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Unemployment Survival Guide

By: Richard Daughty, The Mogambo Guru - The Daily Reckoning

-- Posted Tuesday, 19 August 2008 | Digg This ArticleDigg It! | Source:

Judy Stark, the Homes and Garden editor for the St. Petersburg Times, writes that it is a "sign of the times" when a local county-sponsored workshop on vegetable gardening has suddenly hit the 200-person capacity of the room.

She says that this means, "there is great interest in growing your own food so you know what's in it or on it, and avoid high prices at the grocery store."

Fabulous! So now we know that the economic miracle that Alan Greenspan at the Federal Reserve was supposed to be delivering to us with all of that excessive creation of money and credit to finance the creation of permanent government programs, permanent inflation in the money supply, permanent inflation in consumer prices and permanent inflation in government employment has now required some people to take up subsistence farming to survive!

And it may be Canadians becoming small-scale farmers again, too, as reports that "Economists Say Canadian Labour Force Drop Shows Job Boom Is Over", which is the reaction to a CEP News report that "55,200 Canadian jobs disappeared in July, the largest monthly drop since the early 1990s. The unemployment rate actually shrank, dropping a tenth of a point to 6.1% as an even larger number of people - more than 74,000 of them - dropped out of the labour force during the month."

The numbers are similar in Quebec, as the unemployment rate there "edged up by two ticks to 7.4% while in Ontario, the rate fell to 6.4% from 6.7% in June as 42,000 people left the labour market."

It makes you wonder how people "left the labor market", as this would imply that their families did not constantly hound them and harass them to get another job right away, right now, now, now, now, and how me just sitting there on the couch in nothing but a pair of underwear and sucking down yet another bottle of cold brew proves that "Mom was right! You are a terrible, worthless, lazy father who doesn't care about us!" and I am screaming back at them, "I could have told you that, you stupid damned kids!"

As I interpret it, figures that the government is gearing up for a frontal assault on the people, where they will herd us mercilessly into processing facilities to turn us into Soylent Green, as is suggested by the fact that "A gain of nearly 30,000 public sector positions partially offset the loss of 95,000 in the private sector."

In fact, "Since July of 2007, employment in the public sector has grown by 6.1% compared with +0.5% for the private sector." Yikes!

All of this unemployment must be impacting demand for goods and services, which may be what prompted Jim Sinclair of to ask a lot of questions, including "Do you really believe that present inflation is demand driven?"

This is the crux of the argument by Mark Gertler, a professor at New York University, who unbelievably writes to the Financial Times to take issue with the whole idea "that monetary policy is the root cause of the recent increase in the relative prices of energy and food." Huh? Astonishingly, he says that concentrating on the increases in the supply of money "dismisses the critical non-monetary factors, including increasing commodity demand from strong capacity growth of the global economy, coupled with short-run supply constraints and various government distortions."

To this, I laugh out loud and make rude noises in his direction as if someone farted, which makes me laugh out loud some more, and so I make more farting noises, which makes me laugh even louder, and then I am laughing so hard that I actually fart for real, which makes it even FUNNIER and pretty soon I am laughing so hard I can't catch my breath, which is good because it smells like someone farted.

Well, I soon realized that the farting thing was not my most brilliant attention-getting device, as I can see the security guards gathering to plan their rush upon my position and hustle me out of here.

So, not wasting another precious moment and obviously without waiting to be asked why I am frantically waving my hand in the air like a lunatic and shouting, "Hey! Hey!" over and over, I instead shout out, "Hold on there, doofus! Demand is but desire made manifest, and there is no limit on desire! And if you don't believe me, take your New York University butt over to my house and ask my family something like 'Hey, how would you like a nice burrito?' and you will notice they all say they would love to have a burrito!

"Then ask them 'Hey, how would you like a new car?' and they will all say that they would love to have a new car AND a burrito! And when you ask them, 'And how are you going to pay for this stuff, you greedy little bastards?' you will learn the ugly fact (as they have learned the ugly fact), that without the money to finance infinite desires, 'demand' doesn't really mean squat.

"And so you can also forget about 'capacity growth', too, because without the money to fuel the demand growth, there ain't no stinking capacity growth, and thus there won't be any 'short-run supply constraints', although there will always be 'various government distortions.'"

In short, the availability of money (the increase in the money supply) must come first if you are going to get systemic inflation in prices, and not the other way around, which you would think some hotshot economist from New York University would know!

And I'll bet he doesn't know that gold and silver are the "investment of choice" in response to such monetary insanity, either, so he'll get his comeuppance, which pleases me greatly, for some reason! Hahahaha!

P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed.

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. Click here to visit the Mogambo archive page.

-- Posted Tuesday, 19 August 2008 | Digg This Article | Source:

Visit The Daily Reckoning's website.


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