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MOGAMBO GURU: Things Are Worse Than You Think

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Tace Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 07:42 AM
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MOGAMBO GURU: Things Are Worse Than You Think
Richard Daughty, the angriest guy in economics
email: scgcjs@gte.net

September 28, 2005 -- I note with some surprise ("surprise!") that Total Fed Credit did not go up last week, at the same time that Treasury Gross National Debt did not go up last week, at the same time as Foreign Holdings of U.S. Debt held at the Federal Reserve went down by another $3.5 billion dollars last week. I recall saying to myself, "Hmmm!" I cleverly use the word "hmmm" when I wish to indicate moderate surprise or interest, especially about things that happened last week.

Mike "Mish" Shedlock, writing at the WhiskeyandGunpowder.com site, notes that these latest reports notwithstanding, the national debt is growing, and that the growth rate in the national debt limit totals to "a stunning $3,015 billion ($3.015 trillion) in additional debt in just four years." I admit that it is hard to get your mind around the idea that the Gross Domestic Product (GDP) of the USA is probably somewhere between $11 trillion and $12 trillion a year. So it is even harder to get your mind around the idea that in four short years we have borrowed -- in Treasury debt alone! -- the freaking equivalent of a quarter of everything America produces in goods and services in a whole freaking year! And this is just the INCREASE in the debt!

And when you add in the additions to personal debt (mortgages and other credit debt) and the increases in business debt, you are probably looking at another quarter of GDP. Together they add up to around half of GDP! America and Americans together borrowed, in 48 months, the equivalent of half of everything we make in a whole freaking year! If your heart is trying to commit suicide by pounding and slamming itself into the walls of your chest and your brain is convulsed in spasms, then congratulations, as you are really starting to get the hang of this economics stuff.

Mr. Shedlock also makes sport of what he refers to as "$Ben Bernanke" for "suggesting that the problem is not with the United States, but rather that the rest of the world is saving too much!" Perhaps. To find out, the next time you see "$Ben Bernanke," ask him where he thinks the rest of the world GOT the money to save? He won't tell you. But I will! The Mogambo, brave and mighty Mogambo (BAMM), will tell you and the world EXACTLY where they got the money. The money they save originated from our Federal Reserve! What a surprise, huh? If the damned American Federal Reserve had not increased money and credit so damned much, so unbelievably much, so impossibly much, then those pesky foreigners and their savings and their surplus of savings would not have happened. And our ability to get in so far, so dangerously far, so insanely far over our heads in debt would not have happened either.

None of this is lost on Addison Wiggin, best-selling author and insider at the DailyReckoning.com website, who is, incidentally, a guy I have actually met, but now is "too busy" to loan me a lousy five bucks, or even take my call, writes: "Now with pressure from all sides for the federal government to help citizens repair their lives in Katrinas wake, spending could blow the 2006 deficit projection sky high -- shooting past last year's record of $412 billion.

(more)

http://worldnewstrust.org/modules/AMS/article.php?story...
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Oggy Donating Member (652 posts) Send PM | Profile | Ignore Wed Sep-28-05 08:25 AM
Response to Original message
1. Thanks for posting
I love MOGAMBO GURU's writting
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Tace Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 08:48 AM
Response to Reply #1
2. It's My Pleasure
: )
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Oggy Donating Member (652 posts) Send PM | Profile | Ignore Wed Sep-28-05 09:34 AM
Response to Reply #2
3. Now I've completly read
the latest diatribe I need to find out how is the best way to buy silver in the UK!
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Tace Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-28-05 09:48 AM
Response to Reply #3
4. I'm Thinking Along The Same Lines
BTW, Mogambo, in past rants, recommends precious metal coins. He says they're the easiest to sell, or use as exchange, without assay, etc.
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2Design Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-29-05 08:15 AM
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5. so how does one buy silver? where?
interesting article
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