The bad news is that it is, indeed, scary stuff! The article is by Greg Hunter of USAWatchdog.com, who writes that John Williams of ShadowStats.com has calculated that “If unemployment was computed the way BLS did it prior to 1994, the true unemployment rate would be 22.2%.”

And while the prospect of more than a fifth of the workforce being idle is scary enough, inflation in consumer prices is even scarier, particularly to the aforementioned 1-in-5 unemployed. And while Michael Pento at Euro Pacific Capital does not mention the unemployed or their plight as concerns dealing with inflation in prices, he says, “In current economic analysis, inflation is largely in the eye of the beholder, and depending on how you choose to look, very different stories emerge.”

This is where I thought he would mention the unemployed, or the poor, and their harrowing experiences in paying higher prices without any income, but he doesn’t.

He says, instead, that it is all worse than I think, thanks to the way the American government calculates inflation. “In the US,” he says, “food and beverages count for just 16.4% of the CPI calculation. The Chinese apparently believe that the basic necessities of life should count for more, assigning a 33% weight to the nutritional components. These differences in measurement are partially responsible for the divergent inflation climate in both countries, and make most people believe that inflation is fickle and localized.”

It is not, and Mr. Pento agrees, saying, almost poetically, “From my perspective, inflation is a global wave that will ultimately swamp all shores.”

I am sure that Mr. Pento is right because every country on the Face Of The Planet (FOTP) is desperately creating more and more money, and the money will eventually find its way to the place where it is treated best and/or has the best prospects, which is, in this case, Bob.

Oops! I meant “China.” Sorry! Bob is just a guy from my dim, dark past who treated my girlfriend better than I did, and she unexpectedly left me and went running off with him, sort of like how money goes to where it gets treated best, too, so you can see how I could get confused, and angry, and vow to track them both down to make them pay a terrible price for their treachery, a vow you’d almost forgotten about until just now.

And speaking of China, Terry Lawrence, newsletter writer, reminds us that Obama is our 44th president, and that in the Cantonese dialect, the number 4 sounds like the word for “death.”

Naturally, I look askance at people fearing the number 4, as they should instead fear the number 13, and especially Friday the 13th, like everybody else, and if not that, then at least fear the government creating so much excess money because it means so much inflation in the prices of food and energy that people will actually die!

In contrast, I never heard of anybody being killed by the number 4, unless it was because a metal numeral affixed to the side of a building suddenly broke free, falling down and down, gathering speed as gravity sucked it in towards the center of the earth until it hit somebody on the head who was walking by on the sidewalk below, not suspecting anything, killing them on the spot, blood everywhere, and it was, spookily, the number 4! Believe it or not!

Apparently, nobody appreciated my interruption, or how this shocking tale of superstitious strangeness that I just made up is just one of the many, many mysteries of the universe, including how “In the Cantonese dialect, 44 is double death.”

Again, I interrupt to note that this “double death” is already known by anybody who has two children! Hahaha!

Well, nobody laughed at my little joke, and so to add a little pizzazz, I decided to proceed Las Vegas style! I say, “And any long-shot Louie at a craps table on the glittering Vegas strip trying to impress a couple of beautiful showgirls with long, shapely legs down to here by ‘making 8 the hard way’ faces the Russian-roulette of death in the 1-in-36 odds of making two 4s, while risking the death of 1-in-6 odds of making craps, only to win a lousy 10-to-1 bet if he makes it! But even then, it is better than the odds of the Federal Reserve creating inflation in the money supply without creating inflation in prices, where the odds are literally infinity-to-zero!

“And even then, the odds of avoiding disaster are better than having kids and expecting not to be driven completely out of your freaking mind! Hahaha!”

Again, nobody laughed. I agree that this wasn’t my best material, but in my petulant mood, I unfairly decided to punish them all by not telling them to buy gold and silver as a defense against the horrific inflation that is guaranteed by the Federal Reserve creating So Freaking Much Money (SFFM).

That way, it will be me that has the last laugh! Me! Hahahaha! Me! Hahaha!

Suddenly, I realize, “Whee! This investing and revenge thing is easy!”

The Mogambo Guru
for The Daily Reckoning

I don’t know why, exactly, but perhaps they fear me because I am a cynical, paranoid, gold-bug old man who thinks that the Federal Reserve has turned into an evil institution by creating So Freaking Much Money (SFMM), now so that it can commit the sin of monetizing new government debt by the truckload, increasing the money supply and guaranteeing a roaring inflation that hurts the poor, and hurts the almost-poor, and hurts the not-quite-poor, and (now that I think about it) it hurts everybody, which hurts me personally because they come whining to me to give them some of MY money!

The lesson is that everybody suffers from higher prices to one degree or another.

Or maybe people fear me because I know that The Only Thing To Do (TOTTD) when the money supply is being so seriously expanded is to buy silver and gold as a defense against the inflation that will result, and even though I have literally spent hours and hours with these people over the years, monopolizing every conversation to tell them to buy gold and silver, they don’t!

And then they turn around and get all upset with ME, like it’s my fault, when I politely inform them that I figure that not buying gold and silver, especially silver, despite the entire corpus of the last 4,500 years of economic history proving the wonders of doing so, and the idiocy of not doing so, over and over and over again, is, by sheer tonnage of evidence, completely stupid.

I mean, how stupid is it not to buy gold and silver when the Federal Reserve is creating so much money that it guarantees – guarantees! – inflation in prices.

The fact that most Earthlings do not buy them seems to indicate that most Earthlings are stupid creatures, and that maybe, just maybe, the whole planet should be “sterilized” by sending a couple of Zargmagarth battle-cruisers through hyperspace to deliver a couple jolts from their onboard Exterminator 3000 ray guns, sort of like how America goes swaggering around the world blowing up large pieces of the planet and killing people.

Relying solely on anecdotal information and stuff I just make up in my paranoid confusion, I figure that widespread gene malfunctions are causing this stupidity, and it also explains why terrified people do not recognize that (as is classically said in the movies) resistance is futile, both to Zargmagarth battle-cruisers and to the ruinous inflation in prices that is caused by the constant creation of too much money.

Normally, I would expect them to say, “Okay, strange visitor from another planet! You win! I’ll buy as much gold and silver as I can! Just don’t let the Zargmagarths or the Fed destroy us!”

It is, you may be happy to know, not too late to turn back the Zargmagarths, but it is, unfortunately, too late to prevent the Federal Reserve from destroying the planet with inflation in prices.

And with a dichotomy like that, the decision to buy gold and silver is so easy that you involuntarily giggle in delight, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

I let it go at that, as I am not inebriated enough to get up on my high horse to loudly and rudely note that nobody in the corrupt government (including the Federal Reserve) apparently needs any stinking permission from anybody to do anything anymore, including any number or frauds and corruptions, to keep the government wallowing in the oceans of cash it so desperately, desperately needs to keep, you know, wallowing.

Of course, my own Zero Hour is fast approaching, too, as the pitifully few dollars that I was able to extricate from my wife’s purse without her catching me are almost gone, which turned out to be too few to get me drunk enough to do any serious pontificating about the horrors of the Federal Reserve creating so much money, so that the government can spend so much money, that creates so much inflation in prices everywhere and so much corruption everywhere, too.

I have perhaps struck a chord in Peter Schiff of Euro Pacific Capital, who notes that “Very few people have either the time or patience to sift through the data released by the Treasury Department in the wake of its bond auctions. But the numbers do provide direct evidence of the country’s current financial condition that in many ways mirror a financial shell game that typifies our entire economy.”

And the reason is, I figure, because of the bloated, malignant nature of the economy itself, as Grandfather-Economic-Report.com notes, with ill-concealed horror, that “51% of the economy now depends on government spending,” while another chart, labeled, “Relative Share of Economy Prior to 1930,” shows the government’s share of the economy back then was only 12%. In 1947, a mere two years after the gigantic wartime command-economy of WWII, it was 22%.

Noticing that many of you are drifting off out of boredom, I decide to add a little drama to my presentation by using the eye-catching cinematic technique of dropping the pages of a calendar, one by one, letting them fall into a disgusting, dirty toilet, now stuffed to overflowing with old calendar pages, both as a way of indicating the passage of time and as a rude commentary on the stinking life that you have to lead, day after day, year after year, because you always need more and more money to always pay the higher and higher prices for the things you buy, thanks to the evil Federal Reserve creating so much money that price inflation is ever-present and ever-irksome, to say the least.

Fortunately, there is a point to this “falling of the calendar pages” thing other than, for some reason, a stinking, dirty toilet that is very childish of me. Then you realize that the last page of the calendar to fall was the page for yesterday, meaning that today is today, where the government’s share of the economy is a massive 51%!

And I don’t know if the Grandfather Report shows it somewhere on its massive site, but another Mogambo Economic Horror (MEH) is that 5 out of 10 – half! – of the employees in America work either for a local, state or federal government, or for the education system, or for a tax-supported private agency, or work for a non-profit organization. Half!

“So,” you may be asking yourself as I continually ask myself, “who in the hell is left to pay taxes to the government out of profits, when half of all employees in the Whole Freaking Country (WFC) make no profit at all, and who must get it from those who do earn a profit, and/or solicit charitable donations, which is, in essence, asking people to tax themselves?”

Unfortunately, I have no answer that does not involve screaming obscenities at the Federal Reserve and summarizing the horror as, “We’re Freaking Doomed (WFD)!”

Fortunately, there is an easy answer to the question, “What in the hell can we do to save our butts from the horrible inflation that is guaranteed by the massive over-creation of money by the evil Federal Reserve to feed a fat, bloated, corrupt Congress and their myriad social engineering programs that are half the economy?”

And the answer is, obviously, “Buy gold and silver under those circumstances,” as the entire history of mankind shows that they do Very, Very Well (VVW) when the morons in control of the government and/or the banks are creating excessive amounts of fiat money to attempt to bail themselves out of bankruptcy.

Since nothing can be easier than simply buying gold and silver when the money is being abused, perhaps that is why I say, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Anyway, I said, my mouth full of fabulous fried eggs and crispy bacon (instead of the usual fruit and whole-grain cereals with no-fat milk crap I usually have to eat, because my wife was out of town), “You brats can have the biggest, baddest electronic gizmos made. You can have so many of the freaking things, in fact, that you will need a cart to carry them all around. Just get jobs and then use the money to buy them, like everybody else, ya little blood-sucking parasites!”

This is where my wife would usually intervene, chastising me for yelling at them and telling me to be quiet and consoling the kids. But (and this is the important point) she ain’t here now.

So, finally, I had the chance to, uninterruptedly, explain to what appear to be congenital idiots, for the thousandth time, how the horrible Federal Reserve creates excess money, see, which increases the money supply, which increases prices.

“This,” I explained, “is just the ‘prices side’ of the problem. Now let’s look at the ‘income side’ of the ledger. I don’t make any more money than I made three years ago. Something has got to give, and in this case, it is you. Simple as that!”

I naturally left out the ugly part about how I make the same money, and am lucky to get it, because I am lazy and incompetent, unless I want to pay attention to what I am doing, which I do in inverse relation to how well my golf game is going, like after that unexpected, beautiful, soaring 4-iron I hit last week!

Straight as an arrow flew the gleaming ball, shining in the sun, right at the flag, landing picturesquely perfectly on the green before rolling magnificently to 3 feet from the cup, which I then 3-putted for a bogie and happy to get it. But what a memory!

Back from my delightful reverie to the disagreeable pouting faces of the kids, they let me know that they still do not see the problem.

Suddenly, I hit upon the idea of explaining, “If I make $1,000 per day, but my expenses are $1,200 a day, and getting higher every day, where am I going to get money to buy you stuff?”

At this they started laughing at me, and mocking me, and saying, “You never made a thousand dollars a day in your life! And you never will, either, because you are stupid and mean and cheap and a terrible father who enjoys seeing his children suffer! Boo hoo hoo! Look at us suffer!”

The point was well taken, and I quickly rephrased that to “If I make $200 a day and my expenses are $220 a day, how long can I last?”

Again they started laughing in hooting derision, saying, “$200 a day? Don’t make us laugh, you liar!”

As a last resort, I resorted to the truth. I said, “Okay, if I make minimum wage of $7.25 an hour and I spend $8 an hour, how long can I continue before I am bankrupted and I have to send you kids to foster homes?” which thankfully diverted the conversation as to the pros and cons of that shocking happenstance, where I took the “pro” side.

I was happy not to have to explain it to them that I am using so much money to buy gold and silver as a desperate, frantic response to the price inflation that is guaranteed by the Federal Reserve creating such inflation in the money supply, especially by committing the Big Unholy Sin (BUS) of using freshly-created money to buy government debt.

Keeping from having to confront the kids about it is the hard part, because buying gold and silver is so easy that people say (fill in the blank).

If you answered, “Whee! This investing stuff is easy!” then congratulations! You are waaaAAAAaaaay ahead of the vast majority!

The Mogambo Guru
for The Daily Reckoning

But how do I not eat and talk? Man, it has been said, cannot live on bread alone! Unless, of course, it is made into a nice, big sandwich with all the fixins, maybe with a tall, cool beverage and a fresh bag of potato chips, you’re bent over the plate like some kind of starving Neanderthal, noisily shoveling it in your mouth with both hands, perhaps while you are watching TV, necessitating changing channels by hitting the remote control with your elbow.

In polite deference to the easily offended, I swallow the last of a sandwich, whereupon I take up my one-sided conversation to say that buying gold and silver is the smartest thing you can do when the Federal Reserve is creating So Freaking Much Money (SFFM), as it creates horrific inflation in prices, with the historical evidence strongly indicating that the long-term percentage increase in prices matches the percentage increase in the money supply, which, if true, means that We’re Freaking Doomed (WFD)!

And since the Federal Reserve is creating more and more money with mindless abandon, you can see how the resultant inflation in prices rising with similar mindless abandon is enough to make one want to run, pell-mell, to one’s Mogambo Bunker Of Go Away (MBOGA) in a kind of nervous panic, seeking the security of locked doors, defense systems on “armed,” holding gold coins in one hand and the trigger of something large-caliber in the other.

I don’t personally know if Doug Noland, the author of the Credit Bubble Report at Prudent Bear.com, is in his bunker or not, or even has one or not, and if not, then I salute his courage, because he has the necessary facts to proclaim a Full-Alert Mogambo Response (FAMR) when reports that “Federal Reserve Credit jumped $13.9bn to a record $2.582 TN (19-wk gain of $301bn). Fed Credit was up $174bn y-t-d and $284bn from a year ago, or 12.4%”! Yikes! Big percentages!

And this Fed Credit is the “out of thin air” first step to making new money, and which is multiplied many, many times over by the fractional-reserve multiplier when this new Fed Credit hits the banks. Free money! Whee!

Of course, that “Whee!” at the end was intended as sarcasm, and I see that “Whee!” really “doesn’t work,” mostly because it is so far away from the origin of all the misery, which is the Federal Reserve in creating the new credit in the first place, and for whom I reserve a special, dark place in my heart where I put dreams of revenge.

And since “living well’ is, they say, the best revenge, I have now decided to live well! In this case, I will find out where a few of these Federal Reserve morons live, drive by their houses at 3:00 a.m., and honk my horn exactly 79 times to signify gold’s atomic number on the periodic table, so that they know it’s me – the guy who knows they are idiots for not insisting on a gold standard, which they would do if they were competent economists, instead of insisting on a fiat currency made of electronic digits, which is the Exact Wrong Thing To Do (EWTTD).

Then, after going out to a late dinner at a fabulous restaurant, I’ll have a wonderful time doing it again on the way home a few hours later! Hahaha!

“Ahh!” I sigh to myself as I think of it. “Sweet revenge!”

Before you get all agog that I remembered that the atomic number of gold is 79, I have to admit that a Google search took me to webelements.com to verify that the atomic number was, indeed, 79, as I had remembered, surprising nobody more than I, and which I hope to remember the next time anybody says, “Can’t you remember anything anymore, you worthless old fart?”

But I learned, as a result of the site, that the group of elements of the periodic table that contains silver and gold is named the “oinage metal” group and that the group also contains roentgenium, whatever in the hell that is.

But it sounds radioactive, and it is (in spades!), it doesn’t exist in nature, it has a half-life of around ten minutes, gives off no x-rays when it decays, and has the symbol Rg, which sounds like the sound you make (“Urgg!”) when you are so stinking drunk that you are puking up your guts in the restroom of some stupid bar where you suddenly realize that your boss already ate and left to go back to work, and you just want to die, die, die, but you don’t.

The point is that we know enough about roentgenium not to make coins of it, even though it is in the “coinage metal” group of elements. Oddly enough, there are not many people who know to buy gold and silver, which are also in the coinage metal group, when it seems obvious from the name “coinage group”!

I mean, how easy does this have to get before you say, “Whee! This investing stuff is easy!”?

The Mogambo Guru
for The Daily Reckoning

I laughed, as I cleverly noted by appending, “Hahaha!” to the end of the sentence, because inflation in prices is the Same Damned Thing (SDT) that always, always, always happens when the government tries to, in one way or another, “help the little guy.”

And yet everybody has a government that just keeps on screwing “the little guy,” by creating more and more inflation in the money supply, that creates inflation in prices, that screws “the little guy” during the process of “helping the little guy.”

Luckily, I can ascertain how much “the little guy” is getting screwed because The Economist magazine is within easy reach, and by deftly going to the back page, I scan down the table to see that Argentina has a monstrous 10% inflation in consumer prices, but with three mysterious little asterisks.

“Asterisks? What’s with the asterisks?” I wonder. When I go to the bottom of the page to hopefully find out what these asterisks mean, I find that they mean, “unofficial estimates are higher.” Whoa! Does this mean that Argentina’s government is a corrupt, lying piece of worthless trash like all the other countries in the world, only more so than any other? Hmmm!

Then, curious, I scan up and down the table, and note that none of the other countries in the Whole Freaking World (WFW) have their inflation figures marked with asterisks, even though I am sure they are shot through with lying corrupt crap. So “Hmmm!” again!

In fact, the only other country in that selfsame Whole Freaking World (WFW) that has any symbol attached to their inflation figures, at all, is Britain, so as to note that their 4.0% inflation is the “Centred 3-month average,” which is, I cynically note since I don’t know what it means nor do I care, probably just another kind of corrupt, lying fraud where a lot of people should wind up in prison, too.

So, with that kind of exhaustive, unbiased research on my part, I guess the three asterisks denotes Argentina as being this week’s winner of the Mogambo Biggest Liar Award (MBLA) about inflation. Congratulations!

And my pity to the “little guys” of Argentina who must pay these higher and higher prices, reminding me about the song title, “Don’t cry for me, Argentina,” although I don’t know what that’s about, either.

Then, to expand my fabulous foray into real research, I cast my eye up the page to the United States, and read across to note that inflation in consumer prices is a laughable 2.1%! Hahaha!

Hell, The Economist magazine shows that the dollar index of “all items” is up 42.4%, and the latest government report shows that inflation in food and energy is at double-digit rates, for crying out loud!

And, I am loathe to report, it’s going to get worse because the Federal Reserve is still creating money out the ying-yang, which has increased the monetary base by $73 billion in the last week, which is a rise of 3.1% in One Freaking Week (OFW), and the monetary base is up $160 billion in the last three weeks, which is an expansion of the money supply of over 7% in Three Freaking Weeks (TFW)! We’re Freaking Doomed (WFD)!

That is why I laugh when Spencer Jakab, writing in The Financial Times, writes that, despite acknowledging Milton Friedman’s famous aphorism that “inflation is always and everywhere a monetary phenomenon,” and even after stipulating that “the monetary base has indeed mushroomed,” he nonetheless qualifies it with “in the quantity theory of money, it is not a simple increase in the base that causes inflation. It is an excess supply of money, which is the not the case – not yet anyway.”

I screech, “What? No, it doesn’t! The money goes into government deficit spending! That’s how the government gets money into the damned economy! And I further argue that ‘a simple increase in the monetary base’ is not significantly different from ‘an excess supply of money,’ too, even though you say one will cause inflation and one will not, even though the prices of food and energy are up by double-digits everywhere!”

“So where does the money go?” you ask with that cute little look on your face that melts my heart.

He says, “At the moment, the money shows up as excess reserves on bank balance sheets, for which they receive interest.”

I say, “The money goes into higher prices.”

He does not say to buy gold and silver to protect yourself against the gigantic inflation in prices that is guaranteed by the Federal Reserve creating So Freaking Much Money (SFMM).

I say to buy gold and silver to protect yourself against the gigantic inflation in prices that is guaranteed by the Federal Reserve creating So Freaking Much Money (SFMM).

And while, by his photo, I cannot imagine him saying, “Whee! This investing stuff is easy!” that is exactly what I am saying.

In fact, I’ll say it now! “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

The data shows that they are all morons, and their stupid responses fell into one of three groups.

Either they ignored me completely, replied with something rude and/or threatening, or admitted that they have not been buying gold and silver.

Of course, being the nice guy that I am, always ready to help a friend or a neighbor in need, I generously informed them that they were stupid for not buying gold and silver in response to the Fed creating so much excess money, and that they were in desperate need of some smarts.

I summed it up for my boss as, “The point is that you can’t help but notice that none of my fellow employees – none! – bought gold and silver, even though the economic circumstances scream the necessity of doing so, the entire economic history of the last 4,500 years screams the necessity of doing so, and together they are almost as loud as MY screaming of the necessity of doing so!”

Thus, smugly self-assured, I sat down, thinking my argument was thus made: My failures are not my fault, but are the result of morons infesting the company, whose incompetence is ruining everything.

She sighed, and then looked at me with that stupid, bored look on her face, and said, in a deadpan monotone, “That is astounding.”

“Well,” I replied, “I think it is astounding that Federal Reserve chairman Ben Bernanke and his fellow-traveler, neo-Keynesian, econometric morons believe that there is no inflation in prices, despite food and energy increasing by double-digit rates, among a lot of other things rising in price, and all over the world, too!”

Inspired, I found myself going on, “I particularly like the way the Federal Reserve halfwits puff themselves up and solemnly state if there were any inflation in prices, they could immediately stop it by raising interest rates by, probably, a tiny fraction of a percent. For a week or two. Tops! Hahaha!”

She abruptly held up her hand, stopping my interesting dissertation in its tracks, whereupon she asked, “What in the hell does Federal Reserve monetary policy have to do with your laziness and seemingly complete disinterest for the few, mere basics of your own job, to the detriment of the company?”

Naturally, I explained, “Because the other employees are crazy! They even have an office pool about which mental illness I have! Me! The only guy who knows that the over-creation of excess fiat money will lead to ruination and hyperinflation, as it has always done for the last 4,500 years, and yet these idiots think that this time – for the first time in history! – it will not end in utter disaster and that they have no need of buying gold and silver! Like I said, morons!

“And yet they think that I am the crazy one! Me? Have you ever heard of anything so stupid? Hahaha!”

For one thing, you gotta laugh at any lowlife losers who seem oblivious to the ugly fact that fiat money is created when somebody borrows it from a bank, which literally creates the money on the spot, increasing the money supply, which means that all debt-money is ultimately owed to a bank – plus interest! – by debtors.

The ugly mathematics is that more money is always owed than was borrowed/created from the get-go, so that any slight shrinkage in the already-deficient money supply means that there is now even less money to pay back all of the debts.

Then, usually after trying desperately to keep afloat, people start realizing, “It ain’t coming back! I’ll never breakeven! To hell with this!” and they stop paying a debt, and thus the money literally goes out of existence – poof! – disappearing into that huge Vault In The Sky (VITS), worsening the original “not enough money to pay all the debts” problem, making more debts go bad and extinguishing more money, all whirling around and around, a murderous feedback loop in a whirlwind of falling money supply, reduced tax revenues, bankruptcies, layoffs, deficit-spending, misery and suffering everywhere you look.

But the Federal Reserve believes, apparently for no particular reason, that a little gentle tightening of interest rates will mitigate all that! Hahahaha!

On the other hand, if you want to see how, in real life, demand trumps interest rate increases, a Bloomberg article had a sentence that sums it up perfectly. It reads, “China’s manufacturing growth is accelerating, according to preliminary data from a survey of purchasing managers, signaling the economy may withstand increased interest rates.”

And as long as company gross profits rise along with interest rates until marginal revenue equals marginal cost, then banks can raise interest rates all they want to no avail! Hahaha!

And with that kind of vig on money made possible by such voracious demand, prices will easily increase, which means that the only smart thing to do is to buy gold and silver.

And not only is it the smart thing to do, but it is the easy thing, too! Merely say, “Here’s my money, give me my magical metal!” which is such a simplicity that oft is heard the phrase, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

I’ll tell you what to make of it; Tommy boy didn’t know squat about economics, because if a rich guy wants a fancy carriage, maybe with some cool mag wheels and a snazzy paint job, he is going to pay a lot of money to a lot of people who help make that carriage into a smokin’ babe-magnet.

The article was, alas, not about guys and hot cars, with photos of hot babes in scanty outfits sprawled seductively on hoods, trunks, running boards, seats and, best of all, bent over bumpers, but about greed, and how people wonder about the billions of dollars some people make, as “those on the left use the word as an epitaph against the successful as epitomized by Sen. Bernie Sanders ‘When is enough enough?’ he asked in his impassioned plea for raising tax rates ‘on the rich.’”

I’ll tell you when, Bernie! That’s the same question I have been asking about you socialist morons! When is enough enough? It is not enough that local, state and federal spending has grown to half – half! – of all spending in the Whole Freaking Country (WFC)? That’s not enough, for crying out loud?

And as far as enough taxes on the rich, I’ll tell you when enough is enough, Bernie. It’s when thousands and millions of people get tired of selling goods and services to the rich, and becoming middle-class themselves in the process, enough to support a gigantic government bureaucracy and a huge, desperate underclass whose sole source of support is government programs.

Up until that moment, the rich will get richer and the poor will get poorer because you, Bernie, and your Congressional halfwit socialist morons spend more than you collect in taxes, just as you have for the past 50 years – a half century! – and the Federal Reserve has to create the money which somebody can borrow to buy the new government debt, increasing the money supply and increasing inflation in prices, which hurts the poor the most, you lowlife idiot who loves to bleat for the poor but actually spends his time hurting them!

It’s ironic that he can only do that, for long, under a fiat-money economic system, as those days may be thankfully coming to an end, as I gather from “A Comeback for Gold-Backed Money?” an essay by Andrey Dashkov of Casey Research.

There is something in that title there that gives me hope that, yes, we will return to a gold-backed money, and so I read on where he writes that for “the reasons Aristotle outlined 2,000 years ago (it’s durable, divisible, consistent, convenient, and has intrinsic value), gold is hands-down the world’s best money,” with which I certainly agree, even if he doesn’t mention the benefits of low inflation in prices when gold is used as money, which is good news for everybody, especially the poor, who can’t afford to pay higher prices.

Then he starts out with Gresham’s Law, which is where I almost quit reading, because I already know about Gresham’s Law, which has, as I recall, something to do with good money (gold and silver) and bad money (paper and base metals), and how people holding bad money get Screwed Big Time (SBT). I figure that’s enough to know, you know?

But, apparently, that isn’t the case all the time! He explains, “Gresham’s Law tells us that bad money drives out good, but that’s only true when legal tender laws hold sway (incentivizing people to hoard what’s perceived to be ‘good’ money and spend the ‘bad’ money as fast as they can).”

The result is that, “When people give up on the local legal tender, Gresham’s Law goes into reverse, and good money chases out bad.” The old switcheroo!

Well, this is certainly good news, but it begs the question, “How much gold is there to establish this new Utopia of stable prices and predictability thanks to a gold standard?

Well, according to Wikipedia, “The world has official holdings of 30,562.5 tonnes of gold,” where “One tonne is approximately 32,150.75 troy ounces.”

Interestingly, although “at the end of 2004, central banks and investment funds held 19% of all above-ground gold as bank reserve assets” and they constituted the second-biggest holder of gold.

The overwhelming majority of gold (52%) is held in the form of jewelry!

Also interestingly, 108 countries around the world now have at least 813 ounces of gold (0.1 tonne), the last on the list being Costa Rica.

By this, it is obvious that the overwhelming majority of countries in the world are accumulating gold, and so you are in the majority if you are buying gold, too.

Your big edge is that they are not accumulating silver! Yet! Now you know why I say, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

In fact, it already has, and it will do more and more of it.

Here is the way it is working so far: the federal government loans money to the states to pay for unemployment benefits. Then the federal government passes a law that says the states don’t have to start to pay back any money at all, interest or principal, for five years, and, in fact, interest on the borrowed money does not even start accruing until then!

If “loaning money and not wanting it back” ain’t a bailout, then I am not sure what “bailout” means, which is not surprising, in that I apparently do not understand what a lot of things mean, like when I got that date with Wanda, who said, “If you try to kiss me one more time, something is going to happen to you,” which is so nebulous compared with the usual, “Try to kiss me one more time and I am going to shoot you with the pistol I have in my purse,” or, “Try to kiss me one more time and I’ll have my daddy shoot you with the gun he has in HIS purse!”

Well, as it turned out, Wanda almost ruptured my spleen as a result of my not understanding the true meaning of what she said, which happens all the time, like, for example, I was in line at the pharmacy and I was, you know, passing the time constructively by graciously educating the other people in line about how We’re Freaking Doomed (WFD) because the Federal Reserve has created so much money that it created bubbles in stocks, and bonds, and housing, and derivatives, and size of government in a long, crippling, simmering inflation in consumer prices, and now the evil Federal Reserve is creating even MORE money, in quantities that are Whole Freaking Multiples (WFM) of the monetary horrors of the Federal Reserve under the previous chairman, the moronic Alan Greenspan (1987-2006)!

This is when the people all started complaining, “Shut up about the Federal Reserve and the inflationary horror that will destroy us!”

Here’s another case where I misunderstood what they meant. I thought they meant that they wanted me to expound on some other important topic that ALSO proved that We’re Freaking Doomed (WFD)!

So I started telling them that the equivalent of 7 out of 12 people work for the government, a school system, a tax-supported private agency or a non-profit organization, which means that more than half of all the workers in the USA do not make a profit by their labors with which to pay taxes to support the government’s spending!

My voice rising to an exciting crescendo, I shouted, “What in the hell kind of insane economic system, even from another dimension beyond space and time, can have a minority of all workers make enough profit to support themselves, the government, and still possibly begin to pay for incomes of the majority of workers? And especially when they all owe, individually and collectively, more money than the human mind can comprehend?”“

I was surprised that nobody said, “Excellent! Well said! Bravo! You have given us plenty to think about, and hopefully help us to mend our stupid ways! Thank you, Handsome Informed Stranger (HIS)!”

I was further surprised when, again, I was met with a chorus of angry voices saying, “Shut up! Shut up!” to which I cleverly replied “No, YOU shut up!”

It was then I realized my mistake: They were all just trusting and ignorant people just trying to get along, and they liked it that way. I sigh.

Unfortunately for them, they will pay for their folly, as they subsequently did not receive the invaluable Mogambo Gift Of Investing Wisdom (MGOIW), which is to buy gold and silver when the Federal Reserve is creating so much money, especially when they are doing it for such a long time, and doubly-especially when they are creating increasingly, insanely, unbelievably, astoundingly, staggeringly MORE money to support governmental spending that is – literally! – half the economy, and have plans to continue doing it for a long time, too!

I mean, simply buying gold and silver to save one’s financial butt is the way it has worked all throughout history, so how simple can it be? Whee! This investing stuff is easy!

The Mogambo Guru
for The Daily Reckoning

Gaahhh! Prices rising 240%! In seven years, the money supply increased 240%, meaning it more than doubled, as did prices! No wonder they had a recession!

Parenthetically, it is surprisingly hard to Google-search that 1913-1920 period of time to find anyone saying, “We’re Freaking Doomed (WFD)!”

However, this is not a critique of the powers of a Google search nor, alternatively, the apparent stupidity of the people back then who did not realize how important it was to buy gold and silver when the Federal Reserve was doubling the freaking money supply.

Instead, the important point is the “prices had risen by an identical amount”, in that it is inflation that is The Thing To Be Feared (THTBF) and here is what appears to be a handy gauge to estimate how bad the price inflation is going to be!

Given that the money supply has tripled since 2003, and is rising at a faster rate thanks to the Federal Reserve’s insane-yet-new QE2 program that lets the federal government pump $100 billion per month into the economy through its many, many programs and many, many beneficiaries.

The worse news is that prices do not tend to come back down, and the evidence shows that “These higher prices and the expanded money supply remained even as the economy recovered from the early 1920s depression.”

Fortunately, things got dramatically better, thanks to Federal Reserve goosing, and thus were born the Roaring Twenties, where everybody was named Zelda and the beautiful people were roaring around in big cars with running boards, making tons of money in the stock market and having fun until, as current Federal Reserve Chairman Ben Bernanke believes, the Federal Reserve caused the “market crash in 1929 and the Great Depression that followed,” all because “in the two years leading up to the crash, the bank steadily raised interest rates, tightening the money supply, which triggered the crash on Wall Street.”

Crash! Well, raising interest rates and tightening credit to stop an expansion of the money supply will do it almost every time! The whole point is, and which the clueless Ben Bernanke of the Federal Reserve misses completely, is that there is NO way to tighten credit, shrink the money supply and raise interest rates without harming the economy, so it is important that you not loosen credit and drive down interest rates in the First Freaking Place (FFP) so that they won’t need to be tightened and raised later!

And here is another interesting fact, in the sense of perhaps quantifying things to estimate how bad things will get, is that after the crash on Wall Street, “The money supply dropped 30 percent from 1928 to 1931.”

If you can’t see where I am going with this, then you are as clueless as my children, whose remarks I condense to “Are you ever going to stop insulting the Federal Reserve, neo-Keynesian econometric crap, Congress, the Supreme Court, or the moron voters who elected the weenies, who appointed the weenies, who did this to us, or ever stop yelling at us to get jobs to buy gold and silver to capitalize on their colossal folly of allowing such irresponsible increases in money created by the Federal Reserve that it will, because it must, destroy us with inflation in prices?”

I say, with an exquisite brilliant explosion of brevity of wit about which I could go on and on, mesmerizing you in exacting detail for hours on end, “No!”

I mean, why quit something that is so easy? Whee!

The Mogambo Guru
for The Daily Reckoning