The Ultimate Consumer Survival Guide
The Mogambo Guru


" ...I got a copy of the August 18 issue of US News and World Report, and it is a special double issue that they call 'The Ultimate Consumer Survival Guide.' They call it that because it is, practically front to back, in one embarrassing and horrifying example after another, a sorry spectacle of how US businesses, pressed to make ends meet in an environment of pandemic rising costs, crushing debts and price-lowering competition, are screwing people over, left and right, with every sort of sleazy, con-game, hidden-charge rip-off that they can come up with. It is another blistering indictment of the meddling Congress and the damnable Fed, although they never come right out and say so. They left that to me, I suppose, and since I always seem to need something to run my big, fat mouth about, I say 'Thanks!'..." The Mogambo Guru

St Petersburg, Florida - Mars, a planet that we Earthlings have never trusted because they are always launching some sinister invasion plans, and if you don't believe me all you have to do is watch old movies on TV some rainy Saturday afternoon and you will learn what I am talking about, is now closer to the Earth than it has been for a long time, and closer than it will be for the next big bunch of years, the exact number of which doesn't matter because we will all be long dead and buried when it happens again. But it means that the invisible mind-controlling rays that they are beaming at the Earth are now that much more powerful because they are closer to us, and the single-ply aluminum foil hats that we are all wearing in self-defense are now too thin to provide the requisite level of protection. One of the guys who I figure obviously failed to beef up cranial security is Marshall Auerback, and he has weighed in with an essay entitled "Euroland's Deficit Hawks Are Wrong" and decided that Euroland needs to scrap its stability pact so that things can get back, somehow, to growth and stability via deficit spending. Although he quotes the Greek Finance Minister Nikolaos Christodoulakis, who said, "I have never believed, and do not believe that unrestrained handouts, wide deficits and increased debt create conditions for growth or social policy. On the contrary, they lead to stagnation and recession," Mr. Auerback disagrees with that trenchant assessment of stark Reality As We Know It. Instead, Mr. Auerback, who I must assume is suffering mightily from the aforementioned Martian rays, insists that Mr. Christodoulakis, who is obviously a deficit-hawk, is wrong in this instance.

While maintaining that Mr. C is right in the theoretical big picture, Mr. Auerback nonetheless takes the opposing tack and says that now, right now, things are so dangerously fragile that it is appropriate to disregard the stability pact that requires fiscal deficits to be 3% or less of GDP. According to Mr. Auerback, who is obviously not in his right mind due to these aforementioned Martian rays, "These are not normal times, and solutions need to move beyond prevailing economic orthodoxy," which I assume is defined as "What everybody agreed to do and everybody concerned agreed was the right thing to do." I suppose that this is in line with Alan Greenspan's vow to use "unconventional methods" to jam growth down the throat of the US economy. Well, then, why AREN'T these normal times? Because, like a morbidly fat person that has gorged himself for years and years and who now no longer resembles a normal person, economies that have gorged themselves for years and years on one feel-good central bank and government idiocy and malinvestment after another, the economy likewise no longer resembles normality.

And getting beyond that, what, exactly, is the prescription that is beyond this normal orthodoxy that poor Mr. Auerback says is not needed? In the case of the morbidly fat person, I suppose the doctor is supposed to prescribe milkshakes and cookies? And in the case of Euroland, which is what we started talking about before I got sidetracked into a pleasant reverie about milkshakes and cookies, it is more feel-good excesses of credit and money?

I strongly disagree with both the physician and Mr. Auerback for four, count 'em four, reasons. First off, the reason that they are IN the damn mess they are in is because they acted like they DID believe that, again quoting Mr. Christodoulakis, that "unrestrained handouts, wide deficits and increased debt create conditions for growth or social policy."

The second reason is that breaking the pact to allow "unrestrained handouts, wide deficits and increased debt" is NOT the path one takes to get one's house in order, as gorging on milkshakes and cookies is NOT the path one takes to get slim and trim, although both are, to be sure, satisfying and delightful to those chugging them down, and as one who has chugged down his fair share of milkshakes and cookies in his life, I happen to be somewhat of an expert in that area, and I am highly disposed to break off this whole train of thought and go have some of each right now.

The third reason is that inflation is rising at the same time as the economy is stagnating, and adding more excess money and credit will make it predictably worse.

And the fourth reason is that this is pure situational ethics; when times are good the argument is that the economy will grow out of the problems, and so the problems are never corrected, and when times are bad the argument is, as Mr. Auerback says, that is always "the wrong time" to address the problems, since it would add misery to people who were already miserable. So, therefore, there is NEVER a good time to address the problems, and so the problems grow and grow. If you know how to make something good happen when you never address a growing and deadly problem, then you need to register to run for governor of California, because you are obviously brighter than me and everybody else I ever knew.

If there is one thing that you can take to the bank, it is that Euroland, like everybody else, will certainly take any opportunity to continue right down that same feel-good path that got them where they are now. He even quotes a guy named Professor Paul de Grauwe, who said the same thing, in a Financial Times piece, that reads, "Structural reforms...are very difficult to implement in democratic societies. They imply changes in the distribution of income and in economic security, and are resisted by those who are called upon to be more flexible. The implementation of these reforms will take many years." I like that; asking people to be "flexible," which is a euphemism for "not acting like grubby, greedy little children who will always show their petulant pique by voting for any yahoo that advocates bankrolling all of the wishes of grubby, greedy little children, regardless of the disastrous consequences of doing so."

And I am faaarrrr too old and jaded to believe that "this time is different," or that any politician has learned any lessons, or that any citizen in the whole of Euroland enjoying their bankrupting cradle-to-grave nannyism is going to sit still for even the most minute change in their extensive menu of unearned benefits and unearned lifestyles. Oops, I mean, I don't think they are going to be "flexible."

From a more philosophical perspective, which you will immediately recognize as "I told you so," to even imagine that there even COULD be a single currency and monetary regimen against a dozen separate fiscal and nationalistic policies was, as I stridently proclaimed in my snottiest voice the whole time, ludicrous to start with. And trying to overcome the stupidity of even thinking such a thing was even remotely possible, given the inflexibility of the voting populace, was the reason for the strict pact in the first place. And now that I, the mighty Mogambo, and all the other nay-sayers have been proven correct, here come the experts, saying that what Euroland needs is do more of the exact wrong thing, namely to run as much deficits as necessary, for as long as necessary.

Mr. Auerback writes that the EU would "pay more attention to structural deficits so that a country's fiscal deficit would be judged in relation to its economic cycle." And what in the hell CAUSED the economic cycle in the first place, except for central banks and redistributionist governments creating more and more excess credit and money so as to enlarge and expand a increasingly dysfunctional and bankrupting economic paradigm? So I am being asked to believe, like we here in America are being asked to believe, that the governments acting like jerks can be cured by the governments being given leeway to act like bigger jerks? My God! I thought only us Americans and the Japanese had cornered the market on that kind of idiocy! The mind reels!

Fortunately, the Europeans may be saved from their fate, as they have the fabulous advantage of having the clear-headed Dim Duisenberg in charge of the EU, and although I have not seen any recent photographs of Mr. Duisenberg lately, I am pretty sure that he is wearing an aluminum foil hat and staying strictly out of the line of sight with Mars. How do I know this? Because he said that the Euroland countries have not used the good times to "...consolidate their budgets. Now they bear the burden of it." Exactly right! See? Didn't I tell you he was clear-headed?

And like the fat slob in the doctor's office, whining and complaining about always feeling hungry and out of sorts because a necessary low-calorie diet is the only thing that will save his life, it is a burden they must bear, and hopefully learn from. Not that they will. And not that we will, either. Until it is too late. And probably not even then, since neither them nor we have shown any inclination in that regard, because if we had, we would not be in the mess we are all in now.

Now, all of this petulance may be caused by the results of my own gluttonous indulgences, as I went to a party over the weekend where there was this gigantic taco bar, see, and of course I made a big embarrassment of myself in front of my wife who was doing her wifely duties by reminding me, by slapping me on the back of my head, that stuffing tacos into my mouth with both hands was one thing, but making horrible slobbering and grunting noises while doing it was quite another, and so I was finally reduced to constantly fending her and all the other guests off with one hand and stuffing innumerable delicious tacos into my mouth with the other. And now I am reminded, days later, that mature men cannot act like starving, ravenous beasts, and that the penalty of ridiculous, massive overindulgence is lethargy, indigestion, replete with moaning and groaning. But I feel a little better, now that I know I was just being, ummm, inflexible.

Another guy who has apparently been blinded by Martian thought-control rays is, you guessed it, me, as I cannot fathom Milton Friedman's incomprehensible piece on the op-ed page of the WSJ on Tuesday, entitled "The Fed's Thermostat."

For example, first he says that the Fed does not directly control any of the variables in the equation MV=PV. Then he turns right around and says that the Fed DOES control high-powered money, and then that control allows them to "absolutely" control all the M's! Huh?

And while he does recognize that "the basic responsibility of the Federal Reserve us to produce...price stability," he then goes in search of it by using the GDP deflator as the indicator of inflation. And he serendipitously finds it starting in the late 80's and early 90's, but without recognizing the fraud committed by the Boskin Commission, which took raw price increases and then substituted and chained and adjusted for quality until it totally eliminated price inflation by direct statistical massage, because that is what they set out to do. How special.

Perhaps the things that really caused my brain to seize up were, first, when he has extrapolated the trend of velocity to the present, which he has defined as GDP/M2, which shows no change, although the M's have exploded in the last couple of years! How could that possibly be?

And the second is when he defines a decline in the demand for money as a rise in velocity! Just as I think I maybe understand how a decline in the demand for money could be a rise in velocity, it slips away. Then I start thinking about it again, and just when I intuitively sense something, oops! There it goes again!

And, to drive the nail into the coffin of poor Mr. Friedman's mental health, he sums up by saying "...the crucial function of a central bank is to produce price stability, interpreted as a low and relatively steady recorded rate of inflation. Once the banks adopted price stability as their primary goal, they were able to improve their performance drastically."

Let me sum up for you. The central bank decided to eliminate pesky price inflation by numerical trickery. The reported inflation numbers responded. Therefore, we see that once the Fed set out to stabilize actual prices, they achieved stabilized prices by merely adjusting them, and then they reported these new and improved adjusted prices, and everyone wrote them down, and everything been wonderful every since.

And poor Mr. Friedman chose now to write this piece, just when Greenspan and Bernanke are vowing to get inflation started roaring! It's all too, too weird! Maybe I need another taco. Or two.

There was an interesting op-ed piece entitled "Our Minimum Wage Doesn't Add Up" by a guy named Douglas McKinnon, who was the press secretary for Sen. Bob Dole. He goes into the predictable laundry list of how the low-wage worker can't make ends meet on minimum wage, and how the accepted "poverty line" for a family of three is $14,800 per year, and how awful it is for them. All lamentable and true.

What he does NOT say is WHY a family of three cannot get along at that income level, and the reason is, obviously, because prices have gone up so much. And why did prices go up so much, you ask? Well, here we are again pointing the Finger of Shame and clucking our tongues at the damned Fed, as the Iron Clad Rule of Money Debasement is that all that excess money and credit will eventually work its way into prices. And, because it is an Iron-Clad Rule, the egregious behavior of the Fed, lo these many, many years, HAS worked its way into prices, and that is the damn reason why a little family of three cannot even get by on $14,800 a year, and now the government has to send them money to keep them from being thrown out into the street. And now this person, this Douglas McKinnon, wants the government to mandate that wages go up more, which increases the costs to businesses, which will have to raise prices to maintain the profit margin, so that they can "meet their numbers," and thus making things worse.

And notice that not once in the entire article, and remember this is the guy who was the press secretary to Bob Dole, a Republican and so he is supposed to know these things, or you would think, does he prescribe that the damnable Fed stop "fighting deflation," which is Fed-speak for fomenting MORE inflation, making the plight of the minimum-wage worker worse! For if there is one damn thing that the poor could actually use, it is for the Fed to do a 180-degree turn, and work to encourage deflation, so prices would go down.

But nooOOOoooo! It's always turning to the damned government for some more market-distorting legislation. If this is the caliber of people that he picked to be on his team, then it is no wonder Bob Dole didn't get elected President, because he obviously did not deserve it in the first place.

I got a copy of the August 18 issue of US News and World Report, and it is a special double issue that they call "The Ultimate Consumer Survival Guide." They call it that because it is, practically front to back, in one embarrassing and horrifying example after another, a sorry spectacle of how US businesses, pressed to make ends meet in an environment of pandemic rising costs, crushing debts and price-lowering competition, are screwing people over, left and right, with every sort of sleazy, con-game, hidden-charge rip-off that they can come up with. It is another blistering indictment of the meddling Congress and the damnable Fed, although they never come right out and say so. They left that to me, I suppose, and since I always seem to need something to run my big, fat mouth about, I say "Thanks!"

In a related vein, that irrepressibly handsome Philip Spicer of The Gold Fund of Canada sent an article where Canadian government employees conspired to screw the US government out of money and bankrupt a truck maker at the same time. So the level of fraud and corruption continues apace, in both public and private life.

Continuing in the same vein, Theodore Butler, one of the world's experts on silver and the workings of the silver market, is reporting that the fraud and deception at the COMEX that he has been reporting on for years and years is likewise continuing unabated. In his latest screed, he notes, "785 million total ounces (of silver) are held short as of today, more than 5 times total world visible inventories. Outrageous."

At least now we know who are the dumbest guys in Investment Land, and if you were one of the goofus-doofuses soaking up some of the unbelievable tsunami of debt that was issued in the last year, then you are indeed one of them. To even imagine that bond prices would go up at the same time as bond supply was going up, and at the same time as inflation was going up, shows that you are so stupid that you cannot even comprehend what you learned in the first day of Economics 101. Or that you are so gullible that you fell for the machinations of an unctuous salesman on the phone. Or both.

But you are not alone, so you and your misery have lots of company. Perhaps now you are a little smarter from being a little poorer, and have a more comprehensive understanding of the two terms, "You gotta pay for your education" and "caveat emptor."

One of the holdovers from the old days, those halcyon days of yesteryear, back in the days when the Lone Ranger galloped around the countryside on his horse Silver shouting "Hi ho, Silver, away!" and was getting into fistfights with bad men even though you had two perfectly good guns with you all the time, well, anyway, back in those old days the amount of money available for investment WAS strictly limited. It was limited by the amount of savings in the system, which meant that there was a finite amount of money available for anything, because there is always a finite amount of saving, because there was a finite number of people who saved money. In those days long past, there were millions of American people who saved money, and that saved money was all there was available to borrow. Today, on the other hand, there are just two guys saving money, me and this old guy in Fargo, as far as I can figure out, and I sure as hell don't have enough in savings to loan for every financing and borrowing scheme, so that guy in Fargo must be loaded.

Anyway, the reason why I even bother to bring this up, and I don't want to waste your time because I know what a busy and important person you are, but I want to quote from a recent essay from a guy who will remain nameless, "Washington politicians erroneously believe that an inexhaustible pool of money exist to be spent on endless government programs." The author is, needless to say, one of us old guys.

The ugly modern truth is that he is wrong, and that there truly IS an inexhaustible pool of money available to fund endless government programs! In fact, the amount of money available is, quite literally, infinite. Well, as infinite as the amount of paper and ink that can be made out of all the trees and inkwells in the world, or wherever in the hell ink comes from, and I guess I could go and look it up, but this is not a science lesson, so let's just live with the assumption that ink does come from ink wells and it is not being squeezed out of squids or something.

To show you the possibilities of infinite money, there is literally nothing to stop Congress from getting up off their dead butts, picking up the phone, and calling John Snow with authorization for the Treasury to send every person in America a check for one million dollars! They literally have the power, any time day or night, 24/7, to make an instant millionaire out of every man, woman and child in the USA! A nation of millionaires! Or better yet, how about a billion dollars each? A nation of billionaires! Why DOESN'T the damn government do that? Huh? Why not?

Well, for one thing, the government is out to get me, of course, but that doesn't explain why they are not sending YOU a billion or two to, you know, get you through the weekend. No, the real reason is because there is a downside to all of that, since every economist knows that having that much money suddenly floating around would find its way into prices, and that means inflation. And if there is one thing that nobody wanted, and I mean NOBODY, it is inflation. Because all politicians are scared out of their minds, and this is probably one of the very few instances when the words "politicians" and "minds" are found in the same sentence but not insisting that the former has lost the latter, that the voters will have to suffer the hardship of paying higher prices when incomes are not similarly going up. If that happens, the best that the politicians could hope for is to be voted out of office, because there is plenty of historical examples of inflation-ravaged populations not waiting patiently for the next election cycle, but deciding to take up flaming torches and march on the seats of power and take their revenge in a more, shall we say, overt manner. The French Revolution comes to mind. And now California, although they are using a special election to achieve the same result, which is not nearly as photogenic as maddened crowds with flaming torches.

Now, and you gotta imagine that pages are flying off of calendars to denote that we are speeding forward through time, we get to today. Things are different today. Today we even have a Federal Reserve chairman who says, in so many words, that he is going to hold interest rates artificially low until he gets inflation started rising good and strong! For the first time in all of history we have some powerful clueless jackass promising to cause inflation, which is one of the very things that a central bank is supposed to prevent! And if you don't believe me, then re-read that little thing about Milton Friedman above, and he is a Nobel laureate, so he ought to know. Well, anyway, this anomaly has even impressed Alan Abelson, the witty and erudite scribe that writes the entertaining weekly column "Up and Down Wall Street" for Barron's, writes, "One thing you can count on the Fed, or any central bank, to do it print money in sufficient quantity to make it worth less -  and in some cases worthless. And this Fed, uniquely in the history of central banking, has vowed to do just that."

Note that he has alluded to the fact that the current Fed policy is exactly that, "uniquely in the history of central banking." Now, you just gotta ask yourself, how come this is unique? How come no other central banks ever did this? The answer is obvious; because it is supremely suicidal, as history has proved over and over and over again!! Note the use of double exclamation points, which is a literary device I am cleverly using to denote profound importance.

So if you want a clear-cut indictment of the woeful and impossibly bad ministrations of the jackasses of the entire education establishment in this country, this is it: The boneheads who have been matriculated from the public school cannot even recognize when they are being abused and on their way to being financially murdered!

And this segues perfectly into an article by Stephen W. Carson entitled "Fiat Degrees" and posted on the Mises.com website, who asks, "What does it mean to say that there has been 'education inflation'? It is an analogy to money inflation. Austrians understand money inflation in this way: money substitutes are created that do not represent actual goods and services, (e.g. counterfeiting). So to draw an analogy to education, we might say that education inflation would be the issuing of degrees that do not represent actual learning. Fiat degrees, like fiat money would over time experience a devaluation. This is precisely what we have experienced. There was a time when having a high school degree really meant something. Some older friends were telling me that in the 30s and 40s to be a "college man" marked one out as in a small, select and respected group. Now people with Bachelors' degrees are a dime a dozen. A Masters or PhD is really ideal to distinguish oneself as educated. But even PhDs (in some fields) seem to be overproduced. Ironically, the premier example of this is PhDs in Education which are turned out by the boatload and typically signify very little learning."

Being the angry loudmouth that I am, I hasten to include a PhD's in Economics as a likewise worthless college degree, because if it wasn't then we would not be in the economic mess we are in and we would not have people like Bernanke daring to run around trying to explain how their program of fostering price inflation is some wonderful thing.


Speaking of inflation, the latest consumer price inflation (CPI) numbers came out, and they were "only" up 0.2 for the month, or, if you multiply that number by the twelve months in a year, 2.4% a year. This is NOT good news, this is NOT neutral news, but it is likewise NOT end-of-the-world and we-are-all-going-to-die news, so THAT is good news, but it IS, nonetheless, bad news. But you wouldn't know it from the jackasses that like to run their mouths and thus demonstrate their lack of intellectual capacity, who all say how this proves that inflation is, in their egregious estimation, neutral and tame and benign and all the rest of those Pollyanna terms that make me so angry that I spit up blood whenever I hear them say them.

The bad news is that after-tax, after-fees, after-everything wages, the kind that you take home in your paltry pay envelope, and what is left after you pay all the other taxes and fees and everything, are not going up nearly as fast as prices. This means that either one must borrow to make up the difference, or that one must stop buying so much stuff. Up to now, the American consumer went with the first option, and has now borrowed himself into a hole that has never been so deep, and which will prove to impossible to climb out of. It is a numerical imperative that that particular financial wizardry will have to, one day, come to an end, as there is obviously an upper limit on how much you can borrow.

Don't believe me, eh? How many twenty-something kids do YOU know that still live at home with their parents because they cannot afford to go out on their own? Everybody I know is aware of at least one, and I personally know three, and I'll wager that YOU know at least one, too. And why are these kids still living at home with their mommies and daddies instead of getting out there and getting with the program? Because prices of housing, electricity, phones service, utilities, insurances, food, gas, cars and all the rest of that stuff have, after all these years of "benign" inflation, and I can feel the bile rising in my throat just from writing that word, now cost too damn much compared to the piddly wages these people can earn. They literally cannot afford to live on their own or have lives of their own.

And, now, once again, the CPI shows that next year, and the year after that, these young people will STILL be living at home, because they will never be able to move out.

Such is the sad legacy of persistent "tame" inflation.

And yet, getting back to Alan Greenspan and the horrors of horrors, he is promising to make you suffer MORE inflation! If you have teenagers at home now, this ought to send you scurrying to the medicine cabinet on a quest for powerful pharmaceuticals to calm you down enough to stop screaming in fear.


James Cook of Investment Rarities is one of the few guys who has a handle on the reason behind Greenspan's "war on deflation." In his latest newsletter, he writes, "The government wants the stock market to recover. They don't care about value. They are doing everything in their power to drive stock prices higher. That includes a positive economic spin from the Fed and questionable economic statistics."

And the reason behind that is that everything and everybody is now connected to the stock market. All retirement funds, government tax revenues, foreign governments, foreign citizens, foreign governments, and every financial entity in the country and the world have all hitched their wagons to a stock market.

That it will end badly is guaranteed, as there is no precedent in history where government attempting to boost economies and stock markets did NOT end badly, even though every attempt to do so always STARTED out great. And it always starts out great because all of that money suddenly appearing in the economy cannot fail to generate activity. If all that goosing of the economic embers did not also allow the growth of the cancer of big government, then perhaps the bursting of the bubbles created would just be a matter of some tough luck for the greedy people who got involved. But when the size of the government also grew alongside the asset bubbles, then, well, let me again quote Mr. Cook, "The road to big government is the road to social disintegration. In the end, the safety net erected by the state will fail to do its job. Government programs, with their high cost and runaway expenses, will contribute to the bankruptcy of the nation." Here is pause and note how this sounds like the European mess I was screeching about earlier, doesn't it? Now that I have tied it up in a pretty bow, Mr. Cook continues, "Markets will crash and the dollar undergo a disastrous drop. Interest rates will soar and the debt will never be repaid."


Martin Weiss, the brilliant guy who publishes the Safe Money Report, has an extremely bearish take on things. The latest e-mail from him has these troubling teaser lines as headlines, "Why Wall Street hotshots are dead wrong about bonds and interest rates" and "Why a major bond-related derivatives crisis is going to erupt, shaking the world's financial system to the core."

He writes, "All told, I estimate the bond market carnage so far at over $165 billion - just in long-term US Treasuries. Throw in the losses in corporate bonds and the wipeout is $396 billion. Add in mortgage bonds... expected derivative losses... and related debts going bad - and you're looking at a loss of an estimated $1.7 trillion. Worldwide, you're staring in the face of an estimated $3 trillion wealth wipeout!" And this is just in the last two months!

For the rationale behind why this has happened and why the future holds much more of it happening, he cites the three big reasons as being the soaring federal deficit, the soaring current account and trade deficits, and the new powerlessness of the Fed.

See? Didn't I tell you he was a smart dude?

In a similar vein, Martin and his budderoo Larry publish the Stock Option Alert newsletter, and the latest one is as scary as the rest of their stuff. For example, "In 1987 bonds soared 20% in 63 days and equities suffered a 34% crash. This time, bond yields are up 32% in just 58 days. This is just one more piece of evidence that a major sell-off is around the corner."

 

John Mauldin, another really smart dude who writes the Front Line Thoughts newsletter and is president of Millennium Wave Advisors, is getting to be as dyspeptic as me here lately. In this most recent newsletter he takes to task the guys who use charts to produce constant linear trends, who use the assumption that no trend ever reverses. His attitude about that is the exact same as mine, namely, "Assuming trends never end and drawing charts to demonstrate that is a Stupid Economist Trick. To believe such verbalized investment garbage (not too strong a term), investors must suspend rational thinking."


Mr. Mauldin continues, "For me, they study of economics is part science and part 'art.' The 'art' part is why you can get two otherwise reasonable people looking at the same statistic and coming away with different opinions. As a rule of thumb, when an economist tries to make what he does all science and no art, he is on the way to a train wreck. There is simply no way to accurately model all of the thousands of variables to predict the future with any degree of certainty." My only quibble with this is that I think that his estimate of "thousands of variables" is far too low. My stupid opinion is that there are as many variables as the number of people with money, multiplied by the number of dollars that each of these persons has, and again multiplied by the number of hours that these people are thinking about money, multiplied by their height in millimeters, and so therefore the number of variables reaches to the range of, to be precise, jillions and jillions. Maybe even gazillions, who knows? Anyway, it is a lot, and there are not that many computers or economic models that can incorporate all of that.


The 321gold.com site keeps a close eye on the official Treasury debt, and their comment at the latest $35 billion one-week explosion in the debt balance was, and I quote, "yikes!" I couldn't have said it better myself. Yikes! Ugh.
---Mogambo Sez: Insiders are selling. NYSE Members are selling. Specialists are selling short. So who in the hell is doing all this buying? And why?


The Mogambo Guru Lives!


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.