The Tequila Model of Exponential Growth
"As a guy who has been married and a father for a long time, and as a guy who has seen everything get continuously worse, I'm kind of getting freaked out here because 'continually worse' is a nightmare from which you never awake!"
by The Mogambo Guru If you wonder how bad it is going to get, then you may have wondered "How bad will it get?" while you are also wondering if a Double Deluxe Bacon-Blasted Blowout Burger myocardial-infarction-on-a-sesame-seed-bun came with the large side of fries, the extra-large size, or the colossal super jumbo size of deep-fried spuds. You may be surprised to learn that the answers to the two questions are remarkably similar, in that you won't live to a ripe old age with either one, and you will die clutching your chest and writhing in pain. For the former as an explanation for the latter, Financial Sense New Hour is just the place to go, and Jim and John explain "the most important law of all inflations and that is the law of the exponential inflation. Think of this law in a way as a law of geometric progression. Every inflation must compound itself at a geometrically increasing rate in order to continue to have the same beneficial effects as in the beginning." I instinctively knew that he was going to get into logarithms, as they are a natural for this kind of exponential growth thing, and how I ought to get some logarithmic graph paper, and maybe read up on logarithms again for the zillionth time, and maybe this time something would actually penetrate my idiotic linear brain, which would be nice because somebody is going to assume that I understand the parabolic curves of logarithms, but I don't. And I don't like being reminded of it, either, and if I have a low blood-sugar at that moment, then things will almost certainly get ugly real fast, which is probably why nobody brings up logarithms around me anymore. And Jim and John didn't, either, and explained themselves as, "So in practical effect, what we're saying here is that every inflation once begun becomes continuously worse." Gaaahhh! Yes! But gaaahhh anyway! As a guy who has been married and a father for a long time, and as a guy who has seen everything get continuously worse, I'm kind of getting freaked out here because "continually worse" is a nightmare from which you never awake! Then, perhaps without knowing it, they mention how the whole thing ends, as it shakes itself apart; "Only it does it in up-down cycles, so the ride gets worst as you get towards the end," as everything "gets more violent." I was trying to think of a clever way to most clearly illustrate exponential growth, and was experimenting with a bottle of tequila. My terrific idea was to drink half the bottle, and then half of what was left, and then half of what was left, and then half and then half, on and on, sort of like a Zeno's Paradox with the time and distance components decreasing exponentially. As a natural teacher and brilliant pedagogue extraordinaire, I bravely chug down half the bottle of tequila in one long pull to get the lesson going, only to find to my dismay that the Mogambo Stomach Of Iron (MSOI) ain't what it used to be; I am immediately puking all over the place, and I am thinking that I am going to have to start all over with a new, full bottle of tequila, and I am suddenly not looking forward to that! Fortunately, the day was saved, because I got a perfect example, a horrifying example, a terrifying example, a terrifyingly, horrifyingly perfect example of exponential growth from JMR Paul Harder, who reports that he has looked into the number of deaths attributed to Methicillin-resistant Staphlococcus aureus in the USA, and finds that "MRSA deaths are increasing EXPONENTIALLY!!!" Note the use of all capitals, and the three exclamation points, which seems entirely apropos since MRSA has evolved from ordinary staph germ into a deadly microscopic murderer that can't be killed with antibiotics, and practically nothing can stop it from killing you by, for example, eating your flesh. He admits that the data is murky, but "as best as I can gather" he says, the trend is: 2007 90,000 +
2006 13,000
2005 3807
2004 1629
2003 955
2002 487
2001 229
2000 201
1999 155 Now, that is exactly what exponential growth looks like! Perfect! It gets truly ugly when he says that the extrapolation is that there will be "46,000,000 deaths in 2011", which does not have any exclamation points at all, which I cannot explain because in my Mighty Mogambo Mind (MMM) there are several! Like that one right there!! Or the two right there!!! Now three!!!! Gaaaah! It's happening! It's getting worse more and more quickly, and then one day the shaking and violent upheavals in the system will finally shake it all apart!!!! Exclamation points everywhere!!!!! Except for gold, which is the only thing that, historically, is not destroyed by the monetary and fiscal stupidities of governments or central banks. Note the calming use of a plain, no excitement, sentence-closing period. Ahhh! The serenity and comfort of gold! P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed. 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. | 
