boom, bang!-- finally ends up, after taxes and expenses, as pure profit for someone, who now has to decide what to do with it, and who quickly discovers that only the stock and bond markets can absorb that preposterously much cash, which will be seen as a good investment at the time because stocks and bonds will have been going up, benefitting from previous massive and insane deficit-spending, as all that previous insane amounts of cash, after cascading through the economy -- bing, boom, bang!-- finally ended up, after taxes and expenses, as pure profit for someone who had to decide that do with it, and who quickly discovered that … Well, you get the picture.
Ergo, the stock and the bond markets must go up just because there is nowhere else to invest that much cash.
And this is exactly the point of the Treasury exercising its powers under the Exchange Stabilization Fund to cheat and lie: To keep the stock and bond markets up, which must be done because everyone has every one of their dollars, in one way or another, in those markets. Even your stinking checking account sweeps all your cash out of the bank every night, into the Treasury market or banking system debt!
And let’s remember, too, that the government is not nearly out of options yet. For example, giving every worker (about 100 million of us) a tax rebate of $5,000 each would “only” cost the government $500 billion, which is less than HALF of the projected budget deficit as it is!
And how about the marvelous, magical market-boosting potential of a 100% tax credit for, say, buying a motor scooter with that $5,000 refund, Congressionally justified as “saving the environment” by encouraging “green transportation,” with the wonderful result that you get all your money back, and end up with a free motor scooter to boot!
The second option, which I label as The Second Option That Is Better Than The First Option (TSOTIBTTFO) is to put your cash into gold and silver bullion, which are guaranteed by 2,500 years of history to be winning investments, especially when the aforementioned stocks and bonds have turned to worthless crap because the currency in which they were priced was a turned into piece of worthless fiat currency crap, that turned into, figuratively when measured in buying power, crap, by the monstrous over-issuance of fiat money to sustain a bizarre, nightmarish economy that is not built on real, sustainable demand, but on government spending! Government spending! An economy based on government spending!
It sounds weird when you say it. It looks weird when you read it. And it is proven weird when you think about it for more than, oh, say, about a jillionth of a second.
But if Nassim Taleb is right about “black swan” events, then there is nothing to fret about anyway, because, by some completely random, unforeseen and catastrophic event, we will all probably be killed long before that, maybe by an asteroid slamming into the Earth, or a mega-volcanic eruption, or something zombie-related, maybe with laser beams shooting from their eyes (zzzt!)! And flames shooting out of their mouths!
Or something from outer space!
There are, of course, many, many ways for all this monetary and fiscal madness to unfold, but for almost all of them, history has proved that owning gold and silver is the one Sure-Fire Road To Investing Success (SFRTIS), which, because I am too lazy to come up with anything better, is also, verbatim, the Mogambo Sure-Fire Road To Investing Success (MSFRTIS).
And when people ask “Tell me, good sir, what is the Mogambo Sure-Fire Road To Investing Success (MSFRTIS)?”, I proudly say “It’s $39.95! Plus shipping and handling! But I’ll tell you what: If you are so stupid that you can’t understand the concept of merely buying gold and silver bullion, especially when all the details were given to you, free, in the previous paragraph, and yet you still need your own, personal copy of some bogus, fictitious Mogambo Sure-Fire Road To Investing Success (MSFRTIS) book, that I just made up, to reassure you, then send me $40, in cash, addressed to “Occupant”, and we’ll call it even.
And, one day many moons from now, and certainly within a few years, when you realize that you have probably been ripped off, you will think “Hey! If I had bought gold and silver bullion, instead of waiting around for the postal carrier to bring me a book that never existed in the first place, that supposedly said the exact same thing, I would be very well off! No wonder people who bought gold and silver bullion, and oil stocks, always said ‘Whee!’ when they did!”