"$503 billion is a lot of collateralized debt obligations, and a whopping 500% increase in three years is enough to make your eyeballs comically spring from your head, as in 'Booiinnnnng!'"

Fortunately, I had been eating a very low-roughage diet for a couple of days, which worked out perfectly to keep me from making a big mess in my pants when I saw that, last week alone, Total Fed Credit was up by $3.7 billion, foreign central banks bought up another $14 billion in government and agency debt (stashing them at the Fed), and another $4.8 billion of actual, in-your-hand cash money was printed up, which comes out to about $35 for each of the 137 million Americans who have a freaking job. In one week! One!

And sure enough, all this new money and credit is showing up in prices, and the Consumer Price Index, as tortured into compliance as it is, is still registering a hefty monthly increase of 0.6%. This doesn't look so bad at first blush, but if you are adept at multiplying numbers by 12, then you a probably aware that this comes to an annual, non-compounded inflation rate of 7.2%, which is in the range of "R", as in "Run, screaming for your life, because inflation is going to eat you alive!"

And inflation in prices is soon to visit the euro region, too, as from Bloomberg.com we get the spooky news that "Money-supply in the euro region grew at close to the fastest pace in 24 years in April" as the M3 money supply "rose 10.4% from a year earlier, after increasing 10.9 in March". Yikes!

And my guts were also wrenched by the complete surprise of Larry Edelson, of MoneyandMarkets.com, reporting that "Not many people noticed, but on May 17 the folks in Washington upped the country's national debt limit to $9.815 trillion."

Getting over my shock at not having already heard of this important news, he goes on to say that he's still got enough time on his hands after unearthing this interesting nugget of news to do a little research, and says, "That's a whopping $1.635 trillion increase in less than three years."

He then puts his finger on the cause of it all, and writes, "I've said it before and I'll say it again: As long as there is no gold standard - nothing and no one to hold back politicians from spending money and creating debt at will - then the value of the U.S. dollar will keep plummeting and inflation will keep rising."

As examples he notes that "A postage stamp in the 1950s cost 3 cents; [today] it's 41 cents: That's 1,266% inflation.

"A gallon of gasoline at full-service stations used to cost 18 cents; [today] it's $3.25 for self-service: That's at least 1,705% inflation.

"In 1959, the average price of a new house was $14,900; [today] it's $220,900: That's 1,382% inflation, despite the recent price dip in the real estate market.

"A dental crown used to cost $40 in the late 1970s; [my] dentist just quoted me $1,400. That's 3,400% inflation.

"In 1970, seniors paid $5.30 a month for Medicare insurance. Today, they pay $93.50 a month. That's 1,644% inflation."

And as bad as that sounds, and as bad as that is, it is actually far, far worse if you are also looking at things that are NOT included in calculating the Consumer Price Index, the popular (although compromised) gauge of inflation in prices. He writes, "perhaps the biggest scam of them all is that the CPI does not include the cost of taxation. Not one dollar of taxes - federal, state, or local - is counted. Nor does it include property taxes or usury taxes. Since when are these not part of your cost of living?"

I think to myself, "Good point! And since the total tax burden is north of 50% of income, you can see why things are 'far, far worse'! Who is that guy that is always saying we're freaking doomed? Oh, yeah! Me! I say that! We're freaking doomed!"

As Junior Mogambo Ranger (JMR) Peter G. says, soon, "It will be bunker-up and hunker-down time!!"

I have suddenly found a quote that I was looking for. It is an AP news item that reported that Senator Edward Kennedy, D-Mass. - who is at once one of the biggest jerks ever elected to Congress and the perennial shame of Massachusetts for having elected such a commie rat - called the recent increase in the minimum wage one of "the proudest achievements of this new Congress."

The actual truth is that raising the minimum wage is the most shameful "achievement" of any Congress in the last forty years. The reason that I make this highly-inflammatory and rudely derogatory statement is threefold:

1) Congress's own continual, irresponsible expansion of government, by deficit-spending the excess money and credit (monetary inflation) created by the Federal Reserve, is what produced the inflation in prices that "necessitated" the increase in the minimum wage,

2) it is the culmination of 94 years of gathering the most profound, incontrovertible actual proof that the Federal Reserve cannot be trusted to maintain the value of the fiat dollar because the dollar's buying power has gone down, and down, and down the whole freaking time since the Fed was established in 1913, and the dollar now has a lousy 3% of its original purchasing power left, and yet not one damned Congress has done one damned thing to require the Fed to do anything different in the whole 94 years, and

3) because I enjoy being contemptuous and sarcastically rude to people who are being trusted to know better and act better, but don't.

I can see you out there, yawning in boredom, as this is shaping up to be another Pointless Mogambo Rant (PMR). But you would be wrong! There IS a point! Buy gold, because the end is almost nigh, as evidenced by the anxiety produced by Dennis Cauchon's column in USA Today titled, "Rules 'Hiding' Trillions in Debt". The subhead was "Liability $516,348 per U.S. household."

The short story is that it is the same old story about how if the federal government was required to use accrual accounting like corporations and most businesses are, then the whole economic jig would be up as the horrific dollars-and-cents truth was revealed, and there would be rioting in the streets if the newspapers, the schools and the population as a whole were not so damned stupid that they do not even dimly grasp the profound, bankrupting, horrifying inflationary significance of this.

Well, the new twist is that USA Today has updated the figures, and shows that the federal government would have recorded a $1.3 trillion loss in 2006, "far more than the official $248 billion deficit."

It was explained that "The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel."

Surprisingly, we learn that "The loss - equal to $11,434 per household - is more than Americans paid in income taxes in 2006." Yow! What kind of crazy government IS this, anyway?

Well, they are resorting to obfuscation, "so promises for Social Security and Medicare don't show up when the government reports its financial condition. Unfunded promises made for Medicare, Social Security and federal retirement programs account for 85% of taxpayer liabilities. State and local government retirement plans account for much of the rest."

At that I immediately thought to myself, "What? How in the hell did state and local government retirement programs get included in the federal government's accounting? What in the hell is going on here?"

Naturally, I raised my hand and said, "Hey! Hey, you! It's almost lunchtime! Could you hurry it up a little? Like, get to the fabled 'bottom line' so we can get the hell out of here? And my five-day 'cooling off' period is over, so I want to go by the gun shop to pick up my new pistol. So if I have to come back here, I'll be packing heat again, but that means I will have to wear a coat to keep it concealed, see, and it's too damned hot to wear a damned coat! So let's get a move on!"

Well, there must have been something charming about me that they instinctively liked, because they immediately went on to graciously grant my exact wishes and said, "Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined."

And who is so corrupt and despicable as to be against revealing an on-rushing destruction and doom that is afforded by accrual accounting? You're going to love this! "The White House and the Congressional Budget Office oppose the change, arguing that the programs are not true liabilities because government can cancel or cut them." Hahaha! I told you that you would love it!

Well, I loved it, anyway, and I was so delighted with the ramifications that the next day I snuck into the employee's retirement fund and borrowed all the money, leaving my IOU. If the ungrateful employees ever demand that I make good on the IOU, I can now say that they are "not true liabilities" because I can "cancel or cut them", and therefore I don't owe them anything! I love this government accounting thing!

Antal Fekete of the Gold Standard University writes that gold is being secreted away, and that "The present episode of gold vanishing into private hoards is no less ominous than the previous one that was followed by the collapse of the Roman Empire, and the lights going out in the civilized world."

Hmmm! Very interesting! He goes on, "The last time in history when huge quantities of gold were going into hiding occurred during the twilight of the Roman Empire. It was an ominous portent of bad tidings", as "People were withdrawing gold coins from circulation. They declined to spend them hoping that saner and safer times would come."

Unfortunately, saner and safer times never came in their lifetimes, showing how bad a bust can be after such a long boom, and, "these ancient hoards were forgotten and remained buried in the ground throughout the Dark Ages. Present day archeologists still keep finding them fifteen hundred years later."

The timeless lesson is that, "The fortunes of empires tend to be predicated by the fortunes of their currencies." Do you see the decline in the dollar? What do you think will happen? Me, too!

I was dumbfounded by the report at Bloomberg.com titled "Banks Sell 'Toxic Waste' CDOs to Calpers, Texas Teachers Fund" by David Evans.

This is kind of important because, "Worldwide sales of CDOs - which are packages of securities backed by bonds, mortgages and other loans - have soared since 2003, reaching $503 billion last year, a fivefold increase in three years."

Wow! $503 billion is a lot of collateralized debt obligations, and a whopping 500% increase in three years is enough to make your eyeballs comically spring from your head, as in "Booiinnnnng!"

And like anything that has been assembled in tiers of quality, the good, profitable stuff is owned by the insiders, co-conspirators, their friends, extortionists, blackmailers and all their relatives. What about all the crappy leftovers that nobody in their right mind wants? Mr. Evans doesn't answer my question directly, but instead says, "Bankers call the bottom sections of a CDO, the ones most vulnerable to losses from bad debt, the equity tranches. They also refer to them as toxic waste because as more borrowers default on loans, these investments would be the first to take losses. The investments could be wiped out."

Anyway, if this equity tranche is just a bet on the value of the houses themselves, then the guys who are sitting on these equity tranches must be now losing money! How could they not? House prices are declining, and so equity must be declining, too!

As proof, I note that the latest report shows that the median price of a new home has now plunged 10.9% from this time last year, and is now selling at $229,100. Apparently, that was the biggest drop in almost 37 years!

So how to get rid of this "toxic waste" stuff so that you don't get stuck with it? Mr. Evans writes, "Bear Stearns Cos., the fifth-largest U.S. securities firm, is hawking the riskiest portions of collateralized debt obligations to public pension funds."

The plan seems to be to get a bunch of government pension dorks together in a whirling party atmosphere, remind them that in today's environment, government employees and their hired representatives are rarely fired or even reprimanded for making egregious, costly and stupid mistakes anymore, and thus with no downside to cloud their decision-making process, dangle the prospect of undeserved riches!

The crowd erupts in howling disagreement at my crude and rude disparagement of governments and their hirelings! Instinctively pulling out a couple of Uzi submachine guns from under my coat, I cleverly fire a couple of bursts into the air, which shuts them all right down, which is such a terrific time-saver in quieting unruly mobs that I now understand why it is so popular with governments! It works great!

Anyway, I couldn't get Ms. Jean Fleischhacker, who is a senior managing director at Bear Stearns, to appear on the show, so I have taken the liberty of taking her remarks and then cleverly devising questions that make her appear to agree with anything I say.

So I say into the camera, "Why are you in Las Vegas, shamelessly promoting a line of plastic, anatomically-correct, blow-up adult novelty dolls to pension fund managers?" Then I reach over to hit a button that turns on the tape playback machine, and suddenly Ms. Fleischhacker's voice says, "I think a lot of people are confused about what this product is and how it works."

I shout, "Hahaha! Cut! Cut! That was for the 'Mogambo Bloopers Reel (MBR)'. Let's start again and do it for real this time, people! Ready? Lights! Camera! Action!"

With a little sense of deja-vu, we begin anew as I say, "Tell me about the financial sophistication of your audience and why they would be remotely interested in equity tranches." Hitting the tape button, Ms. Fleischhacker's voice again says, "I think a lot of people are confused about what this product is and how it works."

Shutting off the tape machine, I laugh "Hahahaha! How stupid can they be NOT to understand?" whereupon I reach over and hit another button that inserts the sound of cheering and clapping, as throngs of happy people shout, "That's right, Mogambo! Hooray Mogambo! All hail The Mogambo! Free tacos for The Mogambo!"

And then, hitting a button again, the studio is suddenly silent as I ask, "And why would anyone in their right freaking minds buy this 'toxic waste' crap from you?" Turning the tape machine back on, Ms. Fleischhacker is now heard to say, "It has a very high cash yield to it."

Ergo, Bloomberg reported that "At a sales presentation of the bank's CDOs to 50 public pension fund managers in a Las Vegas hotel ballroom," she told "fund managers they can get a 20 percent annual return from the bottom level of a CDO."

Twenty percent!

For this week's Delicious Irony Of The Week (DIOTW), the sales presentation is being held at a city famous for gambling and famous for busting people out, after which the people go home and are reduced to scrimping and suffering, heroically trying to cover their gambling losses, and as a result they are always in a really foul mood when I go over to their houses and politely ask to borrow a measly hundred bucks, but then I have to sit and listen to them moan and whine about how Las Vegas almost bankrupted them, and now they are ruined, and how all their money is gone, and now they can never retire, boo hoo hoo and blah blah blah like I want to hear about their stupid problems.

So when I finally get the conversation back around to the hundred bucks I wanted to borrow, they look at me with those big, sad eyes and tell me that they don't have a hundred bucks to even buy food, much less loan to me. So I end up with squat! It's a completely wasted trip, and so please don't mention that damned Las Vegas to me!

But this is not about irony, but about the tantalizing promise of a whopping twenty percent yield! Wow! Twenty percent! You can see why fools are interested!

The article notes, for the record, that Ms. Fleischhacker, "doesn't associate toxic waste with the equity tranches she's selling", which I am sure is true, as I once sold Mogambo Snuggle Bunny (MSB) stuffed toys that I knew were made out of contaminated rags from cleaning up accidents at nuclear reactors, but I certainly did not associate massive chromosome damage with just touching the damned things or breathing the little bit of fumes they gave off!

Whereas the circumstances are obviously different, our defenses are eerily similar. I attempted to prove my innocence by declaring, "A lot of these things were sold, and there are probably lots and lots of parents who bought Mogambo Snuggle Bunny toys whose child or children did NOT suffer massive brain damage, paralysis, organ failures, convulsions, comas, multiple personalities or out-of-body experiences! So that fact proves that these toys are completely, completely safe!"

Well, it's obvious by her silence that not even Ms. Fleischhacker believes I was innocent, proving her obvious bias against me, and now I can have her whole testimony thrown out if it comes to that.

She does believe, however, that "Pension funds in the U.S. have bought these CDO portions in efforts to boost returns", which I guess makes it perfectly okay as long as everybody is doing it! And it's especially okay if nobody's stupid kid gets sick from it, and how I am the only inhumane, sadistic, money-grubbing monster around here, and how I ought to at least give the grief-stricken parents their money back, but I say, "Screw 'em! All sales are final!" And then everybody gets mad at me about that, too! See the kind of aggravating crap I have to put up with every damned day of my life?

The article quotes Edward Altman, director of the Fixed Income and Credit Markets program at New York University's Salomon Center for the Study of Financial Institutions, as saying, "I have trouble understanding public pension funds' delving into equity tranches, unless they know something the market doesn't know." I laugh out loud!

Ignoring my rude outburst, he nevertheless seems to agree with my laughing disrespect when he says, "That's obviously a very risky play," as, "If there's a meltdown, which I expect, it will hit those tranches first."

Well, Mr. Altman's statement instantly qualifies as this week's Mogambo Understatement Of The Week (MUOTW), as it is an impossibility that pension funds know something that nobody else knows, that knowledge will somehow turn into money for them and less money for someone else.

And I'm sure that it won't take a meltdown to negatively affect the return of this ugly equity tranche, and I am quite sure that it will be negatively affected by every dime of decline in home values.

Calpers declined to comment, but "Kay Chippeaux, fixed-income portfolio manager of the New Mexico council, says it decided to buy equity tranches after listening to pitches from Merrill Lynch & Co., Wachovia Corp. and Bear Stearns." When asked why she would do such a thing, "She says the investment is worth the risk because the fund may be able to get higher returns than it can from bonds." Hahaha! Yeah, they might! And I might be chosen as The Most Handsome Man In America Who Is Not Already A Famous Movie Star and I might make a big splash in People magazine, but probably not.

But I would really LOVE to hear someone argue the case that equity tranches are a good investment when the sales value of the average house is now at its highest ratio to buyer's income in the whole history of ratios of housing prices to buyers' incomes, going all the way back to caveman days when the housing market was hit with the fad of caves with reflecting pools and downwind toilets, and everybody was getting rich playing the market in mastodon futures and going short the Neanderthal Index!

Maybe this explains why Fannie Mae and Freddy Mac, the goliath mortgage holders that own most of the mortgages in the USA, are now suddenly gearing up (with the sudden and inexplicable approval of OFHEO, the oversight group that is supposed to monitor them) to buy up an initial $20 billion of the mortgages in the collapsing subprime group.

This is a blatantly obvious move to bail out the damned banks, who would otherwise be stuck with that equity tranche crap! Hahaha! There seem to be no depths of corruption and depravity to which these people will sink!

The mysterious Sorcha Faal reported to her "Western Subscribers" that Congressman Ron Paul has been "Targeted For 'Destruction' By U.S. War Leaders".

Of course, I figure that he is also rumored to be "targeted for destruction" by the Federal Reserve, the IMF, the CIA, other central bankers, the Mafia, the communists, the Jews, the Rothschilds, the Trilateral Commission, Dick Cheney, the Vatican, and mutant brain spores from outer space, to name but a few.

But intriguing conspiracy theories aside, why are the damned Republicans also embarrassing themselves by attacking and marginalizing Dr. Ron Paul, a highly-respected Congressional Representative from Texas who is also running for President?

At such blatant, shameless corruption, I am now sure that some of these conspiracies are true because there are just too, too many people who would lose too, too much wealth and too, too much power if Dr. Paul was elected President and he required that we adhere to the Constitution and demonstrate even a slight semblance of sanity as regards wanton expansion of the money supply by the Federal Reserve.

The good news is that Ms. Faal reports that there has been a "surge" of "popular support for him and his message", which delights me to learn that Americans are not completely the half-witted trash that I thought they were, judging by the execrable liars, thieves and psychotics that they have been electing to Congress and the Presidency for decades.

Except for Ron Paul, of course, and for which the USA owes the intelligent voters in his electoral district who elected him a profound debt of gratitude. Thank you! I hope he makes us all proud to get the Presidency, as it would be one of the best damned things that ever happened to this country in a long, long, long time.

The morons who have been buying bonds at ridiculously high prices (and thus accepting ridiculously low yields) for the last six months are now starting to pay for their folly, as unnaturally-high bond prices are falling (causing unnaturally-low bond yields to rise).

We immediately see that if there was ever a group of ignorant halfwits who richly, richly deserved to be busted out, it is anybody who has been buying bonds, as these troglodyte knuckle-draggers actually bought bonds to literally lock in yields of less than the rate that the money denominating the damned bonds was losing in purchasing power! The ultimate in stupidities!

And speaking of inflation in prices, lets' not forget weddings, as from UPI we learn that "A survey found that most British brides-to-be want big glamorous and expensive weddings that will impress their guests".

I don't know if the UPI is biased against me, or biased towards lovely young brides-to-be, or are in the thrall of the whole wedding industry, as far as I know, but I think it is very suspicious that they did not report a related recent survey conducted by the highly-esteemed research firm of Mogambo, Mogambo and Mogambo Inc., which reported, "Most fathers of brides-to-be see nothing unusual in their daughters wanting more and more expensive stuff, mostly because they are always wanting more and more of my money, continually gnawing the guts out of my pathetic little bit of savings, and now she wants to dig my financial grave with a huge, expensive wedding so she can marry that weird little twit boyfriend of hers, which I know will turn out badly, but I am willing to pay almost any price to get her out of the house for good, and thus free up her bedroom to turn into a fortified cache of back-up ammunition, pizza, tasty beverages and 'adult literature', all of which will come in real handy real soon, according to The Mogambo, who says 'We're all freaking doomed!'"

In light of these two bits of research, it is not surprising that UPI reports that "The average cost of a wedding and reception has doubled in the past decade to almost $40,000." Hmmm! Let's see; prices doubled in ten years. So using the Rule of 72, we divide 10 into 72, which calculates out as a 7.2% annual inflation rate in prices! Yikes!

And while prices are rising, to make matters worse, from Bloomberg.com we read, "The U.S. economy grew last quarter at the slowest pace in more than four years, a 0.6 percent annual rate."

And remember that this is GDP that has been reduced by the suspect GDP Deflator, the latest official reading of which shows an adjustment for inflation of 4.0%, which is less than half the actual inflation rate that bedevils us according to ShadowStats.com.

So in reality, real GDP, when adjusted by the actual 9% consumer price inflation raging around us, is a negative 5% or so! Negative GDP! This is a freaking depression!

And finally, if your heart can stand the strain, "The trade deficit widened to an annual pace of $611.8 billion, subtracting 1 percentage point from GDP, twice as much as previously estimated."

I sigh. I am weary. And scared. Weary and scared. Ugh.

Mogambo sez: Gather your friends to sing with you in a jolly little round, "Gold and silver and oil for me". The tune isn't important. In the immortal words of Obi Wan Kenobe, "Listen to the words, Luke Skywalker! Listen to the words!"

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Editor's Note: This year, the Mighty Mogambo is actually going to bravely exit his Big Mogambo Bunker (BMB) in order to speak at the Agora Financial Investment Symposium in Vancouver, British Columbia. Don't miss this opportunity to hear his rants live, on why "We are all Freaking Doomed!" Agora Financial Investment Symposium - July 24-27