Boozed-up Brits can beat the
blues By The Mogambo Guru
Junior Mogambo Ranger (JMR) K O B asks,
"Why wasn't it a big deal early last month when
gold went over 100,000 yen per ounce for the first
time ever, or platinum going over US$2,000 per
ounce?"
Well, there are many answers to
that question, including mind-control rays from
the CIA, but the most important thing is that it
actually WAS important, but only if you comprehend
what in the hell is going on in the world of
economics.
And if you do understand what
is going on, then you are correctly terrified out
of your freaking mind and you immediately took
refuge in the bliss of alcoholic beverages,
perhaps with the weird mind-warping properties of
various medications consumed in various
proportions, and then you
don't talk about gold over 100,000 yen or platinum
over $2,000 an ounce, either, because you missed
the news since your eyes refuse to even focus, and
even lifting your head up off the floor, or even
wiping the drool from your chin, is too, too much
work, but any lesser level of anesthesia makes you
want to scream and scream and scream in fear, and
you do.
But if you still have a tenuous
hold on reality and want an update on what happens
to an idiot country that continually tries to
print up enough money to buy its way out of
inflationary trouble, JMR Ed S sends a link to
Guardian.co.tt, where we get the report that, "The
official rate of inflation in Zimbabwe tripled in
the space of one month to 66,212% in December
2007, by far the highest in the world, but less
than half the rate calculated by independent
analysts." This "official rate" is up from "only"
24,470% in November.
Now, you know it must
be bad if this incredibly bad news comes from a
government that is always lying to conceal its
mistakes, like this one is doing, which was to
create money and credit like the US Federal
Reserve, only more so. And it is this, "only more
so" that is the only economic difference between
hyperinflationary Zimbabwe and the merely
inflationary US!
Indeed, the facts are
worse yet, as "Independent analysts estimate the
real annual rate of inflation is closer to
150,000%. They cite supermarket receipts showing
the price of chicken rose more than 236,000% to
$15 million Zimbabwe, or about US$2.15 a kilogram,
between January 2007 and January 2008. The price
of eggs rose by 153,000% in the same period. One
of the lowest increases, of about 64,000%, was for
sugar, bringing independent estimates for overall
food inflation to about 164,000%."
Then I
recall that the average retirement plan in
America, like a 401(k), has somewhere between
$25,000 and $60,000 in it, and I wonder how long
that would last if one lousy chicken cost $15
million. Hahahaha! Nice investing there, dude! And
this does not count all the people who have
literally nothing in any stupid retirement plan,
savings account, checking account or secret stash
of cash that the spouse doesn't know anything
about, and which you start to think of as your
secret "ejection seat" money, which will be there
to save you, at the last minute, from the burning
wreck of your miserable life by shooting you
safely out of the current hellish environment of
family and career, letting you parachute gently
down into a friendly little country where you can
start over, and life will be perfect from now on.
Then I got this in the email, which has
been around a long time, but the message is the
same even today, only with different names: "If
you had purchased $1,000 of Nortel stock one year
ago, it would now be worth $49.00. With Enron, you
would have $16.50 left of the original $1,000.
With WorldCom, you would have less than $5.00
left. If you had purchased $1,000 of Delta Air
Lines stock you would have $49.00 left. If you had
purchased United Airlines, you would have nothing
left. But, if you had purchased $1,000 worth of
beer one year ago, drank all the beer, then turned
in the cans for the aluminum recycling refund, you
would have $214.00. Based on the above, the best
current investment advice is to drink heavily and
recycle. This is called the 401-Keg Plan."
Well, as funny as that is, and as
absolutely correct as that is, especially being as
old as that is, this must be what is happening in
Britain, which is popularly seen as having a big
thirst for beer, as Jack Crooks at
MoneyandMarkets.com reports that, "the UK savings
ratio dropped below zero for the first time in
roughly 20 years". Yikes! Not only saving no
money, but borrowing to spend more than they make!
And please notice that he suspiciously
does not even mention anything about empty beer
cans! Hahahaha! The "dog that didn't bark!"
Hahaha! Getting drunk and coming out better than
if you had used the money to invest in equities!
Hahaha! What a world!
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 2008, The Daily
Reckoning.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
