Mogambo Guru
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This brings up your homework assignment for tonight. I want you to perform a spreadsheet analysis that assumes that your income is slashed
by five percent. You must now make cuts in discretionary spending to balance your budget. Detail these cuts in spending to achieve a balanced budget under the new paradigm of lower purchasing power.
Then, for the next year, take another five percent loss of income. Again detail the cuts to achieve a balanced budget. Then the third year, take another five percent loss of income. Detail those spending cuts, too. And the fourth and the fifth and the sixth year do the same thing. And then you'll notice, which I call The Mogambo Moment Of Enlightenment (TMMOE), that the price of inflation is measured in the aggregate price of happiness lost. And the sheer tonnage of lost happiness accumulates, year after year, as prices rise year after year, and it adds up and up, and pretty soon you realize that life ain't fun anymore, and all your money goes to pay for necessities, and they, as I said, ain't fun.
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When Alan Greenspan took office in 1987, the national debt stood at $2.3 trillion. Now it is over $7.4 trillion. John Myers of Outstanding Investments never says it in so many words, but that is a LOT of money. But he does allow, "Currently Uncle Sam is carrying around a debt of $7.4 trillion. It is almost impossible to really understand just how big $7,400
billion is. But to put it into some perspective consider the following about America's federal debt: It is twice the value of all the oil beneath
the sands of Sandi Arabia. It is larger than the combined GDP of Germany, France, England and Canada. It is 15 times more than the value of all the gold that has ever been mined since the dawn of mankind."
This is all thanks for Alan Greenspan and the Federal Reserve. Bill Fleckenstein calls Alan Greenspan, "The most incompetent and irresponsible
Fed chairman in the history of the world." I say the same thing, only with
more obscenities and at a higher volume.
Regards,
The Mogambo Guru
for The Daily Reckoning
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