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I Think I Swallowed my Tongue!

Richard Daughty
...the angriest guy in economics
The Mogambo Guru
Jun 22, 2005

- The Federal Reserve is being, pun intended, reserved here lately, and they are still not increasing Total Fed Credit with the old élan. I am sure that they miss me calling them on the phone to complain and make rude noises like the old days, when Fed Credit used to be parabolic in nature.

Foreigners are, bless their little foreign hearts, still buying US debt with the old fever, so at least we have THAT abuse of the monetary system still working!

- China's government is, so I read, mulling plans to prop up their fallen stock market by buying shares, which is such a bad idea that I am surprised that they are even thinking of something so stupid.

Now, there are a lot of people in the USA, namely me, who are so naturally distrustful and paranoid that they believe the worst in everybody. And we, mostly me, is are am absolutely convinced that the Fed would happily create tons and tons of money to buy stocks, bonds, houses, raw land, real estate on the moon, perpetual motion machines, Elvis collectibles, and anything else you can name in their desperation to get more money pumped into the economy. And the reason that we, meaning I, is are am so convinced is that the Fed is already on record as saying that they are not only willing to do any of those very things, anytime that they want, but they have literally given themselves that option! In effect, the banks will create money and buy up everything for themselves!

I used to think that we Americans are a real stupid bunch of people, but for us to allow this blatant ripoff and fraud really takes the cake for me.

So your term paper assignment is to research the entire economic and financial history of all the countries in the world, and all the countries that ever existed in the world, and find an example of where the banking industry could, for free, buy up the assets of the country, and keep them for themselves, and thus the banks get richer and richer and richer, until, one day, they will own everything. Your task will be difficult, young grasshopper, because I have never heard of a nation so stupid that they would allow the banks (and the stockholders who own them), to do such a thing. So, although you will spend lots and lots of time on this frustrating fool's errand that will comprise half of your final grade, you will get an F when you predictably fail, which is, I admit, harsh. But that is the way that the world really works anyway, so you might as well start getting used to being assigned impossible tasks and then being punished for failure.

If my eyeballs are bugging out and I am running gracefully berserk through town wearing this adorable pink tutu and snazzy matching handgun and holster set, you gotta remember that if we simply allow the banks to just take stuff for free, then nothing makes sense anymore! So of course I look insane! But I am obviously not insane, as I prove by being upset as hell about this! Okay, maybe I AM insane, or maybe I just act like it because I am such a jerk. But I am still upset!

This, of course, brings to mind the words of Thomas Jefferson, one of the most remarkable men America has ever produced (and who is, parenthetically, my entry as "The Greatest American"), who was ALSO not insane. He said, "If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered." And where will their homes be? Owned by the banks, along with everything else!

So that is what China is getting ready to do, and I suspect that that is what our central bank, the Fed, is already doing, too. We are so trusting and simple-minded that we are letting the banks create money out of thin air to buy stocks and bonds, thus transferring assets into their own hands? Yow! Banks are getting our stuff for free? Double-yow!

The ugly reality is that all that additional money flooding into the economy will make inflation soar. But, and this is the crucial "but", if you do not care about inflation, then everything is okay! If you don't mind seeing millions of people suffering from the ravages of inflation, then you are going to love this! Stocks will go up, making people who own stocks richer! Bonds will go up, making people who own bonds richer! Houses will go up, making people who own houses richer! The people who do not own any of these things will be poorer. Lots poorer. Lots and lots poorer.

And given the depths of moral and intellectual depravity that is the norm these days, that is why I am getting more and more cautious about predicting the eminent doom of stocks and bonds and houses. The Fed, which has spent the last eight years doing this silly expansionist crap, may just be getting warmed up! So stocks and bonds and houses may continue to go up for a long, long time. Weird. And scary

But there is nothing to stop them, since the Congress is a spineless bunch of socialist, Big Government buttheads (SBGB), and especially now that our money has been ruined by the Supreme Court, which means it is time to again bring up the fact that the Supreme Court is directly responsible for the huge, suicidal error of allowing a fiat currency in America. With this one monstrous, colossal blunder, our money can literally be the one thing that money was not ever, ever, EVER supposed to be! Namely, a damned fiat currency! Money made out of nothing but printed paper and electronic digits!

But don't get me started on the lying hypocrites that have comprised our Supreme Courts since the infamous traitorous commie bastard FDR extorted their compliance with his un-Constitutional scam of confiscating gold and the rest of that un-Constitutional crap, because it usually ends up with me going ballistic and then waking up weeks from now in a straightjacket, screaming "Oh, noooooo! Not again!"

But creating more money will make prices rise. But people don't like paying higher prices, and it causes anger. And so I am telling Bettie, according to her name tag, that I am personally outraged at being charged $1.27 for a single damn tomato that is smaller than a baseball, and she is telling me to take a hike, and walk my nasty little butt back to the end of the long line of other customers complaining about the prices. And so now I am doubly outraged and aggrieved! First, I am paying higher prices, see, and I also have to take a lot of snotty guff from a checkout clerk, and then have to stand in line with other grumpy people.

So (and I am sure that you will agree with me here), my quality of life is falling, as I have to pay higher prices for things AND the quality of my "shopping experience" is adversely impacted, too! So the question springs to mind, "Is that decline in the value of my shopping experience adequately reflected in the Consumer Price Index?" Hahahaha! I doubt it very much! Rising prices is extracting a price from me in more ways than one! And a high price at that, dammit!

And so, follow my reasoning here, if my quality of life is a price I pay, and then if I pay more money but get less value, then it should be included as a rise in the Consumer Price Index. But it is not! So inflation is understated! And so inflation is again proved by The Mogambo to be actually higher-- a lot higher! --than what the government tells us it is! The bastards!

But Mr. Puplava of FinancialSense.com is not interested in my tomato problems, but instead harks back to my earlier remarks about fiat currencies, and notes wryly, "Ironically, it was the abuse of the gold standard, the Fed's credit-creating habits of the 1920s, and its subsequent mischief in the 1930s, that not only gave us the Great Depression, but also prolonged it. When the government can replicate the monetary unit at will without regard to cost, whether it's paper currency or a computer entry, it's morally identical to the counterfeiter who illegally prints currency. Both ways, it's fraud."

And how does this all fit into my screeching denunciation of the banks? Easy! As I get ready to launch into one of my famous Mogambo diatribes (FMT), Mr. Puplava sees what is happening, and frantically jumps in and takes over for me. He says "A fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation." Well, the obvious question is, "If power, influence and money accrue to those who create fiat money (the banks), who pays the cost?" I threw myself that softball question so that I can get a few words in, but before I can answer that question, Mr. Puplava again beats me to the punch with the answer, "The insidious and eventual cost falls on unidentified victims who are usually oblivious to the cause of their plight. An actual transfer of wealth goes from the poor and the middle class to those in privileged financial positions."

And if you think that Greenspan and his horrible, dimwitted cronies at the Federal Reserve are so much smarter than all the other countries in all of history who have tried this crap and failed, then guess again. Mr. Puplava reports "In many societies the middle class has actually been wiped out by monetary inflation, which always accompanies fiat money."

Well, if this is true, why doesn't anybody try and stop it? Again, he has an answer ready. "In the early stages of inflation, the business class actually benefits from the easy credit. An astute stock investor or home builder can make millions in the boom phase of the business cycle." That is why they call it a boom. And to make sure that you understand the ramifications of this insidious inflation, he adds that "The poor and those dependent on fixed incomes can't keep up with the rising cost of living."

Well, perhaps this explains why the use of credit cards to buy fast food is gaining so much ground. According to CardWeb.com, in the first quarter of the calendar year, Americans charged $6.6 billion in fast-food restaurants. For the full year, they project that consumers will charge more than $30 billion on fast food. This enormous sum of money, representing an even more enormous load of delicious, fat-filled calories, equals about 21 percent of annual sales at these restaurants!

- My wife says that she heard on the radio that in celebration of the 70th anniversary of the board game Monopoly, they have come out with an updated game. In the British version, the property values have gone up by 10,000 times. So, what is the REAL inflation rate when even board games get this extreme?

- As proof that the government is getting bigger and bigger, the Heritage Foundation has found that "Federal spending has climbed 150 percent on higher education, 48 percent on health care and 27 percent on housing since 2000."

They also calculate what they call their Index of Dependency, which measures the number of people who are dependent on the government, and is also a measure of the degree that the government has replaced local governments, churches, communities and families to provide charity and welfare. They figure that "The Index jumped at least 5 percent in each of the previous three years, 27 percent since 2000 and 112 percent since 1980."

- So I am standing there, thinking about the horror of inflation, which is pretty much all I do anymore, which is weird, I know, but it scares the hell out of me because of what history says will happen. I now know that I was foolish to try and take some solace in Peter Schiff, of Euro Pacific Capital, who writes "With today's release of a .1% decline in May consumer prices, many pundits continue to assert that the inflation threat has ended. However, a closer look at the data reveals that the threat has only just begun. Despite May's benign figures, which were driven mainly by falling energy prices, so far 2005 is on pace to achieve the largest CPI increase in fifteen years."

Fifteen years! Prices are rising faster than they have for the last fifteen freaking years! And yet all I hear is how Greenspan is so concerned with price stability! Hahahaha!

He goes on to say, "In fact, given that oil prices have already increased by over 18% in the last four weeks, and that a reversal in the dollar's recent strength is likely to push commodity prices higher for the remainder of the year, I expect CPI gains in the second half of 2005 to push the year's total increase to over 4.6%, its second largest gain in twenty-four years." Twenty-four years! It was fifteen years before, and now, one sentence later, it is up to twenty-four years! Jeez Louise! Talk about your hyperinflation!

By this time I am a babbling mess of fear and confusion. Seeing my finger start moving toward the trigger, Mr. Schiff finishes me off with, "Even more shocking, if one adjusts for the facts that in the late 1980s the government took housing prices out of the CPI, and that in the late 1990s it began hedonically adjusting the price components which comprise much of the index, inflation this year would probably be much closer to 10%, were it still calculated using the same methodology as the one used back in 1981."

Ten percent! Gaaahhhh! I think I swallowed my tongue in my outrage and fear! Inflation is running at ten freaking percent!

- Rolf Hackmann wrote a book entitled Globalization, and he has apparently taken the time to read a little history, as he understands what usually happens at the end of a long boom financed by credit and seemingly-impossible debt loads. As summarized by those clever guys at the Daily Reckoning, he sees, "a prolonged decline.. [including]... crushing competition...falling prices, profits...high levels of unemployment...business and consumer bankruptcies...deflation of asset values...trade wars...major reductions in white- and blue collar workforces...rising long-term interest rates...perverse valuation bubbles coexisting with the generally weak economic conditions that seem poised to add more capital destruction and malaise coming from their inevitable implosion."

- If you want proof in graphical form of the unbelievable growth in credit, look no farther than the second graph of Doug Noland's Credit Bubble Bulletin at PrudentBear.com. It is the perfect example of exponential growth. At first, the rise is gentle, but as it goes along, the rise gets steeper and steeper, until at the end, the line is going almost straight up.

Now, if this was a graph of "Pizza Consumed By The Mogambo" or "People Who Hate The Mogambo", we would all have a laugh and then get into your car and head out for a few beers. But the scary part is that the graph is instead labeled "Bank Credit Growth, 1980-Q1 2005, Y-O-Y Change, $billions." The really, really scary part is that, eyeballing the graph, around about 2010, it WILL be straight up at this rate of growth! Then you will be able to see the actual face of infinity!

And peaking of exponential growth, the US current account deficit continued its exponential expansion in the first quarter, rising to $195 billion. Those of you who are handy with calculators will immediately recognize that $195 billion in a quarter, times four quarters in a year, comes to almost $800 billion at an annualized rate.

- Hans Sennholz's essay "Inflation Breeds Many Evils" has this immortal line from FDR, who, I maintain, is a commie pinko jackass weirdo crackpot who has ruined this country and who is, lamentably, being parroted by jackass Democrats even to this day, which is why I maintain that the average Democrats is a raving lunatic. He quotes former-President Roosevelt as saying that the national debt "is owed not only by the nation but also to the nation." What a load of crap!

This kind of stupidity should have caused him to be laughed out of office, but we Americans were already showing our emergent stupidity, so they did not laugh him out of office. The national debt is, as he correctly said, owed BY the nation, meaning that everybody is going to have to pay taxes, so that all that money can go TO a bunch of guys who loaned money to the government. Now they are going to get all their money back, plus interest. So, who were these people? Rich people, mutual funds, retirement accounts, foreigners (who own over a trillion dollars worth of American government debt) and banks are classified as "the nation?" Hahahaha! Talk about diversity! And everybody has to pay either higher taxes or higher prices (so that the higher-taxed businesses can recoup their losses), or both? Hahahaha! FDR! What an idiot! And that is why every time I hear some clueless jerk Democrat invoking the name of FDR, I know that they are morons, which saves me a lot of time checking up on them.

And speaking of clueless Leftist losers, alert reader Jim S. turned up a funny quote from another loathsome Democrat, JFK, who said "If a free society cannot help the many who are poor, it cannot save the few who are rich." Hahahaha! What a moron! The rich have never needed any help, and in fact the government has never saved poor people at all, and in fact, has made them poorer with their ugly socialist idiocies!

- Robert Novak, renowned political columnist, says that Chairman Greenspan is "described by close onlookers as confused by the economic data." Well, duh! He is confused because they actually believe that their asinine econometric equations and hopelessly convoluted computer models ("New! Improved! Now calculated out to four decimal places!") and all the rest of that neo-Keynesian stupidity is telling him that everything should be fine. They lowered interest rates, and now everything should be perfect! But things are obviously not fine. No wonder the poor dumb bastard is confused.

This is because economics is a social science, and not a physical science. At least the psychologists gave up trying to model human behavior with equations decades ago. But the idiot-savants at the Federal Reserve keep on, bizarrely, trying to do that very thing, and failing failing failing. Which proves that Psych majors are smarter than Econ majors, just as I and all my hoodlum friends said as we slouched outside the Student Union, smoking cigarettes and acting cool.

Mr. Novak continues that "The Consumer Price Index's warning of inflation ahead is regarded by one Federal Reserve governor as 'phony.' Nevertheless, inflation concerns were rising at the Fed until weaker economic news prevailed going into last Tuesday's meeting of the Federal Open Market Committee. Three days later, gains in employment reported on Friday suggested greater inflationary danger."

And let's not forget that the Conference Board's Leading Indicator was actually down after being flat last month! In fact, only one of the ten components of the Leading Indicator was up, and that was stock prices! Hahaha! The Coincident Indicator, reflecting current conditions, was almost flat, too, but it was up a little bit as you would expect since every clueless stock tout in town in trumpeting how the economy is so robust.

But it was the Lagging Economic Indicator, the one that corresponds to future inflation, that gained the most of all of the three indicators! Wow! And with future inflation in the cards, perhaps this is the time for me to tell you that you should put down that TV remote and get up off your fat butt and go buy some gold and silver. Lots of it. And any other commodity that you can get, while you are at it. They will all make money for you.

- So I am watching CNBC during a commercial break in a Gilligan's Island episode on another channel, and to my surprise I see a little roundtable discussion about the housing bubble. The consensus is that lending standards have become too lax as a result of all the banks being inundated with money from the Fed, and they competing so heavily to "put the money to work" making mortgages, so as to enrich themselves. One analyst made the observation that, contrary to what is normal, mortgage rates are not "prime, plus" as they used to be, meaning that the mortgage interest rate was the prime rate plus some additional percentage. But nowadays mortgage rates are "prime, less", meaning that these idiot banks are loaning money at almost a half-percent LESS than the prime rate, so that unqualified people can buy houses, who shouldn't be allowed to buy houses in the first place!

But this is only natural, as explained by David Jensen, who writes, in his essay "In Denial of Crisis: An Economy Undermined by Failures of the Monetary System, the Concentrated Media, and Political Will", that von Mises explained that "in prolonging the expansion of credit, in addition to mal-structuring the economy, by definition dictates that continually lower credit quality borrowers must be brought into the credit pool, which further destabilizes the financial system."

Lyle Gramley, of the Fed, or formerly with the Fed, I can't remember, notes correctly that a collapse of a housing bubble would create a loss of wealth, which would create a decrease in consumer spending, which would take the consumerist economy down and down, and everybody would suffer, and that is a bad thing, and that is why we don't want a housing bubble that will, inevitably, pop. But we are getting one anyway.

Even Kurt Richebacher, everybody's favorite Austrian-school economist, remarks that housing bubbles "heavily entangle banks and the whole financial system as lenders. For this reason, as a matter of fact, property bubbles have historically been the regular main cause of major financial crises."

What the good doctor does not say, mostly because he knows that I tend to get hyper about it, was that it is always traced back to the damned banks, as the behavior of the greedy banks are always at the root of financial crises.

But getting back to the reason why real estate is not such a hot investment, Dr. Richebacher goes on to say, "During its bubble years in the late 1980s, Japan had rampant bubbles both in stocks and property. While the focus is always on the more spectacular equity bubble, hindsight leaves no doubt that the following economic disaster was mainly rooted in the property bubble. Both bubbles burst in the end, but the property deflation has continued for 13 years now, with calamitous effects on the banking system through a horrendous legacy of bad loans."

"Therefore," he says, "major housing bubbles imperatively end in a hard landing. A second major adverse influence on economic growth implicitly arises from the sudden cessation of the building boom. Yet the worst looming problem is always the potential damage to the banking system through escalating bad loans." Mogambo translation (MT): if you thought the dotcom bubble bursting was bad, you ain't seen nothing yet.

But I have a surprise for you! The surprise is that a lot of that mountain of mortgage debt, that gigantic glob of gluttonous debt, has now been bought up by Fannie Mae, which has been, in turn, bought up by your pension plan! Hahahaha! You, as the owner of a retirement fund that owns Fannie Mae stock, are now the sucker on the hook for a lot of this debt! Hahaha! Surprise! You had better hope that the Congress and the Fed conspire to get the housing market up! Hahahaha!

In that regard, perhaps you will find it interesting that Martin Weiss, of the SafeMoneyReport, says that he figures that every time interest rates go up by a quarter of a point, it costs Fannie Mae a half-billion smackeroos.

- The Economist magazine is more that succinct when it says "The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops." What they do not dare mention is the degree of pain that they want you to prepare for. It is not the kind of temporary kind of pain, like when I'm standing at the line at the bank, and out of sheer boredom I casually strike up a conversation with this pretty girl in line, and then the next thing I know she is kicking the Kung Fu hell out of me just because I, maybe, made a few innocent slobbering noises in her direction.

No, the kind of pain that they are talking about is akin to getting third degree burns over your entire body, and then somebody shoots you with a machine gun, and then a swarm of bees sting you, and then you burn your mouth a burrito that was in the microwave for far too long, and as tears stream from your eyes it starts to look like nothing is ever going to go right ever again. THAT is the kind of pain you should prepare for.

But the Economist magazine has apparently looked at the historical data, and writes, "NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000. What if the housing boom now turns to bust?" Notice the way they capitalized all the letters in "never," which says a lot!

The question burning in my puny little Mogambo mind (PLMM) is not "What if the housing boom now turns to bust?" The REAL question is, "Why is there is housing boom in the first place?" The answer is because all of the world's central banks, every last one of them as far as I can tell, has been creating excess money and credit for so long, and all of those trillions of dollars had to go somewhere. And when it starts going somewhere, it makes prices rise, and then that attracts a lot of attention, and then more money starts flowing there, and that makes prices rise some more, and that attracts more attention, and then more money starts flowing here, and around and around and around it goes.

All it takes is central bankers acting irresponsibly and stupidly. And the world has had that, in spades, for decades. As proof, Richard Schlessel sent me a graph, compiled by Bud Conrad at Macroanalysis, that shows mortgage debt is now 68% of GDP, up from 15% when Greenspan took over in 1987. Mortgage DEBT is 68% of GDP, not housing values!

And how much money are we talking about? According to Economist magazine's estimates, "the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs." The houses are worth more than the country makes in an entire year? My God! I raise my hand to my forehead in a swoon, and say "Rhett! Rhett Butler! Do be a dear and get me my smelling salts. I think I am overcome with the vapors!"

And in sheer size, the world-wide housing bubble is monstrous. I know that you are too smart to take my word for this, and I would have no respect for you if you did. So harking back to the Economist magazine, I direct your attention to "Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP), or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history."

The biggest bubble in history! In HISTORY! And you think that the biggest, baddest bubble in all of history it is going to work out fine and the economy is going to be fine and everyone is going to get rich? Hahahaha!

And it is not just the global housing boom that is setting records. "American prices have risen by less than those in Britain," continues the Economist, "yet this is still by far the biggest boom in American history, with real gains more than three times bigger than in previous housing booms in the 1970s or the 1980s."

I can see that you are wondering what house prices are in comparison to what the houses would command in rent. Just in time to answer your question, we read that "house prices have hit record levels in relation to rents in America, Britain, Australia, New Zealand, France, Spain, the Netherlands, Ireland and Belgium." So, anticipating your question, who cares about a bunch of foreigners, huh? Everybody can go to hell, as far as America is concerned. What we want to know is, because we are patriotic Americans, what this means to US, the Americans? They answer, "America's ratio of prices to rents is 35% above its average level during 1975-2000."

This means that, if we start right freaking now, house prices have to stand still until rents increase a lot,or house prices have to fall a lot, or both, because something has to change by a lot. Whatever happens, somebody is going to get screwed out of a lot of money, as the ratio of house prices to rents reverts back down to the long-term average, as it must.

- Kennedy Gammage, who probably already lives in a real nice house and has no interest in that kind of thing, is more concerned with the stock market, and the reason he is so concerned is that he sees rough sledding ahead. "In any event, the market continues to be in a giant topping formation -- the result of the peaking of the up-leg bull phase of the 4-4 1/2 year cycle that began with the bottom of 2002, and is now destined to head down in the down-leg bear portion of that cycle into 2006. All of this, of course, is within the context of a much longer secular primary bear market that began with the major market top of 2000, and probably won't conclude until sometime around 2010 or thereabouts."

Robert Prechter of Elliott Wave fame is also thinking along those lines, and he figures that the collapse of the stock market will be led down by the Dow Jones Transportation index, mostly as a result of that sector never actually showing a profit even when times were good, and one can only moan and groan and roll one's eyes about how badly they will do in a general economic downturn. He writes, "I would guess that the DJT will outperform virtually everything else on the downside from here on out."

- A reader who refers to himself as Nosy says that the semi-annual report from Prudent Bear just made things worse for his peace of mind: "Indicative of the uneven flow of finance to the economy," reads the report, "over the past year 303,000 jobs have been added in construction, 307,000 in 'leisure and hospitality', 170,000 in financial services and 144,000 in government. Over this period our manufacturing base has shed 12,000 workers." Terrific. The one occupation that actually creates something that we can sell to foreigners, and hopefully get the trade deficit back in balance, is the only one that continues down and down and down, year after year, decade after decade.

- On the other hand, the news is good for gold, as Peter Schiff of Euro Pacific Capital concludes "safe-haven money is going into gold. That is why over the past several weeks, the price of gold has risen sharply in terms of all currencies. In other words, this is a legitimate gold rally, not simply a dollar decline." So is it time to back up the truck and load up on gold? Well, if not today, then probably tomorrow. Or the day after. Either way, soon.

- John Mauldin of FrontLineThoughts.com has looked at the pension problems, and concludes that over the coming years "corporate pension plans may have to make up an almost $1.2 trillion shortfall, if the market gives only the 5%, which history suggests it will, at current valuations and earnings levels. That number comes from the current $400 billion dollar shortfall and a 4% earnings shortfall on the portfolios. It could be a few hundred billion here or there, as no one knows exactly what the future will bring. But whatever the number, it is huge."

And it gets worse. As bad as corporate pension plans are, the problem is far worse for public pension plans. 84% of state retirement plans are underfunded. And as for people's private pension plans, the average account value of those aged 55-60 is around $10,000! Ugh.

*****The Mogambo Sez: Things seem to be on the cusp of something bad. As Rick Ackerman of Rick's Picks says, "To be sure, we have probably seen a peak in discretionary spending, as well as in GDP growth. However, the real damage will come when consumers drastically curtail buying out of fear the economy is sinking." I'm already scared. You should be, too.


Richard Daughty

email: RichardSmithGroup@verizon.net
Daughty Archives
Provided as a courtesy of Agora Publishing and The Daily Reckoning

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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