the mogambo guru

I recently had a revelation of sorts, distilled from my merely noticing what happens when passing by my neighbors, out on their stupid lawns, playing with their stupid kids, or washing their stupid cars, or just doing something stupid.

I am sure that you wonder how I can tell that they are stupid. Easy. I've been telling them to buy gold, silver and oil, for so long, and to such little effect, even in the face of such enormous gains accruing to those who followed such Fabulous Mogambo Advice (FMA), that one can only conclude that they are stupid or deaf. 

And I know they are not deaf because when I helpfully say to them "Hey, you drooling moron! Buy gold, silver and oil stocks or kiss your stupid, ugly butt goodbye!", where by "ugly" I mean "big", they always reply, all huffy, "Who are you calling a drooling moron, you moron?", thus proving that they can, indeed, hear.

Anyway, being the friendly, peach-of-a-helpful guy that I am, as I pass by them in my snazzy Mogambo-Mobile, I always honk the horn several times to get their attention, and then we exchange the usual pleasantries, usually along the lines of them saying to me "Shut up that stupid horn, you dumb Mogambo bastard!", with me responding by cheerfully reminding them of their many, many errors, delivered along the lines of "I told you that your economic hell was going to happen, you lowlife cretin of a moron, because the Federal Reserve is creating so much excess money and credit!"

If I don't think that they are near enough to actually hit my car with anything, I can go slow enough to manage to throw in a little free history lesson for them, too, as in "And if you had bought gold, silver and oil when I told you to, then maybe you would be wealthy by this time, instead of just being older, uglier, fatter and (as far as I can tell) even stupider now than you were when you were too damned stupid to buy gold, silver and oil like I told you to, way back when, which was, QED, pretty damned stupid of you, and a complete waste of my Precious Mogambo Time (PMT)!" 

They, of course, voice their displeasure at my reminding them of what imbeciles they are, mostly by engaging in making crude gestures, shouting rude profanities and flinging pet excrement at me, all of which are low-class behaviors that you would naturally expect from morons that are so, as previously postulated, stupid. 

To be accurate, and just to set the record straight, my idiot neighbors only act hateful and cruel because they foolishly think that I am NOT carrying some kind of weapon that might "accidentally" fire, usually in the direction of somebody being hateful and/or cruel to me, and who is, obviously, asking to have their middle finger shot clean off.

But as to stupidity, if you want a frustrating afternoon, trying explaining the simple idea that the continual creation of a larger money supply leads to price inflation, even though Milton Friedman famously said -- long enough ago that they should have heard of it by now! -- that "Price inflation is always and everywhere a monetary phenomenon."

So, I honk my horn at these boneheads, and I disdainfully huff in my haughty condescension that they deserve what they get for ignoring Friedman, and ignoring the enormous increases in the money supply created by the evil Federal Reserve, a lot of which was used to buy the $5 trillion of new Treasury debt issued by the evil Obama spendthrift administration in the last 3 years!.

So, I mean, you would think that some, or at least one, of these proletariat halfwit neighbors of mine would have been impressed with Friedman's profound economic truism, especially considering the fact that nobody has disproved it yet!

Nor has anyone even found any time in history where such increases in the money supply did NOT produce inflation in prices, which of course hurts the poor by making things cost more.

As to the economy today, in case you are wondering on the edge of your seat what will happen, pull your chair up here closer to me so that you can look deep, deep into my eyes, and thus be impressed by my Awesome Mogambo Sincerity (AMS). 

Perhaps then you will understand the terrible enormity of what is happening because the evil Federal Reserve created, and is still creating, so much excess money and credit for the last 25 years, and maybe that explains why the soundtrack to this Fabulous Mogambo Essay (FME) sounds so spooky and foreboding, a sonic mishmash with crashing, clashing horns making your skin crawl at the horrible dissonance, but not quite able to disguise the sound of ravenous wolves and government-employees unions approaching, one to eat you, and the other to eat your wallet.

If you don't hear the soundtrack on your computers, it is bad news for those of us who are both paranoid and have no idea how computers or soundtracks work. I figure that it means that the government is censoring me, crushing me under its hob-nailed boot heel, to keep me from giving you the vital, VITAL advice to buy gold, silver and oil as protection (and enormous wealth-generation!) against the raging price inflation that will rain down upon us because of the foul Federal Reserve.

In fact, the vital, VITAL information to buy gold, silver and oil, distilled, as it is, from thousands of years of history, is so important (as indicated by the repeated use of the word "vital" over and over, which I use to make myself feel important) that I expect secret government agents to take action against the spread of this Immortal Mogambo Message (IMM) at any secon.

Copyright © 2010 MogamboGuru.com. All rights reserved.

Serial Bubble Blowers

05/05/12 Baltimore, Maryland – The shrinking dollar is a modern problem. The U.S. dollar has been shrinking since the inception of the Federal Reserve — the very crew assigned the task of maintaining its value. Of late, the decline is accelerating at an alarming rate.

For many Americans, the suggestion that the dollar is losing value is unthinkable — even unpatriotic. The problem is not simply a lack of understanding about the nature of wealth and investment used to sustain it.

Our policy makers and economists make no distinction between wealth created through savings and investment in the real economy versus “wealth” created in the markets through asset bubbles brought about by credit policies.

When I tell people this, I feel like I’m addressing a meeting of folks who want to lose weight at the local burger joint. We as individuals — and as a nation — are addicted to cheap, easy credit. What the government gives, we’ll take. We spend at a high level, and we want to accumulate wealth on the same fast track.

Forget hard work, we’d rather our house go up in value like magic! Traditionally, economists recognized that it took time to build an estate. People and countries could build wealth slowly. Those days are far, far behind us. Now we are at the mercy of what I call serial bubble blowers.

All the U.S. economy’s so-called improvements stem from one main reason: all economic growth during the “recovery” since 2001 can be traced to a seemingly endless array of asset and borrowing bubbles.

First, we saw the stock market bubble, then the bond bubble, then the housing bubble, then the mortgage refinance bubble, then the commodities bubble. Now another bond bubble approaches.

In between, we haven’t seen a single sign of stable, sustained growth. And that makes sense; consumer spending has been surging in excess of disposable income for years. That’s not real growth.

Right now, Washington thinks that another round of stimulus will solve the problem. That’s like saying that overeating will eventually lead to serious dieting. Consumer spending isn’t juicing the economy.

Meanwhile, since the government is broke, all the borrowing they do to fund stimulus, tax cuts, and anything else to save the economy puts us at the mercy of foreign investors. If and when they decide to slash their investments in U.S. dollars or Treasury securities, we’ll have a crash landing worse than anything we’ve seen yet.

It’ll be far worse than Lehman Brothers’ collapse, far worse than 2008’s aftermath.

We depend on foreign investors for everything. Be they private, institutional, or governmental, we need them. If the dollar’s fall frightens foreign owners, they will sell from this immense stock of dollar assets.

But how big are these foreign holdings? You rarely hear about this on financial news channels, so you probably don’t think it’s a big deal. In fact, it’s a big fat deal.

We’re sitting on $15.4 trillion in debt. How is it going to get paid? And by whom?

Back before 1970, foreigners held a 5 percent slice of U.S. public debt. Today foreigners hold nearly half the pie. And the government owes a bunch of it to itself — $4.6 trillion — including what it’s borrowed from the Social Security trust fund.

Is Washington at all alarmed? While the end of 2011 did culminate in near-monthly government shutdown threats, we expect the debt ceiling to go on being raised as it was under every presidency since, well, 1917, when we had a World War to finance.

At last count, it’s been raised 74 times. And lest you believe the crisis came to a head in the Obama administration, we’d like to point out that he’s only raised it three times so far. Famed fiscal conservative Ronald Reagan raised it a whopping 18 times. So you see borrowing to spend is everyone’s favorite game. 

Darn all the consequences.

Key near-term number to watch in Gold is $1646

Key near-term number to watch in Silver is $30.50

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