Cashiers Responsible for Inflation
Personally, I was not aware that factory gates were that big of a deal, and certainly did not know that inflation in the prices of factory gates would have an impact on banks changing interest rates! Especially since the only factory gates I know about are the ones through which security personnel have pushed me, and then slamming shut behind me, usually with erstwhile coworkers laughing at me, and taunting me, saying, "You're fired! Go away and die, you Stupid Mogambo Moron (SMM)!" through the rusting iron mesh of those factory gates. Well, I was embarrassed to find out that I was the only guy who had ever been fired by being thrown literally through the factory gate and into the street, but I was also wrong about the meaning of "factory-gate inflation", which is a British idiom for "producer price inflation". Now it makes sense when they write, "The 0.5 per cent rise in output prices in November took inflation on the producer price index (PPI), an early indicator of price pressures, to 4.5 per cent, the highest level since August 1991." They note separately that "Energy prices also climbed, spurred by a 9.8 per cent increase in the oil price over the month. The annual rise in petrol products' cost hit 18.5 per cent." Yikes! Well, if you don't need any gasoline for your car since you are not going anywhere, but are staying home with an Uzi in one hand and a bottle of tequila in the other, nervously watching out the window for the chaos of the Economic Apocalypse that is sweeping down upon us, then this inflation in energy prices won't mean much to you. But if you are like everybody else, your gut must have tightened into a knot when you read, "The Office for National Statistics (ONS) said that the increase had been driven by soaring food and energy prices. The prices that food producers charge retailers rose by 6.6 per cent over the year, the strongest such figure since June 1993." So, look for these higher wholesale prices to begin showing up in retail prices, which means you should look out for people getting really angry at the higher prices and blaming the little cashier, who starts crying and whining that she's not responsible for the prices of things, as she whines about how she only waves the groceries over her little scanner and it goes "beep." So you ask her who IS responsible for the higher prices, she says she doesn't know, and starts begging me to please, please just go away and leave her alone, which she says while she is repeatedly pushing the little button to summon the manager, who I can see hiding behind the Service Counter and peeking out at me from between some lottery ticket dispensers. I laugh, and then I take pity on her, and say, for the edification of all and sundry, "I'll tell you who is responsible! The Federal Reserve is responsible, that's who! They are the only ones who can create all the excess money and credit, which is then used to bid up the prices of things! And the Congress (except Ron Paul) is responsible, too, as they allowed the Federal Reserve to do it so that they could borrow all that new money and credit to sink us into bankrupting, un-payable debt!" I paused and waited for her to think I was done yelling. She tentatively swept a can of creamed corn over the scanner, the buzzer went "beep", and I could see her relax as she worked her way back into the routine. That's when I pounced! Raising my voice a few decibels, I bellowed out, "And the Supreme Court is responsible, too, because they consistently ruled that the money supply does NOT have to be static and fixed, which is inherent in a gold standard currency, as the Constitution mandated! The damned Supreme Court literally overruled a part of the Constitution! Then, thanks to this Supreme Court perfidy, everybody after FDR could use a fiat money based on insane levels of fractional-reserve banking, which means that money comes into existence by virtue of somebody going into debt for it, dollar-for-dollar! Debt that is killing us!" She stopped, her eyes opened wide and in shock and fear, seemingly frozen in place, which suits me fine because then I could more directly continue, "And not only that, but the banks no longer had to make loans out of the savings of depositors! They could, by virtue of their own Federal Reserve, create money out of thin air! Hahaha! What ruinous idiocy!" Getting all wound up, I swept into my Big Mogambo Finish (BMF) and loudly screamed, "And the ignorant, blubbering, Big-Government-loving American citizens, like you and your stupid little store manager and all you stupid people in line behind me and at all those other cash registers, are ultimately responsible, in that you, he and/or she deliberately voted into office, and kept re-electing to the office, the very people who were committing this monetary inflation outrage, which causes inflation in prices! And here it is! Inflation in the prices of our food!" By that time a policeman came up and politely inquired if there was a problem, and I said "No problems, sir, except that this little cashier here is a moron for electing people who allowed the Federal Reserve to create so much excess money and credit, which makes the prices of stuff go up. And now the prices of food is going up, and I don't like it one bit! And not only her, but all the people in this store are responsible, including you, you stupid Gestapo pig cop who is in here hassling me like it's ME that did something wrong! Arrest them all, you idiot policeman, for treason!" Well, to make a long story short, by the time I was arraigned and bail was arranged, all my frozen goods were thawed and ruined, and when I told them I wanted them to pay me back for the ruined groceries, they all laughed at me. See the kind of aggravating crap I have to put up with around here? Jeez! And then they wonder why I hate them so much! Richard Daughty email: RichardSmithGroup@verizon.net Richard Daughty is general partner and C.O.O. for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise the better to heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications. ***
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From the Times Online site, I got the strange news that "Hopes of further cuts in interest rates from the Bank of England were dampened yesterday after factory-gate inflation."