The Majority of Investors Are Wrong

Having a little time on my hands lately, I had generously offered my Valuable Mogambo Time (VMT) to provide a little free economic education to neighbors and the media.  Alas, as it turned out, my sweet disposition again mislead me to mistake their natural stupidity for mere ignorance and sloth.

In making the glorious announcement, I even took the time to happily go house to house, banging on doors and loudly proclaiming the glad tidings that “I’m back, you morons! Now, get out here! I want to tell you, right to your stupid faces, how stupid you are! Hup! Hup! Let’s go!”

Naturally, as I always do, I expected that they would happily fling open their doors, excitedly begging me to enlighten them as to their various stupidities, such as electing treacherous monetary and fiscal morons who allowed, and encouraged, an always-expanding fiat-money supply via the evil Federal Reserve always creating the wildly excessive dollars and debt.

And, since we are speaking about it, and because I am so angry about it that I seize on any opportunity to wail like a wounded banshee, get this: Now the Federal Reserve is even literally committing the unforgivable, supreme sin of creating credit with which to buy government debt and private equity FOR ITSELF, thus increasing the money supply and removing whole chunks of debt and equity from the markets, so as to make prices of the remaining debt and equity rise under the onslaught of all the new cash pouring into the market!

You can probably see the absolute fear in my eyes, and the way I actually seem to be gagging up blood, that this type of monetary insanity has, in 2,500 years of history, failed Every Freaking Time (EFT) it has been tried, and with horrendous consequences.

It’s insane, I tells ya, with emphasis cleverly indicated by the conspicuous use of three exclamation points!!! Which I now follow with four exclamation points to validate the three exclamation points, upping the ante, so to speak, using an ill-conceived poker metaphor that goes absolutely nowhere, just to show you how crazy things are!!!!

The Big Freaking Problem (BFP) is, of course, that We’re Freaking Doomed (WFD), a dismal fact undoubtedly noticed by Junior Mogambo Rangers (JMRs) around the world and through the cosmos, whose keen eyes doubtlessly noted two acronyms of the Bad New Variety (BNV) — now three! — in the same sentence, with significance perhaps akin to a Jedi knight sensing, ominously, “a disturbance in The Force.”

But one person who DID come out in response to my generous offer of a free education in economics was the old lady down the street who had actually followed my good advice to invest in gold, but who has lost money the last couple of years as a result, because gold, like all other markets these days, is now a rigged market in the grasp of a dying and desperate government and their horrible, heinous henchmen, the evil Federal Reserve.

So there I am, standing in the street, trying to explain all this to her, and how it is not my fault, and how nothing is ever my fault, regardless of what my vengeful wife (“I’ll get you for this, you bastard!) and kids (“We’ll be her alibi!”) say.

Anyway, old lady Simpson is hitting me in the head with a broom and yelling that I “don’t know squat” about gold, investing, economics, or anything, and that I am the most horrible and hateful man she has ever known, like I don’t get enough of that at home, thanks.

Worse, the neighbors are all leaning out of their windows, lustily cheering her on (“Hit him in the groin!”).

But I soon mollified them with by saying “Stop acting like morons and stop hitting me with that damned broom! Instead, I bring frabjous news, so take cheer!  If you, and you, and you will accept economic solutions that are Completely Freaking Insane (CFI), then I am here to save you!  And along those lines, I have devised a truly wondrous CFI plan!  I call it Ultimate Keynesian Insanity Plan (UKIP), whereby all your economic problems can vanish in an instant!”

To wit: Consumers having inadequate income?  Easy to fix! Do like Finland and Switzerland propose, which is to pay everybody a guaranteed minimum annual income!  The evil Federal Reserve merely creates the cash and credit, and bingo! Thousands of dollars of new, gloriously spendable cash for everyone, every month! Problem solved!

And are you worried about the problems of incipient deflation in the market prices of stocks, bonds and houses, taking your retirement plan down with them?  Easy, too! Just allow the Federal Reserve to create more cash and credit so it can buy up stocks, bonds and houses, literally removing them from the market, creating a shortage of equities and debt at the same time as trillions of new dollars pour into the markets looking for a home, every month! How clever!

Instantly, the stock markets, the bond markets, the housing markets and the whole consumerism-besotted, gimme-gimme-gimme economy would explode gloriously up, up, upward! Soaring to wondrously preposterous valuations under the deluge of all these new dollars! Dow 36,000 here we come! An economic miracle!

Insane?  Yes. CFI-level insane? Oh, yes!

Oh, I can hear you saying “No, YOU’RE the one who is insane!” and I cleverly reply “No, YOU’RE insane!”, and then you dully riposte “No, you’re insane!” whereupon I again brilliantly disagree “No, YOU’RE insane!”, back and forth until our wives have to come out and make us come back into the house to “settle down” before the cops come.

So, being rudely distracted as I was, I never got to, firstly, educate anyone about the proven historical imperative to buy gold and silver at dangerous times like these.  Look it up! For instance, it’s on practically every page of the classic book Economica Mogambo, along with plenty of friendly, helpful reminders about how stupid you are if you do NOT buy gold and silver.

Nor did I get to tell them the “good news” about how easily the government can, using a fiat currency and total command of the whole banking system, generate a rising stock market, debt market, housing market and boost consumer spending — an economic miracle of Biblical proportions! — anytime it wants to.

Anytime. It. Wants. To.

Of course, if the government tried such monetary stupidity on such a scale, prices of everything would go up, including the prices of food, shelter and energy. Then, for the resultant mobs of hungry, wet and/or cold people, it would be time for flaming torches and pitchforks, riots in the streets, starving hordes of angry peasants storming government buildings, revenge-of-the-sheep kind of thing.

So the lesson is NOT that flooding an economy with fiat currency will always generate economic activity, nor that it will end in total disaster, but that you should never underestimate how low a desperate, degenerate government can sink, especially when there is no way out, and this Ultimate Keynesian Insanity Plan (UKIP) stuff is the only thing they can still do.

And WILL do, when the political pressure is high enough (“Do something to save us, even if it is  Completely Freaking Insane (CFI)!”)

Of course, the real lesson for you is to instantly (if not sooner!) convert fiat-money wealth into gold and silver, but without attracting any attention or showing any outward panic. Just act normal. Just an ordinary day, strolling along, maybe buying a little gold and, you know, picking up some milk on the way home kind of day.

But people don’t buy gold, and I can see you are getting pretty bored with it, too.

Oddly enough, this is good news for those who DO listen and heed this Excellent Mogambo Advice (EMA) to buy gold and silver bullion!  Why? It temporarily keeps their prices down, sort of buckling under the onslaught of low demand. Hahaha!

Sorry about the bad joke, but to illustrate how low demand for gold (in dollars or ounces) can go, as a ratio to the monetary base it has never been lower in history! Ever! Or never! I mean ever!  Wait! Never!

Either way, it’s good news because if everybody listened to Excellent Mogambo Advice (EMA), the prices of gold and silver would already be astronomical, and where’s the profit in that? And that’s the point of the whole investing thing, right?

So remember: The majority of investors being wrong makes it possible for the minority of investors to be right, over the long term. It’s an inviolable mathematical imperative.

And as regards gold and silver, the majority is wrong big-time.  Big time. Big, BIG-time!

And when you put it all together, what can you say except “Whee! This investing stuff is easy!”?

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