Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Inflation, Rounding Up the Culprits of Rising Prices

Economics / Inflation Sep 01, 2010 - 01:22 AM GMT

By: Richard_Daughty

Economics

Best Financial Markets Analysis ArticleFrom Bloomberg.com we get the bad news that "Bank of England Governor Mervyn King said inflation is likely to exceed the UK government's upper 3% limit in coming months as higher sales taxes drive gains in consumer prices," which "rose 3.1% in July from a year earlier after climbing 3.2% in June."


Apparently, he has to write a letter about it, probably something along the lines of "Dear British taxpayer, Our stupidity and incompetence have caused prices to rise more than 3% in a year, which means you are all doomed unless we government lowlife halfwits stop being incompetent, especially as regards monetary policy in general and creating far too much new money in particular, which we won't. Terribly sorry, old chap. Respectfully yours, Mervyn."

Of course, this cruel punishment of having to write a letter is harsher than the justice meted out in the USA, as New Jersey, and everybody connected with their pension disgrace, lied, hid relevant information and data, and is, according to the SEC, being charged with the fraud and corruptions of "withholding and misrepresenting pertinent information about its financial situation" so that municipal bond sales could continue.

Actually, in the UK, their consumer price index (CPI) rose at an annual rate of a scary 3.1% in July, which was only down from a slightly-scarier 3.2% rise in prices in June.

And inflation in something called the retail price index (RPI) came in at a terrifying 4.8% annual rate of increase! Yikes!

Here in the USA, according to The New York Post reporting a "recent JPMorgan Chase study" of prices at Wal-Mart showed that "the world's largest retailer has raised prices by nearly 6% on average over the past six weeks," and, "Prices on certain items increased by more than half," which is an instant inflation rate of 50%, which all thinking people agree is a lot of inflation! Wow!

Now, if you are like me, then you are already calling for rough vigilante justice and/or some mindless, merciless mob rule, an obviously hysterical over-reaction when compared to saner heads saying to simply let the justice system take care of these government and Federal Reserve creeps, and they will all be found guilty and locked away in a dark and dank dungeon for the rest of their lives, and you can go to the prison on visiting day and laugh at them and make fun of them right to their snotty faces, and tell them how much you enjoy seeing them slowly rotting in prison as punishment for having caused so much suffering and misery with their greedy, self-serving arrogant treachery.

So, we all finally agreed that they would let me up from being pinned rudely to the ground if I agreed not to advocate open revolution, rebellion of any kind, mob rule, vigilante justice, or have anything to do with any extra-legal "rounding up" of any, or all, of these malfeasant monsters for any punishment, well-deserved or not.

They, in turn, were required to stipulate that this Whole Stinking Mess (WSM) was proof of how justified I was in having so little faith in a lying, moronic, rat's nest of incestuous government thievery and lying.

So, what happened to these lying, thieving Jersey scumbags who ripped us off? According to Ian Mathias, in his essay "Another Warning Shot for Bond Investors" here at The Daily Reckoning, "the penalty for this outright fraud" is "Nothing."

In fact, "The State of New Jersey will pay the SEC precisely zero dollars. Not one state employee will pay a fine either, or go to jail...not even lose his job. In fact, the State didn't even have to admit wrongdoing. 'New Jersey agreed to settle the case without admitting or denying the SEC's findings,' calmly explains the SEC press release."

About this time my fists clenched into Mogambo Fists Of Rage And Outrage (MFORAO), and I am screaming obscenities at them, and curses upon them, and exhorting the excitable gathering crowd to do the same and then converge on Washington, DC to take over the US government in some spontaneous revolutionary rebellion, whereupon everybody agrees to place me, The Fabulous Mogambo (TFM), on the Throne Of Absolute Dictatorial Power (TOADP), and thus begin the wonderful reign of the Fabulous Emperor Mogambo (FEM)!

This is where I bring back gold and silver as the currency of the United States to fix the dollar's value to the only tangible things that have survived 4,500 continuous years of history, explaining their required use as money as written in the Constitution of the United States, and I will be a true American hero, and everyone will love me and proudly name their children Mogambo, a proud name meaning, "The wise and handsome one, and hung like a horse" instead of meaning, you know, other stuff not as complimentary.

After doing that, I would probably have lunch, and maybe a nice nap. Then, when I got up, I would eliminate, at a stroke, all barriers to real entrepreneurial free-market capitalism that don't address actual criminal frauds and corruptions, setting us on the road, at last, to Utopia.

The closest I can come to providing a parallel is in the movie It's a Wonderful Life when Jimmy Stewart returns to Bedford Falls after Clarence the Angel gives him his wish to have "never been born." Jimmy discovers that the town has turned into Pottersville, where the previously sedate downtown area is now a hoppin' and boppin', be-boppin' thriving community, where one finds blaring marquees advertising "Girls Girls! Girls!", all in a fun-loving, laughing, whirling, jazz-crazed, alcohol-fueled boomtown extravaganza of "party down, dudes and dudettes!"

I will not get into criticizing Jimmy Stewart when he finds out he is not married anymore, since he had never been born, and he gets weird about it ("Mary! Mary!"), instead of saying "Yippee!" and happily heading back to the party, hopefully to run into Violet, and I will stick, instead, strictly to economics.

From a research standpoint, I had been hoping that there was something in the official records of Pottersville that would indicate the conditions of the local economy under the wise stewardship of Mr. Potter lending money for capital equipment to satisfy real demand, instead of the previously lackluster economy of crumbling Bedford Falls, where the Savings and Loan was apparently so broke that they had all Sam's money in Joe's house, and Sam said to Joe, "What are you doing with my money in your house, you moron?" and Joe said, "Who you calling a moron, you ugly little snot?" and there was a big fight, all of which was later completely edited out of the movie, which explains why not many people know about this ugly part of the story.

The point is that the people affected by my wholesale slicing of the government payrolls and paring of the list of Pottersville government parasites would be employed as new-hires by new private businesses, new industries springing up as solid, demand-led growth, and hired as part of a brave new economic tomorrow of zero inflation, higher quality goods and services with lower prices, thus raising the standard of living for everyone, which is the gift of the free market. Whee!

Well, it turns out that official records of Pottersville are, mysteriously, missing, and there is constant denial at all levels of government, where most of their "official government policy" is summarized as, "It was only a movie, you nitwit! They made it all up! There is no Pottersville, and there never was! What in the hell is wrong with you that you keep calling us up and asking this stupid question all the time?"

So, it looks like the truth will never be known, so my advice is to keep buying gold, silver and oil until it all gets sorted out, one way or the other. By that I mean, of course, that one way is to end badly, and the other way is to end very badly.

Except if you are buying gold, silver and oil today, because then it will all end happily for you, and you will say to your son Mogambo Junior, "Whee! That investing stuff was easy!"

Copyright © 2010 Daily Reckoning

© 2010 Copyright The Daily Reckoning - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in