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And speaking of dimwits...Richard Daughty - The Fed settled down last
week, but the Treasury admitted that the national debt zoomed
to a new record which is, as of today, $7.994 trillion, which
is why I am hiding in the closet under the stairs. What makes
this interesting is that, at our average rate of acquiring new
debt, we will hit the new Congressionally-mandated debt ceiling
($8,314 billion) in the next couple of months. And what will
our Congresspersons do then? Hahaha! You guessed it! They'll
raise the limit again! Par-tay down, dudes! But while I was waiting for everybody to stop drinking coffee and maybe do a little work around here, like maybe mounting my damned new tire on the damned rim, you lazy bastards, I casually noted that they were not very busy, as every OTHER time I came in here in the past, there were always guys ahead of me and their cars were in the bays getting fixed, and people bustled around, and things got done (to use a Chinese expression) plenty chop chop. The guy says that, yeah, things are slow. The telephone repair guy, who was supposed to be fixing the phone but was instead eavesdropping on our conversation when he was supposed to be working, says that it is that way all over town, and that everybody is complaining about how slow things are. Spooky! But all I keep hearing is about how the earnings of companies are going up and up, and how this means growth, growth, growth, and how this means that everything is wonderful wonderful wonderful, and how this means you should be buying stocks and bonds right now with all your money. Growth? If Mogambo Manufacturing sold one widget last year for ten bucks, and this year we sold one widget for eleven bucks, my earnings went up. But did I grow? I still only made one lousy widget! Hahaha! Growing? Growing more cold-hearted and cruel perhaps, especially as concerns my looting the pension fund of the idiot employees and selling their ugly children to gypsies at the company picnic. But growth as a healthier, bigger company? Ha! Don't make me laugh! But you can hear the American economists, the dumbest guys on earth, all saying "But Mogambo, you big fat idiot, GDP went up by 10%!" And then everyone agrees that GDP went up by 10% and that The Mogambo is a big fat idiot, and then people call my wife up, and laugh at her, and say hurtful things like "Haha! Your husband is a big fat idiot!" and she says "I know, mom! I know!" But then the retailer guy who bought that widget for $11 says "But inflation was 10%!" So, net net net, the economy did NOT grow at all! And don't get complacent on me, because we are not done yet! No, sir! I'm just getting STARTED getting angry! Not only that, but the price of widgets to the final consumer, meaning you and me, went up not by 10%, but by 11% or 12%, as all those middlmen try to protect their profit margins! So inflation went up for all of us final consumers out here, you and me, who pay the full price for everything, and the full price for everybody, up and down the whole freaking line, including outrageous executive paychecks and perks, by charging the end-user another 11%, or 12% or 13% or whatever the retailer can get out of me! But, but, but, and notice how I am stammering here in my outrage, but the government does not count the 10% inflation figure to calculate the inflation adjustment to raw GDP to get "real" GDP! They have new, weird ways of "adjusting" 10% raw inflation down to a lousy 2%! Or less, if they want! And so when we worthless employees try and get a little raise to offset these rising prices, they laugh in our faces, and say "But the government says that inflation is only 2%! You employees are idiots, because only idiots listen to The Mogambo!" And the guy getting the fixed pension knows that he is getting screwed by at least 2%, but it feels like more (and it is) than that. And the people living on Social Security start getting pinched, and they want to know why the Cost of Living Adjustment (COLA) is so meager, and they get grumpy. So the final consumer, me and you, gets screwed, and we get it good and hard in the checkout line, and the cashier is ringing up our purchases by scanning the bar code across the scanner, all day long, pick it up and scan it, pick it up and scan it, and so it is a real crappy job, and she is plenty angry about the rotten job and the lousy pay which does not even keep up with inflation and her husband's Social Security check doesn't seem to go as far, and then she gets all testy with me like it is MY fault or something, just because I innocently mentioned, just trying to make a little friendly conversation, that the hairs on her chin made her look like a goat. But old Mrs. Goatface and her testy attitude is right, and we are all getting screwed as far as measuring GDP is concerned, because our wages did not go up, and inflation is covered up by lying with statistics, and we buy less and less stuff each month as a result. I hate the thought! Buying less and less stuff every month? I hate it! I want to buy MORE stuff every month! - Analyst Mark Lunden, who sent a NY Times article reporting that "The federal government contends that General Motor's pension fund is $31 billion short of what it owes its work force, according to closely held government data, a figure in stark contrast to G.M.'s assurances that its pension plans are 'fully funded.' " The company had a plan in case anybody brought this up. So, implementing Plan A, they trotted out a guy named Jerry Dubrowski to act as spokesman for the automaker, and he said, "There is no reason to expect that G.M.'s pension plans will be terminated, and to assume otherwise is to unnecessarily alarm the many thousands of people who rely upon those plans for their retirement." Hahahaha! There is no reason to expect it? This reminds me of the concept of Probalism, which is the philosophy heralded by the Environmental Protection Agency and championed by David Bond, which contends that if something cannot be proven to be false, then it is thus proven to be true! Hahahaha! "There is no reason to expect" it? $31 billion dollars short right now, and with sales in the toilet pension problem will just get worse and worse? And this $31 billion shortfall came at a time when things were good, and yet, now that they are not so good, "there is no reason to expect" that maybe, just maybe, the G.M. pension plan will be terminated, or changed, or jettisoned, or anything? Hahahaha! And did you crack up when he said "And to assume otherwise is to unnecessarily alarm" people? Hahahaha! Me too! "Yes, I saw the anvil was going to drop on your head, but to admit even the possibility of it falling on your head would be to unnecessarily alarm you!" Hahaha! - Marshall Auerback, in his last regularly-scheduled essay for the Prudent Bear site before he retires, or leaves, or quits, or starts devoting his life to tracking the Mogambo down and knocking some sense into my thick head, writes about the probable course of the economic future as he rides off into the sunset. As we wave goodbye, he notes that the ways countries use to extract themselves from their international balance of payments problems are protectionist, namely the government (which needs the money) imposes taxes, and surcharges, and fees, and duties on imports, which also allows domestic companies to compete in a high-priced market. It is a loser of an idea in many, many ways, one of which is that "to the extent it succeeds in reducing the imbalances in US trade, it also reduces the increase in dollar savings held in the hands of foreigners, which in turn places the greenback in a vulnerable position. Assuming no change in their portfolio preferences away from US assets (a not entirely realistic assumption, as there may well be some form of retaliation which reduces the proclivity to hold dollars), there is in fact less foreign savings available then for them to disperse additional external financing requirements at the margin." In short, if they sell less to us, they get less money, and then they can't loan us more money, which we need to keep borrowing to keep this consumerist expansion going! It's a vicious circle! Yikes! Then there is the biggest, baddest thing (BBT) that the government can do. "There is a yet a more radical option: the US might simply resort to outright debt repudiation." But would the USA do such a thing? Hell, yes! We'll break any agreement, with anybody, when there is the slightest advantage to it for the government! We're real scumbags in that department! But Mr. Auerback, always too classy a guy to say such things, is repulsed by my words and actions, and says only "There is ample historic precedent for breaching previously agreed legal international obligations." I guess that would send people
scurrying to get gold! But Mr. Auerback looks at me with
more undisguised contempt and says "Ultimately, it would
not surprise us to see various restrictions imposed in regard
to the holding of foreign currencies and gold.
As recently as the early 1970s, Arthur Burns, then Fed Chairman,
railed against the 'unsound practice' of Americans having foreign
currency bank accounts." Mr. Auerback may be too classy
a guy to bring up the point that Arthur Burns was, as I understand
it, a pretty terrible Fed chairman, and he caused one hell of
a mess, but I am not. Maybe not as bad as Alan Greenspan, of
course, but pretty bad. - To show you the vacuity of the Federal Reserve and the whackos who infest it, nothing could be better than the juxtaposition of two headlines on the goldSeek.com site. The first one was Thomas Hoenig, president of the of the Kansas City Federal Reserve Bank, which reads "Little risk of inflation surge: Hoenig" immediately followed by a Reuters article entitled "Services sector hurt by spiraling prices." - Richard Greene of Thunder Capital wrote an interesting essay entitled "Greenspan's greatest gift", which is a surprising title, as the only gift I want to give him is a couple of hard thumps to his stupid head, big enough to raise a nasty lump, so that when people ask him "Alan, where did you get those horrible bumps on your poor head?" he can tell them that The Mogambo put them there as a punishment to him for acting so stupidly and irresponsibly, and also as a warning to the guy who is going to be NEXT chairman of the Federal Reserve. So you can imagine my trepidation in reading what he wants to give ME! But this is not, thankfully, about that. In fact, Mr. Greene goes out of his way to praise the guy, like when he says, "While in no way condoning Greenspan's policies and realizing they will result in an economic disaster eventually, I can't help being impressed with his mastery of the press, Wall Street, and the common man to perpetuate this fraud. "I, for one have been amazed at how long this has gone on. It has been over five years since the stock market bubble burst, yet he has managed to float the economy on a sea of debt while not only convincing the masses that everything is all right, but also that they were getting rich on real estate." Hahahaha! Yeah! I know! Weird, huh? I can't believe we fell for that one! Apparently, neither can Mr. Greene, who says "With only a reasonable amount of economic understanding one should have identified the unsustainable nature of the last few years' expansion." But this is not, for a change, an editorial about how stupid we Americans are, but how gullible we are. "Thanks to Alan Greenspan's skillful manipulations," Mr. Greene goes on to say, "not many have identified the opportunity at hand. For those of us that have, the appearance of a healthy economy has prolonged our opportunity to accumulate gold and silver at bargain levels. In due time this, will be seen as Greenspan's greatest gift." Hahahaha! How ironic! Greenspan, who started out as a gold-loving, hard-money man himself, and then repudiating it, ends up destroying the American dollar, and thus proving the case for gold! So he's right! It is a gift! I never thought that I would be saying this, but "Thanks, Alan!" - In an interesting essay entitled "Myths about gold & the money supply" by Aubie Baltin, PhD, he argues that the only real measure of the money supply is cash and checking account money. Noticing that my eyes have this vacant look, he knows that he must start with the basics. "Before we start," he says, "some definitions regarding the money supply are in order. M1 Money Supply; consists of cash plus checking accounts and travelers checks. M2, consists of M1 plus retail money market funds, savings and small time deposits. M3, consists of M2+ large time deposits, Eurodollars & large money market funds." He immediately starts off positing that a "Large portion of the M3 money supply is not really money and should not be included in any money supply discussions. Real money is defined as cash or checking account money". It is about this time that I am starting to nod off, because this looks like this discussion is tending towards the pedantic and theoretical, and that intellectual stuff really bogs me down because I am too stupid to understand it, for one thing, and too lazy to even try for another, so it is a big waste of time for us both, and pretty soon I am doodling in my notebook, mostly consisting of these cool bomber aircraft dropping all these big bombs all over everything, and there are explosions everywhere, and I am laughing at watching my enemies being blown to pieces! Ha! Take that! Ker-bloom! But this Baltin guy knows how to get under my skin, and that is to mention inflation. Seeing that I am falling asleep in his stupid class and actually seem to be snoring, I get a whiplash in my neck as I snap to full Mogambo alert (FMA) when he mentions that if you really, really want to see the inflation in the money supply, then "the real inflation-inducing money supply (M1) in the last 10 years (1994 to 2004) has increased by $2.2 trillion, not by the $190 billion reported." Hmmm! If inflation in prices follows the inflation in the money supply, then this 1,160% increase is a serious increase in the money supply! Which implies, and you can check my math here, that we are going to have a serious increase in prices, which is caused by a serious increase in the money supply, which is causes a fall in the purchasing power of each dollar, and the increase in the money supply was, checking my figures again, more than 1000%. In ten years! So where did all the money suddenly come from? He explains that "It appears that there is $1.971 trillion of money market mutual funds buried in M2 and these accounts have check writing privileges, so it is 'real' money. In other words M1 should actually be $3.3 trillion. It is being reported as $1.3 trillion (June 2004)." So I don't want to tell him that I am only taking this stupid class to learn how to make money with this economics stuff, but what I REALLY want to know is what does this mean to ME and how can I make money on it? He has obviously run into my type of lazy, greedy white trash before, and calmly says that "These numbers imply that a severe and sustained inflation is more likely to occur than most people suspect, which is very bullish for gold." And if you think YOU have trouble with YOUR checkbook and YOUR credit cards and how YOUR whole financial life going up in smoke right in front of your eyes and pretty soon you are going to be ruined, then listen to how Mr. Baltin describes "The Dilemma that Chairman Greenspan and the Government are now faced with is: How can they continue to print money when inflation has clearly reappeared? But how can they not print money in the face of Katrina, Rita and Iraq?" And, in case you want some practice for the upcoming SAT tests, this is an example of "Damned if you do and damned if you don't." - For an interesting look at hyper-inflation, gracious reader Eric Y. sent proof of the hyperinflation of the Weimar Republic in Germany with copies of German stamps. At the end, it cost 5 million marks to mail a letter. An interesting sidelight is when he notes that the stamps "illustrate the horrific inflation of post war Germany, primarily from mid-1922 to November 1923. It is my understanding that not one life insurance policy was redeemed in Germany during 1923, as the inflation of the latter part of 1922 was sufficient to cause the cost of a postage stamp to exceed the face value of even the highest of the policies in force." Hahahaha! So the owners of life insurance get screwed, too! It cost more to write the letter to the insurance company telling than you would get from the settlement! And if you have a chunk of your retirement stuck in the cash-value end of an insurance thing right now, then perhaps there is a lesson in there for you. Such is just one of the horrors of hyper-inflation, my little grasshopper, as the horror of ordinary single-digit inflation is bad enough. And speaking of insurance policies, from an anecdotal perspective of the SteveQuayle.com site, it appears that something is happening with plate tectonics, and earthquakes and volcanoes and all kinds of ugly things that result from the earth's plates adjusting are increasing, and their latest grabber headline is "Magnitude 4.6 - Off the Coast of Oregon. Is This the Start?" The conclusion of the author is, "If it is, then be prepared for some devastation over large segments of the population." Yikes! I wouldn't doubt it, as the earth has received a hell of a jolt of cosmic radiation from the sun over the last few months, and all that energy has to go somewhere, or causes something or, perhaps in some bizarre alchemy, be turned directly into matter for all I know. I don't know, and I never will know because I am a real stupid guy who never seems to learn, but I am not surprised at what seems to be an increase in earthquakes and hurricanes and volcanic activity. And I expect a lot more, too, particularly as I read that some geeks think that this is just the beginning of 35 years of this, which is the offset to the last 35 years of relative quiescence. And this will not be good for insurance stocks, I figure, so my latest Stupid Mogambo Investment Advice Out Of The Blue (SMIVOOTB) is to sell insurance stocks. And speaking of doomsday, I am not merely one of an entire population of paranoid gold bug lunatic armed-and-dangerous loudmouth crackpots, but I am The Mogambo, their king. As thus it has occurred to me, and a lot of people who are just as weird as I am (and sometimes more!), that this avian flu thing is just what the doctor ordered, from the standpoint of solving the Medicare and Social Security problem. I mean, what could be better than to kill all the old people who are causing the problem? Voila! Problems solved! - An editorial in the October 5 issue of the WSJ by Cesar Conda had this priceless quote from a paper by Alan Blinder and Ricardo Reis, both "Princeton economists," commenting on Alan Greenspan. They said "We think that he has a legitimate claim to being the greatest central banker who ever lived." Hahahaha! But what else could they say about the guy, when they were all there at Jackson Hole to pay homage to the damned man. But it was a little overboard for me, so I will attack them without mercy, as that is the kind of arrogant bastard I am. To prove that the media is biased against me, what you did NOT read was an editorial by The Mogambo on the same Alan Greenspan, where I quote myself saying "Alan Greenspan is the worst central banker that ever lived, as will be seen shortly!" This Greenspan is the guy that caused trillions of dollar's worth of assets to go up in smoke in the stock market collapse in 2000. He did it by first providing the excess money and credit which was used to bid the assets up to unsustainable high prices, which then collapsed in a fit of common sense, and thus produced the losses. And then, to compound his calumny, he tried to bail himself and the economy out of the mess he caused by pounding interest rates to absurdly low levels, and thus screwed the living hell out of the senior citizens out of hundreds of billions more for years and years. And not just seniors, but others whose incomes depended on that miserly interest income, mostly from Certificates of Deposit and Treasury bills. And so millions and millions of people who needed, and depended upon, that piddly little bit of interest income suffered as they saw their incomes slashed by two-thirds! And more! Does any of this sound like what you would expect from the "greatest central banker who ever lived"? And insurers need to invest the premiums from the policies they write. But since they cannot make any money on bonds, thanks to Alan Greenspan driving interest rates down and down to save his own nasty butt, the insurers have to make up the difference by charging higher insurance premiums to the policy holders! So we pay more, even as we get less! This is supposed to be genius from "greatest central banker who ever lived"? We also saw the huge, monstrous, freaking enormous expansion in growth and reach of all the levels of government, all financed, in the final analysis, by the Federal Reserve creating all that money and credit, which created tax revenues of all kinds, which was spent on creating huge permanent government programs. Does that sound like what you would expect from the "greatest central banker who ever lived"? And speaking of dimwits, let me also say a few unkind things about Wayne Angell, former Fed functionary of some sort and now, having been kicked out for what I assume is (to be as snarlingly and ruthlessly unkind as possible) incompetence and stupidity. This is the little, ummm, person, who, not more than a couple of months ago, looked right into the camera on CNBC, and I could see that he was using his little weasel eyes to try and to penetrate the inner mind of the Mogambo (IMOTM), and with a straight face and an irritating little smirk assured us that not only IS there no inflation, that there is not GOING to be any inflation, and that anybody who thinks differently is, and I quote verbatim from memory because the exact words were burned into my brain from the moment he uttered them, "out to lunch." And then I watched helplessly as he sat back in his chair and laughed to himself, because he knew that The Mogambo was out here, watching, and hearing, and now is probably exploding in outrage at such a bald-faced lie and spitting at the television screen, which was a lucky guess on his part. He even brought up the fact that inflation is "impossible" without wage growth. Which makes sense, sort of, as people need money to keep bidding up the prices of things. And I bring this up because some other jerkwad "chief economist" at some doofus capital management firm or another was on CNBC the other day (are you seeing a pattern here?), who said the same thing, namely that inflation is "impossible" without wage growth. Well, that may have been true in the old days, when America had all the money and wages and all the foreigners were on their knees kissing our American butts in thanks for not crushing them like the little bugs they were. But no longer! And the ugly fact is that there is plenty of wage growth! Just not here in America. But there is plenty, plenty plenty big money being made in other places. Wages in China and India, to name but two, ARE rising, and by a lot, too! So if you insist that rising wages are necessary for inflation, then brother, that's alright with me, because we already got 'em! And since we got 'em, then inflation is not far behind! And one thing to do about that is, as I never seem to tire of saying, buy gold. And to show you that there is SOMEBODY listening to The Mogambo when he declares that anybody with half a brain should prove it by buying gold, the Economist magazine reports that "New figures from the World Gold Council show that demand for physical gold is growing strongly, up by 21% in tonnage terms during the first half of 2005 compared with the same period a year earlier. Supply, meanwhile, increased less quickly, by just 18%, thanks partly to slowing central-bank sales." Wow! Demand is up 21%? So demand is higher than supply? This latter fact should ring a little bell ("ding ding ding!"), which is Nature's Way of reminding you that the adjustment to the disequilibrium in demand vs. supply is always made, in the beginning at least, through the price going up, and that the price will continue to go up until enough demand has been destroyed by the higher prices and new supply is brought on-line to take advantage of the higher prices, which in turn, pushes prices back down. And if you go all the way back to Day One of your home-study course in The Mogambo's Famous Lazy Man's Way To Get Rich In Investing, you will remember that you must always try to "buy low" as the necessary precursor to "selling high." Putting this all together, then I think that this means you should be buying gold with both hands. And if you are stupid enough to take the advice of The Mogambo, then perhaps you are stupid enough to SEND the gold to The Mogambo for "safekeeping" after you buy it! And Paul van Eeden, market commentator from his site PaulVanEeden.com, is getting the heebie-jeebies, too. "I am becoming more and more convinced that the end of the current boom in US real estate, equities and bond markets are upon us. Of course, it is not only impossible to predict when markets will turn but also how the future will unfold. So I have decided to stick with my original plan, which is to focus on mineral exploration because of the depleting nature of the mining industry and, within that, to focus on gold." Alert reader Shelby M writes to tell me that he is surprised that gold is not higher in price, and how "Even Money magazine is advising 5% of a portfolio into gold." Me, too, Shelby! Me too! But summoning up profundity from the philosophical side of the Mogambo (PFTPSOTM), I raise my face to the heavens, and gazing out over the vastness of space and time, declare "Thus, It's ALWAYS this way at the beginning of an asset boom; low price and a general disinterest." What is new THIS time around is that not only do we have a pure fiat currency, but in the case of central banks, an actual dis-hoarding gold, as these private banks sell their own nation's gold into the market at such low prices! They trust each other so much that they are willing to do the biggest, stupidest thing that a central bank, much less ALL the central banks, can do! It staggers the mind! And as a result, you can still buy the stuff for less than $500 an ounce! And don't get me started on silver, which looks even better! - I have discovered, to my delight and surprise, that there is actually one man in the whole world who is NOT out to hurt me, kill or me, or says he is going to knock my block off if I unless I quit picking on his stupid and hateful kids. This wonderful person is none other than Mike "Mish" Shedlock, who writes the WhiskeyAndGunpowder.com newsletter. He was writing an article about Richard Fisher, who is the president (and CEO! How convenient!) of the Federal Reserve Bank of Dallas, and who is also a member Federal Open Market Committee (FOMC), which is the little secret group of private bankers who get together every month and decide how much they are going to destroy our dollar, by deciding how much money and credit they are going to allow themselves to create and make a profit on. I am sure that you noticed that they do not mention that they stand to make a profit on every dime of money that they can create and then loan to some guy. Screw the dollar! So I am reading along, and Mr. Shedlock recaps his June 13 editorial entitled "Stupid Comments by the Fed." I remember what happened when I read that very June 13 editorial, and believe me when I say that people around here all remember it VERY well, as it was in the newspapers for weeks, and the trial achieved a local notoriety due to my legal strategy of acting crazy, mostly by suddenly leaping to my feet and shouting "Crazy with anger! I'm freaking crazy with anger!", and the judge would pound his stupid little gavel bang bang bang, and that would make me even MORE angry. But this is not about my legal troubles, but about how I am not surprised and angry about it anymore, but only because I am not surprised anymore. I am still angry. Just not surprised. But Mr. Shedlock, who must have been following my case in the newspapers and taken pity upon me, for which I am grateful, actually goes out of his way to warn me by telling me "I have a duty to tell you to have a stiff drink (or three) before reading any further. I would hate to be responsible for causing some kind of Mogambo consternation." For that I am thankful, although Mr. Shedlock is obviously unaware that recent court decisions have ruled that this does NOT constitute a valid legal defense, and I always drag everyone down with me. But he says "Fisher did make two comments that are 100% believable." And they are believable because it is exactly what The Mogambo has been screaming himself hoarseabout. Mr. Fisher relates that "Five years ago, Chairman Greenspan told his colleagues at the FOMC that Information Age technology had begun rewriting the operations manual for the economy. 'We really do not know how this system works,' he said. 'It's clearly new. The old models just are not working.'" Medical after-care reports think that this is where The Mogambo's brain neurons began overheating, because this is one hell of a thing to admit! Secondly, Mr. Fisher blurts out, "I believe the same can be said of globalization today: We really do not understand how globalization works." Scientists have concluded that at this point more brain cells began popping. I can't believe what I am hearing! The central banks have screwed things up so badly that they have concluded that they do not know how things work anymore! Gaaahhh! Thirdly, MR. Fisher admitted that "Business is risky enough without the additional uncertainty created when a nation's unit of account -- in plain language, its money -- is undermined." Okay, everyone agrees that it was here that I lost it completely. By this admission, that the dollar is being undermined, is some gigantic example of cognitive dissonance, as I cannot reconcile the fact that this Fed bank president KNOWS this, and yet seems unaware of the consequences! Namely, 1) spending an inordinate amount of time tying up his phone lines by calling him up, day after day, and wanting to speak to "the big stupid butthead in charge" (which is soon changed to "the big stupid butthead in charge, and don't put me on hold!") and 2) the utter destruction of the US economy, which is already bizarre, relying as it does on government deficit-spending and "services." Because I am here to tell you that IF there was a way, any way, any possible way, any possible freaking way in hell to make a national Gross Domestic Product out of providing services, then everybody, in every country, in every period of time, in all of history would have done it, and be being doing it right freaking now. And they ain't going to, neither, because you can't make an economy out of services. You have to make stuff in a value-added way. Like the Chinese who, according to Yanick Desnoyers, senior economist at National Bank Financial, is going to register "an enormous account surplus," which is "50% higher than 2004. And more than 6% of GDP." What makes this interesting is that the current-account deficit of the USA is about 6% of our GDP! Perhaps this is what prompted him to say "China's current account position is now almost the mirror image of America's in terms of GDP." They make a surplus of 6% and we show a deficit of 6%! This is probably why China has been engaging in what Mr. Desnoyers calls "constant market interventions" in the currency markets to keep the dollar strong, so that they can keep selling to Americans on the cheap, and keep their hoard of US assets from falling in price. They hope. But things are going to get a lot worse. A lot worse. Ugh. ***Mogambo sez: Sell everything and buy gold and silver and oil, and some guns to keep people from taking your gold and silver and oil away from you. Oct 11, 2005 email: RichardSmithGroup@verizon.net
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