Unemployment is a favorite topic of conversation of late, especially among those who are unemployed. I assume it gives them something to do other than watch their lives going down the toilet as the federal government continues with unbelievable levels of deficit-spending and the Federal Reserve continues to create staggeringly more money so that it can be borrowed by the government and then spent, all of which makes prices rise.

Rising prices is Bad News Enough (BNE) when you have a job and your biggest fear is asking for a raise and the boss says “no” which means that you will have to tell your wife, who will think that you are a big, stupid loser, just like her father and mother and all her friends thought, but it is Doubly Bad News (DBN) when you have no income with which to pay the higher prices, and there are no jobs with which to earn some income with which to pay the higher prices, either!

I wish I could help them, and especially help family members, to get good jobs, if only to stave off their pathetic begging for food and wanting to live in my car, but I am too pessimistic to even hope for that, mostly because I know that the root of their unemployment is the result of them being replaced by software or industrial technology, or soon will be, because there is someone out there, right now, working on a computer program and/or a machine that will replace you, too.

And if you don’t believe me, tell me what it is that you do that cannot be done by a computer program or a robot? Hahaha! I thought so! Me, too!

In fact, I am sure that the only reason that most of us, especially me, have not yet been replaced is that nobody has gotten around to economically assembling the necessary machinery, or train a monkey, to do our jobs.

Perhaps that dismal jobs outlook – necessary as jobs are for consumption, necessary as consumption is to production, necessary as consumption and production are to the economy – is part of the reason why I spent most of the last week in Mogambo Emergency Mode (MEM).

But mostly, things are getting to be Too, Too Weird (TTW) for me to handle.

Most of the time, I am sitting alone in my Secondary Mogambo Bunker (SMB) in the closet under the stairs, wedged in between a stupid stepladder and a vacuum cleaner poking me in the ribs, thus darkening my already gloomy mood.

And now everyone, including the third of the population that still has not been replaced by robots and can still support the other two-thirds of the population, is in Big, Big Trouble (BBT), just like the Austrian school of economics has been perfectly predicting and which, as it turns out, is now happening.

That alone should send you screaming (“Gaaaahhhh!”) to the exits to buy more gold, silver and oil, but if you are one of those people who wants to know all the little nit-picky details, like the reason for my latest attack of “we’re freaking doomed!” paranoia and panicky fear, it is a speech by Jean-Claude Trichet, the president of the European Central Bank, titled “Stimulate No More – It Is Time For All To Tighten.”

My initial response was to ask, incredulously, “Is this guy serious?” since I have long regarded him as a hopeless leftist/socialist/commie/moron who would end up doing exactly as he did, and ruin everything just like he has, because he thinks that government is supposed to spend its time finding more and more ways to help more and more people by giving them more and more money and more and more benefits.

My second response, thinking that he may actually be serious, is, “Gaaaahhh! We’re Freaking Doomed (WFD)!”

And the reason that We’re Freaking Doomed (WFD) is simplicity itself: once you start down the road of a highly-leveraged fractional-reserve banking system that creates fiat money from debt, you can’t easily stop, mostly because if you try to stop, then you will Die A Horrible Death (DAHD), which is why it is not popular.

And the horrible death will be from deflation, which is when money literally disappears the instant that the underlying debt, which created the money in the first place, is defaulted upon. The debt goes away and the money goes away! It’s just that simple!

This means, in practical terms, that there is less money to support the prices of the remaining pool of assets, so prices of assets go down

For your edification, the exact point at which “it ain’t easy to stop creating too much money” is easy to pinpoint: it’s soon after you start. Very soon after you start, in fact. Practically simultaneously.

In our case, the point at which it was “easy to stop” creating more money and credit was a Long, Long Time Ago (LLTA), a calculation made obvious beyond the need for precision when you realize it was a Half Freaking Century (HFC) ago! Hahaha!

Therefore, we must abandon all hope of ever, ever, EVER stopping the wholesale “stimulating” of economies with fiscal and monetary insanities, which means that since we will not stop creating more money, we will not stop creating more inflation in prices, which is the Big Freaking Problem (BFP) that everyone is trying to avoid, as preventing inflation in prices is the whole purpose of macroeconomics!

I am sure that you were, like me, enjoying a good laugh at the sheer absurdity of trying to tighten monetary policy in the Eurozone, and you were probably thinking that if the president of the ECB has the time to make stupid wisecracks like this, then things are not as bad as you feared.

Suddenly, you are wondering if you have had a stroke, or have been transported to some weird, stranger-in-a-strange-land alternate universe where the laws of physics and logic no longer exist!

You wonder these things, your brain whirling in a panic, because a sudden excursion into La-La Land would explain why you see Mr. Trichet’s words, “We have to avoid an asymmetry between bold, if justified, loosening and unduly hesitant retrenchment,” but no matter how many times you read it, over and over, you do not understand it! Huh? What?

And the more you mull over the sentence, “We have to avoid an asymmetry between bold, if justified, loosening and unduly hesitant retrenchment,” the more you are enlightened to one more reason why, as if you needed any more reasons why, I am always saying to buy gold, silver and oil, and why I say, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

No Stopping the Money Creation Machine originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

I get a lot of mail concerning my single-minded fanaticism about how gold, silver and oil are the best investments to buy when your stupid government is deficit-spending and allowing excess amounts of money to be created, in our case by the Federal Reserve, and particularly that part about buying oil, meaning, of course, oil company stocks.

I throw up my hands in exasperation, especially now that China has surpassed the USA in terms of energy usage, ahead of all forecasts! Therefore, with a guaranteed rise in demand for oil, for as far as the eye can see, you would think that my Stupid Mogambo Advice (SMA) to buy gold, silver and oil is the famous-yet-elusive “no-brainer investment” that stupid guys like me are always looking for, since it does not involve any thinking at all at this point, except to remember to buy them, and thus we can save our thinking for thinking about getting a new set of golf clubs and how happy we think we will be.

Instead, I get complaints. For example, I recently received this email from what appears to be an erstwhile fan, who writes, “I saw you at a restaurant recently, but you broke my heart because you did not notice me just because I was not wearing a short skirt like the beautiful Kimberly, the shameless slut who was your waitress. I just wanted to tell you that your taste in women is superficial, your table manners are atrocious, and watching you slobber and gobble your food while you drooled over Kimberly disgusted me.”

Immediately I realized that this has nothing to do with my advice to buy oil along with gold and silver! This was, instead, merely another series of slanderous lies about me, this time concerning my eating habits and my kindly, almost grandfatherly, benevolent interest in the welfare of pretty waitresses.

As I was reaching to delete the email, with the dismissive word “Bah!” half-formed on my lips, with my peripheral vision I saw that the email was about oil after all! It turned out that the foregoing was mere preamble, as she then went on, “It was not until later, when I was at home relating to my neighbor how repellent and stupid you are, that I realized that your appalling lack of even a minimum of social graces was in keeping with your stupid advice to buy oil companies, as the depression that is necessary to wipe away the irresponsible fiscal and monetary excesses of the last half century will take oil companies down, too.”

I notice, of course, that she did not mention that I also recommend that she buy gold and silver, too, which is probably because she agrees with me that everyone should buy them when the government is deficit-spending (now at more than 10% of GDP!) and the Federal Reserve is creating all the new money to pay for such a tsunami of new government bonds, and all of this new money will create consumer price inflation that will destroy us.

But would she mention that? No! Or maybe tell me how my adorable blue eyes twinkle with an inner light? No! Or how my delightful, tinkling laughter is like music to her ears? No! Any compliment at all? No!

And yet she wonders why I prefer Kimberly over her? Hahaha! At least Kimberly brought me things to eat, and giggled, “Oh, stop it or I’ll call a cop!” when I leeringly said, “Hey, baby! Want to sit on Santa’s lap?”

The point is that if a rise in demand for oil is not enough reason to buy oil, then I am surprised at you, and if the rise in the inflation-driven price of oil as a result of the Federal Reserve creating so much money is not enough reason to buy oil, then I am surprised, again.

But if not rising demand, if not rising inflation, will the news of supply problems convince you to buy oil?

If so, then here is a quote from Casey’s Daily Dispatch, which is that “the oil companies must now push the outer envelope of what’s technologically possible in their quest for the oil that humanity requires to maintain forward momentum. That we are forced to drill so deep, or that the Brazilians are contemplating ultra-deep drilling through three and a half miles of water, rock, hot sand, and salt, is a clear sign of how serious the quest for large new oil reserves has become.”

I smile at this otherwise bad news because it is all so easy – as in “Whee! This investing stuff is easy!” – when you know how, and buying gold, silver and oil is, as I have always said, how! Whee!

The Mogambo Guru
for The Daily Reckoning

A Crude Display of How to Invest in Oil originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

I knew the instant that I read the article’s title, “Fed Nominees Seek Economic Boost” in The Wall Street Journal, that I was probably going to be outraged and end up screaming a fearful and angry Mogambo Howl Of Anger (MHOA).

It was, alas, a feeling of doom that soon gave way to stark fear when I saw that the accompanying photo was captioned “Fed nominees – Janet Yellen, Peter Diamond and Sarah Bloom Raskin – at a Senate hearing Thursday.”

I am already petrified of this Yellen woman and the horrifying things that she has said over the years, and probably done, for all I know, and maybe far worse than even I expect. In fact, I am so distrustful of the “sacrificing the minority to benefit the majority” insanity that I am sure that they would have no qualms about killing all the first-born sons if it meant a higher standard of living for the remaining population, a proud tradition she perpetuates when she embarrasses herself by testifying, “Over the next few years, the Fed must craft policies that ensure that our economy accelerates its progress along the recovery path it has begun to trace.” Yikes!

Because I was paying so much attention to my sudden crushing chest pains and my left arm going numb at what she said, and the fearful inflationary implications thereof, I was not sure if my hands were shaking at the prospect of the Fed creating enough money to “ensure that our economy accelerates.”

So I stood up, raised my hands and loudly asked, “Hey! Are my hands shaking?”

Well, almost everyone said something rude along the lines of, “Shut up, you creepy little weirdo” or, “Hey! I’m on the phone here, moron!” but a few acknowledged that, yes, my hands were shaking.

So I said, “Of course my hands are shaking, you morons! Yours should be, too, when you read about the staggering amount of money and credit that the Federal Reserve is willing to create, according to this horrid woman, which is sufficient to be deemed ‘all the help that the Fed can provide over the coming year,’ which is a truly terrifying thing for those of us who fear the terrible miseries of inflation in consumer prices that such monstrous inflation in the money supply will bring!”

Well, everyone went back to work, most of them shaking their heads and muttering under their breath, so I went back to reading the article, and saw that Ms. Yellen apparently mentioned something along the lines of, “the Fed achieved price stability for a generation,” which made me want to laugh, and would have, too, if I wasn’t so angry that I was grinding my teeth together so hard that sparks were flying out of my mouth.

So, to distract myself, I looked up the definition of “generation” and found that a “generation” is 30 years, which really, REALLY makes me want to laugh that Ms. Yellen would be so boldly, so brazenly, so bereft of brains that she would DARE say that the Fed has achieved price stability for 30 years!

Even the Bureau of Labor Statistics calculator shows that $1 in 1980, 30 years ago, had the buying power of $2.65 today! That’s 3.3% a year, compounding for 30 years, for crying out loud!

As Exhibit A in my persecution of Ms. Yellen, according to thepeoplehistory.com, “In 1980 the average cost of new car was $7,210.00,” and now the average cost of a new car in the United States is $28,400, according to the National Automobile Dealers Association.

I apologize for bringing up the cost of cars because you and I both know that the car we really, really want is not an “average car” that costs $28,400, but one that costs at least $75,000, and usually more, lots more. Of course, we can’t afford either of them, like we are some kind of big-shots who could even afford the insurance on a snazzy ride like that, which we find, after careful research, that we could actually swing if the spouse left and took all the kids, vowing never to return, but who kept paying the mortgage!

Then you realize that THAT sure ain’t gonna happen, either, and this is just one MORE thing to be angry about, as if you didn’t already have enough heavy crosses to bear.

Well, peoplehistory.com also notes, probably as Exhibit B, that “From Our 80s Price of Food Section,” milk was 85 cents a 1/2 gallon, while I easily find that the average price for a half-gallon today is $2.06.

So, Ms. Yellen, price stability? Hahaha! A stable currency? Hahahaha! Isn’t the expressed mission of the Federal Reserve to provide a stable currency? Hahaha! I laugh at you! This is outrageous inflation!

Again, the more frightened and enlightened among us scream in dismay in the dark, dank dismay of doom and destruction, where all we have is a depreciating currency and gratuitous use of alliteration, meaning higher prices day after day, and month after month, and year after year, and decade after decade, each of them filled with people suffering because their incomes did not rise as much as inflation in prices because they were old, young, infirm, ignorant or just plain lazy, or otherwise had nothing to offer with which to bargain for higher incomes to offset inflation in prices.

So congratulations to the horrid Federal Reserve, and congratulations Ms. Yellen, for inflicting continuous financial pain on the population, despite the fact that the freaking mission of the Federal Reserve is to preserve the stability of the buying power of the dollar. Hahaha! Failures all!

So while everything else was a crappy investment that barely broke even in nominal terms, they were dismal failures when adjusting for inflation, although you might happily note that buying gold and silver were fabulous investment decisions over the last 30 years, and for the 2,500 years before that, too!

And, I might add, just like right now. This amazing, wonderful consistency of precious metals makes investing so easy that you cannot stop yourself from happily laughing and clapping your hands together, saying, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Price Stability Not a Fed Priority originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

The way that federal taxes are going up next year by huge percentages is Very Interesting News (VIN) for gold-bugs like me, and probably the Founding Fathers who wrote the Constitution, too, if they were still alive, as we all think that gold-as-money is the only “way to go” because it absolutely precludes rapid increases in the supply of money, which is important because increases in the money supply cause increases in prices, which is important if you think that paying $1,000 for a loaf of bread is important or if milk costs $2,000 per gallon, and pretty soon the rest of the world is going to wake up to that fact, too.

Note the way the soundtrack has gotten all gloomy and discordant in an ugly, dissonant way, and the dark, dreadful tone to my voice when I dramatically say, “But only after it is too (pause) late.”

But with a soundtrack changing to sounds of happy birds chirping and children laughing, it also means soaring demand for gold, silver and oil, with their prices and all prices rising astronomically along with all other prices, and all my problems will then be fixed because I will have so much gold, silver and oil, worth So Freaking Much (SFM) money that I can buy anybody off, or hire enough lawyers and goons to scare anybody away! Whee!

I shall refer to it as the Golden Age Of The Mogambo (GAOTM), with round-the-clock security people intercepting visitors and intruders saying, “None shall pass!” as did the Black Knight in the movie Monty Python and the Holy Grail, which apparently worked for a long time before King Arthur arrived on the scene.

I see that I have gotten off the subject, which is why we gold bugs are delighted, which is because now the investment playing field has been leveled, as the profits from investing in gold (classified by the IRS as a “collectible”) are taxed at 28%, whereas now ordinary income is taxed at 28%, too, I guess!

To spread the word about how buying gold, silver and oil now are such sure-fire winners, I was taking a more proactive stance in my mission to save this planet, and recruiting volunteers to spread the Gospel Of The Mogambo (GOTM), hopefully leading to an educated citizenry who will demand a return to a gold standard as the money regime, and who will rise up in angry, bloodthirsty mobs to kill anyone who says differently.

The essence of my latest terrific Mogambo Plan To Educate Earthling Morons (MPTEEM)) was simplicity itself; when you are in a store buying something, and the cashier gives you your receipt and change, instead of saying something lame like you usually say, like “Thank you” or “Up yours, too!” instead say, “Goodbye forever, chump! You are doomed because the demonic Federal Reserve is creating So Freaking Much (SFM) money so that the cancerous federal government can spend the aforesaid SFM money that it will finally bankrupt America with an inflation in prices that will make you beg for mercy or a quick death, and this place will shut down, and you will be out of a job, and you and everyone you love will starve to death in bitter agony because prices keep going up and up, and you will be living in the gutter, eating filth, while I have this $3.37 in change, right now, right here in my hand, which I can immediately turn into more gold and silver, albeit not much, and thus not only avoid your dismal fate, but, instead, prosper as a result!”

Well, initial results of this fabulous new plan were bad, as saying the, “Goodbye forever, chump!” speech was, as it turned out, an untimely choice since my forecast of doom did not arrive sooner than my need for more groceries arrived, and thus necessitating another trip back to the grocery store, where I had to endure everyone saying, “Goodbye forever, chump!” and laughing at me.

I soon went back to researching ways to raise the dead and turn them into my Mogambo Army Of The Night (MAOTN) to take, you know, revenge on them all, but it was slow going since it isn’t easy to reanimate dead people, regardless of what you see in the movies.

Being a naturally lazy guy who always looks for the easy way out and dreams of wealth without working, I am soon back to feverishly buying gold, silver and oil in response to the fiscal and monetary insanity of Washington, DC because, with fiscal and monetary insanity like this, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

US Money Supply Prompts a Hard Goodbye originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Last week, President Obama signed into law the Dodd-Frank Wall Street Reform bill - hailed as the most sweeping overhaul of US financial regulation since the 1930s.

In the calming environment of the Big Mogambo Big Is Better Bunker (BMBIBB), I can finally relax by sitting, armed to the teeth, amongst my puny trove of gold, silver and oil, idly trying to say, “Big Mogambo Big Is Better Bunker” five times quickly until my seething, vaguely homicidal rage at the Federal Reserve and the socialist/fascist/ communists in the White House and Congress that have destroyed us all.

Still, I can find no respite from the paralyzing fear of economic catastrophe as I wait for a huge avalanche of people, who are sitting on unrealized profits of any kind, to sell the profitable asset, realize the profit, and willingly pay the tax on the gains.

I see the quizzical look on your face, as you wonder, “What in the hell are you talking about, Lunatic Mogambo Weirdo (LMW)? Does this have anything to do with tacos, pizza, Chinese food or making money without working, or does it really have something to do with taxes, which you are far too stupid to understand, so who’s fooling who here?”

Well, if there is such a thing as the hypothetical “rational economic man,” then this “sell everything!” scenario is exactly what will happen because taxes of all kinds, including the all-important income taxes and capital gains taxes, are going to all go up by – hold onto your hats! – almost a third or more next year!

Right now, the marginal income tax rates are 10%, 15%, 25%, 28%, 33% and 35%, which is the range of six different tax rates for the few people that make enough money to actually pay any federal income taxes, which seems like such a quaint anachronism these days because more people receive money from the government than people who pay the government, which explains why the budget deficit this year – alone! – is $1.4 trillion or so, and when including the inevitable supplemental appropriations throughout the year, will surely be near staggering $2 trillion, bringing total federal government spending to almost $5 trillion, whereas all the business and personal income taxes collected for the whole year is less than $1.5 trillion!

And yet, with that kind of staggering imbalance, there are 6 income tax brackets! Hahaha! 6 brackets! Hahahaha! Income taxes are now just chump change for the government, for one thing, and yet it has to be complicated, too? Thanks, Congress, you corrupt morons! Hahaha!

According to the Tax Foundation, “All taxpayers” paid a total of just over a $1.1 trillion in 2009, and thanks to the taxpolicycenter.com, I see that corporate taxes were a mere $250 billion pittance in comparison.

The surprising and alarming thing is the amazing, cancerous growth of payroll taxes over the years, which now collects almost as much tax as individual income taxes! Hahahaha!

Pardon my laughing at the sheer stupidity that creeps into government, and the sheer stupidity of the people who elect the stupid representatives in the stupid government that stupidly create such sheer tax stupidity, but this is not real laughing, like when you are laughing at a funny joke.

For example, notice how you can’t help but laugh at this joke: “How many mainstream economists who agree with the neo-Keynesian econometric theoretical underpinnings of the Federal Reserve does it take to change a light bulb?”

Answer: “None, because they are too stupid to realize that the light has actually burned out, and they think that by merely lowering interest rates and creating more money, they can raise the ‘animal spirits’ of the light bulb to light again, and again and again, as many times as needed, and everything will then be fine from then on, as many times as needed, but in the meantime they are all stumbling around in the dark trying to make the light bulb incandesce again trying various magic tricks, like just throwing money out into the darkness.” Hahaha! See? It’s funny!

Now that is real laughter! On the other hand, my laugh is a kind of nervous titter, accompanied by shifty eyes narrowing to slits and by my shaking hands furtively inching towards bulging shoulder holsters, all of these behaviors being indicators that I am So Freaking Scared (SFS) that I want to start blasting a path to the safety of the Mogambo Bunker For Scaredy Cats (MBFSC) so that I could lock myself in, safely away in a panicked shoot-first-and-ask-questions-later defense from the calamitous destruction that always ultimately befalls an economy that is so stupid, so unbelievably stupid, so tragically stupid, as to construct an entire economy around the belief that there is such a thing as a “free lunch for everyone” through government deficit-spending, despite racking up a national debt ($13.3 trillion) that is almost 95% of GDP ($14 trillion) to pay for the “free lunch” so far! Gaaahhh!

Fortunately, this is not about how I am such a sniveling coward, but about how the current tax regime is scheduled to expire at the end of this year, and then the tax rates automatically go back to five brackets of 15%, 28%, 31%, 36% and 39.6%, unless Congress “does something.”

And unless the government “does something”, then selling assets to realize a profit before the end of the year means paying a third less taxes than if you sold next year! Big savings!

Alas, most of us realize at this point that the government will “do something,” by which I mean “borrow and spend money,” and things will get worse, and inflation will surge as the filthy Federal Reserve “does something” by creating staggering amounts of money to accomplish it.

And if you want something to do, too, then buy gold, silver and oil, because such fiscal and monetary stupidity makes the decision to buy them so easy that you positively giggle with childish delight, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Higher Taxes are Coming. Head for Your Bunkers. originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

“Green Jobs Don’t Exist in a Free Market” was the headline for Tom DeWeese, writing at NewsWithViews.com, which is exactly right; the only jobs that exist in a free market are those supplying real demand for, as an example, hamburgers, pizza, fried chicken and tacos, which has resulted in fast-food restaurants supplying them to be located on, seemingly, every other block in the Whole Freaking Country (WFC).

The reason he brings this up is that he says, “Obama and his environmentalist hordes convinced Congress that the money would be used to create an army of home weatherizers, wind-turbine factory jobs and other employment opportunities that would help put to work the nearly 8 million people who have lost their jobs during the recession.”

That sounds just like Obama, as that particular doofus said, apparently before reading Mr. DeWeese’s article and getting a little smarts, “We know the jobs of the 21st century will be created in developing alternative energy,” which is so laughably preposterous that I am sure it made Mr. DeWeese laugh with a cruelly mocking tone as did the Cruelly Mocking Mogambo (CMM)! Hahaha!

Actually, I figure that the most jobs will be created in making 3-D pornography, importing high-definition video equipment on which to view it, smuggling stuff, and rampant prostitution as Americans find out the true market value of their terrible educations and ridiculous sense of entitlement versus the value of software and industrial robots, particularly if software starts making a robot that can shoot flames out of its mouth and bullets out of its fingers.

As to where Mr. DeWeese got this timeless fact that “green jobs” don’t exist in the private economy, it apparently comes from “Economic lesson number one: Government regulations do not create jobs. Private industry serving the wants and needs of the consumers create jobs. Period.”

I figure that the word “period” followed by a real period was somewhat premature, as I would have added, “In fact, government and government regulations are a net economic drain and a real loser, you morons, and the more government and the more government regulations you have, the sicker and sicker the economy becomes until you wind up like we are today, where government spending is half the economy, the total tax take is almost 60% of Every Freaking Thing (EFT), national debt is 95% of GDP and going up 10% a year, and everybody is broke, and if you are not buying gold, silver and oil, then something is wrong, seriously wrong, with you!”

And I am sure that it will get worse and worse as the ridiculous Obama and his Congressional lapdogs will spend gigantic amounts of money forcing people into “green jobs,” with the Federal Reserve creating the money that the government will borrow and spend, creating ruinous inflation in consumer prices. Maybe even to the point of hyperinflation! Hyperinflation and beyond!

As to that, Jim Sinclair, in his Mineset newsletter, notes that “Hyperinflation is always the product of a loss of confidence in currency resulting in a ‘Currency Produced Cost-Push Hyperinflation,’” which is very classy of him, since he does not mention that I am screaming that “loss of confidence in a currency” is the result of the stupid government creating, or allowing to be created (as in the case of the foul Federal Reserve here in America), excess amounts of money so that the money goes into prices, and price inflation is because the money is more and more valueless because so much of it is being created, and soon nobody in their right mind wants the stuff.

Again without mentioning my Screaming Mogambo Interruption (SMI) about the odious Federal Reserve and how they should all rot in hell, he goes on, “All hyperinflation in modern history has occurred for one reason, and one reason only. That is loss of confidence in currency.”

Worse, “When hyperinflation has occurred in modern history, EVERY economy involved was decimated as, and when, it occurred.”

I notice that again he does not mention price inflation, the scary boogieman that haunts my nightmares and the thing that will destroy us all. I figure that this is my chance to interrupt with something more than denouncing the horrid Federal Reserve for creating so much money that inflation is boiling along at more than 6%, which he probably cleverly deduces from the expectant look on my face.

Anticipating me, or perhaps trying to make me just sit down and shut up, he says essentially the same thing! He notes how hyperinflation, “has never been caused by ‘Demand-Pull,’ but always and without exception caused by ‘Currency Induced Cost-Push Hyperinflation” which makes me scream even louder because this is the same thing as saying prices are higher, which is what I have been screaming about for about ten minutes now and my throat is getting sore! Gaaahhh!

The awful news is that Fed will create trillions and trillions more dollars over the years to slake the ravenous appetite of Congress for deficit-spending, a fact characterized by Mr. Sinclair as “the Fed can and will do QE to infinity.”

Setting your Mogambo Secret Decoder Rings (MSDR) you can translate “quantitative easing to infinity” to mean, “Buy gold, silver and oil!” which makes it all so easy that I finally stop screaming, and merely shout in glee, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Green Jobs from the Government Not Gonna Happen originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

It was raining outside, and so I was stuck inside the house, listening to my family remind me that I was just a worthless, penny-pinching, hateful old man who loves gold, silver and oil more than I love them, which I hasten to add is not exactly true in all respects, but you gotta admit that gold, silver and oil will treat me very nicely as they soar in price along with inflation in prices because of the insane levels of money creation by the Federal Reserve so that the loathsome Obama administration can deficit-spend us into hyperinflation, whereas spouses and children will be just a heavy millstone around my poor, aching neck, dragging me down, down, down by forcing me to spend money on them for their food and medical care and all the rest of that expensive crap.

So I was thinking that my economic situation had gotten a lot worse, and that I am probably the only guy in the whole world whose life Really, Really Sucks (RRS), when I saw a new survey by AlixPartners showing that 71% of Americans report that their economic situation is “the same,” “somewhat worse” or “a lot worse” than this time last year. Wow!

Being one of those guys who thinks his economic situation is “a lot worse,” I instantly see that only the people who think their situation is “a lot worse” are correct, as we are the only ones who actually understand how this “economics” thing works, or at least think we do, or at least say we do, or at least wish we did.

If AlixPartners had called me with this question, I could have told them that everybody’s economic situation is “a lot worse” because the foul Federal Reserve has created too much money over the past few decades, and then one despicable Congress after another borrowed and spent it, disguising it with off-budget accounting and other slimy trickery to create a large, terrifyingly over-intrusive system of governments and their legions of beneficiaries that are now half the population, with the inevitable result that we have been destroyed by inflation in consumer prices and strangled by a cancerous economy that is composed of massive government taxation and spending, and, like poor old Sisyphus pushing a big rock to the top of the hill only to have it roll again to the bottom, busily complying with ever, and evermore, government regulations.

And, alas, it will all get a Lot, Lot Worse (LLW) from now on with the panicked idiocy of the Obama administration deficit-spending a couple of trillion dollars per year, every year until you are old and the sheer insanity and smug arrogance of Ben Bernanke in charge of the despicable Federal Reserve creating the jillions and gazillions of dollars to make it happen.

So, since we are all in this together, I think I have proved that everybody is “a lot worse,” and those who think differently do not understand inflation, as their usual-yet-laughable 1% and 2% wage increases, reported by the Labor Department, are a lot less than the real rate of inflation for a decade that has been running consistently north of 6%.

Of course, my Big Mogambo Plan (BMP), designed to capitalize on this idiocy, is to buy gold, silver and oil so that my situation will soon improve dramatically. For those who don’t, it won’t. And it is the former who can declare, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

US Economic Outlook: Bad and Getting Worse originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

When I saw that Illinois cleverly solved its budget crisis by just not paying its bills, I knew that the end is near, or would be, if we still had a dollar that was not a stupid fiat currency, because nowadays it would be child’s play for the Federal Reserve to just create as money as any state wanted! And they can do it in less time than it takes to tell you about it, too!

And then the Federal Reserve can turn right around and use that money to buy up all the state debt out there! Wipe debt completely out! And flood the economy with money!!!

The more astute Junior Mogambo Rangers (JMRs) out there noticed the rare triple exclamation point, which is a Secret Mogambo Code (SMC) for, “We’re freaking doomed, and you need to buy gold and silver with all the money you have left over from building a fortified bunker in the backyard to protect yourself from the starving, rioting, desperate people who did not!” because all this new money created by the Federal Reserve and spent by the Obama Congress will cause prices to rise in a horrible inflation that will probably destroy us forever, or as long as you live, whichever comes first.”

Actually, this “death by inflation” thing is the only reason why they don’t do more of this create-money-and-borrow-money-and-spend-money crap than they do! Hahaha!

So, it is obvious that Obama and Congress, either this one or the next one, will bail out Illinois, California, and all the other dirtbag states that are literally or technically bankrupt, and then all the other states will want to jump on this “free money to pay off our debts” bandwagon, and the Federal Reserve will simply create the fiat money that Obama and Congress want to, thus, give away.

Oh, I know that there are those who think that I am now going to launch into a Howling Mogambo Outburst (HMO) of anger and outrage about how all this new money is going to create roaring inflation in consumer prices, which history has shown to be the One Thing To Be Feared Above All Others (OTTBFAAO).

Normally, I would do exactly that, except that my throat is already raw and sore from all the previous HMOs of late, from the foul Federal Reserve destroying the dollar by creating so much more money, to the corrupt Congress deficit-spending, over-regulating and micro-managing the economy into the Wretched Rat Hole Of Doom (WRHOD) in their panic, their desperation, their stupidity and their arrogant sense of omnipotence.

And, too, I am already so battered and beleaguered by my fear of the unstoppable, imminent collapse of the economy that all I can do is whimper and sigh in weary resignation, hugging my teddy bear a little tighter, not even rising to the bait of ridiculing Illinois’s comptroller, Daniel W. Hynes, ludicrously saying, “Only the most delusional people think you can solve this without raising taxes,” as if there is Any Freaking Way (AFW) to “solve” any of this, because if there were, I certainly think I would have heard of a plan to “solve” economic ruin by raising taxes, which sounds so ridiculous that I, in spite of my dark outlook and homicidal mood, laughed out loud! Hahaha!

Whew! That little laugh made me feel better! Thanks, Mr. Hynes!

Maybe this has something to do with how the federal House Democrats (all Republicans voted against it) passed a “deemed as passed” non-existent $1.12 trillion budget. The effect is, as one said, “to allow Congress to start spending money for Fiscal Year 2011 without the pesky constraints of a budget.”

The federal government, on the other hand, has also decided that what this country needs, despite my snorting in Rude Mogambo Derision (RMD) at the concept, is more taxes, and to that end, Claude Sandroff, writing at americanthinker.com, reports that “In 2011, one of the largest tax increases in American history goes into effect. Not only do capital gains rise, but so too does the payroll tax, the income tax, and the estate tax.” Yow!

As if my constant-yet-irritating advice to buy gold, silver and oil in response to the unbelievable fiscal and monetary insanities around the world were not enough, but now I am howling louder and longer than ever that we Americans are committing the ultimate fiscal folly; raising taxes in response to a recession/depression!

When one is past yelling and screaming in fear at such economic insanity, and one is collapsed, spent and exhausted, on the floor, drawn up into a fetal position and choking on one’s own bile at the mere contemplation of the economic horror of what is unfolding, what can one do except buy gold, silver and oil, and what can one say except, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Raising Taxes to Combat Recession: The Ultimate Fiscal Folly originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Those of us who are now called “gold bugs” will soon be referred to as “genius rich persons who must be obeyed” because we bought gold, silver and oil while the rest of the world got laughably infatuated with paper assets, which top scholars will tell you shows why the word “infatuated” sounds sort of like “flatulence” in a secret-code kind of way, which (when one has successfully calibrated one’s Mogambo Secret Decode Ring (MSDR)) can be unscrambled to reveal the message, “You will be so rich that when you fart, you can ask ‘What is that smell?’ and all around you people who have been losing everything by not buying gold, silver and oil will answer in unison ‘It is truly the smell of sweet, sweet roses, second in delight only to the heavenly odor of your feet, oh, glorious genius rich person!’ because they know what will happen to them if they don’t.”

I apologize for the vaguely threatening nature of the end of the foregoing, but such arrogance is the natural by-product of the arrogance one gets when one is rich, rich, rich because one has been buying gold, silver and oil with frantic abandon as one’s world was awash in new money created – whole mountain ranges of new money created, indeed, whole freaking oceans of money were created! – by the Federal Reserve, especially nowadays so that the idiotic, desperate, corrupt, lying Congress and an equally corrupt White House can horrifically conspire to deficit-spend us into some deep, dark, dank whirlpool of destruction and despair where prices rise so high as a result of all of this new money that newspapers report food riots in the streets, often while running lighthearted stories of the magnificent and opulent lifestyles of those who bought gold, silver and oil, often referred to as the Really, Really Rich (RRR), and how we live it up with cute Hollywood starlets and drive snazzy new cars!

And it may happen sooner than you think, and hopefully as soon as I had dared hope, as an article titled “Mysterious BIS gold swaps are likely a bullion bank bailout” by Adrian Douglas of MarketForceAnalysis.com refers to the odd goings-on at the Bank for International Settlement as concerns a mysterious 380 tonnes of gold being involved in a mysterious gold swap with some commercial banks.

I smell corruption, a foul odor not dispelled by Mr. Douglas noting, “While a central bank theoretically and practically could hold 380 tonnes of unencumbered gold, there is no way that a commercial bank is sitting on 380 tonnes of unencumbered gold.” Hmmm!

His next sentence is pure horror film, if delivered in a darkly sinister voice, perhaps with some kind of foreign accent dripping intrigue. So lower the lights and set the spooky mood before saying, “So the gold in the BIS swaps came from” (pause for dramatic effect) “somewhere else.” Yikes!

He asks, “Why would this be done?” Well, the answer is not, “To raise money! The cash is needed because I have had it Up To Here (UTH) with the wife and kids complaining about a more-than-generous 1,000 calorie-per-day diet, which is all I can afford after using all my money to buy more gold, which is selling for peanuts when compared to the staggering amounts of money being created by central banks around the world!”

And why would I do such a thing? Because, as the Magnificent Mogambo (MM) himself said, “Gold at these prices is at the #2 spot of the Mogambo List Of Fabulous Investments (MLOFI), whereas the coveted #1 spot on the MLOFI is silver, which you will notice that I am not selling because of the compelling relative risk/reward ratio, no matter how much the ungrateful family whines and complains.”

Mr. Douglas is too smart to be drawn into the swamp of my personal life, especially where it is always a desperate “me against them” situation. Without even mentioning what a shame it is that I would sell gold just to buy food for people who happen to look good with that thin and pallid, sunken-eyes and protruding-bone, “Goth” look, he says that it is not about the money anyway!

He says, “This is not about currency liquidity, as the $14 billion reported raised is not liquidity; it is pocket change.” Hmmm!

Then he goes on, “On the other hand, 380 tonnes of gold is liquidity in the gold market, where mines produce only about 2,200 tonnes per year,” which I thought he would follow up with how output is actually falling, and how no new big gold discoveries are being made, or how few new mines are being opened, or how people are finally listening to the Wise Mogambo Advice (WMA) to buy gold, silver and oil, and maybe how they are slapping themselves on the forehead (Slap! “Ouch!”) and saying to themselves, “Who knew that That Mogambo Idiot (TMI)) was not as stupid as he sounded? He always said, ‘Buy gold, silver and oil when your idiotic, satanic central bank is creating excess amounts of money which will, because it must, show up as inflation in consumer prices, and buy them especially when the moronic government is deficit-spending the nation into asinine bankruptcy, where the national debt is over $13 trillion dollars and climbing at almost $2 trillion a year while GDP is barely $14 trillion! It’s insane, insane, insane!’ And I remember also that he used to say that buying gold, silver and oil to protect myself from this preposterous lunacy was so easy that I would feel the urge to exclaim, ‘Whee! This investing stuff is easy!’”

But Mr. Douglas did not say any of that, and says instead that the deal is that “In this way the central bank or banks would get cash and the BIS would get the unallocated gold as collateral and as if by magic the bullion bank or banks would get 380 tonnes of gold to bail them out for a few more weeks as massive physical demand for metal eats their lunch.”

In short, the giant gold-manipulation scheme that the Gold Anti-Trust Action committee spent years exposing, and getting attacked by critics who, it turns out, did not know what they were talking about, is running up against the only thing that could ruin their game; buyers are demanding physical gold instead of pieces of paper that say that they represent ownership of gold!

And since the manipulation situation is even more outrageous for silver, you can see why I say, “Whee! Investing in gold, silver and oil is easy!”

The Mogambo Guru
for The Daily Reckoning

The Sweet Smell of Investing in Silver and Gold originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Markets will fear the worst if testing European banks fails to reveal any weaknesses. But if problems are found, wider systemic worries could surface.

Lately, I have been hinting to my boss that I need a raise to do my job, and she has been hinting that she needs an employee to competently do my job, so you can see how we are temporarily at an impasse in negotiations.

Not so in China, however! The Economist magazine notes that in China, “Wages have been rising at 10-15% annually, but recently workers have begun to demand even heftier increases.”

Well, I am already astonished at this increase in incomes, and to impress you with my facility with the Rule of 72, I calculate with simple division that a 10% increase in wages will double wages in 7.2 years, which you gotta agree is a lot of extra spending power, unless inflation in prices eats it all away, which, unfortunately, it probably will.

And this is compounded by the Chinese economy itself growing by at least 10% a year, too, meaning that the Chinese economy will double in size in that selfsame 7.2 years! Wow!

An economy that is twice as big, and wages that doubled? My Inner Mogambo Economist (IME) immediately sees that this means a lot more consumption!

And turning that interesting fact to our advantage, so that we can hopefully make a lot of money without working, let me ask an instructive question; “Do you honestly think that commodities will go down in price when there is such growing demand, even when you can see by the look on my face and the tone of my voice that I am going to laugh at you and heap Rude Mogambo Scorn (RMS) on your stupid head if you say yes?”

And the boom may be bigger and sooner than that, as we read on Bloomberg.com that “At least nine Chinese provinces and cities raised minimum wages by as much as a third after Premier Wen Jiabao called for measures to head off growing worker unrest in the world’s third-largest economy.”

And it gets more delicious when Gary Gibson from Whiskey & Gunpowder interviewed Chris Mayer, who said that in “the next five years or so,” that China will gain “almost 400 million middle class consumers.”

The Really, Really Important Thing (RRIT) about this particular statistic is that 400 million new middle class Chinese people is more people than the entire population of the United States!

Perhaps now you are beginning to understand why the 21st century is going to be about the Chinese and what the Chinese want to consume in prodigious amounts, especially when the yuan starts gaining strength to make imports cheaper.

To put it in perspective, Mr. Mayer says, “when you think about China, they’re the largest incremental buyer of just about any commodity you’d care to name, so a stronger renminbi means that they have more purchasing power to buy iron ore and coal and oil and all the other things they need. That could be an extra little fire under commodity prices.”

Commodities? China? It is here that I began to think of Chinese food, and the next thing I knew, I went out to get some, hoping to get a seat before 400 new middle-class Chinese consumers started getting in line ahead of me at the restaurant.

As soon as I thought about it, of course, I realized that this won’t happen, says Chris, for 5 years, so since I had an extra few minutes, I whirled the Mogambo-Mobile around (“screech!”) and stopped (“screech!”) to buy more gold, silver and oil as both a guaranteed reaction from my wife (“screech!”) and as a guaranteed play on commodities, as gold, silver and oil are a Big Bold Bet (BBB) against the government and the Federal Reserve succeeding at creating, borrowing and spending more money to “fix” the massive, bankrupting problems caused by creating, borrowing and spending too much money, a hopeless task so daunting that no other dirtbag government has ever succeeded, at least none in the last 4,500 years of dirtbag governments borrowing and spending themselves into bankruptcy while twisting their economies into huge, distorted, malignant, parasitical nightmares of government domination and funding.

In other words, “Whee! This investing stuff is easy!”

And, I am happy to report, it goes well with Chinese food, too!

The Mogambo Guru
for The Daily Reckoning

Chinese Economic Growth: Commodities to Go Up Middle Class originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."