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Thread: the Mogambo Guru makes his usual 'sledgehammer' point ...

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    Default the Mogambo Guru makes his usual 'sledgehammer' point ...

    (snip)"one of the reasons why the economy is doing badly is that the latest unemployment numbers are Bad News Aplenty (BNA), as people do not buy as much stuff (demand) when they don’t make as much as much money, and the people who make stuff (supply) are then laid off, proving, once again, that supply follows demand.

    And, since we are talking about it, people are not buying as much stuff, which I cleverly conclude from the fact that consumer installment debt has been going down since September 2008 as the American consumer is gradually, slowly, ever so slowly, almost glacially, paying down some of their super-sized, staggering $2.5 trillion in consumer installment debt.

    How much? Consumers have, in a year and a half, paid down a measly $135 billion! Hahaha!

    At this rate, one wonders, at 20% interest on the unpaid balance, how many freaking lifetimes will it take just for consumers to pay off their $2.5 trillion in existing debt, which doesn’t even count the debt they are going to incur in the future, just trying to buy the basics, as the inflation in prices from the insane inflation in the money supply makes things so costly that they get to the choice of debt or starvation, and even then, most people will buy food instead of gold, silver and oil.

    Hoping to gently motivate them, and to provide the apparently necessary motivation delivered in a non-threatening, person-centric, positive way, I say, “Hey! You could stand to lose a few pounds there, chubby! Stop eating for a couple of days and use the ‘found’ money to buy yourself some gold, silver and oil, you moron!” but even then, they always act upset, like I said something wrong! See the kind of stupid crap I have to put up with around here all the damned time?

    Anyway, their only hope is that everything survives a massive inflation, so that $135 billion dollars is, in terms of buying power, less than a week’s average minimum wage or something like that! Hahaha! Problem solved! Hahahaha!

    In case you were curious, I put a lot of it down to the unholy combination of moronic do-gooders trying to save my life and greedy governments trying to drain my blood, as they, all over the place, raised cigarette taxes by several dollars per pack, so that the quarter of adults (54 million) who smoke a theoretical carton a week, have $40, $50, $60 sometimes more than $70 a week less money to spend on everything else, which comes to, at an average of $6 per pack, $3.24 billion per week, or a tidy $168 billion a year in lost spending power!

    In short, tobacco addicts stopped buying other things so as to afford one thing that has become so expensive.

    If they were smart, smokers would be spending their money on gold, silver and oil, waiting a little while until their prices soar as the government deficit-spends the massive, monstrous amounts of money that the Federal Reserve creates, and THEN taking up smoking when they could easily afford cigarettes at any price, the higher price for insurance, and the needed medical treatments, also at any price!

    It’s enough to make you say, “Whee! This investing stuff is easy!”

    The Mogambo Guru
    for The Daily Reckoning"(snip)

    from


    The Mighty Mogambo's blatantly obvious point is that 'everyone who buys cigarettes' can be exchanged for 'everyone who will buy food' and/or 'everyone who will buy energy' before they will buy non-essential consumer goods or pay down their existing debts.

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    Default Re: the Mogambo Guru makes his usual 'sledgehammer' point ...

    Once those bills come out with the number of years to pay down at minimum payment there is going to be a great wail in the air. Then the decision will be to pay it off ... accept slavery to the credit card ... or let it go into default. I think a lot of people pay on their cards and never see it go down. Then having the number of years of servitude before them in black and white will make it... very exciting and entertaining.

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    Default Re: the Mogambo Guru makes his usual 'sledgehammer' point ...

    ^^^ well, the Mogambo's other and not so subtle point is that if the US gov't chooses to devalue the dollar to the point where minimum wage pays $75 per hour instead of $7.50 that it will then become possible for those Americans who owe huge amounts of money towards credit card ( or mortgage or consumer loan ) debt to actually manage that debt. Of course such a US dollar devaluation would also mean that gasoline would cost $30 per gallon, that a Big Mac Meal would cost $75, that the least expensive new car would cost ~$100,000, that a US retiree with $250,000 saved up in their retirement fund could maybe afford one year of retirement expenses etc.

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    Default Re: the Mogambo Guru makes his usual 'sledgehammer' point ...

    speaking of which ...

    (snip)"China wants US reassurance over dollar
    China's premier calls on Washington for `concrete steps' to reassure Treasury bill investors

    BEIJING (AP) -- China's premier expressed concern about the U.S. dollar and called on Washington on Sunday to take "concrete steps" to reassure Beijing about the safety of its huge Treasury bond holdings.

    "Any fluctuation in the value of the U.S. currency is a big concern for us," Premier Wen Jiabao said at a news conference.

    "We cannot afford any mistake, how slight it is, when running our financial assets," he said. "I would like the United States to take concrete steps to reassure investors."

    China has pressed Washington to control its yawning budget deficit and prevent inflation that would erode the value of the dollar and China's holdings.

    The premier said Treasury values were a matter of the "national credibility" of the United States."(snip)

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