The Mogambo Guru

10/10/07 - Did He Say, "Tighter Monetary Policy"?

10/11/07 - Dollar Bears Unite

10/12/07 - The Mogambo Theory of Currency Relativity

10/15/07 - Jobs Fight to the Death

10/16/07 - Trading Your Paycheck for a Coin Purse

Did He Say, "Tighter Monetary Policy"?

Total Fed Credit expanded only $2.0 billion last week, taking the total to $861.6 billion. Not much of an increase, and sure enough, Doug Noland says, "Fed Credit has increased $9.4bn y-t-d and $31.9bn over the past year (3.8%)." Almost nothing, considering their record!

So the money to finance the world's bull markets is coming from someplace else. Hmmm! I wonder where? And I wonder why the people providing the money to keep up the bull markets in stocks, bonds and government are doing it? What is their motivation? And if they are that carefree with their money, can I talk them into giving some to me? Or is there some slimy corruption at the root of it all?

Being naturally paranoid and distrustful, I vote for corruption every time, because the history of the world is clear; the amount of corruption at the end of long booms is always at unbelievable levels. And then Jeremy Grant at the Financial Times hears us talking about corruption and volunteers that, "The number of cases involving manipulation and false price reporting in commodity and commodity futures markets caught by U.S. regulators has reached record levels in the past 12 months. The Commodity Futures Trading Commission, which oversees such markets, yesterday revealed it had collected a record $540m in civil penalties, restitution and disgorgement (the return of ill-gotten gains made as a result of a fraud) from cases involving fraud, manipulation and other misconduct. It said this was a record." Hahaha! A record! It's just history repeating itself, as corruption is at the maximum!

The good news is that when the regulators get around to looking at the staggering manipulation in the gold and silver markets, they could probably balance the federal budget for years to come if they forced the manipulators to "disgorge" their "ill-gotten gains" as a result of the price-manipulating frauds they committed for the last few decades!

My face breaks into a beaming smile and I rub my gnarly hands together in wicked, ghoulish glee when I extrapolate from this tthat when the regulators get around to looking at the sleazy, shadowy, scumbag guys who own the Federal Reserve and force them to "disgorge" their "ill-gotten gains" for the entire 94 years since the despicable Federal Reserve was created by a few loathsome Senators late at night on a deserted Christmas Eve in 1913, and then unanimously passed by them, and the resultant un-Constitutional fraud of a fiat currency has been upheld by every stinking traitorous Supreme Court ever since, and how all of that means that we should rise up as one and descend like a plague upon Washington, D.C. ("Mogambo and a small mob of drunken, obscenity-spewing mental defectives drive to the nation's capitol and make a nuisance of themselves!"), overrunning the Supreme Court, immediately putting all ultimate judicial power in the Capable Hands Of The Mogambo (CHOTM) for about, oh, I'd say about ten minutes ought to be enough to order the arrest of all current and the former Supreme Court Justices, living or dead, since 1913, for the crime of treason against the United States of America, in that they colluded to ignore the stark Constitutional requirement that money must be only of silver and gold, but it isn't, and now we are paying the inevitable economic penalty for it, and I positively break into an Evil Mogambo Cackle (EMC) at the now-very-real possibility of having the miscreants brought before me, in absentia if necessary or even expeditious, crying and sniveling, whereupon I give them a quickie kangaroo trial before I pronounce the seemingly-foreordained guilty verdict and order an appropriate, thus excessive, sentence.

Next, I will order the arrest of all living and former members of Congress (except Ron Paul) on the same charges, but with harsher sentences because they deserve it so richly, because they acted so irresponsibly, and so, so willingly stupid, and have them "disgorge" their ill-gotten gains, too.

Obviously, the Financial Times correspondent is horrified by the extremes of Savage Mogambo Revenge (SMR), and perhaps tries to calm me down by imploring me to realize that "the System is working" by saying, mysteriously, "The disclosures are a sign that unprecedented volumes in commodity markets are giving rise to a corresponding increase in enforcement actions."

Huh? So we still have the same number of crimes per unit of volume in the commodity markets? Criminal activity is in a constant ratio with volume of transactions? What in the hell kind of lackluster "law enforcement" and "regulation" do you call THAT crap? Jeez!

In spite of that, and many more instances of American stupidity, I have now officially stopped standing at the street corner and yelling, "We Americans are the biggest bunch of godforsaken monetary and fiscal idiots in the history of godforsaken monetary and fiscal idiots, and yeah, I'm talking to you, you moron!" at motorists who foolishly stop at the stoplight.

So why this sudden change of heart? Is there some evidence of Americans showing some smarts?

The answer is, surprisingly, yes! (And please take note of all the surprises), as from AP we surprisingly learn that "Long-shot Republican presidential candidate Ron Paul raised a surprising $5 million during the past three months." And this is certainly surprising, in that, "Paul barely registers in polls of Republican voters, a sign of low name recognition nationally."

So, surprisingly, "Since he entered the campaign, he has operated with little media attention, getting the spotlight only during debates", which surprisingly proves that the media are co-conspirator idiots who can't recognize real quality in candidates, and which is surprisingly proved by the admission that people can sure as hell know quality when they see it, as "that has been enough to attract an avid Internet following."

Wow! In short, the people who actually know Ron Paul and his platform are so thrilled by him that they are giving the big money to him! So much so, in fact, that surprisingly, "Paul, a Texas congressman who once ran for president as a Libertarian, also will report having $5.3 million cash on hand. The amount places Paul well ahead of all but the Republican front-runners in the race"! Fantastic! There is real hope for America!

In fact, Ron Paul is so popular that "His fundraising for the quarter almost matches what Sen. John McCain is expected to report. His total is half the amount that former Massachusetts Gov. Mitt Romney is reported to have raised." Hooray! Hooray for Ron Paul and the people who are supporting him!

So I decide to celebrate Ron Paul winning the Presidency, and the fact that this shows real intelligence in Americans, with a good old-fashioned, "Lost Weekend", booze-guzzling party. But just as I knocked a few drinks back in one long pull on the bottle, just when I think people are getting smarter, here comes Frederic Mishkin, who is one of the new guys at the Federal Reserve who apparently have to say stupid things as part of the secret Federal Reserve initiation process (probably getting their brains knocked out by spanking, and then chanting "Thank you sir! May I have another?" a la Animal House).

For example, unbelievably, Mr. Mishkin is reported to have remarked that, "Gold is not a particularly reliable indicator of inflation," which he thinks somehow handily dispenses with that particular piece of evidence, especially since gold is roaring along at over 30% a year and thus has been acting like price inflation is roaring at over 10% a year (just like John Williams at ShadowStats.com calculates), which I am sure is probably true because the M3 money supply (monetary inflation) has been growing at about 15% a year, and price inflation is caused by monetary inflation, and in roughly the same degree. It's that simple!

So even as I am feeling the initial effects of greedily chugging down some powerful alcoholic beverages start to kick in, Mr. Mishkin is rendered comically beyond laughable when he says that not only has inflation in prices come DOWN, but that, "Inflation has come down in the old-fashioned way. Tighter monetary policy and a commitment to price stability by central banks throughout the world have led to lower inflation and an anchoring of inflation expectations." Hahahaha!

And did he say, "tighter monetary policy"? Hahahaha! All rates of interest are less than half of the 10% rate of price inflation (when calculated the traditional way, which the government does not do anymore, but John Williams at ShadowStats.com does). Hell, a 30-year bond yields less than 5%! 5% when inflation in prices is running at 10%, even when the dollar was not falling in value, driving up the price of imports! And now? Who the hell knows?

And did he say, "tighter monetary policy"? Hahahaha! The Congress just raised the limit on the National Debt by almost $900 billion, which is almost a trillion dollars, as made necessary when the Congress has already used the last twelve months to deficit-spend almost $500 billion more than they collected, all made possible by the Congress using the last six short years to increase the debt by a staggering $3.2 trillion, all financed by the Federal Reserve creating the money out of thin air so that it could be borrowed and used to buy the government debt, thus relieving the government from having to raise that much in taxes or borrowing that much in savings!

If you look at my face, you will notice that I am having a hard time not breaking into a big, loud belly laugh of Maximum Mogambo Mirth (MMM) as I say, "And I am supposed to believe that the Fed will NOT create the money and credit to allow the government to borrow all of this $900 billion more, and then even more when that runs out in about two years (extrapolating the long-term trend)? Hahahaha!"

And did he say "tighter monetary policy"? Hahahaha! Required Reserves in American banks are, in total, still only a lousy, insignificant, almost nothing, squat-like, stinking $40.2 billion, which is about the same low, low, low amount that it has been since 2000, while deposits and loans grew like a cancer to trillions of dollars, and now Required Reserves as percentage of anything new in the banks is certainly the lowest in the history of banking, because there is nothing less than zero! Hahahaha!

So, for how much assets and debt is this piddly $40.2 billion counted as its "reserves"? Doug Noland, in his Credit Bubble Bulletin at PrudentBear.com, reports that bank credit alone is $8.923 trillion. And how fast is bank credit growing? "Bank Credit," says Mr. Noland, "is now up $280bn over the past ten weeks, with a $627bn, or 10.1% annualized, y-t-d gain", while "Loans & Leases surged $25.9bn to a record $6.574 TN (10-wk gain of $249bn)."

So it looks like about $15.4 trillion in bank assets and liabilities is being backed up by a minuscule $40.2 billion! That's a microscopic 0.0026%. A quarter of 1%! Hahahaha! Fractional reserve banking at its finest! Hahahaha!

And all of this is Mr. Mishkin's "tighter monetary policy"? Hahahaha! I'm laughing my Stupid Mogambo Butt (SMB) off here! Hahahaha!

And it is not just us Americans feeling the inflation in prices, the ugly price we must pay for allowing the government and its lapdog, a central bank, to create excess money and credit (monetary inflation) which produces price inflation, as from Bloomberg we read that consumer prices in Taiwan, "advanced 3.08% from a year earlier", mostly reflecting higher prices of food. Yikes!

And in Russia, "the Federal Statistics Service" said that, "consumer prices rose more than expected in September as sunflower oil, dairy and other food products became more expensive." Yikes yikes!

How much more expensive? "Consumer prices increased a monthly 0.8%" and "7.5% in the first nine months of the year", which shows that prices are rising the most in the recent past, meaning that they are rapidly getting worse. Yikes yikes yikes!

And it may soon be getting worse for all of us, as shown on the cover of the new Economist magazine. It is a photo of Bill and Hillary Clinton walking in a parade, smiling and waving at the crowd, with the caption "The comeback kids". The significance of the whole stinking thing is that if you look closely, behind Bill Clinton is a half-hidden person who appears to be wearing a folksy dress and holding out an orange plastic bucket. Due to the angle of sunlight, there appears to be something IN the bucket! Like money!

Obviously, the only possible, logical conclusions that anyone with half a brain can come to are that this visible hand and bucket are either:

1). Like the guy that sweeps up after the elephants in the big circus parade, picking up all the stinking socialist/communist "love muffin" crap pumped out by these two leftist morons, before too many people get a whiff of that stinking collectivist effluvium and say rude things like, "Jeez! What in the hell is that awful stink? Did somebody cut one, or is the Mogambo around here or something?", or

2). The Economist magazine has doctored up the photo, adding the dress, the hand and the bucket so that the really smart people (like you and me) will immediately recognize it as brilliant Bill and Hillary Clinton satire, as the photo is now clearly, clearly, clearly showing a mysterious, half-hidden somebody in the background (faceless bureaucracy!) with a gun (not shown but obviously implied), who is confiscating the buying power of the money of the very people who are cheering the collectivist Clintons on! Hahaha!

The real joke is that none of the cheering, mindless people in the photograph realize that this is happening, and is destined to get worse under a President Hillary Clinton, as all of her promised additions to the nanny-state redistribution and outcome-equalization crap (that has become the very lifeblood of our economy!) will become more and more expensive from now on, and the government will borrow more and more money, which the Federal Reserve will create as credit in the banks, so that somebody can borrow the money from the banks with which to buy the new government bonds, which increases the money supply, which drives up prices, which kills the economy. Whew! What a piece of cover art!

All of this means that dollars will be created like you will not freaking believe, the dollar will go down and down and down in value like you will not freaking believe, and that everyone ought to be buying gold, silver and oil right now, but they don't, because they don't believe their own eyes.

And of course, as soon as I open my Fat, Stupid Mogambo Mouth (FSMM) about how all of these new dollars is such bad news, here comes Peter Schiff of Euro Pacific Capital with his essay "Are There Too Many Dollar Bears?"

I immediately think to myself, "Oh, crap! If Mr. Schiff is going to repudiate what I just said, then I am really screwed! I hate this! Am I ever going to be right about anything my whole pathetic life?"

Sure enough, my fears seemed justified when he started out that we dollar bears are "united by two basic assumptions. First is that the dollar's decline will be orderly, and second is that the decline will actually be positive for both the U.S. economy and the stock market. Therefore, other ways to confound the consensus would be for the dollar's decline to be disorderly or for it to be negative for both the U.S. economy and the stock market."

Suddenly, I am thinking to myself "Huh? I think that? I didn't know that is what I thought! I thought I thought that a weakening currency is only good if you are a net exporter, which we aren't, because you can undercut your international competitors' prices while keeping your domestic prices steady when sales are converted into your own currency, but that a strong dollar is good if you are a net importer, like we are, because it keeps price inflation down by making imports cheaper!"

I was trying to wrap my three remaining functioning cranial neurons around this seeming paradox when I discovered that he was just toying with me! Teasing the poor mental defective cripple like the big bully he is! It turns out that he actually agrees with the premise that the dollar will fall, but that his disagreement is that "Of course should such a run on the dollar commence, it will not be the orderly decline everyone seems to expect."

Apparently, standing next to me in a crowd or even agreeing with me about anything is somehow repugnant to Mr. Schiff, as it is to most people, so he makes a joke of it and says, "However, I am still not sure why so many feel a declining dollar is not a problem so long as it does so in an orderly manner. If you're headed to the poor house, what difference does it make how you get there? Whichever road you travel, you're just as broke when you arrive!" Hahaha! Perfect!

This is all at odds, of course, with a Bloomberg.com headline that reads, "Weak Dollar Boosts Growth Without Fueling Inflation", which was full of the feel-good story that a weak dollar is good for exports, which it is, and that it is good for net-import America, which it is not. And as the joke goes, "Not only is it not, it's snot!"

The Mogambo's Theory of Currency Relativity

I have been advised over and over again to consider foreign currencies as an investment, and I have declined over and over again because I think that all foreign currencies are, being as polite as I can, pieces of crap. Now, I realize that there are many who question my authority to say such a thing, ("Who in the hell do you think you are? You're nobody and you're nothing!") and even my capacity to make such a statement ("You are an idiot!").

Both caveats are unfortunately true, and this is just a teeny, tiny part of the heavy cross I must bear. Nevertheless, these people who so cavalierly insult The Mogambo are going to find that not only are foreign currencies pieces of crap, but that somebody has repeatedly run over their garbage cans and smashed their mailboxes, which will perhaps teach them a lesson both about currencies and insulting psychotic lunatics. A two-fer!

But this is not about revenge and how it is so sweet, but about fiat currencies, about which I have so little respect that I make rude noises which resemble long, undulating farts, a style hopefully indicative of the particularly revoltingly redolent variety, as befits my low opinion of fiat currencies in general and rapidly inflating ones in particular, which they all are.

And not only that, but these fiat currencies are routinely multiplied by the banks using miniscule amounts of reserves in a wildly-inflationary fractional-reserve banking paradigm, just like the United States does with the dollar, and that means that all their currencies are crap, too, just like the U.S. dollar, and the purchasing power of each unit of each of these currencies will always be going down, just like the U.S. dollar, and the only stupid "strength" that they can muster is to be fractionally stronger than other stupid fiat currencies and other more extreme fractional-reserve central banking idiocies, namely (as if you had to be told) the U.S. dollar and the wildly inflationary Federal Reserve.

That means that anybody who says (as I read in a newsletter recently) that "the decline in one currency always reflects the rise in another currency" is wrong, wrong, wrong.

For example, imagine, if you will, that I am in the hospital emergency room, bleeding profusely from three gaping gunshot wounds to my chest (all off-center, poorly grouped and thus non-lethal thanks to my wife being such a lousy shot), but I am being ignored by a disinterested, hateful medical staff, whose worsening lack of attention to me and my medical problem has forced me to now refer to them as, "Soulless, thieving, murdering, sadistic quacks and ghouls".

But if the guy sitting right next to me has only one such sucking chest-wound bullet hole inflicted by his wife, then his marriage is some whooping big damned success? Then how come when I try and "level the playing field" with a little self-medication by merely taking the morphine IV drip of this lucky guy, everybody gets all bent out of shape?

For one thing, it's a matter of Einstein's relativity; two entities are in relation to each other, so that one currency appears to be moving ahead and one appears to be falling behind, but the reality is they are both falling, falling, falling in purchasing power and they are saying in their little currency voices, "Oooh! Help us! We're faaaaalllliiiiing!"

It's just that one is perceived as losing value less fast, and so it is just a matter of time, and the contraction of time, which explains why the speed of light is a perceived constant, and why one currency moves against another because one of them is seemingly standing still.

Einstein, whom everyone thinks is such a hotshot intellectual giant, did not see the obvious correlation to how the speed of inflation in prices are functions of how insanely, traitorously stupid, stupid, stupid your central bank is in creating the enormous gravitational mass of excess money and credit, and thus inflation will kill your currency and your economy.

And yet people think Einstein was such a hotshot, and I am reduced to begging for money outside of the supermarket and selling loose cigarettes to school children just to make ends meet!           

I bring this up because the Nobel Prize for economics is coming out this week, and I sure could use the huge wad of cash that comes with the Prize, and I finally deserve it this year, as I have just neatly connected Einstein's Relativity with money! Brilliant! And by the time the Nobel Committee finds out I have no idea what in the hell I am talking about, the awards ceremony will be over, everyone will have gone home and moved on, and everybody will be happy, especially me, since I'll have the money.

And you don't have to take my word for it, as I have recently proved it with a famous Mogambo Global Survey (MGS)! Since China is experiencing price inflation of 6.5%, and everybody else on the planet is experiencing price inflation of more or less than that (but always more than zero) let's ask your typical citizen around the globe what he thinks about that!

The patented MGS research methodology is that I randomly pick up somebody's phone so that I don't get charged for the long-distance call, randomly dial an area code and a random phone number, and when someone answers, I ask, "What do you think is the best thing to do with a fiat currency that a central bank is devaluing by constantly creating excess money and credit in the banking system?"

The answers, of course, were probably all over the map, but since I don't speak any foreign languages, all their replies sounded like, "How jongg moi gram geschlag hooigang!" or something equally as foreign-sounding, but I think I got enough of the gist of it to learn that they were going to take their money and buy gold!

Therefore, the Important Mogambo lesson (IML) distilled from this important survey is that not even stupid foreigners want their own inflating money! They want gold!

And a little informational sidebar is that we also learned that these foreigners are rude, nasty little people who have so little regard for scholarly research that they get really snotty just because you call them at 2 AM (their time) as part of this important, important research survey, like their not being able to sleep is my fault or something!

So, this study has shown that foreigners don't want their own money, and they do want gold, but you want their money and don't like gold? What can I do but laugh in wonder and amazement, "Hahahahaha!"?

As MarketWatch.com reported, "The dollar rallied against major counterparts early on Friday, after the September employment report showed an in-line gain of 110,000 and large upward revisions of previous months."

I couldn't believe my eyes! What!?! A gain of jobs? I had the same dumbfounded look of utter stupefaction upon being told that consumer confidence was up, too. Huh? What? Huh?

George Ure at UrbanSurvival.com notes that some of the details were that, "only 14,000 construction jobs were officially lost, while manufacturing dropped 18,000. Services on the other hand were up 143,000. Doing what? Who knows?" Hahaha! Pretty mysterious!

And I note that the Birth-Death Model is used to estimate the number of new jobs created, and jobs lost, that have not shown up in official data because they are so new, or maybe it is used to estimate the number of jobs that were born and which then killed another job by strangling it, maybe even murder-suicide things, or something to do with O.J. Simpson slashing more people to death with a knife. Who knows?

Anyway, the important thing is that the Birth-Death Model can usually be counted upon to add bunches of jobs, and has added more than 100,000 jobs a month since May 2005, but this time it added only 17,000 jobs, the second lowest number of new jobs since that selfsame May 2006 so long, long ago.

And most of the jobs lost were in "Leisure and hospitality", but the categories of "construction" and "manufacturing" were actually up in the Birth-Death Model! This is truly surprising, in that Challenger Gray & Christmas estimated that in September, mortgage lenders, construction companies and real estate firms fired a total of 27,169 people. And as bad as that sounds, it was actually better than in August, when the number totaled 35,752.

But manufacturing was up! Up! Wow! This means that more people are working in heavy industry, but there are less people going out after work for a drink to complain about their bosses and plot righteous revenge against their fellow office workers for being so rude to you that they only had a lousy birthday party for you, with some stupid cake and gag presents instead of the new car that you really wanted and hinted at all freaking week?

Well, Addison Wiggin at The 5 Min. Forecast is not "into" getting drunk and planning revenge, no matter how righteous or deserved, but noted that, "What's more, the sector that the Labor Department forgot to mention? Government jobs! In their revision, the BLS added 57,000 government jobs in August, up from the originally reported loss of 28,000." I say "Yikes!", but Mr. Wiggin will only allow himself a thoughtful, "Hmmmmnnn…"

After thinking about it a bit, he apparently realized that this was clearly insufficient, and expanded on that by saying, "The jobs report is bogus. If you suffered through the BLS official site, for example, you'd find they allow themselves a margin of error of 129,000 jobs. Any deviation less and you're in an area that statisticians called insignificant 'noise'." Hahaha! You're right!

John Williams, he of the famous ShadowStats.com, probably for these and other reasons, opines that the September jobs data from the Labor Department "cannot be believed."

And another thing that is unbelievable concerning inflation in prices is the mental disconnect about oil. Kevin Capp, in the Rude Awakening newsletter, writes that that the latest report from the International Energy Agency shows that Peak Oil is here, we are all freaking doomed, and we should be running down the street screaming our guts out in mortal fear, completely nude if you want, but wearing some good footwear since scuffing up your bare feet would be just adding insult to injury.

Although they did not use those words exactly, he reports that the agency did say that, "the global production of liquids dropped by 854,000 barrels per day from August 2006-August 2007."

My British sense of bathroom humor rises to the fore and I shout out, "854,000 barrels of liquids? Hell, I probably pee that much every night, as I have to get up about every two hours to go to the damned bathroom! Hahaha!"

Alas, neither my unfortunate urinary situation nor my little joke were appreciated, maybe because it was too clever for them, or the fact that I was eating a beef-n-bean burrito at the same time, and my words were probably both mumbled and my breath more fragrant. For whatever reason, nobody even smiled at my pathetic attempt at humor, and he goes on to say, "In addition, we're pumping out 1.53 million barrels per day less than the all-time high of 86.13 million extracted in July 2006. Translation: The sun may have already set on our ability to meet world demand."

Naturally, I say "Who in the hell is 'our', as in 'our ability to meet world demand'?"

I could immediately tell by the way the other journalists and reporters were sniggling and laughing at me that he meant "our" in the manner of "the Earth's ability" to supply oil, and I was real embarrassed, which soon turned to anger, and soon thereafter I was angrily trying to tear a piece off of my chair to use as a club.

Mr. Capp says, "This is not good", and I said through clenched teeth, "As soon as I get my opposable thumbs around a truncheon made from a part of this chair, it'll be fine!", but I could tell by his tone that when he said, "This is not good", he meant that, "Running that close to the bone means any systemic shock - a hurricane that damages drilling platforms in the Gulf, a terrorist attack on oil pipelines in Nigeria, an unexpected cold snap in the Northeast - could cause prices to skyrocket, impacting everything from costs at the pump to costs at the grocery store."

And if there is one thing you can count on, something will happen, because it always does when you have no margin for error, and the price for acting with such stupidity is always heavy, too.

JMR Arlo S. was cheery as he sent a link to Rense.com, whereupon one learns that somebody has figured out how to beat the inflationary destruction of the money by the actions and inactions by the Lying, Cheating Government (LCG) and the Lying, Cheating Federal Reserve (LCFR): Use old coins!

The headline was, "IRS Suffers Staggering Defeat". In short, the guy paid his employees with old silver dimes, silver dollars and old gold U.S. coins according to their face value. Thus, he could pay his workers with silver dimes, silver quarters, silver dollars and gold coins, and thus the employee made so little money (according to the face value of the coins) that they fell below minimum income reporting thresholds, and thus no income tax was due.

Mr. Rense explains, "In other words, if a worker is paid with such coins, his taxable 'income' (if any) can only be the face value indicated upon the coin money paid - i.e., $1.00 for a circulating silver dollar or $50 for a circulating gold U.S. coin."

The government, on the other hand, argued that the market value of those coins made them very valuable, and thus the employees owed taxes on the true value of their coins, not the paltry pittance of the face value. The IRS argued that, "Obviously, a $20 coin made of gold is worth at least $750, which is the market price of gold!" 

So, "The essence of the argument is that under the Constitution, Congress is obligated by law to mint and circulate such coins as demand requires, and must establish the value of coins as they are used as legal tender, but the coins' market value, arising as valuable personal 'property,' is a distinct, separate attribute of such coins, and is of no legal consequence if the coins are used as legal tender." Hahaha! Fabulous!

The first Supreme Court argument underpinning the defendant's case was Ling Su Fan v. U.S. in 1910, which "establishes the legal distinction of a coin bearing the 'impress' of the sovereign: 'These limitations are due to the fact that public law gives to such coinage a value which does not attach as a mere consequence of intrinsic value. Their quality as a legal tender is an attribute of law aside from their bullion value. They bear, therefore, the impress of sovereign power which fixes value and authorizes their use in exchange.'"

If that was not enough, the second pillar of the defendant's argument is Thompson v. Butler from 1877, which, "establishes that the law makes no legal distinction between the values of coin and paper money used as legal tender: A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value any more than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, that is to say, as a medium of exchange, the law knows no difference between them."

Hahaha! The damned government has now ruined the money so badly that the little bit of metal in the old coins is now worth more than the face value of the coin, but the government can't wiggle out of paying for their sins by letting people not pay confiscatory income taxes! The government and the IRS are required to honor the face value of the coins! This is too, too fabulous!

But the most interesting part, mostly because I love to read it over and over, comes at the end, where we are reminded that "In 2005, the Ninth Circuit Court of Appeals refused to overturn a previous District Court ruling holding that the federal prosecutor is not entitled to absolute immunity for the unlawful raid."

Therefore, "In March 2007, the primary defendant, Bob Kahre, filed a federal civil rights lawsuit against the prosecutor and IRS agents who had conducted what he alleges to be an unlawful search and seizure raid"! Hahaha! Go get 'em, Bob!

Okay, that is old news, but still somehow comforting to know that I can use this as a club to beat the hell out of any public employee who does me harm without the legal authority to do so.

Mr. Rense is not interested in my reveling in the happy prospect of suing rambunctious government employees and retiring in luxury on the settlement, and says that the cover-up is the real story, as he reports that, "To this day, with exception of the single article by the Review Journal, no major media entity has published a news story regarding the outcome of this important federal criminal tax case."

And little wonder, eh? Since when were the news media and the school system NOT a couple of whores for the government? Hahahaha! Ugh.

Mogambo sez: I figure that the insiders, who are massively short, are colluding to manipulate the prices of gold, silver and oil down, only to let them rise, so that they can profit, not just with bets covering the guaranteed inflationary rise in prices thanks to central banks dangerously expanding the money supplies, but also on spread bets in the futures markets as they make the spreads widen and narrow.

You know they have to do it, you know they want to do it, you know that they are doing it, so you know it's coming, and so you know you can make money trading them as they reach extremes in the trend, or just constantly buying at the low prices after the manipulated pullbacks. What a wonderful world!

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The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications.

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