| By Bill Bonner, Chairman, Bonner & Partners “If I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it. One reason was that I feared that such a prize […] would tend to accentuate the swings of scientific fashion. […] My second cause of apprehension […] is that the Nobel Prize confers on an individual an authority which in economics no man ought to possess.” – Friedrich Hayek, upon receiving a Nobel Prize in economics YOUGHAL, IRELAND – Last week, the Nobel Committee announced its winners for the prize in economics. It gave the prize to three professors, including a pair of numbskulls. One from France… one from India… now both at MIT in the U.S., married, and alas, reproducing. But let us turn to the world of finance first. Then we will return to benighted academia… | Recommended Link | | Are You Ready to Make More Money Than You Can With Options By Trading a Group of Tiny Stocks? Trading legend Jeff Clark is revealing how to trade tiny, $1 stocks and potentially walk away with as much as $4,550… $15,900… and even $30,050 per trade – without using options – during an exclusive event on October 23rd. While Jeff has helped all kinds of people retire rich using options, over the past 18 months he’s started targeting a small group of stocks… And the results have been too astonishing to not share. | | | -- | Dark Heart Investors are generally optimistic. The trade deal with China is “coming along very well,” their president told them. Larry Kudlow, his advisor, also gave out word that the December tariffs might be delayed if the talks are still on track. But the real reason for investor optimism is that they know the fix is in. FX Empire reports: More than 30 central banks around the world have cut interest rates this year amid trade wars and slowing economic growth and subdued inflation. The Fed cut the federal funds rate twice this year, each time by 25 basis point[s]. We caution our Dear Readers, however. You don’t get to Heaven without dying. Markets go up and down. After 10 years of up… Mr. Market is probably getting bored. He’s more likely to turn around than to continue his upward hike much longer. And the great and glorious Valhalla in which stock prices rise from here to kingdom come is never going to come at all. So let us return to the dark heart of academia… the economics department. There, the professors are bound and determined to stop the natural ebb and flow of markets and economies. For them, a market sell-off is a problem to be avoided by adroit government policies. As for a recession… they have a solution. And when that one causes further, graver problems… they’ll come up with another solution. Quantitative easing? Negative rates? Fake money? Repo liquidity? Fiscal policy… monetary policy? Hey, there’s a lot more where that came from… | Recommended Link | | Trump’s New 5G Plan Is Opening The Flood Gates The Trump administration just unveiled a new 5G FAST plan… Trump’s 5G plan is opening the flood gates to 3 million new jobs, $12.3 trillion in economic growth, and a brand new 5G device. One of the world’s top angel investors – a tech genius named Jeff Brown believes the company behind this device is the Number One Tech Stock of 2019, and it will go from $0 to nearly $100 billion in sales – this year. Warning: This presentation may be banned at any moment, watch now before you lose your chance for good! | | | -- | Call in Roto-Rooter Paris Match reported that one of the recent Nobel Prize winners, Esther Duflo, urged economists to think of themselves as “plumbers.” To her, the world’s economy is merely a system of pipes. “The poor will always be with us,” said Jesus. But not if Professors Duflo and her husband, Abhijit Banerjee, can help it. They’ll call in Roto-Rooter! Like Paul Samuelson, who won his Nobel for bringing pseudoscientific rigor to the profession, the two most recent winners aim not just to opine on the causes of poverty, but to study them – as if they were a sewer system – and help governments put in bigger drains. Our son Henry, based in Paris, was on the case: One of the studies most frequently cited in connection with Ms. Duflo only showed what we already knew, that people – even professors – respond to cash incentives. She convinced a school district in a rural area of India to run a test. The idea was to pay an extra bonus to teachers for every day they taught in excess of 20 days per month. And if they didn’t show up, they would be penalized a like amount. Teachers proved that they had come to work by taking a photo of themselves with their students daily, with a special camera that stamped the date and hour. Surprise! Once the system was put in place, the rate of absenteeism on the part of teachers fell and the performance of students improved. Henry goes on to remark that financial incentives are not exactly a revolutionary new idea. “You get what you pay for,” as Milton Friedman used to say. But the duo didn’t stop there. They also did a study that showed that villagers would be more receptive to a taped speech by a woman if the village had previously had a woman leader. Hmmm… They’ve conducted 80 of these “experiments.” Another of them discovered that special tutoring could help schoolchildren who were falling behind. And another discovery was that the poor didn’t necessarily spend extra money on more or better food; they had other desires too – such as TVs and radios. Solutions for Everything In addition to these staggering insights, Mr. Banerjee also has a solution for the slowdown in the world economy: Raise taxes! Yes, by letting the rich hold on to their dough, “you are giving incentives to the rich who are already sitting on tons of cash.” What is he thinking? The rich are not chickens, sitting on their cash like setting hens. Instead, the money is put in banks and T-bills… and lent out to governments to do the very good things that governments allegedly do. Or, it is invested in the corporate world, where businesses hire people, build factories, increase productivity, and create more wealth. At least, that is the idea. What really happens is far too complex for economists to comprehend… and far too nuanced to imagine for their pipe dreams. But it must be a delight to be so simpleminded. And so vain. You think the troubles of the human species – real and imagined – can be solved with a wrench. And you just happen to have one in your hand. Regards, Bill P.S. Fortunately for Europe and America, modern economists didn’t come along until the great growth spurt that took us from scarcity to obesity was largely over. Paul Samuelson didn’t win the Nobel Prize until 1970. Paul Krugman won it in 2008. And now Duflo and Banerjee have it on their wall. We’ve seen that the plumber economists didn’t create prosperity. What we will see next is how much of it they can destroy. FEATURED READS WeWork Paying Off CEO to Walk Away
Investors finally caught on to what Bill has been saying for months: WeWork doesn’t work. Now, the company is paying its former CEO almost $2 billion to step down from the board… China Surpasses U.S. Number of Unicorns
WeWork is just one example of a “tech” company that doesn’t make any money. The U.S. is filled with these so-called unicorn businesses. But now, China has even more of them than the U.S… The Pin That May Burst the “Everything Bubble”
Longtime readers know that Bill believes we are living in a “Fin de Bubble” period. Now, Dan Denning, Bill’s coauthor on The Bonner-Denning Letter, shows how the flood of money into passive funds is helping pump the “everything bubble”… and why that bubble is about to pop. MAILBAG On Friday, Bill showed how the opportunities for corruption multiply as the feds interfere in the markets. And it struck a chord with Dear Readers… I had long been wondering how Trump was monetizing his position as president; I never doubted that he was. Of course, the insider transaction noted in your article was not conducted in his name and is almost certainly well camouflaged. But can there be any doubt that he is getting some monetary benefit? He may not overtake the three Bs (Bezos, Bill G., and Buffett) in total wealth, but there’s no reason to doubt that he will end his presidency with more billions than he started with. And his cronies are also getting richer. – Allan H. I have been reading Bill Bonner’s letters for several years and have found him 100% accurate, with common sense in his wisdom about where the world is heading… And I have had all the scales peeled off my eyes regarding where the rot comes from where the feds are concerned. It is all designed to crash and catch the poor common fool out. I caught on through dear Bill’s letters. – J.P. Is Trump using his presidency to covertly grow his own wealth, as Allan believes? What schemes has the Diary helped you catch on to? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… Does the Pentagon Have a Weapon Hidden in Your Phone? New technology aimed at Communist China could be on your cellphone. National security directive E.O. 13859 was issued on February 11, 2019. Its goal is to stop China’s dominance of a new technology that could neutralize America’s spy satellites. And that technology is tied into new smartphones. While this cloak and dagger game plays on… It’s unleashed a $4 trillion wealth wave – the size of Germany’s economy. It’ll reshape national security, healthcare, automobiles, manufacturing, and more. It’s opened so many opportunities for investors, that USA Today claims, “Early investors in it could become rich.” E.B. Tucker, Casey Research’s chief analyst, agrees. He’s found the best way for you to make up to 50 times your money in a matter of months. But to claim it, you must act before December 10th since that’s the “buy-in signal” for Wall Street. Click here to see how you’re affected. 
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