"You and your money, and the money of your little goon squad storm troopers here, is what is dying, and is going to die! And you will follow it into the grave as inflation kills you all!"

My mouth went dry when I saw that Total Fed Credit dropped by a huge $7.9 billion last week, and even foreign central banks were not buying with their usual gusto of snapping up quite a few billion in government and agency debt every week, and actually sold $134 millions' worth.

My hands visibly shook as I also learned that the official rate of inflation inched up to 2.7%, which is marginally higher than the official 2.6% last month, which is down from the official 4.2% we had a year ago.

Disguising my terror with a cruel sneer in my voice, I say, "Note the wide disparity between this official 2.7% inflation to the official GDP Deflator, which is an official 4.0%, my darling Junior Mogambo Rangers (JMR)! Inquiring minds want to know, 'What in the ding-dong hell is going on around here?'"

The answer is that consumer price inflation is actually raging at over 10%, according to John Williams of shadowstats.com, who calculates the actual rate of inflation the "old" way, which is the way that people have always calculated inflation, which is to look at how much things cost, and then compare that to how much they cost last week/month/year/decade/in all of freaking history.

But now, thanks to the loathsome Alan Greenspan - in league with the despicable Michael Boskin to come up with this new "hedonic adjustment" crap - the official policy of the United States is that we don't measure just prices to establish inflation in prices; we now adjust prices for changes in an assumed increase in some quality or utility of the item! Therefore, inflation can be anything you want it to be! Hahaha! What a scam!

How is this possible? It was made possible by the "aiding and abetting" of an insane Federal Reserve system, a corrupt see-no-evil Congress, a complicit press of ignorant "journalists" and a traitorous school system staffed with ignoramuses! It's easy when you know how!

So I was chuckling merrily to myself about the idiocy of governments, news media and schools when my heart froze as my wife suddenly kicked open door of the Mogambo Bunker Of Manly Solitude (MBOMS) which I had carelessly left unlocked.

She had a piece of paper in her hands and a wicked smile on her face, and her eyes glowed with the heat of raw vengeance as she bellowed "Prepare to die, creep! The latest Consumer Price Index Summary from the Bureau of Labor Statistics says, 'During the first five months of 2007, the CPI-U rose at a 5.5 percent seasonally adjusted annual rate (SAAR).'"

My brain was stunned! 5.5% inflation! I fell, moaning, to my knees, my hands frantically clutching my chest as my heart was pounding, pounding, pounding in terror!

Out of the corner of my eye I can see her just standing there, smiling to herself, watching me flopping around, writhing on the floor at this horrible news. With a heroic, manly effort I started to rise to my feet to launch a counter-attack, but she pre-empted my loud and scathing rebuttal by relentlessly continuing, "The index for energy advanced at a 36.0 percent SAAR in the first five months of 2007'!"

36%! My worthless life swam before my eyes as consciousness flickered in and out. I knew that she never tired of seeing me suffer, so my plan was to stall until I recovered enough to roll over onto my stomach, with the idea of kicking her if she ever came near me, but she had seen that trick too many times to be fooled again, and instead launched another salvo.

"How do you like this one?" she asked, her voice rising in an unmistakable cackling glee. "It says 'Petroleum-based energy costs increased at a 63.9 percent annual rate and charges for energy services rose at a 6.8 percent annual rate.' Hahaha! You like that one, Mogambo? 63%! You like that? Hey! Quit puking up blood and look at me when I'm talking to you!"

By this time my daughter comes in to see what the racket is all about, and quickly sizing up the situation, excitedly says, "Hey! Let me in on this!" Grabbing the report out of my wife's hand, she scans down the page and says "Hey, pop! Check this out: 'The food index has increased at a 6.2 percent SAAR thus far this year! Hahaha!'"

6.2%! My blood ran cold at her scornful laugh and at the terrifying news about rising food prices! After that, details become murky, and the police report is, of course, filled with lies and is all a big frame-up, as I prove when I distinctly remember that the police were experimenting with shooting their Tazer guns at me and ineffectually holding back my wife, who was screaming and spitting and kicking at me, "Anybody who can be killed by a stupid inflation report deserves to die! Die!", and I was screaming back, "No, you moron! You and your money, and the money of your little goon squad storm troopers here, is what is dying, and is going to die! And you will follow it into the grave as inflation kills you all!", but none of this was even mentioned in the report, even though it is the crux of the whole thing!

And while neither of my beloved family members knew it, it will probably get worse, as commodities guru Kevin Kerr at DailyReckoning.com is reporting that this "inflation in food" thing is to be expected, as "the United States Department of Agriculture said 49% of the spring wheat crop was already harvested and only 32% of it was rated good to excellent. That's down from 67% a year ago. This year may be even worse, and demand is growing."

He goes on, "The situation gets even more grim as the United Nations Food and Agriculture Organization is reporting that nearly two-thirds of the winter wheat crop in western and northern China has been wiped out by a prolonged drought. Some other areas have experienced a 40-50% cut in the winter wheat harvest."

This of course has had an effect on us money-grubbing speculator swine out here, and Mr. Kerr reports that "The rumbling in the pits is that red winter wheat, while volatile, is one of those crops that simply will go higher in the long term, due to increased demand and ever-decreasing supply."

Demand and supply? Immediately I grab some paper and start graphing out charts of the supply-demand dynamic, and busily move the supply curve up and down and around, and the demand curve up and down and around, and I'm trying to remember where you put prices. Pretty soon I am confused and hopelessly lost. I look at Mr. Kerr with my Big Sad Mogambo Eyes (BSME) as if pleading for him to solve my problem, and he does! He says, "Sounds like a good time to buy."

Not only that, but the Bernstein research firm actually tracks a dozen agricultural raw materials in its Food Commodities Index, such as wheat, barley, milk, cocoa and edible oils, which are used by food companies. Their Food Commodities Index shows a food cost inflation of 21% this year, which is "by far" the largest increase since they started the index almost ten years ago.

To make matters worse, corn is not even in this index, although it is a basic staple in a lot of processed foods, besides being a main livestock feed, the source of taco shells from whence you get delicious, crunchy tacos, and the most popular ingredient to make a jillion new gallons of ethanol, the latest huge Congressional boondoggle.

They say that there are 46 million Americans who do not have health insurance. Not true. Everyone in America is fully insured by me and other people who pay for health insurance, and we are paying their bills; Congress has long since made it a law that hospitals must provide healthcare to anyone who asks for it, regardless of their ability to pay, but have capped the payments to the providers under Medicare, Medicaid and myriad other government programs.

And Congress and the courts have agreed that if these people do not get complete, first-class treatment and a satisfactory outcome, they can sue and collect damages, adding to the bill.

And since there is no one left to pay except me, health insurance for my wife and me is now $10,512 a year, to which one must add a $2,000 deductible for each of us and a 20% co-pay, which comes out to about $15,000 a year.

At this rate, more and more people will soon be forced to drop health insurance coverage altogether, and only grossly over-compensated government and public employees will have health insurance, which is paid for by a government raising our taxes, which we probably can't pay, and they take our houses, and when they get to me they will find an adversary very, very heavily-armed and insane with anger. That is the true "healthcare crisis."

The Bank for International Settlements (BIS) has reported that the total clot of global derivatives in existence is now $415.2 trillion, with comes out to 789% of global GDP.

In typical Mogambo parlance, grubby financial bets financed by banks and the financial services industry now total almost eight times the value of every freaking good and service produced on the entire freaking planet in an entire freaking year!

And according to the McKinsey Global Institute, the ratio of global financial assets to annual global output soared from 109% in 1980 to 316% in 2005!

I scream "Gaaaaahhhh!" All of this central bank idiocy of creating more and more money and credit is not news to Jason Hommel of the silverstockreport.com, but a grown man screaming "Gaaaaaahhhh!" at the top of his voice seems to be startlingly novel, judging by his reaction.

Nevertheless, he writes, "Money in U.S. banks, M3, is growing at a rate of about 12% per year, or more. So, in the last 12 months, it grew by about $1.3 trillion dollars, which is $1,300 billion dollars."

So why is a guy who is primarily interested in precious metals talking about the growth of the money supply? Well, we learn why when he wonders aloud how much the 2,500 tonnes of annual world gold production (80 million ounces) is worth at $675 per ounce.

I immediately started sweating bullets, thinking that I was certainly not expecting a damned pop quiz in math, especially one multiplying such large numbers. So I breathe a huge sigh of relief when I learn that he already did the math, and says, "It's worth only $54 billion dollars."

Then he stops and looks at me with this expectant expression on his face, like I am supposed to draw some important conclusion from this or something, but I am sitting there with this big, dumb look on my stupid face, as I don't get it. Sensing my problem, Mr. Hommel helpfully reiterates the facts by saying, "$1300 billion of new money printed. $54 billion dollars worth of new gold mined, at $675/oz."

Obviously, this is supposed to mean something to me, but it doesn't. Again, I just sit there, dumbfounded, feeling uncomfortable and trying to look small so that maybe he won't see me.

After what seemed an eternity, he finally got tired of waiting for me to show some uncharacteristic smarts, and just tells me what this means. "So," he says, "the U.S. is actually creating new paper money at a rate 24 times as much as new gold. 1300 / 54 = 24!"

I say "That's a lot! And thanks a lot!" as I get up to leave in case this breaks out into more math, as I have enough problems as it is, no pun intended. But he is not done with me yet, and grabs my attention with "And of course, this is hardly a fair comparison. I'm comparing U.S. dollars to world gold production. We should compare total world paper money creation rates, to world gold mining rates."

Intrigued, I sit back down to learn more about how much money the world is creating versus how much gold. Then he says, "But that's a lot of work, and I don't know if I can source it all out."

As soon as I heard the word "work" and how he was "sourcing this out", I was instantly scrambling to get the hell out of there. But again, before I could get more than a few yards towards the door in my panic, he lets me know that he was merely toying with me by saying he has, again, already done the work, and, "My well-researched guess is that the U.S. dollar is only about 1/4 of the world total increase of paper money. So, let's multiply by a factor of 4."

By this time I am lost again, and realize that by this time I had forgotten what in the hell he was even talking about in the first place. Again I was saved when he laid it all out in front of me with "$1,300 x 4 / 54 = 96! Thus, the world is creating new money at about a rate nearly 100 times faster than the world's value of new gold." A hundred times more money than gold!

Wow! Finally, a light bulb, albeit low-wattage, goes on over my head! The amount of gold per unit of currency is rapidly falling to record levels, all over the globe, indicating that gold is a Big, Big, Super Big Bargain (BBSBB) right now, and getting more so every day, and for everybody on the planet!

Now you know why I am always screeching that gold will soar, as the dollar is just another of the world's disastrous experiments with a fiat money and unrestrained fractional reserve banking, meaning that it will go to zero in buying power, or (in the original Latin), magnus squatus profundus. And now it is happening all over the world, as we all use fiat currencies!

The fact that gold is not rising in price right now makes me squeal with glee (SWG) "Whee! A chance to buy more gold, and at prices effectively cheaper by the minute!"

But gold is so alien to most people that even when you are screaming in their faces about how stupid they are, they still don't go out and buy any! Weird!

Junior Mogambo Ranger (JMR) Milan R. writes, "You say: 'Since all money is created by debt nowadays, and interest is due on all that money, you have to keep expanding the money supply at faster and faster rates just to achieve an economic standstill, and even more to offset inflation in prices, you witless jerk!'"

He brings this up because it turns out that "the time rate of change of acceleration in physics is called jerk (sometimes jerk rate)!" He thoughtfully included a link to the Smithsonian/NASA ADS Physics Abstract Service, where we find the abstract for "Jerk: The time rate of change of acceleration" by Stephen Schot, who is "affiliated" with the Department of Mathematics at American University.

Anyway, the abstract is, "The time rate of change of acceleration has been called the jerk and is important in certain applications of mechanics and acoustics. For planar motion, the jerk vector is resolved here into tangential-normal and radial-transverse components, and the normal component is expressed in terms of an affine differential invariant known as the aberrancy. Using known aberrancy properties of curves, several geometrical properties of the jerk vector are established for plane motion."

Imagine my surprise, as I actually remember this particular thesis! I remember that a draft copy came across my desk, and I immediately realized I had no idea what in the hell any of it meant. Inspired, I tried to get Mr. Schot to expand his paper to use what is apparently a load of completely indecipherable gobbledy-gook to perfectly illustrate how the Federal Reserve is a bunch of idiots and losers who think that they can use incomprehensible stuff like this to guide monetary policy!

But Mr. Schot cruelly turned his back on The Mogambo and America, and in case he tries to wiggle out of his shocking lack of responsibility, I have the transcript right here!

I will now quote from the relevant part of the transcript:

"Mogamb So you are unwilling to bend to the Will Of The Mogambo (WOTM) and use your utterly baffling theory to save America from the loathsome predations of the Federal Reserve, whose theories are equally as dense, and whereas you say your thesis actually is correct and verifiable, the Fed's economic theories are a load of hooey? Is that what you are saying?

"Mr. Schot: Who in the hell are you? Stop bothering me."

I think I have made my point as regards Mr. Schot, and I will mercifully not linger on how I can't count on him for a little help in enlightening America to the idiocies of the Federal Reserve and their bizarre economics. Instead, I will note that the Financial Times report that Ben Bernanke, chairman of the Federal Reserve, is ignoring all the big problems, and is pursuing similar academic arcana, as we learn from the headline "Bernanke Hints at Thinking on Housing".

The big idea is (as I understand it) that people with more equity in their houses will be less likely to default on a mortgage loan, and thus the interest rate they should pay on equity loans should decline, the homeowner will then have more disposable income, and that this is some new "financial accelerator effect". This translates as, "If banks, for some strange reason, suddenly demand less than the maximum amount that the market will bear and thus screwing unwitting borrowers all the damned time, then this 'lost money' will show up in the pockets of the consumer instead of in the pockets of the money-grubbing banks", to which I contemptuously laugh "Hahahaha!"

This dream world, of course, will be in addition to the already-established "wealth effect", which posits that when you get richer, you spend more of your take-home pay since your basic needs are now such a pittance compared to your total wealth. Thus, spending increases by as much, or more, than income increases! Economic magic!

Of course, his "financial accelerator effect" is all complicated by the type of mortgage, credit-worthiness, shifting populations, the value of the dollar, the current-account imbalance, monetary policy, fiscal policy and a zillion other variables, which means that the problem is unsolvable and a big damned waste of time. But this is how Bernanke, the chairman of the Federal Reserve, spends his time! Hahahaha!

What has everyone all worried is that this works in the opposite direction for the people on the other end of the bell curve where people are NOT experiencing any "financial accelerator effect", and how their "access to credit" will be curtailed as the interest rate they have to pay is higher, due, I guess, to a "financial brake effect." If they can even get a mortgage at all!

So how did we get into this mortgage mess? Greg Ip at the Wall Street Journal Online writes, "Alan Greenspan was arguably the country's most powerful financial cop in his 18 years as chairman of the Federal Reserve. But Mr. Greenspan's regulatory record has received far less scrutiny than his management of the economy."

Now, to show you a prime example of censorship in America, the next line of Mr. Ip's column was supposed to be, "It used to be that the brave and heroic Mogambo was the only person calling Alan Greenspan the most horrible, terrible, lying, deceitful, traitorous, and thoroughly despicable piece of crap that ever befouled the American economy because he allowed the Federal Reserve to explode the economy with massively excessive creations of money and credit for almost twenty years. Now that we are now on the verge of economic destruction from the ruinous inflation in prices caused by this ruinous inflation in the money supply, and the vast, untold misery and suffering this will cause, other people are starting to notice. So while it used to be that only the Manly Magnificent Mogambo (MMM) was critical of Mr. Greenspan, that may be changing."

What emerged from under the censor's knife was the much shorter and blander sentence; "That may be changing." The specific issue was that "A former colleague says Mr. Greenspan blocked a proposal to increase scrutiny of subprime lenders under the Fed's broad authority." This allowed "questionable lending practices now blamed for soaring defaults by mostly low-income borrowers."

When asked, "Mr. Greenspan, in an interview, says he doesn't recall a specific discussion of the idea but confirmed his opposition to it. There is 'a very large number of small institutions, some on the margin of scrupulousness and very hard to detect when they are doing something wrong,' says Mr. Greenspan. 'For us to go in and audit how they act on their mortgage applications would have been a huge effort, and it's not clear to me we would have found anything that would have been worthwhile without undermining the desired availability of subprime credits.'" Hahahaha! I love this!

So, imagine my anticipatory excitement about the next time that my boss comes sniffing around here and starts getting in my face, you know, about how I don't monitor the activities of my subordinates, or appear to actually do any work of any kind, or how everything connected with me and my gross incompetence is a huge deadweight loss dragging the company into bankruptcy, or blah blah blah. Now, next time I am going to use this invaluable new excuse!

My delicious plan is to calmly ask her to sit down, and when she does, I will get up from my desk and slowly walk around to stand right in front of her while saying, "I understand that you think that my performance is below par. Perhaps it is best that we get together to talk about it."

Soon, standing right in front of her, I will bend over so my face is up close to hers, right in her nasty little face so she can smell my bad breath and start fearing that she is going to catch my cooties or something, and tell her (almost verbatim from the former chairman of the Fed himself), "It would have been a huge effort, and it's not clear to me we would have found anything that would have been worthwhile without undermining the desired availability of total license for everyone to act imprudently, if not completely irresponsibly. So it is not my fault, and we aren't going to talk about it anymore!"

It is a gutsy move, I admit, but I figure that since nobody is persecuting Alan Greenspan for his incompetence, malfeasance and stupidity upon admitting this, it won't happen again to me, either. We'll see!

Anyway, apparently this kind of stuff will appear in a book by Edward Gramlich, former Fed Governor, titled "Subprime Mortgages: America's Latest Boom and Bust", to be released by the Urban Institute. In it, Mr. Gramlich says, "There are certain things that unsupervised lenders do that a Fed supervisor would not let you get away with," such as "not escrowing taxes and insurance, not verifying an applicant's stated income, or", and this is the defining moment for me, "assessing the borrower's ability to repay based on an introductory 'teaser' rate." Hahahaha! "You can afford the house if interest rates are zero! Sign here!" What a disgusting scam!

And who are these scamsters? The banks! It's always the scumbag banks! And who are Greenspan and Bernanke trying to protect? Themselves! The damned banks!

Mr. Gramlich does not stoop to the level of screeching such scandalous and slanderous conclusions, but allows that "According to Inside Mortgage Finance, an industry publication, in 2006 three of the eight largest subprime mortgage lenders were units of bank holding companies." Ugh.

Mogambo sez: Today, students, we read a passage from the Book Of Mogambo (BOM). "And verily did The Voice Of The Mogambo (TVOTM) roar like thunder across the multitudes, 'Oil went over $69 a barrel on Monday, proving that you can't go wrong with holding only gold, silver and oil! Maybe not always optimally, but never wrong!'

"Thus did the enlightened leave with wisdom, and bought gold, silver and oil. The others did not, and came to rue that decision, and their suffering chastened them, but they still had a bad attitude all the days of their lives."

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