Bill Bonner here at The Daily Reckoning reports that "Even if America taxed
100% of all household wealth, it would not be enough to put its balance sheet
in the black", which I note seems exactly right to me, and I am able to
corroborate Mr Bonner’s analysis because it seems to me that I seem to remember
that just the federal budget deficit - alone! - would consume all federal
income taxes paid by people and businesses!
Perhaps Mr Bonner won't need any testimony from me, and people will accept the
things that he says as facts because they trust him. But when I say something
like that, even with facts aplenty at my very fingertips, they want to argue
with me like, for example, just the other day when I was taking a little walk
in the morning and I ran across a group of kids waiting for the school
bus, which was just pulling up as I got there.
So I am telling the kids, "You brats might as well quit school right now
because there is no future for you since your own federal government has
borrowed and spent this country into the ground, made possible by the loathsome
Federal Reserve creating all the wildly excessive amounts of dollars that made
it all freaking possible, which became, because it is, an inflation in the
money supply, which is what will cause terrifying inflation in prices as all
this money is used to bid for a relatively static supply of goods and services
so that prices will always be going up and up, all your miserable lives, and at
the rate that the idiot Leftist Obama government is deficit-spending money by
the trillions of dollars, and the rate at which the foul Federal Reserve is
creating new money by the trillions of dollars to finance it, prices will rise
so high that this Whole Freaking Country (WFC) is doomed to suffer catastrophic
inflation! We're freaking doomed!"
So, instead of everyone just accepting what I said, like they do Mr Bonner, and
maybe patting me on the back and saying something cheery like, "Masterfully
said, Brilliant Mogambo Maven (BMM)! Thank you for the good education in bad
economic governance!" the school bus driver is yelling at me to shut up and for
the cheering kids to get on the bus and quit listening to "that damned crazy
man", but the kids are hesitating, and the driver is frantically calling 911 on
her cell phone to report me to the police as some kind of deviant weirdo, and
the kids are dancing around, chanting, "We're freaking doomed! We're freaking
doomed" and the bus driver is yelling, "No, you're not! Now get on the bus,
kids!" and pretty soon some parents come up to see what all the fuss is about,
and they start arguing with me, too!
To the adults who can appreciate adult-level conversation, I say, "If you are
not concerned about the destruction of the buying power of the dollar because
of the insane trillion-dollar increases in the money supply by the Federal
Reserve or the ludicrous Obama deficit-spending trillions of dollars that
necessitated it, then you're an idiot!"
And then, out of nowhere, they start arguing with me about THAT, too!
So you can see the kind of crap I have to put up with all the time around here
every time I open my mouth, and I imagine even Mr Bonner would have trouble
with these losers, too.
Apparently, Mr Bonner has heard my sad, Cassandra-like tale of woe, and has
decided not to press his luck in this neighborhood of what appear to be, in a
word, idiots, and safely quotes some guys named "Professors Rogoff and
Reinhart" who "show that when external debt passes 73% of GDP or 239% of
exports, the result is default, hyperinflation, or both."
At this point, most of us have stopped reading because we have had our fill -
"up to here!" - of egghead professors finding some relationships between the
horrendous condition of the US and impending calamity, as that is the continual
state of the US today, and indeed the world, in terms of increasing human
suffering, a terrible economy, a travesty of a monetary policy and flagrant,
bizarre irresponsibility in fiscal policy.
And after a full day of reinforcing the Mogambo Bunker Of Desperate Refuge
(MBODR) with another layer of aluminum foil just because of the terrors of
these kinds of things, I am too tired for more horror, as if I could be more,
you know, horrified at this point.
I mean, this is nothing new for a real Junior Mogambo Ranger (JMR), who knows
that it is the same impending calamity that has impended every other time in
human history after these idiotic kinds of expansionary monetary and fiscal
insanities are rampant, and now we JMRs have, with heroic stoicism and
serenity, moved away from constantly thinking of certain disaster and have
started, instead, thinking about lunch. Or weekend plans. Or, if it is the
weekend, lunch.
Fortunately, I was not too far immersed in plan making (other than I was
already sure that it was going to involve bacon in some capacity), and so I was
taken aback when these two professors said that International Monetary Fund
data "show the US already too far gone on both scores, with external debt at
96% of GDP and 748% of exports."
I was hoping that someone would raise his or her hand (especially the adorable
Peggy who said she would never, ever even be in the same room with me ever
again, and now there she is - in the front row! - which only shows what a
deceitful, lying, heart-breaking little tramp she is), and ask why we didn't
get "default, hyperinflation or both" when external debt passed 73% of GDP on
its way to the current 96%, or after passing the point of 239% of exports
growing to today's 748%.
That way, I could spring to my feet, noisily interrupting, and state my own
version of how it is easily possible that the largest economy on the planet,
that for decades consumed the majority of the industrial output of the planet
so that, at its zenith, our trade deficit was almost a trillion dollars a
freaking year, was able to continue such stupidity by being financed, for a
long while, by scared vendors frightened of their biggest customers not buying
more stuff, all so that the USA could indulge its gluttony, its imperialism and
its most far-fetched socialist dreams by being financed by the very people who
made the stuff that we bought, using the money that the Federal Reserve
created, that we gave them as a minimum monthly payment for the last batch of
stuff that we bought from them on credit! It's recycling, dude! Hahahaha!
Of course, this would lead me directly to a long harangue about how "You would
have to be an absolute idiot not to buy gold, silver and energy stocks as an
iron-clad defense against the aforementioned 'default, hyperinflation, or
both', which, in this case, will be 'both' because the whole financial
enchilada is a big leveraged bet where every little change is magnified
many-fold into losses, losses, losses as far as the eye can see, growing bigger
and bigger, and that our only hope is to riot in the streets, overthrow the
current regime and install me - The Mogambo! - as Wonderful Emperor Mogambo
(WEM), where I will wage a never-ending battle for truth, justice and the
American way, which is (now that you asked), the glories of free enterprise
coupled with a fixed money supply."
Before I could even make a pitch for everyone stocking up on Mogambo
Enterprises Riot Gear And Supplies (MERGAS) that they will need in their
glorious popular rebellion to oust the government and put The Mogambo on the
throne of absolute power, or even give me a lousy minute to hand out some
brochures, Mr Bonner, apparently embarrassed to have his presentation hijacked
by a megalomaniacal power-hungry lunatic hawking insurrection, shoddy
pitchforks and flaming torches, obviously alludes to it and says, "The rioters
can go home, in other words. The system will collapse on its own."
Well, if it is going to collapse on its own, then, like everyone else, I sigh,
and figure, "Why bother?" So, instead, I take the easy way out because the easy
way out is The Real Mogambo Way (TRMW), which, in this case, is to just buy
gold, silver and oil because with the ugly, inflationary-collapse way that
things are going, and which cannot be stopped, it makes you Giggle With Glee
(GWG), "Whee! This investing stuff is easy!"
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 2010, The Daily Reckoning.)
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