-- Posted Friday, 7 September 2007 | Digg This Article
Jim Sinclair of jsmineset.com sums up the current economic disaster as, "The hope for every central bank is that the real problem can be kept from public view. The truth is the public, even professionals on Wall Street, have no clue what the problem is. They know it has something to do with derivatives, but none realize it is a more than $20 trillion…mountain of unfunded, unregulated paper that has just been discovered to not have a market and therefore any real value."
Jim Cook at InvestmentRarities.com looks at this and snorts, and reminds us that this is just one small part of what Austrian economist and author Henry Hazlitt warned us about, namely that, "The consequences of inflation are malinvestment, waste, a wanton redistribution of wealth and income, the growth of speculation and gambling, immorality and corruption, disillusionment, social resentment, discontent, upheaval and riots, bankruptcy, increased governmental controls, and eventual collapse."
You would think that with an economic situation like that, gold would be more popular. Is it? Well, from time to time, I do a little research so that I can write off the activities of Mogambo Research Associates (MRA), which is pretty much used to finance furtive trips into a lot of dirty bars, saloons, night spots, dives, rat holes, and "gentlemen's clubs", which (given the activity inside) is an insult both to gentlemen and clubs.
But this is not about the flaws in my research methodology or the flaws in my personality that drives me to grovel in the gritty gutter pursuing such fatuous intellectual pursuits, but a glorification of them, since they are so effective and efficacious; I find someone who is a lot smaller than me, grab them by the collar, drag them up close to my face so that they can smell my various aromatic stenches, and then loudly interrogate them, demanding to know things like, "Tell me everything you know about gold as an investment, or I shall take you to my spacecraft and use strange devices to probe your orifices, lowly Earth creature!"
Analysis of the data from these Mogambo Research Associates (MRA) forays into the field has shown that test subjects readily and consistently reveal that they don't know anything about gold, they don't have any gold, that they will happily rat out their family and friends about THEIR gold, offer to buy me all the gold I want if I let them go, and that the younger ones usually have about sixty cents for lunch money, which isn't really that interesting in itself but it explains why I am not that happy that those stupid kids are so physically exhausting, always squirming and crying for their stupid little mommies to come and help them, just to net a lousy sixty cents "for science."
And this is not to mention my troubles with the police, who are impressed with the obvious parallels between Mogambo Research Associates (MRA) and the United States of America, which is a country that has recently adopted 1) the military philosophy of the "preemptive strike" as so famously utilized by Japan at Pearl Harbor on December 7, 1941, and 2) the use of torture to get information.
The police are probably, like me, old-school Republicans, and we are both horrified by what the neo-con Republicans are doing, which I think is best summed up by Paul Craig Roberts as, "In the administration of George W. Bush, the Republican Party has achieved the greatest combination of idiocy and evil in human history", which is both true AND (I note for your edification) makes absolutely no comparative reference to Mogambo Research Associates (MRA) or the eerie similarity of our fact-gathering methodologies.
So imagine my chagrin when it turns out that I could have saved myself a lot of time and trouble by merely asking Doug Casey of the International Speculator newsletter about the general attitude towards gold, who writes that there is no rush, and you can still buy gold and silver at bargain-basement prices at your leisurely convenience.
This is the conclusion I get from his referring to the behavior usually encountered in the "mania phase" of classical boom-market phenomena, which is that glorious ultimate bull phase of a boom market when there is mass, universal public participation, as literally everyone with two nickels to rub together is buying and clamoring to climb aboard a booming asset bubble, and prices are rising to the moon because of it.
Specifically, he reports that the mania phase lies ahead, as, "The public is still out of the gold market. I promise you that every market top I've witnessed in my life was accompanied by cocktail party chatter about the asset class in question. I have yet to have any indication the public has a clue that gold and other resources even exist. If this is a market top, it's unique."
This very point was brought home to me the other day when I had accidentally driven my tee shot into a greenside sand trap. I instantly sized this up as a "touchy shot", and since nobody was looking, I just picked the ball up and threw it onto the green, very nearly holing it out and leaving just a two-inch "tap-in" par.
Suddenly, one of the other guys in the foursome yells out "Hey! I saw that! I just saw you throw your ball onto the green, you Cheating, Lying Piece of Mogambo Crap (CLPOMC)!"
Naturally, I yelled back, "You can see me throwing a little golf ball, even when your back was turned to me, but for some reason you can't see that your own government is lying to you, and the Federal Reserve is lying to you, and they are destroying the purchasing power of your money right in front of your eyes? Is that what you are telling me, you stinking mashie-niblick moron?"
As I walked up to my ball with my putter in hand and tapped in for par, I continued yelling, "Well, you are a lying piece of trash, because you couldn't have seen me throw it on the green because I purposely waited for you to turn your back to me so that you COULDN'T see me throw it on the green! And yet even with your remarkable power to see out of the back of your damned stupid head that even Superman would envy, you don't buy gold in response to the blazing destruction of your own money caused by the Fed issuing so much more of it, right in front of your stupid, ugly face?"
Well, skipping the ugly details of the ensuing animated discussion, I got the par and they all resolved to watch me much more closely from now on, and one day they will start watching gold, too, just like Mr. Casey said they would!
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Editor's Note: 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.
The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications.
-- Posted Friday, 7 September 2007 | Digg This Article
