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Richard Daughty "The Mogambo Guru"

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The Shock of a Thousand Trillions

By Richard Daughty "The Mogambo Guru"      Printer Friendly Version
Dec 5 2007 10:12AM

Today we are going to for the Mogambo Laugh O' The Day (MLOTD) concerning gold, in the award subcategory, "A joke that does not make fun of people so damned stupid that they have no clue of what the last 4,000 years of economics and gold says about why they should be buying gold with both hands with every penny at their disposal, and selling the kids into slave labor to get a few extra bucks with which to buy gold, and since they are slaves and thus somebody else's problem now, they won't need their stupid piggy banks, and these parents can help themselves and use whatever money is in them to buy a little more gold. Later, when gold has zoomed up in price and you are finally rich, happy and generous instead of being poor, hateful and stingy, you can buy the kids back! Probably at a discount! And certainly better trained to follow orders and able to work 20 hours a day chained to a sewing machine for weeks at a stretch!"

Anyway, this is not about Fabulous Mogambo Financial Plans (FMFP) that always seem to take a backseat to some stupid "child-labor laws" I never heard of, or how some stupid judge wastes the court's time with some pointless diatribe about how I am the most "despicable father" he has ever seen in his life, but about the MLOTD, which is from a Financial Times quote about how the economy is in such bad shape, and how we have such a disastrous penalty to pay for being so damned stupid as to allow the Congress to allow the Federal Reserve to create so much excess money and credit.

Now, things are so bad that a reader at Felix Salmon's Market Movers blog is moved to darkly say, "Gold is for optimists. I'm diversifying into canned goods." Hahaha! Gold is for optimists! Hahaha!

The Times went on, not about this terrific joke, but about economist Nouriel Roubini, of Roubini Global Economics and former director of the Treasury Department's Office of Policy Development and Review, who "has long been positioned firmly on the gloomy side of the outlook scale - but the past week's batch of predictions has been ominous even by his own dark standards. In fact, they're nigh on apocalyptic. Or, in other words, a 'generalized systemic financial meltdown.'"

In his own words, Mr. Roubini said, "Losses due to subprime alone will be as high as $400 to $500 billion and this does not count losses due to near prime, prime mortgages, auto loans, credit cards, commercial real estate, leveraged loans, loans to the corporate system; if add it all up losses could end up - in a US recession - as being as high as $1,000 billion or $1 trillion. The financial bloodbath thus has only started and a hard landing of the economy is clearly ahead of us."

A trillion? It used to be that a trillion was a lot of money, but my eyes opened when I saw the article by Sharon Kayser, titled, "Hey Buddy, Can You Spare $1,000 Trillion?"

Instantly, I knew that someone had erred! A thousand trillions? Hahaha! What a preposterous number!

So I was instantly on the phone to call Ms. Kayser so I could tell her that there has been an error in the title, and then maybe, you know, she could drop a line to my boss and tell her what a nice guy I am and how firing me right before Christmas is so tacky, no matter how well-deserved, or maybe she could get me a job there with her or something.

So imagine my horror when I learned that there was no error! We are talking about a quadrillion freaking dollars! Instantly I knew that she was doing that on purpose to give me a heart attack!

The actual excerpt is that "there is currently at least a $1,000 trillion dollar black hole in the world economy", what with "$600 trillion in world liabilities, plus more than a $400 trillion-derivatives neutron bomb, all of which will go off when the Westerners (from EU and US) will no longer be able to borrow."

So, with trembling hands I feverishly punched the calculator, adding 400 trillion plus 600 trillion, which is 400,000,000,000,000 and 600,000,000,000,000,and then I think, "That's too many zeroes! It won't even fit on my calculator screen, for God's sake!"

So I do it by hand, and it keeps coming out as "1,000,000,000,000,000", and it looks so weird that I knew that had to be wrong. It can't have that many zeroes in it!

So, I go to the dictionary and look up "quadrillion", and it says that it is "a one followed by fifteen zeroes." Except in Britain, where it is 24 zeroes, for some reason.

Anyway, it really IS written out as $1,000,000,000,000,000!

That number must have stunned me into insensibility, as the next thing I knew, it was later in the day, things were coming into focus, people are yelling at me to wake up and get back to work, and asking when I am going to do a little work around here, and how about getting a little work done? Naturally I responded to their inquiries by yelling obscenities and spitting on them, when right in the middle of the discussion about my work habits, here comes Ms. Kayser again, saying, "Talking of jobs, did you know that in 1972, wages reached their peak? Today, real wages are nearly one-fifth lower - inflation adjusted!"

If I wasn't so engrossed in teaching some manners to my fellow office workers, I would have said, "No, but I do know that you can't have economic growth if prices are rising faster than incomes!"

Now that I think about it, this is a perfect segue to a Loud Mogambo Discussion (LMD) of how inflation eats away at the buying power of your income, and how the damnable Federal Reserve and the despicable Alan Greenspan destroyed the dollar and the American economy when he was in control of the Federal Reserve and how this means that anybody who sees Alan Greenspan should be able to slap his nasty little face, and maybe beat him with sticks, and throw rocks and him and his nasty little car and when he has to pay a lot of money to have the dents taken out and repainted, maybe he will think to himself, "Hey! That Mogambo Idiot (TMI) was right! I was a stupid little man who created too much money and credit, and now we are going to be destroyed by inflation in prices! For example, look how much the repair shop wants to fix my stupid car!" Ugh.

Mogambo sez: Another day, another wheeze from the morons who think that they run things, as they frantically drive down the price of gold, silver and oil with their market manipulations, meaning that all you gotta do is walk over and pick up a few bargains every time they do this. Ahh! Life is sweet!

The MOGAMBO GURU, e-economic newsletter,
by Richard Daughty, the angriest guy in economics.



Editor's Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.

The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications.