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...snarling like a jungle cat

Richard Daughty
The Daily Reckoning

...the angriest guy in economics
The Mogambo Guru
December 2, 2004

- Congress, as confidently predicted, approved increasing the limit on the Total National Debt by another $800 billion, to $8.184 trillion. Personally, I got another solicitation in the mail to apply for another credit card. Of the two of us, only I have the smarts to turn down the offer to go deeper into debt.

This is the third time since 2001 that Congress has raised the debt limit, and now, only three years later, we are $2.2 trillion farther in debt, and so soon we shall be $3 trillion more in debt. The Treasury did not waste any time borrowing the money, and as soon as the ink was dry on the legislation authorizing the increase, they went out THE NEXT FREAKING DAY and put us $21 billion dollars farther in the poorhouse! $21 billion! In one day!

The dollar continued to crumble, of course, and even Greenspan himself said that if anybody is NOT taking out some kind of defensive insurance against higher interest rates or the falling dollar, or both, then they have nobody to blame but themselves, because he has said, and the international community has said, and the stock market has said, and the bond market has said, and The Mogambo has said, that interest rates WILL be higher the future.

The part that baffles the hell out of me is just who in the hell is taking the other side of that "insurance" policy against future interest rate hikes? That person is the most stupid doofus on the face of the planet, or that ever lived on the face of the planet, by that I mean that not even I, The Mogambo, am that stupid, and you can believe me when I say that I have done some really stupid things in my life, and I mean really, REALLY stupid things, (audience yells out, "How stupid Mogambo?") things so stupid that I look back and ask myself, incredulously, "What in the hell were you possibly thinking?" and other, secret things so unbelievably stupid that I do not dare go back and look at them, because nobody normal is THAT stupid, and so to even acknowledge their existence would prove that what experts are saying about me from the witness stand, waving their snotty little lab reports around and yelling "I have proof! I have proof!
", are true.

Although my credentials are obviously in impeccable order to qualify me to testify as an expert on behaving stupidly, not even I would DARE take the other side of that bet, even on my craziest day, which would be, according to official transcripts, on or about the 12th of June, 1967. So, this is another Take It From The Mogambo To The Bank Moment (TIFTMTTBM) when I tell you that taking the other side of this derivative trade is the ultimate in stupidity, and one that will come back to haunt any moron who thinks he can make money on that bet.

It would be the ultimate "blonde joke". A guy comes up to this blonde on the street, and says "Hey! Blondie! Want to make some quick cash?" and of course I say that I would LOVE to pick up a little quick cash, and he says, "I'll bet you that I will punch you in the nose" and I naturally say "Okay, I'll bet you DON'T punch me in the nose, wise guy!" and he says "Okay, let's see your money!" and I say that I don't have any real money on me, if one defines money as something that is, simultaneously, 1) a unit of account, 2) a medium of exchange, and 3) a store of value, although I do have some of these American dollars, which are the first two of those three things, and he says, "Okay. Let's bet ten of them!" and I say, "Okay by me, bozo!" Then he hits me-- oof! --in the freaking nose! Then goes running off with my money!

The next thing I know, I'm sitting on the sidewalk nursing a sore nose, and I get a call from a financial center, and they say "Hey! Blondie! Want to make a little quick cash?" and of course I tell him that I would LOVE to make a little quick cash, and they say, "Interest rates are going up. I'll bet you that they go up, and you can bet they don't go up!" And then I say "No,
" because blondes are not stupid enough to take THAT bet! Hahahaha!

Well, it is not the funniest joke I ever heard, but I am not here to make jokes. I am here to talk about economics, and maybe borrow a few dollars from you, and I promise I'll try and pay you back a little every month, if I can.

- American boneheads are still lining up around the block to buy houses at prices that they KNOW are ridiculous, and taking out mortgages that are huge freaking multiples of their incomes, multiples that that are equally ridiculous, something like 4.5 times their annual gross income! The old standard was that you could afford a house that cost about twice your annual income, because experience had shown that mortgages for amounts more than twice the borrower's annual income were too burdensome for the borrower, and defaults were thus higher, and the banks tended to lose money when they lent out so much money to such over-stretched borrowers, and that is how Traditional Rules of Thumb (TROT) are created. But rules of thumb are so old-fashioned, especially when there is a chance to act really, really stupid, as only government and their bastard offspring, Government Sponsored Enterprises, can act.

This is, of course, a reference to Fannie Mae and Freddy Mac, two absurd and absurdly gigantic mortgage lenders that were created, of course, by the government, and who don't give a rat's patootie about prudent lending practices, or defaults, or problem loans, or rules of thumb, or any of that stuff that normal businesses have to worry about. Only a GSE could get away with a business plan that essentially promises, "We promise to ignore the lessons of history, economics, finance and common sense, and yet we will nevertheless make money for investors, although it has always proved impossible before this, and that is why nobody in their right mind ever lends such huge sums of money, and that is why there is nobody in this bubble-making market niche!" although that particular phrase is NOT included in the prospectus. But it should be.

- And speaking of deceit and stupidity, the United Nations has, once again, proven itself to be a corrupt, lying piece of expensive worthlessness, and it is getting embarrassing to be supporting it, much like my wife is getting tired of sadly nodding her head in response to people asking "Hey, lady! Is that stupid jerk really your husband?" I say we disband it, and then, if you gotta have one of these supranational entities, start fresh with a new bunch of guys who have not had time to organize their cozy cobwebs of interconnected schemes and corruptions. I will take over, and I'll give you a New United Nations, or United Nations Part II, or The United Nations, the Sequel (The Empire Strikes Back), that you can be PROUD of!

Of course, I figure that this great idea of mine will fare about as well as my failed bid for the Presidency, and although Badnarik, the Libertarian candidate that we should have elected pulled in less than 1% of the popular vote, he still fared better than the Presidential aspirations of the Mogambo, who didn't even get an "honorable mention" or even a shot at the Miss Congeniality Award, so I don't want to hear any boo hoo hoo crap from him!

- Paul van Eeden has a new essay entitled "It's Over" on the DailyReckoning.com site, and he is taking a look at the concept of the eventual de-linking of the Chinese yuan and the dollar, but from the perspective of the Chinese, instead of always looking at what it means to us Americans. Now, normal, loyal, flag-waving American bozos like you and me are thinking to ourselves, "Screw the Chinese! What have they done for ME? Let's call out for some chicken wings!!" If you know me personally, or have ever seen me acting suspicious on America's Most Wanted, you know that I am as fearful and xenophobic as the next guy about these Chinese people, nefarious and inscrutable as they obviously are. But you may not be aware that I am also happy to be getting my share of those delicious chicken wings. Preoccupied as I am, making these characteristic gobbling and slurping noises that most people think can't be made by a normal human being, I am getting barbeque sauce all over my face, and all over my clothes, and I am getting it all over everything, and now my wife is in one of her "moods" for some damn reason that I can never understand, it is amazing that I still manage to find the time to be alarmed that these foreign competitors have been quietly working to undermine the whole economic fabric of the USA by selling stuff to us for years and years at such low prices! Treachery! I told you they were nefarious!

These bargains, flooding into America year after year, obviously disguised the true rate of inflation, which was effectively masked by the absence of a rise in prices in a whole range of stuff, which would have been obvious if we still made the stuff we buy, but we don't, or if we had to finance our own consumption, which we don't, either.

The effect is that that clueless bozos like Alan Greenspan and the whole gang of equally-clueless boneheads who work at the Federal Reserve can get all dressed up, then parade around in front of the TV cameras, showing off their latest Autumn fashions, and look into the camera and bat their eyes seductively and say "Inflation? What inflation? My dear Mogambo, there is no inflation!" And because the schools and the media and the governments all agree that very Laws of Economics now obey the commands of Alan Greenspan, the lack of inflation means that he is not only free, but OLIGED, to create more and more money and credit, money and credit in amounts that are unprecedented in size, year after year after year! He ignores the fact that this creation of money and credit IS inflation! But just because it has not yet shown up in higher prices, thanks to the Chinese keeping prices low, this does not mean that they won't, because they will, because they always have, every freaking single time in history when any central bank or government acted so uncomprehendingly irresponsible and deliberately ignorant as to try such a crazy stunt.

But this is all by way of mere introduction. And so, without further ado, I turn the podium over to Mr. Van Eeden, who says, "The falling dollar has caused the price of Chinese raw material imports to soar. Just in the last year, the cost of oil is up 33%, copper is up 55% and nickel is up 18% - you get the picture. If China allows the renminbi to float, and it appreciates against the dollar as is widely expected, then the cost of raw materials imports to China will drop significantly and that is most certainly positive for the Chinese economy."

You bet that is positive! That is the joy of a strong currency! People with strong currencies get to buy imported stuff cheap! And it was that whole strong dollar thing that made imports cheap for us all those years. And now, as China more and more responds to domestic demand for stuff, they will want to start importing stuff cheap, mainly oil and other commodities, which requires a strong currency. Goodbye, dollar-yuan peg! And then it is goodbye, dollar!

- "Banknote 'Bugs' In Your Pocket" is the headline in the "This Is London" section of Mail on Sunday, written by Dan Atkinson. "Electronic 'smart' tags could be embedded in £50 notes within ten years, allowing the state to invade people's financial privacy further, warns a leading academic. Some Japanese notes are already fitted with the devices and the European Central Bank is likely to follow suit next year. The devices, which give off radio signals, are already being introduced into clothing by major chains and are being used around the world to keep track of pets and livestock. America's Federal Reserve is also thought to be interested in tagging high denomination dollar bills."

Earth to Dan Atkinson! I am SURE that they are interested, dude! All powerful institutions are ALWAYS interested in gathering information on people, and institutions with government coercive power are more interested in knowing all about everything about people, and wives who are becoming suspicious are even MORE interested in every freaking detail of my life. But because they can't call you up on the phone and ask you where you spend all your money, because you wouldn't tell them, and because they can't break your door down and demand to know where you spend all your money, because it would be illegal, and because they can't interrogate your dog about where you spend all your money, because that would be stupid, and they don't need to interrogate my wife because they can't seem to shut her yap about where all the money went, and in fact she likes nothing better than yammering on and on and on about how I wasted money on this, and how I wasted money on that, and sooner or later she is going to get around to bringing up that whole crazy mix-up with the two underage pole-dancers from Leering Louie's Lounge of Lechery and that Bulgarian acrobat troupe, then there is nothing left for them to do except interrogate your money directly. Ian Angell, who is the head of the information systems department at the London School of Economics says, 'The state will know exactly how much cash is being carried, who is carrying it and who has carried it previously."

And if you think they are NOT already doing a lot of this stuff, then you don't know very much about how governments work, and you really ought to pick up a book sometime, maybe something like George Orwell's "1984,
" and then you can be scared out of your mind, too, right along with the rest of us.

- For those of you who have been so kind to ask about the Fabulous Mogambo Indicator (FMI), it has started acting weird again, and so I am more dyspeptic and fearful than ever, which is probably reaching a record of some kind.

- We have forced the world to forgive a lot of debt here lately, the latest example being Iraqi debt, and most nations have gone along with the scam, although with some screaming and complaining and posturing. But let's be sure and remember that this is a pure transfer of wealth, and somebody has to lose an equal amount of wealth, because that is the way both accounting and economics work. Yin yang. Karmic balance. Debits and credits. Dollars and cents. Winners and losers.

So, if all these overly- indebted nations are the winners, who pays? The same guys who pay the cost of everything, my dear Watson! There is only one guy who cannot resell the widget or the baloney sandwich, in whole or in part, and this guy is our old friend, you. And me. Mister Final Consumer, and of course Missus Final Consumer, and all the other Little Final Consumers who are busily pitter-pattering around the house and squealing with that irritating noise that they make, each of them growing bigger and more expensive every day. And all of this forgiveness of debt will be added, little by little, into the price of things you buy, now and in the future.

But perhaps you don't believe me, as you have been recently disenchanted with the advice of The Mogambo just because people are writing the most horrible things about me in restrooms at the mall, which only shows how ignorant those people are, because all those charges were either dropped or I was adjudicated not guilty because of mental impairment, so I was NOT GUILTY! See how wrong they are? So I hope this puts an end to those ugly rumors. And besides, those were all in the pre-Patriot Act era, and now the government can come and get me anytime they want to, and take me away anytime they want to, and make me conveniently disappear anytime they want to, and I figure that the only reason they don't do it now is that they are afraid that they will catch my cooties or something.

But what we end up with, after all this forgiveness of debt, is money without the attendant debt, which is, again, inflationary, and which will, sooner or later, show up in prices, and then, sooner or later, it will start showing up in the headlines of the newspapers, as crime and acts of desperation become more and more numerous because rising prices and stagnant incomes produces falling real wages, which always makes people real, real grumpy (RRG) and real, real desperate (RRD).

But where were we? Oh, yeah! We were talking about how you don't believe me that inflation is coming down the road and will soon be slamming into you like a solid-steel, full-size '57 Buick Road Master going, oh, about eighty miles an hour I'd guess, and your Carbon-Based Spousal Final Consumer Unit and your little Offspring Final Consumer Carbon Units will be yelling at you to get up off the damn road and go out and get another job because things cost so much, and none of them is willing to consume less stuff, and for God's sake stop by the Precious Metals Shoppe on the way home and pick up some gold, because all the damn people who bought gold are now getting richer by the day as that damned gold just keeps going up and up in price, which they say means that the buying power of the dollar is going down, but we don't understand any of that economics mumbo-jumbo, and all we know is 1) we need more damn money coming into this damn house because things cost so much nowadays, and 2) it just keeps getting worse every day, and 3) if we had only listened to The Mogambo and bought silver and gold and the stocks of companies that produce commodities, we'd all be rich now, and living the easy life, probably passed out, drunk as a skunk on some warm, exotic tropical beach somewhere, which is probably where the Mogambo is right now, and that is why we say "All hail Mogambo!"

Of course, there will be those nay-sayers who say "Tut-tut!" to that, and who say that the people obviously got a concussion from being run down by that '57 Buick Road Master with the snazzy whitewall tires, which brings up a real sore point with me, which is, whatever happened to whitewall tires? Black-wall tires look like crap. Bring back the whitewall tire!

Which of course, brings me, full-circle, like a whitewall tire going around and around, to gold and oil and commodities and farmland upon which to grow some of these said commodities, preferably something that is easily defended and already has some barbed wire and defensive concrete structures already in place along the perimeter. And while we are talking about gold and silver and commodities, let's walk over and take a look at the price action of those things here lately and for the last several years. Oooh! Very exciting! And profitable! Which makes it more exciting! Like I said, Oooh!

- Reader W.R.M. gave me a compliment, referred to The Shadow, and demonstrated profound insight about the world of economics and economists, all at the same time, which shows some fabulous productivity numbers, but I'll bet Alan Greenspan doesn't even call him up to say "Congratulations!" Anyway, he writes, "Who knows the evil that lurks in men? Mogambo knows. A lot of them are called Economists." Hahahaha!

- Jim Willy, of FinancialSense.com has penned an entertaining essay entitled "Karl Marx & Greenspan Over Coffee" in which Karl Marx comes off sounding a lot smarter than Alan Greenspan. For example, Karl Marx says things like "Two false horses pull American capitalist wagon, DEBT and INFLATION. Materialism appeals to greed through debt. Secretive theft from workers through sanctioned inflation."

Still talking in that stilted Russian accent that is so entertaining, he says, "Banking leaders, military complex, lobbyists, they run government, not people. Leveraged bond trading to exploit yield curve is not work, but rigged game for banker bourgeois, as inflation steals from workers and savers." And here are two new things to add to The List Of Things That Surprise The Mogambo (TLOTTSTM): 1) when someone tells you that one night very soon she is going to kill you in your sleep, you can actually go for weeks and weeks and nothing happens, and 2) that I would ever be writing that Karl Marx appears smarter than the Chairman of the Federal Reserve, which is the name of our central bank only because the name "Ripoff City" was too explicit and "A Secretive Banking System Designed To Steal the Wealth of People to Enrich Ourselves and Bail Ourselves Out of the Bankrupting Messes We Get Ourselves Into" was, again, too descriptive, and too cumbersome, too.

- USA Today reports that Asian soybean rust has entered the USA farmlands. Soybean rust, which interferes with photosynthesis and reduces crop yields by up to 80%, is spread via spores.

They write, "If supplies are cut, for consumers the disease could mean higher prices for a wide range of items. But soybeans are found in a variety of products, such as tofu, soy milk and meat substitutes, as well as in non-food products, such as cleaners, hair conditioners and fuel additives. And because soybeans are fed to poultry, hogs and cattle, meat and dairy prices could also increase if livestock producers are able to pass along the higher costs." Then the USA Today shows that they are just another bunch of ignorant hacks when they say, "Still, consumers are expected to bear only 20% of the costs from the disease, the USDA says." Hahahaha! What a bunch of morons! Hey! USA Today! I got a hot flash for you! Consumers pay 100% of the costs of everything, you stupid twits, because there is no one else that CAN pay, and if you think that the company is going to absorb those higher costs, and thus suffer lower profits, then you have never suffered the wrath of a Board of Directors, and that is why you laughably say that consumers will only pay 20% of the costs.

- In the Star Tribune, journalist John Reinan wrote an interesting piece entitled "One Nation Under Debt: Betting The House" in which he restored a little of my faith in Harvard as an institution of higher learning. He quotes Elizabeth Warren, who is a Harvard Law School professor and co-author of the bestseller "The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke". She said, "There's no such thing as tapping into your home equity. It's borrowing money. And if you don't pay it back, they take your house away. That's all there is to it."

Everybody has something to say about the weak dollar. To the amazement of many, including myself, there are those who are actually saying that a weak dollar is going to be good for us! To explain how this is possible, sit down and make yourself comfortable, as the plot is a long and complicated one, but it all started with somebody in a coma not knowing that her sister had a baby, the father of which is not her husband, and two sets of evil twins return from a long absence, vowing revenge, while the father's uncle, whose nephew is having an affair with her sister because the mother had an affair with a Ukrainian dwarf that was in town with the circus, which is secretly owned by the guy that she was blackmailing, and, ummm, well, I sort of forget how the thing goes, but there is another episode on tomorrow, where we find out if the doctor lives or dies before he can perform the delicate operation on the orphan, which not an orphan at all, but is the illegitimate daughter of the mayor!

No! Wait! Now that I think about it, that is not the plot at all! Sorry! In fact the plot is simplicity itself. A strong currency is good for a country that imports stuff, because you get to buy so much stuff for so little money, and you end up with a whole shopping basket full of bargains, beautiful, beautiful bargains, including that new hollow-point .50- caliber ammo for the machine gun and two cases of grenades for the price of one! And a new shower curtain that will look absolutely darling!

Conversely, a weak currency is good for a country that exports stuff, as you get a pricing advantage over your competitors in the international marketplace when your stuff hits the market shelves in that foreign market and the shopkeeper puts a price tag on it in local currency. Up to now, see, America has been a consuming country, and therefore we had a strong dollar policy, and we got to buy stuff cheap. And we borrowed money and bought it all. Now we are at the limits of the amount of money a working-class peasant like me can bear without waking up in the middle of the night, drenched in sweat over impending bankruptcy and ruination.

As a sweat-drenched people desperately in need of sleep and debt relief, we are not going to be buying as much stuff from now on, and therefore we will not be importing as much stuff from now on, and so we don't need a strong currency anymore. What we need is a weak currency, so that we can sell stuff to foreigners real cheap, and hopefully getting back into the game.

And now we are going to get one, and if you think that a nation of gluttonous consumers in a Big Government Economy, who make nothing, but consume everything, is going to seamlessly transition itself into an exporting powerhouse without monumental disruptions, and heartache, and misery, and ruination, and collapse of everything you hold near and dear, then I know that, although you are much better looking than me, and much smarter than me, and everybody likes you, that there are more differences between us than just those things. For instance, I also know that you have not spent any time reading history, because if you had, then you would be screaming in horror and fear, which is probably redundant, but saying just "horror" or just "fear" sounded inadequate, somehow, to describe the situation.

- Clive Maund, in an essay entitled "The Dollar Stares Into The Abyss,
" writes "Vast quantities of US debt and dollar financial assets have been created and ingeniously packaged and marketed to foreigners who are right now waking up to the harsh reality that they have been played for suckers and are about to get stuck with this atrophying junk. They have delivered goods and services in the expectation of eventual fair payment, and are right now being defrauded out of a sizeable percentage of their earnings by the falling dollar."

Don't spend too much time worrying about those foreigners, because if there is one thing that I learned in an American public school, it is that all foreigners are very rodent-like, and when things start getting bad, they all go and hide in caves and things, where they will patiently wait for America to come and save them. So start worrying about yourselves, because, to paraphrase, "right now you are being defrauded out of a sizeable percentage of your buying power by the falling dollar."

And if there is one sure-fire bet, then it has to be that oil will go up in price, when priced in US dollars.

- Paul McCulley, of PIMCO, has a nice essay entitled "A Debtor's Blessing." In answer to Ron Paul asking Alan Greenspan about fiat currencies, and how they always fail, and all that stuff that makes me crazy when I think about it, Alan Greenspan is quoted as saying, "Well, Congressman, you're raising the more fundamental question as to the issue of being on a commodity standard or a fiat money standard. And this issue has been debated, as you know as well as I, extensively for a very significant period of time." I leap to my feet and shout "That is not true! In the whole history of currencies, the desirability of using a fiat currency has been debated very few times, because the evidence is overwhelming that every freaking time you mess with the stupidity of using a fiat currency as money, the economy gets ruined."

But he does not pay attention to me, but he knows I am here. I can see him sweat. I can smell his fear, (or, I THOUGHT it was fear, but it turns out that I was smelling the evidence that adult disposable diapers are not as absorbent as they claim, unless you put on a fresh one every once in awhile). Suddenly, he reverses course, throwing me off the track, which was easy to do because I was still thinking that I was smelling fear and was thinking to myself "Hmmm! I did not know that fear smelled so pungent!" He surprisingly tells the truth when he says, "Once you decide that a commodity standard such as the gold standard is, for whatever reasons, not acceptable in a society and you go to a fiat currency, then - unless you have government endeavoring to determine what the supply of the currency is - it is very difficult to create what effectively the gold standard did." Well, duh! No kidding? We'll, hey dude! That is probably why nobody in history has ever pulled it off! Gosh! Ya think? (Note to self: find out how much we pay this Greenspan bonehead, because whatever it is, it is too much!).

Then, seeing as how everybody is now saying, "See, Mogambo? The guy knows what he is talking about! So shut up and sit down!" and I realize that the guy IS telling the truth now, and so I sullenly sit back down in my seat with a big "Squiiiissshhhhhh!" and that is when I found out about the diaper thing, and I was mumbling something under my breath, I forget exactly what, but I remember that there were a lot of obscenities in it. Then, seeing me distracted, he goes out into la-la land again and says "I think you will find, as I've indicated to you before, that most effective central banks in this fiat money period tend to be successful largely because we tend to replicate what would probably have occurred under a commodity standard in general." What? This is absurd! There has NEVER been an "effective central bank" in this, or any other, "fiat money period,
" you blockhead! And I am here to tell you that if you think that the simmering, constant inflation since 1913 has been a replication of the stability of a gold standard, or even a reasonable facsimile, or a rough approximation, or even a vague resemblance, then you are lying right though your stupid teeth! The dollar has lost 96% of its value in that short time, you butthead! It is absolute lunacy to even SAY such a thing, and it is damned insulting for Alan Greenspan to think that we are so stupid that we could possibly believe such an outrageous lie!

By this time, members of the audience are now physically holding me back, pinning my arms behind me, and I am straining to break free of their grasp, and I am trying to gently persuade them to release me ("Let me go, you bleeping bastards, or I'll kill you all!) so that I can leap on the stage and slap the hell out of this Greenspan person, and you can tell by the way I spit out the word "person" that The Mogambo is in one of his Mogambo Hollywood Modes (MHM), and I am actually snarling like a jungle cat for some reason, which is a bizarre plot twist, but we have had script problems from day one.

Seeing that I am liable to break free, he quickly goes on to say, "I've stated in the past that I've always thought that fiat currencies by their nature are inflationary." And I say, "No, they are not, you ignorant butthead! You just have to keep from creating a boom by expanding the money supply via credit and debt! The currency itself is not inherently inflationary, you pompous dolt, because paper and electronic accounting digits have no mind of their own! It takes arrogant, ignorant, twisted, mentally ill morons like you to create an unsustainable boom that ends in a bust, and the only reason we insist on a gold standard, you butthead, is that we because we can't trust government, and we sure as hell can't trust you, either!"

Sweating profusely, he throws what he thinks is the debating equivalent of the Vulcan Nerve Pinch, and if you have ever seen Spock using this technique on Star Trek, you know that it immediately causes the victim to collapse, unconscious, and thus further argument is pointless and thus you have - voila! -- won the debate. He says, "I was taken back by observing the fact that from the early 1990s forward, Japan demonstrated that fact not to be a broad, universal principle." Wow! Let me get this straight! Just because one stinking country, one that had a gigantic trade surplus and a population that saved huge wads of money in the banking sector, and who had a government that bizarrely went on a huge, budget-busting deficit-spending boom, did not quite collapse for fourteen whole years after their bubble burst? Bubbles caused, I might add because that is just the sort of kick-them-while-they-are-down lowlife bastard that I am, by their own idiot central bank creating scads and scads of money and credit, namely doing the same damn thing as us American dolts are still doing right now? And now you are ready to immediately discount the rest of the entire 5,000 years of economic history? The same history that heretofore dictated that a ruinous collapse always follows credit-financed booms? Wow! Are you gullible or what? Or what arrogance! I can't make up my mind which one!


** The Mogambo Sez:
The New Imponderable is whether the government can keep this market up until midnight, December 31, and thus insure lots of tax revenues next April 15th, or whether they will be overwhelmed by scared and desperate people dumping stocks and bonds before they fall in price as things fall apart in 2005.

Quite exciting!

Dec 1, 2004
Richard Daughty
email: scgcjs@gte.net

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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