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August 28, 2008

Intaxicating Rebate Checks
by The Mogambo Guru

"The worst inflation in consumer prices is, in case you were wondering, in Venezuela, suffering a terrifying 33.7% inflation, followed by Pakistan at 24.3%, with Japan being the best at 2% inflation! A 2% inflation is the best in the world! Yikes!"

The Leading Indicator, which is supposed to presage economic conditions up to a year in the future, fell dramatically in July, going down to 101.2 from 101.9, which is a hell of a big loss. This means, as one can readily deduce from the title "Leading Indicator", that the economic situation down the road, say nine months to a year or so, looks bleak.

The Coincident Indicator, measuring economic conditions Right This Very Minute (RTVM), was actually a little positive, as it blipped up the minimum amount possible (one tick), taking this indicator up a little to 106.8 from 106.7. Not very impressive.

Finally, as you would expect from rampant inflation that is raging everywhere, the Lagging Indicator (which is where you find burdens and inflation), zoomed to 112.1 from 111.7! Wow! Big move!

A lot of that inflation is probably because of food prices skyrocketing, which may have been what prompted Junior Mogambo Ranger (JMR) Dan B. to say that even with commodities rising, "There is very little focus on agriculture", which he thinks is a big mistake, and that things are so bad, and likely to get worse, that his watchwords are "Dirt, Diesel and Gold"!

Even with all of this exposure to the terrifying inflations raging around the world, I was still stunned to see that The Economist magazine's table of "Economic and financial indicators" for the 50-or-so largest economies in the world shows that we ALL have raging inflation in consumer prices!

Even Japan! Japan, where inflation has been negative for a decade and was the sole bright spot in the whole table as concerns inflation, now has 2% inflation!

The worst inflation in consumer prices is, in case you were wondering, in Venezuela, suffering a terrifying 33.7% inflation, followed by Pakistan at 24.3%, with Japan being the best at 2% inflation! A 2% inflation is the best in the world! Yikes!

Historically, this is the same 2% inflation that was the historical beginning of the "warning zone" of inflation, that narrow band that provided a little leeway before hitting the "danger zone" of 3% inflation! Now inflation is typically running in the double digits, and nobody cares! Hahaha!! We are all so, so, so freaking doomed!

You can probably tell by the way I am now talking to you through a speakerphone from the Mogambo Impervious Bunker (MIB), and how I am looking at you through the crosshairs of a periscope, that this is not only Bad, Bad News (BBN), but that I am very freaked out of my frightened little pea-brain mind about it, too, which explains why I was carefully lining up the crosshairs right between your squinty little eyes and my finger was on the trigger when I suddenly realized that "shooting first and asking questions later" is not a conscious act, but something that just "happens" because you are just (pause) so (pause) freaked (pause) out. Like right freaking now!

And if you want more inflation, look at the inflated prices of houses, which reminds me that Junior Mogambo Ranger (JMR) Ajit V. sent some humorous neologisms that were created by combining parts of two existing words, and some of them fit the current situation exactly, such as "Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time." Hahaha! Good one!

I naturally thought that this was going to be a clever lead-in to another new word in the same vein, but this time referring to how the prices of houses are falling dramatically, with something like, "Screwedage payment (n.): monthly payment on a mortgage for a house on which you owe more than the damned house is worth, but you can't just walk away, and so you have to sit in it, night after night, thinking about how you can't afford this damned house, and how it and these damned expensive kids are dragging you into the financial gutter, and what you really, really want to know is two things; one, who is responsible since nothing is ever your own fault, and two, who do you sue, or, alternatively, give those damned kids to?"

Well, no such luck on the house or kids thing, but it did have the "it's funny-because-it's-true" new word "Intaxication: Euphoria at getting a tax refund, which lasts until you realize it was your money to start with." Hahaha!

At first I laughed at this, too, as you can tell by the way "Hahaha" is actually written right after it, and I remember that I cheerfully said, "Let's have a toast to intaxification, and to all the 'stimulus checks' that we will receive in the years to come!"

Then I downed a shot of Wild Turkey, wiped my slippery, slobbery lips on my sleeve, and was getting ready to be a really nice guy and helpfully tell the guy sitting next to me at the bar that he looked like one of those common Earthling morons who is NOT buying gold, silver and oil in response to the monetary mayhem happening all around them, which proves that he is an idiot who is as stupid as he looks, and my advice is to go home, sober up and spend some time at Mises.org to get a little smarts about real Austrian economics, when I suddenly realized, "Hey! It never was my money, as I owe more than I can pay, and creditors have first lien! It was the money of somebody else, and yet it belonged to yet someone else, and then to someone else, on and so on, until you find that, at the end, it was the bank's money! It's all the bank's money, in the final analysis! Hahaha!"

The moral is that using the money in the meantime to buy gold, silver and oil, which WILL belong to me, so as to make a huge, huge profit (HHP) when their prices soar due to the stupidity of governments and bankers, seems such a delicious revenge.

And how could you turn such a tasty dish down? Whee!

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Richard Daughty, the angriest guy in economics
The Mogambo Guru

Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise 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.

Copyright © 2005-2008 Richard Daughty

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