Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
WAYS TO SECURE YOUR FINANCIAL FUTURE - 20th Aug 19
Holiday Nightmares - Your Caravan is Missing! - 20th Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Calculating the Misery of Inflation

Economics / Inflation Feb 18, 2011 - 03:35 AM GMT

By: Richard_Daughty

Economics

Best Financial Markets Analysis ArticleI was, unfortunately, sober enough to realize that I needed to get a lot drunker if I was going to withstand the horror of reading of even more economic fallout of the Federal Reserve's disastrous decisions to create So Freaking Much Money (SFMM).

In particular, Michael Pento, in an essay in the Euro Pacific's Weekly Digest newsletter, writes, "For the year 2010, the trade gap surged 43%, which was the biggest jump in a decade, as our government's efforts to reignite consumer borrowing and spending led to a record number of imported consumer goods."


I wince and moan, devastated by the very concept of a trade gap jumping by almost half in One Freaking Year (OFY), a situation where we bought more from foreigners than we sold to foreigners, thus many of the Fed's trillions of new dollars flowed out of the US and into the world economy where it would produce its inflationary havoc, QED.

Mr. Pento is also one of the few to notice that "the Misery Index hit a 26 year high for 2010. The index - which is simply the addition of the unemployment and inflation rate - reached 11.29."

And how bad is this? Well, he says, "You have to go all the way back to 1984 to eclipse such a level of pain. Only back then, inflation was calculated without the 'benefit' of the manipulations of the Boskin Commission. Therefore, the Misery Index should be, in reality, much higher than 11.29 and is probably closer to the pain we felt under Jimmy Carter."

Well, as a guy who thinks that inflation in important prices (food, energy, etc.) is running at least 7%, and as a guy who has seen John Williams at shadowstats.com showing pretty convincingly that unemployment is really running at over 22%, this means that the Misery Index at 29 has NEVER been this high!

As bad as this is, this is, actually, the good news! The bad news is that the Misery Index will continue higher and higher because the Federal Reserve continues creating more and more money, and today's record-setting Misery Index of 29 will one day be considered "the good old days" when the news is filled with catastrophic inflation, widespread bankruptcies and economic collapse.

At that dismal future time, your growing sense of horror will only momentarily be diverted by an amusing sidebar, perhaps a story titled "Mogambo Him Go, Say Fed No Mo'", a human-interest saga of how a guy calling himself The Mogambo is calling for his army of Junior Mogambo Rangers (JMRs) across the country to lean out of their windows and say, "I'm as mad as hell with the inflations and horrors of the Federal Reserve and I am not going to take it anymore!" in their demand that the Federal Reserve be dissolved and the country put back on a gold standard as literally required in the Constitution of the United States so that this monetary and fiscal madness would stop, and with a gold standard, never again would we have to face such appalling, catastrophic consequences of absurd levels of monstrous, monetary irresponsibility and sheer stupidity.

Of course, the Main Stream Media will latch, like vicious, mindless, blood-sucking lamprey eels, onto the fact that my "popular uprising" is just a glaring rip-off of Peter Finch's famous scene in the movie Network, and which proves how I have no talent or creativity of any kind, which in turn shows how stupid I am, despite how I got very, very lucky when I bought all that gold and silver before the full impact of the inflationary horror unleashed by the Federal Reserve creating all that excess money started hitting everyone, but they won't mention that, by then, I am So Freaking Rich (SFR) that the only I reason I don't buy the whole Main Stream Media and fire them all is that I am too rich, too lazy, and/or too drunk, and/or too distracted, and/or too whacked-out to do it, or to even give a crap one way or the other.

Mr. Pento is apparently unimpressed with my Fearless Mogambo Forecast (FMF) of what the future holds, or that whole swaths of the economy will tremble at my whim, but agrees that "America's citizenry are experiencing rising food and commodity prices, rising interest rates, falling home prices and stagnate wages and job growth."

I was going to say that Mr. Pento, again, does not mention how buying gold, silver and oil is a perfect thing to do when the Federal Reserve is creating So Freaking Much Money (SFMM) that it guarantees ruinous inflation in prices so that most everyone will be bankrupt and eating weeds and bugs to stay alive because they can't afford food.

Then I realized he actually DID say the same thing when he said, "But so far Mr. Bernanke has only managed to bail out his buddies on Wall Street and in Washington. Maybe he just doesn't realize that he is in the process of wiping out the middle class by destroying the value of our currency and rendering those without financial means, helpless to guard themselves against inflation."

I smiled with satisfaction that when he went on to disparage Bernanke's legendary acing of the SAT by saying, "Too bad questions regarding the benefits of a sound currency weren't on his SAT exam."

And again I smiled that Mr. Bernanke's dismal, utter failure and ridiculous incompetence shines a revealing light on Princeton, where he was, unbelievably, the head of the economics department.

And a third time I smile because the entire historical record of the last 4,500 years is the same story, over and over, of idiot governments spending themselves into bankruptcy, and how gold and silver prove to be The Best Investment Ever (TBIE).

And a fourth time I smile because one cannot help but smile when saying, "Whee! This investing stuff is easy!"

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.

Copyright © 2011 Daily Reckoning

© 2011 Copyright The Daily Reckoning - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules