Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Calculating the Misery of Inflation

Economics / Inflation Feb 18, 2011 - 03:35 AM GMT

By: Richard_Daughty

Economics

Best Financial Markets Analysis ArticleI was, unfortunately, sober enough to realize that I needed to get a lot drunker if I was going to withstand the horror of reading of even more economic fallout of the Federal Reserve's disastrous decisions to create So Freaking Much Money (SFMM).

In particular, Michael Pento, in an essay in the Euro Pacific's Weekly Digest newsletter, writes, "For the year 2010, the trade gap surged 43%, which was the biggest jump in a decade, as our government's efforts to reignite consumer borrowing and spending led to a record number of imported consumer goods."


I wince and moan, devastated by the very concept of a trade gap jumping by almost half in One Freaking Year (OFY), a situation where we bought more from foreigners than we sold to foreigners, thus many of the Fed's trillions of new dollars flowed out of the US and into the world economy where it would produce its inflationary havoc, QED.

Mr. Pento is also one of the few to notice that "the Misery Index hit a 26 year high for 2010. The index - which is simply the addition of the unemployment and inflation rate - reached 11.29."

And how bad is this? Well, he says, "You have to go all the way back to 1984 to eclipse such a level of pain. Only back then, inflation was calculated without the 'benefit' of the manipulations of the Boskin Commission. Therefore, the Misery Index should be, in reality, much higher than 11.29 and is probably closer to the pain we felt under Jimmy Carter."

Well, as a guy who thinks that inflation in important prices (food, energy, etc.) is running at least 7%, and as a guy who has seen John Williams at shadowstats.com showing pretty convincingly that unemployment is really running at over 22%, this means that the Misery Index at 29 has NEVER been this high!

As bad as this is, this is, actually, the good news! The bad news is that the Misery Index will continue higher and higher because the Federal Reserve continues creating more and more money, and today's record-setting Misery Index of 29 will one day be considered "the good old days" when the news is filled with catastrophic inflation, widespread bankruptcies and economic collapse.

At that dismal future time, your growing sense of horror will only momentarily be diverted by an amusing sidebar, perhaps a story titled "Mogambo Him Go, Say Fed No Mo'", a human-interest saga of how a guy calling himself The Mogambo is calling for his army of Junior Mogambo Rangers (JMRs) across the country to lean out of their windows and say, "I'm as mad as hell with the inflations and horrors of the Federal Reserve and I am not going to take it anymore!" in their demand that the Federal Reserve be dissolved and the country put back on a gold standard as literally required in the Constitution of the United States so that this monetary and fiscal madness would stop, and with a gold standard, never again would we have to face such appalling, catastrophic consequences of absurd levels of monstrous, monetary irresponsibility and sheer stupidity.

Of course, the Main Stream Media will latch, like vicious, mindless, blood-sucking lamprey eels, onto the fact that my "popular uprising" is just a glaring rip-off of Peter Finch's famous scene in the movie Network, and which proves how I have no talent or creativity of any kind, which in turn shows how stupid I am, despite how I got very, very lucky when I bought all that gold and silver before the full impact of the inflationary horror unleashed by the Federal Reserve creating all that excess money started hitting everyone, but they won't mention that, by then, I am So Freaking Rich (SFR) that the only I reason I don't buy the whole Main Stream Media and fire them all is that I am too rich, too lazy, and/or too drunk, and/or too distracted, and/or too whacked-out to do it, or to even give a crap one way or the other.

Mr. Pento is apparently unimpressed with my Fearless Mogambo Forecast (FMF) of what the future holds, or that whole swaths of the economy will tremble at my whim, but agrees that "America's citizenry are experiencing rising food and commodity prices, rising interest rates, falling home prices and stagnate wages and job growth."

I was going to say that Mr. Pento, again, does not mention how buying gold, silver and oil is a perfect thing to do when the Federal Reserve is creating So Freaking Much Money (SFMM) that it guarantees ruinous inflation in prices so that most everyone will be bankrupt and eating weeds and bugs to stay alive because they can't afford food.

Then I realized he actually DID say the same thing when he said, "But so far Mr. Bernanke has only managed to bail out his buddies on Wall Street and in Washington. Maybe he just doesn't realize that he is in the process of wiping out the middle class by destroying the value of our currency and rendering those without financial means, helpless to guard themselves against inflation."

I smiled with satisfaction that when he went on to disparage Bernanke's legendary acing of the SAT by saying, "Too bad questions regarding the benefits of a sound currency weren't on his SAT exam."

And again I smiled that Mr. Bernanke's dismal, utter failure and ridiculous incompetence shines a revealing light on Princeton, where he was, unbelievably, the head of the economics department.

And a third time I smile because the entire historical record of the last 4,500 years is the same story, over and over, of idiot governments spending themselves into bankruptcy, and how gold and silver prove to be The Best Investment Ever (TBIE).

And a fourth time I smile because one cannot help but smile when saying, "Whee! This investing stuff is easy!"

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.

Copyright © 2011 Daily Reckoning

© 2011 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.


© 2005-2019 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

6 Critical Money Making Rules