-- Posted Friday, 12 October 2007 | Digg This Article
| Source: GoldSeek.com
And it is not just us Americans feeling the inflation in prices, the ugly price we must pay for allowing the government and its lapdog, a central bank, to create excess money and credit (monetary inflation) which produces price inflation, as from Bloomberg we read that consumer prices in Taiwan, "advanced 3.08% from a year earlier", mostly reflecting higher prices of food. Yikes!
And in Russia, "the Federal Statistics Service" said that, "consumer prices rose more than expected in September as sunflower oil, dairy and other food products became more expensive." Yikes yikes!
How much more expensive? "Consumer prices increased a monthly 0.8%" and "7.5% in the first nine months of the year", which shows that prices are rising the most in the recent past, meaning that they are rapidly getting worse. Yikes yikes yikes!
And it may soon be getting worse for all of us, as shown on the cover of the new Economist magazine. It is a photo of Bill and Hillary Clinton walking in a parade, smiling and waving at the crowd, with the caption "The comeback kids". The significance of the whole stinking thing is that if you look closely, behind Bill Clinton is a half-hidden person who appears to be wearing a folksy dress and holding out an orange plastic bucket. Due to the angle of sunlight, there appears to be something IN the bucket! Like money!
Obviously, the only possible, logical conclusions that anyone with half a brain can come to are that this visible hand and bucket are either:
1). Like the guy that sweeps up after the elephants in the big circus parade, picking up all the stinking socialist/communist "love muffin" crap pumped out by these two leftist morons, before too many people get a whiff of that stinking collectivist effluvium and say rude things like, "Jeez! What in the hell is that awful stink? Did somebody cut one, or is the Mogambo around here or something?", or
2). The Economist magazine has doctored up the photo, adding the dress, the hand and the bucket so that the really smart people (like you and me) will immediately recognize it as brilliant Bill and Hillary Clinton satire, as the photo is now clearly, clearly, clearly showing a mysterious, half-hidden somebody in the background (faceless bureaucracy!) with a gun (not shown but obviously implied), who is confiscating the buying power of the money of the very people who are cheering the collectivist Clintons on! Hahaha!
The real joke is that none of the cheering, mindless people in the photograph realize that this is happening, and is destined to get worse under a President Hillary Clinton, as all of her promised additions to the nanny-state redistribution and outcome-equalization crap (that has become the very lifeblood of our economy!) will become more and more expensive from now on, and the government will borrow more and more money, which the Federal Reserve will create as credit in the banks, so that somebody can borrow the money from the banks with which to buy the new government bonds, which increases the money supply, which drives up prices, which kills the economy. Whew! What a piece of cover art!
All of this means that dollars will be created like you will not freaking believe, the dollar will go down and down and down in value like you will not freaking believe, and that everyone ought to be buying gold, silver and oil right now, but they don't, because they don't believe their own eyes.
And of course, as soon as I open my Fat, Stupid Mogambo Mouth (FSMM) about how all of these new dollars is such bad news, here comes Peter Schiff of Euro Pacific Capital with his essay "Are There Too Many Dollar Bears?"
I immediately think to myself, "Oh, crap! If Mr. Schiff is going to repudiate what I just said, then I am really screwed! I hate this! Am I ever going to be right about anything my whole pathetic life?"
Sure enough, my fears seemed justified when he started out that we dollar bears are "united by two basic assumptions. First is that the dollar's decline will be orderly, and second is that the decline will actually be positive for both the U.S. economy and the stock market. Therefore, other ways to confound the consensus would be for the dollar's decline to be disorderly or for it to be negative for both the U.S. economy and the stock market."
Suddenly, I am thinking to myself "Huh? I think that? I didn't know that is what I thought! I thought I thought that a weakening currency is only good if you are a net exporter, which we aren't, because you can undercut your international competitors' prices while keeping your domestic prices steady when sales are converted into your own currency, but that a strong dollar is good if you are a net importer, like we are, because it keeps price inflation down by making imports cheaper!"
I was trying to wrap my three remaining functioning cranial neurons around this seeming paradox when I discovered that he was just toying with me! Teasing the poor mental defective cripple like the big bully he is! It turns out that he actually agrees with the premise that the dollar will fall, but that his disagreement is that "Of course should such a run on the dollar commence, it will not be the orderly decline everyone seems to expect."
Apparently, standing next to me in a crowd or even agreeing with me about anything is somehow repugnant to Mr. Schiff, as it is to most people, so he makes a joke of it and says, "However, I am still not sure why so many feel a declining dollar is not a problem so long as it does so in an orderly manner. If you're headed to the poor house, what difference does it make how you get there? Whichever road you travel, you're just as broke when you arrive!" Hahaha! Perfect!
This is all at odds, of course, with a Bloomberg.com headline that reads, "Weak Dollar Boosts Growth Without Fueling Inflation", which was full of the feel-good story that a weak dollar is good for exports, which it is, and that it is good for net-import America, which it is not. And as the joke goes, "Not only is it not, it's snot!"
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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. To read all of The Mighty Mogambo's musings from this week, click here.
-- Posted Friday, 12 October 2007 | Digg This Article | Source: GoldSeek.com
