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[ThatHawaiiGuy]

Long & completely worth it:


The Only Safe Place To Put Money
Richard Daughty
The Mogambo Guru
The Daily Reckoning
Sep 12, 2003

The Treasury continues to issue debt in staggering amounts, and I use the word "staggering" to indicate its effect on me, and as one part of my brain after another shuts down from the shock, I am wandering around the room bumping - ouch! - into things. Finally falling to the floor in a stupor, I feel consciousness slipping away as the blood begins pooling in the abdominal core, and I flash to the movie "2001" where Hal, the evil computer, is being systematically shut down. With a fabulous heroic effort I use the last, lingering bit of purposeful action that I can muster to simultaneously sing, in a voice that is lower and lower and slower and slower, "Daisy, Daisy, give me your answer true" and to use my index finger to shakily write in the dust on the desk, "Since January 2002 the Treasury has issued $900 billion in new debt," hoping that forensic crime-scene people will see that cryptic note and realize that I was not murdered with poison, but instead succumbed to the shock of my own government committing murderous monetary madness. Now, to those of you who are hip to this kind of thing, you will instantly recognize "murderous monetary madness" is not only perfectly descriptive of what the Fed is doing, but is also an alliterative phrase that I use just so that future historians can say, "The guy was a complete moron, but boy, could he alliterate!" But as the world dissolves into inky blackness, I note with horror that I have actually written, "Open the pod bay door, Hal" and realize that I am doomed. I instinctively mouth the word "Rosebud," hoping against hope that switching from "2001" to "Citizen Kane" will prove to be a more memorable last moment.

In the banks, Total Reserves has definitely starting tracking upward, and is now at the highest level since February 1999. Now, there may be many reasons why reserves are increasing, but the traditional reason is that loans are going bad, and they need a bigger cash cushion to keep their statistics from falling into a zone that would indicate to stockholders that there is some problem. Or maybe the banks are loath to make any loans since potential borrowers are less and less credit-worthy, and thus cash is piling up instead of being loaned out. Maybe both. Or maybe something else that goes "bump in the night."

And the hoard of government securities accumulated by the banks has suddenly taken a big drop, too, and is now, suddenly, back to where it was at the beginning of the year. And when I take a look at the open interest on bond futures, I note that they are at surprising lows, which indicates that nobody is making bets that they will want to take ownership of bonds in the near future. And for good reason, I say.

Wynne Godley, from the Levy Economics Institute, wrote a very interesting essay entitled "The US Economy; A Changing Strategic Predicament." Mr. Godley argues that "A new strategic predicament is on the horizon as a result of the exceptionally large and growing balance of payments deficit." He notes that nobody seems to be paying any attention to this problem, including, of course, Alan Greenspan, who has made, and I quote "no reference whatever to the balance of payments. The models embodying the 'New Macroeconomics' which have suddenly become so influential do not even contain a foreign sector nor any representation of stocks of foreign debt which the US is now rapidly accumulating." I will add that neither the models nor Mr. Greenspan's mangled oracular pronouncements contain references to the fact that everybody in the country is up to their ears in debt, either. Or that it takes every penny of disposable income to make the minimum monthly payments on the mountain of debt they already owe.

Mr. Godley deduces that his "default conclusion" is that the US economy will enter a prolonged period of "growth recession." He naturally comes to the obvious conclusion that an imbalance of trade will be ameliorated only when exports start outpacing imports. Well, duh, huh? He includes a chart that shows how the configuration of balances during the nineties was "...quite unlike anything that had happened before." So what happened that caused the imbalances to be unlike anything that had happened before? Us, or we, I am not sure which is correct, idiotic Americans going on a debt-accumulation spree, although he is much more refined in his choice of words, and uses the more professional-sounding phrase, "The expansion of aggregate demand was driven by an unprecedented growth of private expenditure relative to income. By the end of the boom, private expenditure was far in excess of disposable income, an excess made possible by a huge accumulation of debt, both by the personal sector and by corporations."

I will take unusual liberties here, since I don't know any of these guys personally, and so if they come to my house to yell at me up for saying and doing things the Mogambo Way I can easily handle them with my standard excuse, namely "Me no speakee English, him move, me live here now," and I will use my editorial freedom to insert in parentheses my scathing Mogambo-ese interpretation of each phrase. "The Fed has just published a comforting assessment (the Fed is lying through its teeth) of the present financial position of households (greedy morons are up to their collective ears in debt) that emphasizes that, with interest rates so low (the Fed has pounded down interest rates to artificially and grotesquely low levels in a desperate attempt to bail everybody out of the mess that they got into, thanks to the idiots at the Fed who promulgated this mess in the first place with obscene monetary stimulus for over a decade), the burden of debt service is generally quite tolerable (the number of people starving to death in the streets is still pretty low). We have no quarrel with the Fed's assessment of the present position (we leave that to the Mogambo, who seems to take a perverse delight in doing just that thing, almost as much as I seem to delight in referring to myself in the third person), but personal expenditure cannot be financed for ever by a growing flow of net lending - that is by a continuing rise in the rise in debt (only an idiot, a university economist, or a government economist believes that you can keep borrowing more and more money forever).

Mr. Godley asks the question, "Is it conceivable that the private sector will provide the motor for expansion by plunging deeply once again into deficit? This seems improbable if only because of the unusually high level of debt which has already been incurred both by corporations and by the personal sector.

"The argument put forward here is an entirely different one - that the developing balance of payments deficit is going to act as formidable drag on demand. The present hemorrhage from aggregate demand, at 5 per cent of GDP, is already far in excess of anything that has ever been experienced before (in modern times) though this is still being masked by the highly unusual private deficit (implying private expenditure in excess of income) which is likely to go further into reverse.

"So what gives? In my view, the most likely outcome, particularly in the early part of the period under review, is simply that the US economy will not recover properly but rather will enter a long, depressing era of 'growth recession' with increasing unemployment and the ever present risk - with corporate and personal debt so high - of financial implosion."

Financial implosion. Sounds ugly. So how about the current Treasury plan, expounded relentlessly by John Snow, to devalue the dollar so as to ramp up exports? Well, Mr. Godley attacks that suggestion, too. "It seems that surplus countries (e.g. Japan and China) are accumulating mountainous reserves which they have been using to prevent any natural rebalancing process from taking place." This is how they are keeping the dollar artificially strong, so that their own currencies remain weak, so that they can keep exporting cheap stuff to us doofus Americans to buy with our artificially strong dollars, and also perversely lending us the money with which to do it, out of the proceeds of those very sales! "It is unclear what, if any, limits there are to this process. And it is doubtful whether a fall in the dollar, however large, could in practise generate the required (enormous) rise in net exports given that the market is so stagnant."

He sums up with the dolorous assessment, "There would appear to be only one antidote to this predicament; U.S exports must rise faster than imports by very large amounts and for a long period of time." Of course, I immediately leap to my feet to observe that he just said that possibility was, to use his own words, doubtful.

But there are, of course, problems. "It would be madness for the U.S to base its economic strategy on the assumption that it will be hauled out of stagnation by a discontinuous and autonomous expansion in foreign parts. At present, not merely is the rest of the world itself locked into a stagnation, it is looking to the U.S economy to be the motor which will fuel its own growth."

Summing up, he says, "...given present national and international policies... there will be no proper recovery from the recent recession, and that this stagnation will eventually have grave consequences for the rest of the world." Sounds so candidly Austrian, doesn't it?

Speaking of debt, consumer installment debt went up in July at a 4.1% annual rate, as we continue to spend beyond our incomes. The new total outstanding is, and I am writing this out for you so as to perhaps let it make the appropriate impact, one trillion, seven hundred and seventy four billion, four hundred millions of dollars. That comes out to $17,774 for every private-sector worker in America.

I deliberately do not include workers whose paychecks come from a government, as their money has to eventually come from the private sector worker, who will have to end up paying both his own bills and those of the government workers, who are also spending all of their incomes and then some. The difference is that the government workers will agitate to get their government bosses to get them some hefty raises, which will, of course, have to also be paid by the poor private sector workers, who will agitate to get pay raises, but who will then be laid off.

Nelson Hultberg wrote an article on the 321gold website entitled, "Apocalypse This Way Comes." I never met this guy, but he has earned a warm spot in my heart because he quoted what I think is one of the most profound paragraphs in the whole of economics literature, and one that I have quoted so many times that I stopped doing it only because I got embarrassed to keep flogging it. But thanks to Mr. Hultberg, I can present it again, but not as something from me, but from him, so if you have some problems with my endlessly repeating it over and over and over, I say "Hey! Don't come whining to me! Write this Hultberg fella and complain to him. I'm just the messenger here!"

Anyway, the quote is, "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." [Human Action, p. 572.]

Not content to leave it there, although he very well could have as far as I am concerned, Mr. Hultberg flexes his considerable intellectual muscle and characterizes four trends as the Four Horsemen of the Apocalypse. They are, and I quote: "1) Keynesian monetary policy, 2) Demopublican political control, 3) the Pax Americana mindset, and 4) the Kondratieff Cycle."

For those of you who do not recognize the word "Demopublican" it is, at least in the way I use it, a highly pejorative term that indicates that both the Democrat Party, traditionally a clueless and relentlessly socialist and communist-inspired bunch of touchy-feely jackasses who actually believe, against the weight of thousands of years of actual experience, that large and intrusive governments are good for a society and economy, and the Republican Party, who are newcomers to that particular idiocy but rapidly making up for lost time, are now evil twins who are going to destroy the USA with their shared loathsome agenda. Just like it has ruined every other economy where it has been tried. Nowadays, there is very little difference between the two political parties, although, I am sorry to say, the Republicans have a distinct police-state viciousness about them. Ergo, Demopublicans.

But the characterization of these forces as the Four Horsemen of the Apocalypse is appropriate in so many ways, especially as regards the notion that they cannot be stopped. Erudite reader Carol Freinkel wrote me an interesting letter which said almost the exact same thing. Only she referred to the concept of Nemesis, which was the Greek god of retribution. She writes, "The basic concept is that of Nemesis as an implacable force that, once set in motion, cannot be deterred, only (perhaps) delayed. When I look at the charts showing the US budget deficit, trade deficit, debt levels and foreign ownership of debt, I see Nemesis. Forces have been set in motion that will lead to massive changes that will occur whether or not people believe in them, that will have devastating, far-reaching consequences that can no longer be prevented."

So, there you have a whole bunch of things to blame for what is going to happen, which are all pretty much the same thing with different names. "Doctor! Doctor! I'm dying of cancer!" To which the doctor replies, "It is called a malignant carcinoma. You are dying of a malignant carcinoma." To which the patient replies "Gee, thanks! I feel better knowing that!"

Zawya, otherwise known Asia Pulse Pte Ltd as far as I can tell, put out the news that "Generally speaking, Asia is the main market of China's silver export, receiving over 90 per cent of China's total silver export. China's mineral silver output has increased at an average annual rate of 9.5 per cent over the past 10 years to top 2,219 tons in 2002, ranking fifth in the world after Mexico, Peru, Australia and the United States. Generally speaking, Asia is the main market of China's silver export, receiving over 90 per cent of China's total silver export."

Perhaps this has something to do with the recent rise in silver, eh?

The rise in gold, on the other hand, is easily explained: the dollar is rapidly becoming trash, meaning worth little more than the paper on which it is printed, anybody who owns anything denominated in dollars is going to get financially killed, and gold is the only safe place to put money, unless you happen to be one of those fortune tellers who knows what currency and economy will replace the American one.

Bob Wood, one of the local boys around here that manages money and actually spends time doing his job and reading financial publications, instead of acting like me and spending all his time worrying about poor J Lo and Ben and wondering if they again will find love and true happiness, sent me an e-mail about something he read in the Financial Times, since he knows that I am deathly afraid of how the Chinese are going to eat our lunch, which I think about every time I have Chinese food for lunch, which just goes to show you how these things intertwine.

To wit: China is planning to issue dollar and Euro-denominated government bonds. Now this, to me, cowering in my reinforced-steel bunker, is proof positive of how the Chinese are smarter than we are, and that is why they ARE going to eat our lunch.

The plan is simplicity itself. The yuan is currently pegged at 8.3 to the dollar. They issue these dollar-denominated bonds, and get 8.3 yuan for each dollar that somebody invests in these bonds. Then they de-peg the yuan from the dollar. The dollar plunges in value, and now they have a lot of debt where they got 8.3 yuan that they can now literally pay back at pennies on the yuan! Now, personally, I know how it is when people laugh at me in ill-disguised contempt, since I hear it every time I go outside, or venture to the store, or merely open my mouth and say anything at all, and it sounds like "Hahaha!" But I am not sure how it sounds when Chinese people laugh in contempt at anybody so stupid as to buy those bonds, so I will merely write it backward as "Ahahah!"

But until they manage to offload a bunch of this new debt, and thereby saddle some stupid American investors with that toxic junk, then the chances of a revaluation of the yuan is unlikely. Remember, the Chinese sellers of all of this dollar-denominated debt will only prosper with this blatant scheme if they manage to sell the debt BEFORE they devalue.

Plus, the history of the world for the last fifty years is the history of American checkbook diplomacy, and so the Chinese know, as the Palestinians know, as the North Koreans know, everyone knows, that all they have to do is drag their feet and sooner or later Washington will start making some highly lucrative deals with them, otherwise known as raw bribery, where we will simply buy their cooperation. Then they will take the money, renege on the deal, and we will come crawling back and make another, even more lucrative deal, to buy their cooperation again. And again. And again.

Flipping through the channels on TV looking for a Bewitched episode, hopefully starring Serena, Samantha's highly attractive vixen cousin, I happened to alight on a talking-head show interviewing a Democrat who is a California state senator, who shall remain nameless, and who is the poster child for everything that is wrong with politicians in general and Californian politicians in particular. He says things like "We can solve the budget crisis if we sit down and talk." He kept saying it with that aggravating smug sincerity that characterizes politicians, as if problems with money, or anything, can be solved by talking. They can't. They are always CAUSED by talking, almost always by guys like him who talk of nothing but how big their hearts are, and how much they feel everyone's pain, and how they want to help everybody, but they can only be solved by government reducing somebody's income in order to increase somebody else's income.

Let me make this one point extremely clear, and it seems impossible to overemphasize this point, although in typical Mogambo fashion I will happily beat it into the ground for so long, and so loudly, and with so many crude obscenities, that perhaps it WILL be possible to overemphasize this point. But anyway, as a way of providing initial emphasis, I will enclose it in quotation marks, even though it is obviously not a quote, but is merely, as I said, a way of providing an indication of emphasis. "Budget problems can only be solved by reducing somebody's income." And that will always cause other problems, so it seems to be perhaps true that budget deficits cannot be solved at all, ever. And now, thinking about it for a minute, I can't think of a government budget problem that was ever solved, so maybe government budget problems ARE insoluble! Ain't that a kick in the head!

But getting back to the point, there are only two things you can do to address a budget problem. You can cut spending or you can raise taxes. But, and I note for the record, both of them have the exact same end result; somebody's income is cut. If you cut spending, then you directly cut somebody's income. If you raise taxes, then you take money away from somebody, and therefore you, again, reduce somebody's income.

As the genius little economists that you are, I know the reason that you are all waving your hands excitedly in the air, wanting me to call on you so that you can show me how smart you are. You are dying to make the point that raising taxes will, as I said, reduce somebody's income, but it will also increase somebody else's income, namely the recipient of the taxes when the money is spent as part of some government program. So, in the final analysis, one income is cut and one income is increased. And therefore, you say, mathematically it is a wash. And now you are wondering how I am going to get out of this apparent enigma.

Well, I am not, as all of that is true. The only difference is WHERE the money is going. If you spend it on things that you want, then the economy grows along those lines. If the government spends the money, then the economy grows along those lines. Now, all you have to do is figure out which is healthier in the long run.

And for that, all we have to do is trudge forlornly down to the library and look at a few books in the history section. Doing so, we look at the whole of human history, and we will immediately notice that there is no example of a successful economy where the government did all the spending, but that there are lots and lots of examples of successful economies where the people directed the spending of their money. THAT is the big difference. Now I don't know how YOU define "big difference," but for me I mean the difference between blissful economic success where happy people whistled happy tunes and happy puppies cavorted in the happy sun-dappled streets, and abysmal failure where the angry, miserable people spent most of their days praying for an early death, which they perceived would be vast improvement.

As if to add fuel to my fire, a guy named Christopher Mayer wrote an essay on the Mises.org website entitled "Sumner's Forgotten Classic." He starts out the essay with one nice quote from William Graham Sumner, which is "History is only a tiresome repetition of one story." And what is this tiresome repetition? Let's let Mr. Mayer tell us;

"Sumner was referring to the seemingly endless attempts to harness the power of the State to further one's own ends at the expense of other people. The desire to live at the expense of other men is a constant theme that runs through all of human history."

And that means taxing one set of people to give it to another set of people, which is the whole point of the Democrat agenda, who invented this ridiculous idea. And this brings us back to another point which seems to have escaped the Democrats, for whom no pejorative term that impugns their intelligence is too inflammatory, since every time they open their mouths they embarrass themselves with something even more stupid than something they said just ten minutes ago. I will enclose it in quotes to provide that hint of emphasis. "You cannot tax a business, as the business will merely pass along the tax by raising the price of the goods and services that the business produces." In the final analysis, the final customer pays all of the taxes that are levied on businesses, and so the only effect of taxing businesses is to force prices higher, which hurts the customers, who are the taxpayers, and to enable the growth of a bigger and more crippling government through the attendant higher taxation, which also hurts the taxpayers in the end. So taxing businesses is suicidal, in the long run.

And, continuing on in that regard, there is increasing agitation for an increase in the minimum wage, at least around these parts, as I gather from the Letters to the Editor in the paper. The consensus is that wages ought to be at least about, oh, say, a dollar an hour or so higher. This increase in wages will, so the loony Leftists declare, alleviate all the problems of the poor and the not-so-poor but-still-deserving-of-government-help. If only that were true.

So, let's look at it from the side of us money-grubbing capitalist swine who actually own and run the businesses, which we manage to do when we aren't too busy sucking the blood out of the proletariat workers and terrorizing miscellaneous groups of minorities, because you know what kind of people we are if you ever read one of the Leftist newspapers in this country, and those are about the only kind of newspapers and reporters that there are anymore.

But since turnabout is fair play, I will now dishonestly characterize us grasping, rapacious Republican bloodsuckers as pathetic widows and orphans who have investing our last precious few pennies of our meager savings into businesses, so we can hopefully afford an income stream that will provide enough to buy cold gruel and a lump of coal or two to keep from freezing in our drafty little hovels. Now, when the greedy, grubby proletariat workers get government to step in and force us business-owning widows and orphans to pay more money to the workers, they are directly taking money right out of our pockets, and thus taking the meager crust of day-old bread out of our mouths. So, in order to put bread back into our mouths, and the mouths of our pathetic ragamuffin children, we have to raise prices. When we do that, we get some of our money back, and therefore we get some of that missing bread back in our mouths, and the mouths of our children whose screams of starvation are allayed for yet another little while. But not all of it, because we poor pathetic widows and orphans also have to pay the higher prices that OTHER businesses are now charging, since they also had to raise prices to cover their higher payroll costs. And the tax bite is also higher, thanks to the progressivity of the tax tables. So we running-dog capitalist vampires, oops, I mean us widows and orphans, and the nasty, grasping workers, and everybody else, is a net-net loser.

And so I am calling on all the other widows and orphans who own the stock of businesses to rise up and expose the workers as the overpaid gluttons that they are. These shiftless lazy peasants only have to pay the costs of getting to work, and in return they make something like $35,000? My God! These losers say that they want a raise, when already their expenses to get to work run to a few lousy thousands of dollars, maybe $5,000 a year, and that investment yields $35,000? Wow! What a return on investment! We widows and orphans should be so lucky!

Now let's look at it from the perspective of us poor widows and orphans who own the businesses. We have everything on the line, as everything we have in this world is invested in these businesses. And for that gigantic risk we are barely turning a profit, and now the workers want to take even that little bit of money away?

Well, I say it is time that us widows and orphans wise up against the tyranny of the workers! And the first thing we need to do it to recall all the Leftist politicians, a la this whole Gray Davis thing.

Finally, somebody besides me is showing some interest in the huge explosion in people who are being paid by the government. In an article in the 9/4/03 WSJ entitled "Despite Bush's Credo, Government Grows" Oh, not the direct employees, but the legions of people who are contractors and recipients of grants. And we, actually meaning me, have the Brookings Institution to thank for their interest.

Stephen Moore, of the Club For Growth, said "We are now seeing the biggest expansion in government since Lyndon Johnson was in the White House. It is pretty much an across-the-board mushrooming of government."

According to the little chart provided, it appears that the number of contractors is about 42% of actual employees, which already number in the tens of millions.

And since none of the people providing quotes addressed the state's contractors, let me jump up in my highchair, spilling my strained peas and pablum all over the front of my bib that says "I'm a good boy!" and announce that the problem is just as bad, or worse, than the federal problem.

The French and the Germans are leading the charge to allow the EU to violate, again, the Growth and Stability Pact that requires that governments keep their deficits at less than 3% of GDP, which is the same stupid idea that the American and Japanese government are pursuing. They are already running about 4% of GDP, and even that is not enough to suit these guys, probably since we hotshot Americans are running deficits that dwarf that percentage.

It is being called a New Deal-style initiative, which to students of history ought to be enough to cause nightmares. The New Deal that FDR and that whole generation of commie-think socialist pinko creeps crammed down the throats of America lead directly to where we are today.

At least the European Central Bank came out and said they were acting like the bozos that they are. Whew! We here in America could use a little of that caution, but instead we have Alan Greenspan and his loathsome Federal Reserve, who are doing everything that they can think of to make sure that the dollar, America economy and everything we hold near and dear, are destroyed. At least they don't whine about how I never even send them a Christmas card.

Speaking of the French and the EU and their willful disregard of the Growth and Stability Pact, there was an article in Monday's WSJ that froze the blood in horror, at least that is what happened to me. It was entitled "Europe's Central Bank May Have Leader To Match Greenspan." A guy named Jean-Claude Trichet, who is currently the governor of the Bank of France, is scheduled to take over the EU from Wim Duisenberg in November. Getting beyond the renowned communist bent of France, the chilling thrust of the article is made clear by the paragraph, "Mr. Trichet is already a trusted peer of Mr. Greenspan. A strong Greenspan-Trichet partnership could greatly improve policy coordination among the rich nations known as the Group of Seven."

I will not elaborate on this any more, as this is more than enough to know that I will be having nightmares for weeks and weeks. But I am consoled that the horrors that will result from another Alan Greenspan being foisted on the world are in my dreams, because I have gold, which will keep that horror from intruding on my real, waking life. Most others will, because they do not own gold, soon have those horrors in both worlds.

The pension insurance guarantee program hit another new deficit record, hitting $5.7 billion as of July 31. That means that the taxpayer is going to be hit with yet another whack to the head as the government comes up with the money for yet another bailout. It has been said that the fund is already in more deficit than they have ever paid out in the whole history of the guarantee organization. But this is only the beginnings of the bailouts that will be required as we proceed into the future.

Richard Russell, he of the superstar Dow Theory Letters newsletter, has increased his recommended allocation of gold to, and I quote, "at least" a third of assets. His pithy phrase is "The U.S. is inflating its head off and depreciating the dollar's head off."

Ron Paul, the Congressman from Texas who is the only guy in the whole of Congress who understands economics, has written a fabulous piece entitled "Paper Money and Tyranny." Originally published by Agora Publishing, it appears on the Daily Reckoning website and many other fine sites, and if you are able to read it on some other site, then you know you can trust those guys. I strongly recommend that you read it, because you obviously have the time to do so since you have enough time to read my stupid newsletter, learn it, because it will demonstrate that you are an intelligent being, and live it, which will make you wealthy, and which includes always voting for people whose views coincide with it and voting against those whose erroneous views do not. Which translates directly into voting against every dim-witted jackass that is currently infesting Congress and the White House, except Ron Paul. And remember, that's MISTER Ron Paul, as our way of demonstrating profound respect. The rest of the members of the Washington cesspool may be correctly referred to as "Bozos."

The Guardian, a British publication, writes, "The prolonged heat wave has devastated crops across Europe, leaving some countries facing their worst harvests since the end of the second world war." They also dryly note that "Last year was the third time in four years that global wheat, rice and maize production failed to meet demand, forcing governments and food companies to release stocks from storage." As a result, British bakers have warned retailers that wholesale prices will likely rise by up to 15% because of the rising cost of flour.

But, not to worry, because our government will come up with a way to prove that the higher cost of food is not inflationary, but is just your imagination. And so, if the slow-learning British and the other European weenies would only get with the program and have Alan Greenspan and Michael Boskin come over there and show them how it is done, they, too, will be able to show that by simple mathematical wizardry, that they can make the 15% increase in the price of bread disappear completely!

Over here, the success of their program is obvious when you note that you never read anything, anywhere, about the double-digit percentage price increases in damn near everything. "Out of sight, out of mind." It is only when you look into your wallet at the end of the month, and you wonder, "Where in the hell did all the money go?" Ugh.

---Mogambo Sez: The SP500 is nearing a P/E of 34. This is historically even outside of the range normally referred to as "preposterous," and will almost certainly be regarded in the future as the last, dying blow off rally of the ridiculous equity-cult, which is, I am profoundly sorry to say, only one of many bizarre and incestuous cults operating in the USA and the world.

Richard Daughty
Sep 11, 2003

The Mogambo Guru Lives!

http://www.321gold.com/editorials/daughty/daughty091203.html