The Mogambo Theory of Currency
Relativity By The Mogambo
Guru
I have been advised over and over
again to consider foreign currencies as an
investment, and I have declined over and over
again because I think that all foreign currencies
are, being as polite as I can, pieces of crap.
Now, I realize that there are many who
question my authority to say such a thing, ("Who
in the hell do you think you are? You're nobody
and you're nothing!") and even my capacity to make such
a
statement ("You are an idiot!").
Both
caveats are unfortunately true, and this is just a
teeny, tiny part of the heavy cross I must bear.
Nevertheless, these people who so cavalierly
insult The Mogambo are going to find that not only
are foreign currencies pieces of crap, but that
somebody has repeatedly run over their garbage
cans and smashed their mailboxes, which will
perhaps teach them a lesson both about currencies
and insulting psychotic lunatics. A two-fer!
But this is not about revenge and how it
is so sweet, but about fiat currencies, about
which I have so little respect that I make rude
noises which resemble long, undulating farts, a
style hopefully indicative of the particularly
revoltingly redolent variety, as befits my low
opinion of fiat currencies in general and rapidly
inflating ones in particular, which they all are.
And not only that, but these fiat
currencies are routinely multiplied by the banks
using miniscule amounts of reserves in a wildly
inflationary fractional-reserve banking paradigm,
just like the United States does with the dollar,
and that means that all their currencies are crap,
too, just like the US dollar, and the purchasing
power of each unit of each of these currencies
will always be going down, just like the US
dollar, and the only stupid "strength" that they
can muster is to be fractionally stronger than
other stupid fiat currencies and other more
extreme fractional-reserve central banking
idiocies, namely (as if you had to be told) the US
dollar and the wildly inflationary Federal
Reserve.
That means that anybody who says
(as I read in a newsletter recently) that "the
decline in one currency always reflects the rise
in another currency" is wrong, wrong, wrong.
For example, imagine, if you will, that I
am in the hospital emergency room, bleeding
profusely from three gaping gunshot wounds to my
chest (all off-center, poorly grouped and thus
non-lethal thanks to my wife being such a lousy
shot), but I am being ignored by aN uninterested,
hateful medical staff, whose worsening lack of
attention to me and my medical problem has forced
me to now refer to them as, "Soulless, thieving,
murdering, sadistic quacks and ghouls."
But if the guy sitting right next to me
has only one such sucking chest-wound bullet hole
inflicted by his wife, then his marriage is some
whooping big damned success? Then how come when I
try and "level the playing field" with a little
self-medication by merely taking the morphine IV
drip of this lucky guy, everybody gets all bent
out of shape?
For one thing, it's a matter
of Einstein's relativity; two entities are in
relation to each other, so that one currency
appears to be moving ahead and one appears to be
falling behind, but the reality is they are both
falling, falling, falling in purchasing power and
they are saying in their little currency voices,
"Oooh! Help us! We're faaaaalllliiiiing!"
It's just that one is perceived as losing
value less fast, and so it is just a matter of
time, and the contraction of time, which explains
why the speed of light is a perceived constant,
and why one currency moves against another because
one of them is seemingly standing still.
Einstein, whom everyone thinks is such a
hotshot intellectual giant, did not see the
obvious correlation to how the speed of inflation
in prices is a function of how insanely,
traitorously stupid, stupid, stupid your central
bank is in creating the enormous gravitational
mass of excess money and credit, and thus
inflation will kill your currency and your
economy.
And yet people think Einstein was
such a hotshot, and I am reduced to begging for
money outside the supermarket and selling loose
cigarettes to school children just to make ends
meet!
I bring this up because the Nobel
Prize for economics is coming out this week, and I
sure could use the huge wad of cash that comes
with the Prize, and I finally deserve it this
year, as I have just neatly connected Einstein's
Relativity with money! Brilliant! And by the time
the Nobel Committee finds out I have no idea what
in the hell I am talking about, the awards
ceremony will be over, everyone will have gone
home and moved on, and everybody will be happy,
especially me, since I'll have the money.
And you don't have to take my word for it,
as I have recently proved it with a famous Mogambo
Global Survey (MGS)! Since China is experiencing
price inflation of 6.5%, and everybody else on the
planet is experiencing price inflation of more or
less than that (but always more than zero) let's
ask your typical citizen around the globe what he
thinks about that!
The patented MGS
research methodology is that I randomly pick up
somebody's phone so that I don't get charged for
the long-distance call, randomly dial an area code
and a random phone number, and when someone
answers, I ask, "What do you think is the best
thing to do with a fiat currency that a central
bank is devaluing by constantly creating excess
money and credit in the banking system?"
The answers, of course, were probably all
over the map, but since I don't speak any foreign
languages, all their replies sounded like, "How
jongg moi gram geschlag hooigang!" or something
equally as foreign-sounding, but I think I got
enough of the gist of it to learn that they were
going to take their money and buy gold!
Therefore, the Important Mogambo Lesson
(IML) distilled from this important survey is that
not even stupid foreigners want their own
inflating money! They want gold!
And a
little informational sidebar is that we also
learned that these foreigners are rude, nasty
little people who have so little regard for
scholarly research that they get really snotty
just because you call them at 2 am (their time) as
part of this important, important research survey,
like their not being able to sleep is my fault or
something!
So, this study has shown that
foreigners don't want their own money, and they do
want gold, but you want their money and don't like
gold? What can I do but laugh in wonder and
amazement, "Hahahahaha!"?
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.
Republished with permission
from The Daily Reckoning.
Copyright 2007, The Daily Reckoning.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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