March 30, 2005 1 Comment
From today’s Mogambo Guru… (sorry no link,… go to the Free Market News Network and scroll down to the editorials java box, then scroll down to the Mogambo…)
Her voice was crisp and clear as she read, “Whether ancient or modern, monarchy or republic, coin or paper, each nation descends pretty much the same slippery slope, expanding government to address perceived needs, accumulating too much debt, and then repudiating its obligations by destroying its currency.”
So how is the destruction of our currency abiding? Well, James Cook figures that “The inflation rate that covers everything is (my guess) at least 10% annually.” That is about what I guess, too, mostly because it sure feels like it.
Bill Bonner, who seems to have a natural comprehension of inflation that may explain his exalted position at the DailyReckoning.com site, writes “From barely 100 following the crash of ’29, the Dow is now over 10,000. Who can doubt that the tendency is up? Yet, adjusted for consumer price inflation, the Dow is only about 500.” So what is the real gain of 500% over 76 years? It comes to 2.14% a year! Hahaha! You think you are going to fund a retirement by growing your real, inflation-adjusted wealth by 2.14% a year? Hahahaha! No wonder you got such bad grades in math! You are as stupid as I am! Hahahaha!
And if we were actually getting richer on this 2.14% a year, maybe things could work out. But we are not getting richer. Marc Faber, editor of The Gloom, Boom and Doom Report, writes, “In 1975, total domestic non-financial debts amounted to $2.26 trillion, and for the year total non-financial debt grew by $192.7 billion. In 2004, total non-financial debt reached $23 trillion, and annual non-financial borrowings are running at an annual rate of around $1.8 trillion.” So non-financial debt increased by 1000% in 30 years? Wow! What does that work out as? It comes to a compounding of debt at a rate of 8% per year! As if that was not bad enough, he goes on to note that “Household total debt as a percentage of personal income has risen from 60% in 1975 to 120% at present.” He is too polite to mention that this is a new record in the history of mankind, not just in America, but I am not so genteel: It’s a new freaking record in mindless, stupid irresponsibility.
The system is breaking down. There is no justice in the justice system…there is no liberty in the governing system…and there is no money in the economic system…
Won’t be long now…
“The tree of Liberty must be refreshed from time to time with the blood of patriots and tyrants.”
– Thomas Jefferson