-- Posted Thursday, 20 September 2007 | Digg This Article
If you are a person who thinks that there are conspiracies everywhere and that there are secret, coded messages everywhere, too, you may be interested to learn that from CaseyResearch.com I have noted one of these "secret significances" in his latest newsletter; it contains only four exclamation points in the whole thing.
The first exclamation point is at the top, where you are told you can "Sign Up Free!"
The second exclamation point is found in a snippet in the header, "$700! - Gold logs a close above the magic number."
Tellingly, the other two appear in the actual text in the section written by a guy named "Ed Steer" (Steer. Get it? Steer? Like steering you to safety? And you call yourself a conspiracy buff? Ha!) that are down near the end of the newsletter, and actually used in adjacent sentences! Is that significant or what?
Anyway, the first sentence says, "The World Gold Council is predicting that India's gold consumption this year will be north of 1,000 tonnes!" Immediately following, the next sentence includes the only other exclamation point; "That's a 50% increase over last year and a whopping 40+% of 2007 gold production!"
Perhaps this is significant in that the rest of the article says that this all comes, "in the face of the worst economic, financial and monetary crisis the world has experienced since 1929", which is bad enough, but I think it is good news that "the Gold/Silver Cartel is about to crash and burn" because that means, to me, that anybody owning gold and silver are going to get stinking rich, rich, rich as the two metals explode upward from their suppressed prices.
And mightily suppressed they are, too, as their prices have gone nowhere even though, as MoneyandMarkets.com reminds us, "As recently as just five years ago, foreigners had loaned $3.2 trillion to America. The amount the United States owes to foreigners has grown by leaps and bounds - to $3.9 trillion in 2003…$4.8 trillion in 2004…$5.4 trillion in 2005…$6.4 trillion last year…and now over $7 trillion!"
With a national debt now registering north of $9 trillion, does that mean that only $2 trillion is owed to Americans? Hahaha!
Perhaps this would explain why Marc Parent at mparent7777-2.blogspot.com leads off his column with the growth in M3 money supply, which is the biggest, baddest, all-inclusive estimate of money supply, which includes everything that could possibly be construed as money.
There is some difficulty in calculating M3, of course, such as in getting true and reliable information from "institutional money market mutual funds, time deposits in amounts of $100,000 or more, repurchase agreement liabilities of depository institutions (in denominations of $100,000 or more) on U.S. government and federal agency securities, and Eurodollars."
But all of that is, fortunately, not my problem, as calculating things is actual work, and I don't do work unless I get paid a lot of money for it, and usually not even then, which is why nobody pays me money to do work anymore, which is probably why I have no money.
Fortunately, both he and John Williams at shadowstats.com are not so lazy as I, and after busily working, working, working while I am goofing off, they independently get answers that agree on direction and general magnitude, and it looks like M3 in the USA is growing at almost 14 freaking percent a year now! Fourteen freaking percent!
Normally, I would soon begin the traditional Screaming Insane Mogambo Phase (SIMP) of the discussion, as the ramifications of an increasing money supply means increasing prices, and all over the world people are getting angrier and angrier about the way that consumer prices are rising, but are paradoxically happy that the increasing money supply is also financing higher prices for stocks, bonds and houses, and how this means that people are as stupid as the proverbial "bag of hammers", and thus I scream because I assume that screaming at them is the only thing that can get through those thick skulls of theirs that inflation is a Bad, Bad Thing (BBT).
So I was just drawing in a big, deep inhalation breath in preparation, when up jumps Junior Mogambo Ranger (JMR) Grant E. with the perfect example, which may prove instructive!
"While on a camping vacation this summer," he begins, "my son and two other friends started playing an interesting game. They all setup 'shops' to sell things - basically anything that wasn't tied down or in use in the campsite. The real interesting thing was they used pinecones for money.
"So it starts out that a pre-enjoyed pop can goes for 5 pinecones. Sniffing the empty red wine bottle, a couple of pinecones. As the game progressed, the kids found that the supply of pinecones was virtually unlimited as they scrambled in the adjacent woods to gather up the money. I watched this unfolding demonstration economy with fascination!
"Suddenly the prices of things started going up. That pre-enjoyed pop can - well, that'll cost you 10 pinecones now! There were so many pinecones in circulation that soon buckets of them were being offered for some of the more prized pop cans. My son, who now had declared himself the bank, was now running a lottery!! More bucket loads of pine cones came flooding in."
Beyond the humor ("This was just too funny to watch" he says), the lesson was that "it proved that even kids playing a simple game can show us the ways of inflation. Monetary inflation begets price inflation. Pinecones or your favorite paper currency, the fate will be the same."
Exactly! And that is why I sigh, and cry…my, oh my, how I cry and sigh.
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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 Thursday, 20 September 2007 | Digg This Article
