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- The Fed actually drained a little credit last
week, taking it down $3 billion. Why? I figure they were all
too busy partying too much and drinking too much and pinching
each other on the butt too much. Probably giggling too much
while the do it, too. Now that Ben "Bird Brain"
Bernanke has been chosen to take over the Federal Reserve,
they know that when the guy running the show actually WANTS
inflation, as he manifestly does, then it is time to celebrate
with a big, blow-out toga party, using some petty cash to
get some kegs of beer and some of whatever in the hell they
are smoking that makes them think their stupid little New
Age theories could possibly work in the real world.
But I have not personally gone to the Federal
Reserve to check on them, as I feel kind of crappy here lately,
mostly as a result of getting violently sick whenever I read
about how Alan Greenspan (whom I consider the absolute worst
central banker in American history) is such a hot shot because
of his "deft" handling of an Argentina crisis, or
a Russian crisis, or a Korean crisis, or a Mexican crisis,
or a Philippine crisis, or a Long Term Capital Management
crisis, or a Y2K crisis, or blah blah blah. I can hardly read
one of these stupid articles without gagging and sticking
pins in a voodoo doll of the guy who wrote it, because what
none of these clueless, dimwit "journalists" seem
to understand is that Alan Greenspan CAUSED all the crises
in the first damned place by creating so damned much money
for so long, and all that money eventually percolated into
all these other things, and after awhile it got into trouble
after causing bubble after bubble all over the place. Then
something inevitably bad happened as a result. And then to
try and "help" by correcting his stupid mistake,
he continually jammed MORE money into the economy! Astonishing!
He "fixed" the problem he caused by driving interest
rates down to insanely-low rates, and thus insured that we
would soon suffer from more price inflation that inevitably
follows such reckless monetary inflation!
Now I must pause, as I have just re-read what
I just wrote, and I made myself sick again. Urk. Taking a
deep breath and gobbling a taco for strength, I feel life
returning to the brawny arms of The Mogambo (BAOTM), and ducking
into a nearby telephone booth, I emerge again as the mighty
loudmouth Mogambo (MLM)! Now I have a new, vibrant vigor in
my voice as I say that all of this Alan Greenspan crap is
the opposite- the exact freaking opposite, I tells ya! -of
what a competent central banker is supposed to do! If he really
WAS a good central banker, none of these bad "crisis"
things would have happened in the first damned place! If Alan
Greenspan was a great central banker, his 18 years in office
would have been one of smooth, orderly, non-inflationary growth
with a generally rising standard of living for everybody,
instead of the disgusting piece of crap we call the American
economy and, as the logical extension, the global economy.
In fact, this theme is echoed in the title of a book by a
guy named Karl Hosch which reads "The Whole World Is
Going To Crap!!!" and I note that the three exclamation
points are his.
But what we got from Alan Greenspan and the
buttheads that infest the Federal Reserve, as I ceaselessly
point out over and over and over again mostly because there
is something seriously wrong with me, is the opposite of what
we should have gotten. Even Bill Bonner at the Daily Reckoning
wonders why it is that "Bloomberg reports that wages
are rising more slowly than at any time in the last 24 years"
and if this is true, then he wonders "If Alan Greenspan
has performed such a good job of managing the economy, you
might wonder why people are not earning more money."
And they are obviously NOT earning more money,
and in fact the lack of money is what is prompting Wal-Mart
to suggest that Congress raise the minimum wage. Wal-Mart
CEO Lee Scott said that, "We can see first-hand at Wal-Mart
how many of our customers are struggling to get by. Our customers
simply don't have the money to buy basic necessities between
pay checks."
Perhaps this is what prompted a witty British
guy named Jonathan P. to write that while inflation may be
"tame" to the boneheads in government, for us out
here in the real world we have "Necessinflation"
which he defines as "Everything that is ‘necessary’
to life is increasing in price. Shelter .Energy .Food .Utilities
.Medical." Hahaha! Exactly!
And it will get worse and worse because there
is no upper bound on inflation, since, as William Grigg, of
the New American Magazine, so accurately points out, "We
will never run out of zeroes." Hahahaha! Exactly! The
attitude of the Congress and the despicable Federal Reserve
is "$1 today, $100 tomorrow, $1,000 next week! Who cares?
Hahahaha!"
Alert Reader Jan E. sees us laughing, and writes that he doesn't
see anything funny about this, but instead he sees "More
signs that the economy is not growing. There are more vacant
stores in my town. All of the marginal businesses are closing
up. And I, like some of your other readers, am receiving catalogs
from companies I haven't heard from in years. But the biggest
sign comes from a friend-of-a-friend who works for a company
that provides dancers for bachelor and birthday parties. He
says the summer business was flat. The worst they have seen
in years. Now you know things are bad when guys don't even
have money to pay girls to take their clothes off!" Now,
that IS bad news!
This purported lack of money to spend is apparently
borne out by the report by the Commerce Department that said
spending, adjusted for inflation, fell 0.4 percent last month.
And not only do we not have any money to spend, but we are
not saving any money either, as the savings rate was less
than zero- less than zero! -for the fourth straight month
in a freaking row! And it has been falling for a decade, and
hovering around this low level for years!
And it will get even worse than that, since
mass layoffs hit their highest in four years, and durable
goods fell again, this time falling 2.1% in September.
And why is this happening? Is that what you are asking me,
Binky? I'll tell you why, and without screaming at you, since
I love you so much I can refuse you nothing. This is happening
because prices are rising faster than wages. It's as simple
as that!
And now you want to know, "Why is that?"
Well, before I can really get cranking with one of my patented
Mogambo screaming hissy-fits (MSHF) about inflation and how
it is a very bad thing (VBT) and how the Federal Reserve is
evil incarnate for creating all this inflation, here comes
Sean Corrigan, investment strategist at Sage Capital, who
notes that "Nobel Prize winner Elias Canetti wrote in
his 1960 work, 'Masse und Macht': 'One may say that, apart
from wars and revolutions, there is nothing in our modern
civilizations that compares in importance to [inflation].
The upheavals caused by inflations are so profound that people
prefer to hush them up and conceal them."
I patiently try to explain to Mr. Corrigan that
this is not about the actual horrors of inflation, but the
audience drowns me out by furiously chanting "Skostak!
Shostak!" Responding to the crowd, Frank Shostak explains
in his essay "Is the Fed an Inflation Fighter or Creator?"
at Mises.org, that "Once the money supply increases it
sets in motion a process of impoverishment, which also sets
in motion the dreadful boom-bust cycle."
And so I guess that the reason that Ben "Blowhard"
Bernanke is so desperate to "set in motion" another
boom-bust cycle is that we are now suffering the impoverishment
part of the whole boom-bust cycle that Mr. Shostak alludes
to. When you don’t have enough money to spend anymore,
you are impoverished.
And when people don't spend, economies don't
work, and that means that asset prices will go down, and that
means that the holders of stocks, and the holders of bonds,
and the holders of housing, and all those tens and hundreds
of millions of government parasites will suffer impoverishment,
too, as everything goes down. This is the dreaded "deflation"
that Ben "Bunghole" Bernanke is so desperate to
prevent, and rightfully so, that he is on record as saying
that his policy is to deliberate destroy our money by inflation!
Which makes everything worse! Hahaha! Welcome to the lunacy
known as central banking!
Of course, what they HOPE will happen is that
stocks will increase in price (inflation in stocks) and bonds
will increase in price (inflation in bonds) and houses will
increase in price (inflation in houses) so that we can have
an increase in the price of government (inflation in government).
Unfortunately, asset targeting is almost impossible, and so
all that new money will end up as inflation in lots and lots
of other things, too. In fact, in everything.
Even more importantly, and you can tell that
it is important by the way the pathetic Mogambo weeps piteously
as his mighty Mogambo heart (MMH) breaks at the thought, the
poor (who are already impoverished) will be further impoverished
by the inflation. And if there is one thing that I am sure
of, it is that there are lots more angry, desperate poor people
(with nothing to lose) than there are rich people (trying
to keep from losing what they have), and anybody who has seen
any old movies about the French Revolution or the Russian
revolution or heard the stories of Weimar Germany instantly
recognizes that nothing good EVER comes out of further impoverishing
the poor!
But we were not talking about poverty or how
The Mogambo can't afford to go out for a lousy donut and coffee
anymore, and even when he could afford it the snotty little
cashier refused to wait on me because she says I gave her
"the creeps," but about how that miniscule decrease
in Total Fed Credit was more than made up for by foreign central
banks, who bought up, and stored at the Fed, another staggering
$8 billion in US debt last week! Eight billion! Dollars! Which
was real handy because the Treasury is now issuing new debt
at breakneck speed, up almost $100 billion in two lousy months!
And up fifty billion dollars in the last three weeks alone!
Gary North, of the newsletter Reality Check, sees my eyes
bugging out of my head about this national debt thing, and
condescendingly pats me on the head like I am an idiot (did
I mention he is also a real good judge of character?), and
reassures me that this is chicken feed. "The on-budget
debt is merely the tip of the iceberg. The off-budget debt
-- mainly Medicare -- is now in excess of $65 trillion, according
to Prof. Kent Smetters, who testified before a Congressional
committee in February, 2005. In fiscal 2006, this figure will
rise to $68 trillion."
Getting back to the national debt, Mr. North
says "The debt-o-meter will roll over at least once more
during the present Administration. A recession will get it
to roll over twice. I am betting on twice." So he figures
that not only will we have a recession, which means that The
Mogambo will be fired at the first opportunity in a general
downsizing ("Scram, bozo!"), but that the national
debt will balloon by another $2 trillion in three years? Yow!
Yow! Yow!
- GDP was reported up at 3.8% at an annual rate,
which is actually up from last quarter, when growth was 3.3%
or something. Simultaneously, the Gross Domestic Product deflator,
which is the inflation figure that you use to discount the
rise in nominal GDP (sales in dollars), rose to 3.1%, up from
2.6% in the previous quarter! My God! All the ethically-corrupt
wonks in Washington, working like the demons from Hell that
they are, can't find some way to keep the inflation statistics
any lower than this??? Note the use of three question marks,
which is a clever literary device I am using to indicate sneering
incredulity with a distinct undertone of contempt.
The part that makes my mouth hang open in stupefaction
and lets a rivulet of drool slide down my chin is that this
means that the 3.8% reported gain in adjusted-GDP, combined
with the 3.1% deflator, means that the economy was/is growing
at a nominal 6.9%? Hahahaha! Don't make me laugh! I am here
to tell you that nominal GDP is NOT growing at 6.9% AND that
inflation is a hell of a lot more than some piddly 3.1%, or
even 4.7%, as is reported in Barron's and the Economist magazine.
Ergo, the real, inflation-adjusted economy is not growing
at all, and is, in fact, stagnant at best and, even worse,
is almost certainly contracting.
- We now know that the Bush administration is,
officially, the most irresponsibly profligate of any administration
in living memory, as the Cato Institute reports that "The
increase in discretionary spending — that is, all non-
entitlement programs — in Bush's first term was 48.5%
in nominal terms. That's more than twice as large as the increase
in discretionary spending during Clinton's entire two terms
(21.6%), and just higher than Lyndon Johnson's entire discretionary
spending spree (48.3%)."
Bush has now allowed the increase in federal spending to exceed
even that of Lyndon Johnson, the previous record-holder, as
the most irresponsible spending dolt. But it was not just
Bush, as it was the Congress that proposed, and the White
House merely duly authorized, the jillions and gazillions
of dollars in spending (and deficit-spending) in the past
few years. And that is just the on-budget stuff! If you include
the non-budget items, and all the offshore shenanigans, and
the Social-Security and Medicare mess, then you will get a
number so big (audience shouts out "How big, Mogambo?")
that you will find yourself screaming screaming screaming
in your sleep and your children will run in, dressed in their
cute little footie pajamas, and ask "What is the matter?"
and you will tell them, with tears in your eyes, "The
Mogambo was right ! We are freaking doomed!"
And of course a lot of this humongous mountain
of money found its way back to the government. Sure enough,
the Treasury reports that federal revenues rose in the last
fiscal year by 14%, which translates into an additional $274
billion flowing into the government. In case you are keeping
score, corporate taxes increased by 47%, and individual income
taxes increased by 15%. Which they spent on creating more
entitlement programs!
- Robert Kiyosaki, writing and essay entitled "Why Savers
Are Losers" on Finance.Yahoo.com, says "My poor
dad believed in saving money. 'A dollar saved is a dollar
earned,' he often said. The problem was he didn't pay attention
to changes in monetary policy. All his life he saved, not
realizing that after 1971 his dollar was no longer money.
You see, in 1971 President Richard Nixon changed the rules
of money. That year, the U.S. dollar ceased being money and
became a currency. This was one of the most important changes
in modern history, but few people understand why."
Oooh! Oooh! I know this one! I raise my hand,
because I know why! It's because of the inflation that you
get as a result! So I am waving my arm around like it's caught
in a damned whirlwind and my eyes are pleading "Ask me
why! Please ask me!", but he pretends that he doesn't
notice me, and so finally I yell out "Ask me, you stupid
idiot!" which was, apparently, the wrong thing to say,
as he immediately turned away from me and went on to say "In
spite of all these increases in prices, the federal government's
economists say, 'Inflation is low. It's under control.' "
Aha! So it IS about inflation, just like I said! Feeling real
smug and self-satisfied, I cross my arms and have this stupid,
smarmy grin on my stupid face as he continues, "They
are allowed to say that because the government is charged
with only monitoring inflation in consumer prices -- not asset
prices." Exactly right! So I jump up, startling the hell
out of poor Mr. Kiyosaki, and say "Exactly right! We
have had roaring inflation in stocks, and bonds, and houses,
and the size of government for freaking decades! All financed
by the damned Federal Reserve, always creating more money
and more credit! But they never talk about that! NoooOOoooo!
They never want to talk about that! They only say things like
'Go away Mogambo, you hateful and stupid little man!' and
then they send over a goon squad from the CIA to 'talk' to
me, but it never does any good, and that is why they are all
out to get me!"
At the irritating sound of my whiny voice, he
looks over at the security guards clumped around the sides
of the auditorium, makes some kind of sign with his hand,
and flicks his head towards me. I see them converging on me,
and I can feel their little rat-like eyes burning into me,
and I know I should run, but I can't! I stand spellbound as
he continues "The consumer price index (CPI) is the pressure
gauge the government watches because they want to make sure
the consumer is happy finding bargains at Wal-Mart, which
is easy because China is forcing consumer prices down."
At that moment, two big, beefy stooges with
their stupid little security guard uniforms and their stupid
little security guard badges are hauling me down the hall,
and I am screaming back "Wal-Mart? You say Wal-Mart?"
So he never got a chance to hear my clever rebuttal,
but apparently this Kiyosaki guy ain't heard the news that
Wal-Mart's prices are not quite the bargain they once were!
- Lawrence Roulston of ResourceOpportunities.com
wrote on Kitco.com about his experience at a gold show, and
it was entitled "Meltdown or Muddle?" Naturally,
since I think I am so witty, I remark "Well, if it was
a meltdown, then there would be a puddle, not a muddle! Hahaha!"
But nobody laughed, as usual, and I sneer at these puny Earthlings
and how their primitive brains cannot comprehend the sublime,
subtle humor of the Mogambo (SSHOTM). After a little embarrassed
silence, Mr. Roulson finally breaks the tension by going on
to opine that the biggest concern preying on people's minds
is "the outlook for the US economy. Government debt,
consumer debt, escalating government deficits, the war in
Iraq, terrorism, the wilting dollar, and now the devastation
on the Gulf Coast, are all serious issues. But, will these
factors lead to an economic collapse?"
He implies that it is easy to be like the cowardly
Mogambo, going all to pieces over this stuff and screaming
that the sky is falling and hiding under the bed in fear,
but he reminds us that "It is important to look beyond
the headlines and superficial analysis and think through these
issues" and in particular to "go back a few years
and re-read the doom and gloom forecasts from so many commentators.
Granted, some of the events that were forecast have come to
pass. Yet, in spite of the mounting difficulties, the US economy
continues to grow and prosper. It is not the level of growth
that many people would like to see, but it is a very long
way from the apocalypse that was forecast by so many."
That's right! The doom and gloomers are wrong!
I am a doom and gloomer. Ergo, with airtight Aristotelian
logic that is unassailable (and believe me I have tried),
I have been, alas, wrong. Especially about the housing boom,
which I missed completely because I made the same mistake
that is so common amongst us out here on the edges of reality
and sanity, and I am talking us poor, pathetic creatures who
can barely contain our fear and anger and fear (which I mention
twice because it is central to my new legal defense), and
sense of sheer panic, so that we can't sleep, and haven't
slept for weeks and weeks because it is freaking us out so
bad, and now we are paranoid and insane with, as I indicated
previously, fear.
And we are wrong because we doom-and-gloomers always make
the same big mistake (SBM) that we always make. In fact, it
is SO common (audience shouts out "How common, Mogambo?")
that it even has a name: Same Big Stupid Mogambo Mistake,
which is usually referred to by its acronym, SBSMM in the
official literature. And if SBSMM is NOT mentioned in any
official literature that you read, then that proves that they
are censoring what you are reading, and that they ARE out
to get me. And you, too!
But this is not about how I am a paranoid lunatic, but about
making mistakes. So what IS this big mistake, this SBSMM?
The big mistake is: We always completely underestimate the
government's response! And there is ALWAYS going to be a government
response, because when something goes bad, or starts going
bad, or may start going bad, or is not going good, or is not
going good enough, then there is ALWAYS a government response!
And if you are at all familiar with the results of previous
government responses (total failures) then you know why we
doom-and-gloomers are so doomy-and-gloomy, and always will
be, too.
For example, Jim Puplava, speaking on his Financial Sense
Newshour, does not mention the fact that nobody is as doomy
or as gloomy as I, but he does demonstrate that he is hip
to the government-response thing. He says, "We will put
price caps on energy. We will put windfall profits tax into
effect. We will raise taxes. We’ll raise interest rates.
We will increase government interference in the economy. In
other words, we will add all the wrong ingredients to the
bonfire and make the fire grow. Unfortunately, that is the
lesson of history."
- The Economist magazine writes "A central
bank cannot prevent oil prices giving a one-off boost to inflation,
but it can try to prevent this feeding into higher wages and
prices. To ensure that the rise in inflation is only temporary,
central banks need to increase interest rates at least in
line with inflation. If central banks hold interest rates
unchanged as inflation rises, this would imply lower real
rates and hence an easing of monetary policy."
I jump to my feet and exclaim, "And this is exactly what
we are seeing, dudes!" They go on like they didn't hear
me, but notice how they steal my thunder when they say "Global
monetary policy is still unusually lax by historical standards.
In America, despite 11 increases in interest rates since June
2004, real rates are still negative and below any reasonable
notion of the 'neutral rate of interest' at which monetary
policy is neither stimulating nor restraining the economy.
In other words, the Fed will need to keep pushing up interest
rates into 2006." Well, this morning they raised the
Fed Funds rate by another quarter of a percent for the twelfth
time in a row, so maybe the Economist knows what it is talking
about, unlike the stupid Mogambo!
But did they say "unusually lax"?
Hahahaha! I would have said "preposterously low"
or "insanely low" or "stupidly low" or
"pounded down to almost insignificance by a bunch of
brain-damaged weenies at the Federal Reserve as they desperately
try and extricate the economy from the ruination and damnation
inflicted on it by these same Federal Reserve morons, what
Aubie Baltin, PhD, derisively calls "Socialist Neoclassical
economists", who ruined our money with their ridiculous
and stupid economic theories which have been discredited over
and over and over again." But I can see how this is too
wordy, so let's stick with their terse "unusually lax."
But it is not just us Americans suffering from inflation!
Interest rates are rising around the world, as one country
after another is being forced to do something about inflation
in prices, which is what always comes after an inflation in
the money supply, which they are all STILL encouraging! This
is bad, bad news (BBN) for two reasons that I can think of
without thinking or getting up off my lazy butt, which suits
me fine: 1) Financing the purchase of anything gets more and
more expensive, and 2) all the hundreds of millions and billions
of people who bought any American debt, any of that immense
ocean of debt that we have issued over the last few decades,
are now looking at losses, and they will incur more and more
losses for a long, long time into the future (because bond
prices fall as interest rates rise) until interest rates stop
rising, and these people are going to be angry every minute
of every day as they watch their wealth melt away. So they
are sitting on losses, both real AND incipient, made all the
more huge and overwhelming by the amount of leverage that
they used to buy the bonds in the first damned place!
I am not worried about the Europeans getting
angry, or the Japanese. It is the Chinese that I am worried
about, as I have seen too many Kung Fu movies not to know
that when you have a lot of Asians around, sooner or later
there is going to be a lot of fighting, hands and feet flying
around, punching and kicking the hell out of everybody and
everything, and you had better know what you are doing when
mixing it up with those dudes!
Already the Chinese consume half of the cement used in the
world, a third of all the coal used in the world, 40% of the
world's steel, a fifth of the world's copper and aluminum.
And they also make half of the world's shoes, most of the
video games that are rotting our brains out, 80% of all the
toys sold in America, and most of everything else you can
name, from cell phones to computers and furniture and beyond!
As further proof, The Mogambo notes from deep within his secret
bunker way out in the spooky and haunted woods that these
Chinese guys are going to have a strong currency and we are
going to have a weak one, and they are going to have a lot
of rich and middle-class Chinese people with money to burn,
and they are going to want a lot more things that taste good.
And that takes farmland, and that means that foreign nationals
are going to, as I figure it, come over here and buy up all
the farmland with their strong currency, sort of like the
US used to do back in the days when we were younger and stronger
and had a mighty currency, and we strode around buying up
whole swaths of land and resources anywhere we wanted to in
the whole world, and kicked the local population off the land
or made virtual slaves of them, if we could, and used the
land and resources to make stuff for us Americans, to the
impoverishment of the indigenous population, and we laughed
at them "Hahahaha! We are the Yankee, capitalist-pig
exploiters of your environment and your stupid economy!"
So I am predicting, in that fearless-yet-foolish way that
is always my downfall and dismay, that cropland in the USA
will be, one of these days, enormously expensive.
And there may be some divine retribution in there somewhere,
as alert reader Richard P. quotes Morris Cerullo, the president
of World Evangelism, as saying that a coming world-wide financial
crisis "will be so long and so severe that even the rich,
who are usually exempt from such things, will be affected."
Even more surprisingly, and the reason I bring this up, is
that he has also predicted that "wars in the future will
be over farmland and not oil fields."
- Mike Shedlock of GunsAndGunpowder.com is still
concerned about the problems at General Motors, and rhetorically
asks "Is that the extent of GM's problems?" Well,
since he asked, I was going to casually mention that 1) I
obviously don’t know what "rhetorically" means,
and 2) I have written extensively to both GM and Ford about
naming a snazzy new car after me, maybe something like the
"Mogambo Supercar Supreme-o." But I never heard
from them, and they did not snap up the generous Mogambo offer
(GMO), which proves that THEY were idiots, NOT me, as so rudely
alleged in most of their civil cases against me, nuisance
lawsuits initiated so that I would stop bothering them about
the Mogambo Supercar, which they deny the existence of TO
THIS DAY! I mean, I tell Mr. Shedlock to call General Motors
up on his cell phone and ask GM about the Mogambo Supercar,
and they will say "What in the hell are you talking about?"
which will PROVE it's true!
But apparently Mr. Shedlock has heard this story
before, and ignores my challenge. Instead, he elects to say
"Let's summarize all of the problems I can think of off
the top of my head: 1. Falling sales. 2. Enormous debt. 3.
Union strife. 4. Delphi and supplier problems. 5. Cost disadvantages
versus Toyota to the tune of several thousand dollars per
car 6. Poor management. 7. Poor quality versus foreign competition.8.
Lack of industry vision. 9. Medical benefit problems. 10.
Pension woes."
So I am standing there, waiting for him to at
least MENTION the whole Mogambo Supercar tragedy, and what
a fiasco it was, and how it is I who is the real victim here,
and not the bunch of incompetent boneheads running the joint,
and not the equally incompetent boneheads who kept buying
GM and Ford stocks and bonds, and using these stocks and bonds(and
forgive me for turning away, but I cannot help but laugh at
the sublime Theater of the Absurd humor, even in the face
of such a profound tragedy) to fund their own retirements!
Hahahaha!
And far be it from me to mention that Ford ruined
both the Mustang and the Thunderbird, and General Motors ruined
the Firebird and the Oldsmobile, so what in the hell can you
expect from losers like that?
- Alert reader Norman Z sent me the note that David Dodge,
who is the chief honcho dude at the Bank of Canada (the Canadian
central bank), supposedly said "The world should expect
an abrupt and disorderly economic correction in (by) 2007."
Now, I cannot verify this report, but I say that I could not
agree more, which I cleverly indicate by saying "I could
not agree more." And if you want to see what happens
to the price of gold when "an abrupt and disorderly economic
correction" happens, then you are about to get a real
lesson.
Nick Chase, author of The Contrarian's View newsletter, has
a warm place in my heart because not only does he have nothing
good to say about Ben "Bonkers" Bernanke, the new
chairman of the Federal Reserve, but he is also very hip to
what the ramifications are of so much money and credit being
created. As another feather in his cap, he also agrees with
Mr. Dodge, in that "In 2006 will come the hangover after
the party.... the bear market will return with a vengeance."
- The Gold Report reports "Dubai wants to be the Switzerland
of the Arab world and a world financial center. So they're
doing the smart thing." As evidence of that, they note
that Dubai will "launch a gold futures exchange on Nov
22, with South Africa’s Standard Bank among 50 founding
members. Gold and silver options contracts would be launched
in the first quarter of 2006."
- Bob Wood, of Kaizen Managed Assets reported
that Jim Cramer, the manic stock picker on his own CNBC television
show called Mad Money, "has deftly staked out positions
on both sides of the debate. While pounding the table on his
own show every day for which stocks he wants you to buy right
now, I caught his appearance on the Colbert Report. Cramer
said he was a long term bear on the domestic stock markets.
You read that right. He's bearish long term on U.S. stocks."
- To show you the arrogance and intellectual
impoverishment of business in America, get a load of this:
"Auto supplier Delphi Corp. said Friday it has beefed
up severance packages for top executives in order to encourage
them to stay on as the company prepares for a major restructuring
that could include bankruptcy." Hahahaha! These are the
same guys who mismanaged the company into the toilet, but
they are giving themselves more money to encourage themselves
to not run away like rats deserting the ship, even as the
employees, retirees, stockholders and bondholders are in the
process of being screwed royally! Hahahaha! Delphi could have
saved itself the money, as who in the hell would hire any
of these blockheads anyway? Hahahaha!
- Bill Murphy of LeMetropooeCafe.com is really suspicious
of the action in gold here lately. He says "The Gold
Cartel knows their ill-conceived scheme to manipulate and
suppress the price of gold is going down. The price of gold
is going to take off in the months and years ahead."
So the way to capitalize on this slimy mess is to buy gold
whenever the price is manipulated lower like this. I will
point out, in case you are wondering, that this strategy has
worked like a charm for years, and everybody who bought when
the price inexplicably fell like this made a nice profit when
the price of gold subsequently rebounded, as it always does
nowadays. And I am pretty damned sure that it will continue
working like a charm, too.
The surprising thing is that Mr. Murphy says
that the guys on the Comex "have rarely ever seen anything
like it", but that Goldman Sachs, alone, is doing all
the monster selling that took gold down so dramatically here
lately.
And Mr. Murphy sees the Bush Administration in this mess up
to their eyeballs, as the White House knows that "If
the US stock and real estate markets go against them in a
significant way, they know they are done for", and a
rising gold price is always seen as a reason to sell stocks
and bonds and houses. Ergo, White House complicity in rigging
the gold market!
- From Doug Noland we learn that there is plenty of inflation
out there to rattle the nerves of the faint-of-heart (me).
He writes "For the week, the CRB index was little changed,
with y-t-d gains of 13.5%. The Goldman Sachs Commodities index
rose 0.3%, increasing 2005 gains to 40.1%."
And price increases are getting more ubiquitous
too, as Mr. Noland remarks that "The National Association
for Business Economics did their quarterly survey of members,
and they report that their index of prices charged by member
companies rose to the second-highest in the survey’s
whole 24-year history.”
And it doesn't stop there, as the Commerce Department's
latest PCE price index of inflation, which is the inflation
measure supposedly favored by Alan "Jerkface" Greenspan,
shot up 0.9 percent last month. Apparently this is the largest
biggest rise in that index since February 1981, 24 freaking
years ago.
But, you will be glad to know, that if you exclude
food and energy, then the index only advanced a mere 0.2 percent.
Hahahaha! To show you how far removed from reality this stupid
PCE number is, over the past year it has risen just two lousy
2 percent! Hahaha! Prices have increased just two percent
in the last year? Hahahaha! And this is Greenspan's favorite
inflation indicator? With an idiot like that in charge of
the Federal Reserve, now you know why I say that we are freaking
doomed! Ugh.
****Mogambo sez: These temporary low prices for oil and precious
metals are your chance to walk over and pick up some bargains,
as all the things that are bedeviling us and our stupidly
over-priced currency are not going to get better, but they
are going to get worse and worse and worse. From the Financial
Times we read "The Organisation for Economic Co-operation
and Development forecast warned that the continued deterioration
of the US current account deficit posed a risk to the US and
to the global economy, at a time when the US deficit has risen
above 6 per cent of gross domestic product and is forecast
to rise to 7 per cent of GDP next year."
If this doesn’t seem important to you,
then perhaps it will after they go on to say, "Few other
OECD countries have ever managed to sustain imbalances of
that magnitude without eventually experiencing sharp downward
pressure on the value of their currencies.”
That means that the price of oil, gold
and silver will be pressured to rise and rise and rise for
the rest of your life, as the dollar will continue to fall
and fall in value for the rest of your life. And since you
can buy oil and precious metals cheaply right now, thanks
to these obvious manipulations of the market, buy them all,
and rejoice at your good luck! Whee!
Richard Daughty, the angriest guy in economics
9241 54th Street North
Pinellas Park, FL 33782
727 546 5568
e-mail: scgcjs@gte.net
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