Drug Induced Inflation Allowance

"What could possess us to allow the Fed and the Congress (except Ron Paul) do this to us?…I think we are, collectively, so bereft of common sense because we are all so stoned-out on a gigantic cornucopia of prescription tranquilizing drugs…"

by The Mogambo Guru

The doors of the Secret Mogambo Backyard Fortress (SMBF) clanged shut when the Bureau of Labor Statistics reported that recent inflation data showed that there is roaring inflation in food prices, which (as a group) rose by 4.1% for the 12 months ending in June!

I was so busy battening down the hatches at this horrible inflation news that I almost did not catch the details, which are frightening. For example, whole milk was up 13.3% (to a new record high price!), egg prices are 19.5% higher, chicken was up 10%, dried beans were up 11.5%, and white bread rose by 9.6%!

The "good" news (I am led to believe) is that prices for all goods and services, lumped together and an average taken, were up "only" 2.7% over the past 12 months. And since the prices for all these goods and services is also equal to the gross incomes of the people who sold all those goods and services, then not only is average price rising at alarming levels, but yet everybody's incomes were up less than the rise in the price of food! Yikes!

And this does not mention the bankrupting increases in the costs of big-ticket items like insurances and taxes! We're freaking doomed!

And why in the hell are we letting this happen? What could possess us to allow the Fed and the Congress (except Ron Paul) do this to us, when the horrific results are always staring us right in the face?

I think we are, collectively, so bereft of common sense because we are all so stoned-out on a gigantic cornucopia of prescription tranquilizing drugs, anti-depressant drugs, cholesterol-lowering drugs, libido heightening drugs, disease-fighting drugs, or the potent neurological side effects of the whole legal pharmacological cavalcade of medicines and nostrums consumed by the thousands of tons every freaking day.

Which is not to mention the zillions of tons of illegal drugs also consumed every freaking day, nor the terrifying tons of animal hormones, antibiotics, vaccines, pesticides, chemicals and various pollutions that we eat and breathe every freaking day of our lives, too!

My favorite example is Otto, the zoned-out bus driver on the Simpson's, who was in one episode required to take a urine test, which revealed that his urine sample contained, as recited by Mr. Burns from the report, "crack, smack, uppers, downers, outers, inners, horse tranquilizers, cow paralyzers, blue bombers, green goofers, yellow submarines, LSD Mach 3 and trace amounts of human urine."

And so naturally we get the munchies, eat a lot of high-calorie food, get fat and stupid, and make some big mistakes, such as suggested by John Rubino, writing at DollarCollapse.com, who says, "With a few months of hindsight, it's now clear that debt-as-money was not one of humanity's better ideas."

But this is not about how the people of America, as I seem to imply, are a nation of Stoned-Out Communist Morons (SOCM), which they probably are, and how this is the only thing that I can think of that would explain why Americans are not clamoring for Ron Paul to be President of the United States and save us from the traitors in Congress, but about how history is so clear that behaving in such an irresponsible manner with your currency leads to utter, utter disaster.

Of course, there are many examples of this principle, such as those detailed in the tragic misadventures of The Mogambo, as related in the unpublished autobiography, "The Life of The Mogambo, as told by The Mogambo and actually typed by The Mogambo", with the subtitle "But since The Mogambo will probably end up getting screwed out of all the Luscious Mogambo Money (LMM) by greedy publishers and dishonest middlemen, I got my preemptive revenge by spending as little time as possible doing a crappy job writing this stupid two-page book, so that most of it is lies and grammatical errors anyway."

All the other big events in the Mogambo's Review Of History In Search Of Examples (MROHISOE) involve gold and silver, which I wanted to get around to anyway, since I am a big gold and silver (and oil and commodity) bull, and there is nothing I love more than waxing long and loud about them all.

But why should I bother, when I can do no actual work, and merely quote Jason Hommel of silverstockreport.com, who says the same thing? He writes, "A day's wage used to be a silver dime. 2000 years ago in Rome, a silver denarius was a day's wage, and that coin was about the size of a silver dime, too. Even as recently as 100 years ago, a silver dime was a day's wage. A silver dime today costs about 50 cents, at $7.20/oz. for silver."

For some reason (probably because silver and gold got caught up in the big market swoon last week and went down, as people were forced to sell their gold and silver to get the money to meet their margin calls on their stupid leveraged stock portfolios, and that meant that my holdings of gold and silver went down in value, and I'm still grumpy about it), I was not in the mood for a stupid history lesson.

But I held on to my gold and silver, and made plans to buy more, because I know what the future holds, as it is just the same thing that the future has always held for a bunch of monetary madness morons; gold and silver will soar as everything else goes sour (which is kind of poetic, so you know it must be true!)

Well, I felt foolish when I realized I did not connect the dots, and he had to spell it out for me like the brain-dead creep I am, and said "If the world returns to using silver as money, that silver dime might be worth about $150 or more--which is what a day's wage is in U.S. dollars today." Which it will! And I have silver! Whee!

But everybody else will be screwed. Ugh.

Mogambo sez: For various reasons, the dollar has gained a little strength lately. Use it to buy more gold and silver, whose gleaming brightness will be very comforting, as it gets really dark and stormy, and much more bizarre, from here on out, where the light at the end of the tunnel is the U.S. dollar ablaze and turning to ashes.

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Editor's Note: 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.