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     Apr 6, 2011


Up to our eyes
By The Mogambo Guru

Junior Mogambo Ranger (JMR) Terry L sent me the essay "Fiscal Armageddon in the USA" by C Banesh, who reminds us that "Sometime between now and 2012 the US debt will equal the country's gross domestic product (GDP), the total market value of all the goods and services in our economy for an entire year."

Nobody says it, although it is obvious to everyone that I will be a complete raving lunatic by that time, driven out of my mind by the monetary excesses of the Federal Reserve.

The facts are pretty stark, in that, "The $1.65 trillion deficit for 2012 will make the debt grow to 105% of the nation's GDP," which he calls "a perilous milestone".

For some reason, perhaps my rising sense of panic, I suddenly wonder if he really means milestone, which it would be, or maybe

 
he means millstone hanging around our necks, which it also is, or maybe this was some oblique reference to tombstone, in that We're Freaking Doomed (WFD), or that we should get stoned on the way to our tombs, or that stoned zombies are rising up out of their tombs, or what in the hell am I talking about, I have no idea because I am getting so scared?

I don't know, as it boggles my mind that "This year the US will spend $200 billion in interest payments on the debt", which is even worse than it looks because, "Thanks to historically low interest rates this figure is lower than normal. Once interest rates start to rise - and rise they will as inflation is quickly spreading throughout our economy and the world - we will face an extra $100 billion in interest payments per year for every one (1) percent increase in interest rates."

$100 billion more for each percent rise in interest rates? Did somebody say, "We're Freaking Doomed (WFD)!"? Yes, someone did! Me! WFD!

My dark mood was lightened when, for some reason, he quotes The Wall Street Journal ridiculously predicting that "without any changes, the interest on the nation's debt will reach $900 billion annually in another 10 years", which means absolutely nothing in that the ludicrous simplifying assumption is "without any changes", which is a pretty stupid base upon which to calculate anything over the next 10 minutes, let alone 10 years, particularly in a quickly expanding fiat-currency, maximum fractional-banking, government-centric, deficit-spending world! Hahaha! "Without any changes!" Hahaha!

But even with that blanketing, soothing assumption, the results are still terrifying, in that, "According to their forecast, those yearly interest payments will be 17% greater than our annual Medicare costs and 82% larger than 'the cost of all non-security discretionary spending programs combined.'"

This, of course, seems a completely ridiculous situation, and the important "without any changes" stipulation will certainly be violated at every opportunity, by every government, at every opportunity, paid for, at every opportunity, with money created out of thin air by the Federal Reserve, increasing the money supply and thus making prices go up and, eventually, making interest rates go up, making the day when the government's annual interest payments surpasses all other spending into a reality by the fact that discretionary spending programs and stimulus deficit-spending cannot increase as fast as interest rates rising to require another $100 billion per each interest-rate increase, and which will reach double-digit rates meaning perhaps another trillion dollars per year in interest payments! Yikes! We're Freaking Doomed (WFD)!

I can see that all this theoretical stuff has bored you, despite my using my trademark WFD, replete with exclamation point. Perhaps it is because you are only here looking for a guaranteed, fast and easy way to make a lot of money without working.

In that case, you have, indeed, come to the right place, because it is right here, and right now, that you can learn that buying gold and silver is the PERFECT way to make a lot of money with ease, thanks to the foregoing Boring Mogambo Crap (BMC) about the evil Federal Reserve.

As for the guarantee, it is backed up 100% by the last 4,500 years of what happened when thousands and thousands of other dirtbag governments borrowed so much money that they couldn't pay it back.

And as for being fast, it will get faster and faster exponentially, which, at the rate that money is being created around the world, the rise in the prices of gold and silver should reach infinity Pretty Damned Soon (PDS)!

And with that kind of Easy, Fast And Guaranteed Investing Strategy (EFAGIS), what can you say except, "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 2011, The Daily Reckoning. )


THE COMPLETE MOGAMBO GURU


1. Exposed: The US-Saudi Libya deal

2. Pastor Jones and a dreaded ghost

3. Why the Republicans can't find a candidate

4. Fukushima marks a 'nuclear ice age'

5. Arab revolts hand it to Hezbollah

6. Cricket win stirs Indian renaissance

7. There's no business like war business

8. India savors World Cup of joy

9. Battered MediaTek rearms with Android

10. Faster, faster

(24 hours to 11:59pm ET, Apr 4, 2011)

 
 


 

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