Gold Flavored Napoleon Complex

By: The Mogambo Guru | Fri, Nov 2, 2007
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I read somewhere that the money supply in China is growing at 20%, which proves that the Chinese government is every bit as stupid as everybody else's governments, in that they allow the central bank to allow the money supply to grow at such a horrendously appalling rate. As part of the money supply, Kenneth Gerbino at reports, "China now has more money in circulation (M1) than the United States. $1.9 trillion vs. $1.4 trillion."

Okay, to be fair, M1 is essentially just paper cash and coins, ($813 billion in the United States) and some financial/banking stuff that operate as cash equivalents, but jeez! That's a lot of money!

Although Mr. Gerbino did not say, "If you think that's something, get a load of this crap!", but he should have, as the startling enormity of what is happening is that, "the seven largest countries in the world and Europe show that they created $775 billion in new money in the last year."

This fascinating "News about Money from Around the World" thing brings up the interesting article at, which has Olivia Chung reporting that "rising inflation has more Chinese putting their money into stocks, investment funds and the traditional favorite, gold, in an effort to get the most for their money." Gold! See? It's everywhere!

So Mr. Gerbino says, "The supply of gold available for investment, outside of jewelry and industrial demand which would include bars, coins and bullion funds was approximately $13 billion. This is a ratio of 60 to 1 and does not include the money creation by the other 175 countries in the world."

Naturally confused and impressed by such large numbers, I am thinking, "Is there something in there to tell me how to make a lot of money in gold without working, and then I could take the rest of the week off and maybe get some REAL work done; catching up on sending hate mail to everybody in Congress except Ron Paul, who is hopefully the next President of the United States and who will be the first one in living memory to actual uphold and defend the Constitution, which all previous Presidents swore to do on a Bible, but they were lying, which means that when they die, they all go to hell, so there is some small satisfaction in that.

And why do I hate Congress (except Ron Paul)? Because they are the ones that borrowed and spent the $9 trillion national debt! In fact, the $3 trillion federal budget shows that this year we paid $430 billion in interest payments on this huge, bankrupting mountain of debt! Just the interest expense alone!

For the 100 million non-government workers in this country, that comes out to $4,300 each! Hahaha! This is how much each non-government worker would pay in extra taxes, this year alone, just to pay the interest on the national debt!

And don't get me started fixating about the morons in Congress (except Ron Paul), because then I won't get around to also writing hate mail to the Federal Reserve, which created all the money and credit that made all this bone-breaking debt possible, and sending disrespectful hate mail to the Supreme Court, which lets these weenies get away with this un-Constitutional crap, which means that we are going to suffer the horror of inflation in prices, which is the thing that destroys civilizations (e.g. the French Revolution) and brings vengeful madmen like Napoleon and The Mogambo to power, and if Napoleon were alive today I would say, one tyrannical monarch to another, "Nice hat, dude!"

Mr. Gerbino is apparently surprised at the weird direction that took, and with an unsure, confused tone to his voice, says, "The point is that there really is not much annual gold supply around for investment purposes or financial insurance or a money substitute. Sooner or later the price will dramatically reflect this imbalance."

Suddenly, across the room, a hand went up, and I heard someone say, "You're preaching to the choir here, sir. If you want to impress us, tell us when! Otherwise, you're just spouting more Stupid Mogambo Gibberish (SMG), but with less drooling!"

Sadly, I choked on bitter tears as the press conference erupted in laughter at my expense, and I silently took another Secret Oath Of Mogambo Revenge (SOOMR) against all of them to make them pay for their folly!

So as I was getting to my feet to put a curse on them all, Mr. Gerbino quickly heads me off and says, "India has increased its money supply 15.3% in the last year." Knowing that I can be soothed by stories about the big fortunes that will be made with gold, he says, "This is probably why in the first eight months of 2006, gold imports increased by 86%. India could be on track to consume over 35% of 2007 global mine supply all by itself."

Appended was "Editor's Note: India is the world's largest buyer of gold."

From all of this, I assume that "when" is "any time now"!

Douglas V. Gnazzo of the Honest Money Gold & Silver Report hears us talking about gold and says in his essay "Gold Shines vs. All Fiat Paper Money" that, "When the price of gold is rising against most major world currencies it means that gold is in a powerful bull market."

I admit that I immediately started to doze off at this theoretical stuff, as I had had a hard night, arguing with the wife and kids about who REALLY pays all taxes and inflations, namely the little guy, and seeing as how they were all just a bunch of soul-sucking parasites who had taken all the joy out of my life except for those precious few hours where I could spend some "quality time" planning my revenge against all of them, then they were the littlest of the little guys, and I was immediately cutting their rations and allowances, which caused them to howl in dismay about how I am "evil" and "cruel" and "hateful", which makes me laugh because they don't talk that way to the merchants, although the raising of prices is exactly the same thing as cutting an allowance; you buy less stuff.

And so, naturally, I helpfully and politely point out to them what stinking little hypocrites they are, and then they get all upset at that, too! See the kind of crap I have to put up with around here?

Well, Mr. Gnazzo is not interested in me, my stupid family, or how I would like to borrow fifty bucks, and says that if I would just look around, I would see that the existence of a secular bull market in gold is proved because, "this is exactly what gold is doing - it is rising in price as denominated in all major world currencies."

And why are gold-bug, paranoid, psycho-whacko trash like me buying gold with every penny we can borrow from family members and by accosting strangers on the street? He doesn't answer the question directly, but allows that a global bull market in gold, "means that gold is being sought out because it is the currency that retains purchasing power better than all other currencies - it is fulfilling its role as the sovereign of sovereigns."

How poetic! How true! How truly poetic and true!

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The Mogambo Guru

Author: The Mogambo Guru

Richard Daughty, the angriest guy in economics
The Mogambo Guru

The Mogambo Guru

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

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