-- Posted Friday, 4 April 2008 | Digg This Article
| Source: GoldSeek.com
My poor, spinning head was on the bar, comfortably resting in a pool of what smelled like stale beer and something moldy, when the bartender pokes at me and asks "What's the matter with you?" I opened my bloodshot eyes and squinted up at him, and knew that I could not explain to him the significance of John Williams at ShadowStats.com reporting that his new calculations show that M3, the broadest measure of the money supply, is now condemning us to an inflationary hell.
But for some reason my lips were all numb and refused to work, so I just pointed to where Mr. Williams writes, "Money Supply M3 Growth Continues Rising, Monetary Base Surges At Annualized 20% Pace", and "On a similar basis, annual M2 growth would stand at 7.2%, up from 6.9% in February. The increasing signs of accelerating money growth remain coincident with the Fed's increasing re-liquefaction of illiquid assets held within the financial system."
He looks at it, then he looks at me with a bored expression on his face, and says "Yeah? So?"
Trying to think of a nice, friendly way to explain that inflation in consumer prices always follows inflation in the money supply, I ask, "What is your name, sir?" and he replies "Frank."
So, picking my words carefully to keep with the new "friendly conversation" theme, I politely say, "Well, then, you're an idiot, Frank! A big, stupid moron! In fact, all you stupid people in this bar are stupid, because you all think that you are not going to be destroyed by the fires of an inflationary hell that is going to consume you and everyone you love, because the Federal Reserve is destroying the dollar right in front of your eyes by creating so damned many of them, which they are now doing just trying to delay the inevitable catastrophic collapse brought on by the same damned Federal Reserve creating so damned much, so incredibly damned much, so impossibly damned much money in the first place, creating mountains and mountains of debt and money and over-valued assets over the last few freaking decades, and especially since 1997! You're all morons, and you are all freaking doomed! Doomed!"
Well, all my efforts to be nice were for naught, as usual, and they all wanted to argue with me and call me nasty names, and someone suggested not serving me any more alcohol and to make me leave, which I mention just to show you the kind of morons we have hanging out in bars these days, and how I was right when I called them "stupid."
But not one of them said, as I expected, "You're right, oh Wise And Glorious Mogambo (WAGM)! We grovel at your feet in supplication and beseech you to please, please, please impart wisdom to tell us how to turn this to advantage, or at least tell us how to save our nasty stupid butts from, as you say, doom!"
If someone had asked me, I would have told them to buy gold and silver, and they will prosper, just like all of the other times in history when a butthead government allowed the over-creation of money and credit by the stupid banks, which sentenced the currency and the economy to inflationary collapse, and gold soared as everyone turned to gold as there was nothing else that could do the job of preserving wealth.
And if they had shown their gratitude for such terrific advice and said something like, "Oh, thank you, thank you, thank you, Mighty, Mighty Mogambo (MMM)! Let us show our gratitude by plying you with alcoholic beverages and tacos until, you know, you puke!", I would have told them to especially consider buying silver, which is such a freaking bargain that every time I look at it, I think to myself "I can't believe silver is selling for this piddly little price! I should buy some more silver!"
And I would, too, if I could figure out a way to get another $20 out of my wife's purse, as I have already used the other 20-spot here at this stupid bar and I am far, FAR too drunk to noiselessly pull off the heist.
And speaking of gold, Antal Fekete of the Gold Standard University writing at GoldSeek.com reminds us that "Seventy-five years ago this month Franklin Delano Roosevelt…closed the U.S. Mint to gold. Recall that the Mint had been established by the Constitution to protect the people's right to sound money."
If you are like me, then you are not in the mood for a damned history lesson, as the scars of high school and history class are still too, too fresh, even after all these years.
But the result of closing the Mint, says Mr. Fekete, is that we got "the irredeemable dollar", which he considers "the real culprit" of the mess we are in. "It has taken the chickens 75 years to come home to roost," he writes. "Come home they will with a vengeance. The past 75 years were a period of unprecedented turbulence in the financial markets. Yet never during those 75 years has the nation faced a graver monetary crisis than it is facing now. The banking system of the country threatens to seize up. The credit system is facing a violent collapse."
And what does gold at $1,000 an ounce have to do with "violent collapse", if anything?
He gravely intones, "$1000 gold is a milestone - on the road to hell."
Having been married and a father for a long, long time, I know firsthand all about hell, and it will be Very, Very Ugly (VVU) from now on!
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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.
-- Posted Friday, 4 April 2008 | Digg This Article | Source: GoldSeek.com
