| By Bill Bonner, Chairman, Bonner & Partners YOUGHAL, IRELAND – Our dreary mission here at the Diary is to follow the money. Over hill, over dale, and along the dusty trail… but mostly into the gutter. And last night, the Federal Reserve let out word that… surprise!… there’s more money on the way. MarketWatch: The New York Fed said it would expand the size of repurchasing agreements starting from Thursday, as part of its operations to inject liquidity into the financial system. The New York Fed said it would increase the amount offered in overnight repo operations to at least $120 billion from Oct. 24 to Nov. 14., and increase the amount offered for longer-term repo agreements to at least $45 billion on Oct. 24 and Oct. 29. The New York Fed’s actions comes after the overnight repo rate, or how much hedge funds and banks have to pay to borrow for short periods in return for pledging collateral such as Treasurys, rose so high in September that the Fed’s benchmark interest rate briefly pushed above its target range. Since then, the New York Fed has regularly stepped in to prevent strains from resurfacing in funding markets. | Recommended Link | | Jeff Clark Just Revealed His New “Spring-Loaded” Trading Method During Jeff’s exclusive trading event last night, Jeff brought out an ordinary spring to illustrate his “S-Force” Trading Method. You see, in its resting state, the spring doesn’t do anything. But with the right catalyst, it can soar higher. Jeff’s strategy works the same way. So what’s the catalyst Jeff’s found that can send stocks soaring as high as 200%… 800%… even over 1,000%? | | | -- | Mumbo Jumbo That’s right. This morning, there will be more money than there was yesterday. And yesterday, there was more than the day before. There is a lot of technical mumbo jumbo in Fed policies. Between QE (quantitative easing), not-QE, TOMO (temporary open market operations), and POMO (permanent open market operations), it is easy to get lost. But the only thing the Fed has to work with is (fake) money. It can either put it in or take it out. And now, it is putting it in to the tune of about $1 trillion per year. Our subject for today: Where does it go? So, let’s put on our hip boots… and follow the money… into the sewer. | Recommended Link | | ATTENTION: Your $1 Copy of This Book Is on Hold A copy of your $1 Dollar book of 316 of Wall Street’s absolute best income secrets is on hold… Inside, you’ll learn how to: Pocket $1,666 in “rent” every month… without owning a single piece of real estate. (Page 37) Get 10 TIMES more income than America’s best savings accounts. (Page 43) A little-known Wall Street trick to boost your income by $759 per month! (Page 119) You NEED to claim this $1 BOOK now… before it’s too late. Because copies are limited. Once they’re gone, they’re gone! | | | -- | Follow the Money The ability to conjure up money is in itself a remarkable thing. Money is supposed to represent real wealth – time, resources, houses, cars… If you can create money without adding a like amount of real wealth, you are simply counterfeiting. The “money” you create is not real. Since no new wealth is brought forth, this new money is simply an additional claim on wealth that already exists and belongs to someone else. So, printing money is merely a sophisticated form of larceny. The people who get the money end up with other people’s stuff. Richard Cantillon, a colorful Irishman and associate of the world’s first modern central banker, John Law, figured out how it worked approximately 300 years ago. Law – like practically all economists today – believed that you could improve the performance of an economy by giving it more money. But Cantillon, in his Essay on Economic Theory, showed that there was more to the story… that the new money was a fraud. And in his own life, he demonstrated how to game the new system. In 1716, Law got control of the Banque Générale and issued paper money, backed by shares in a bold startup, the Mississippi Company. The shares rose in price, creating a bubble-like atmosphere in Paris. But rather than hold Law’s new money to the bitter end (all fake money eventually returns to its intrinsic value – zero), Cantillon sold his holdings early and walked away with his fortune intact. (Alas, the same cannot be said for Law… who died penniless… or for many of Cantillon’s creditors, who allegedly pursued him with such vigor that he burned down his own house, staged his death in the fire, and made his escape to South America.) | Recommended Link | | New 5G Device is Revealed to Public for the First Time A groundbreaking new technology is expected to be in every household in America by the end of the year… This technology has the potential to make over 266 million smartphones become obsolete forcing nearly every American to switch over to this new “5G Device”. | | | -- | Don’t Fight the Fed Law and Cantillon are long gone. But the chicanery Cantillon described is alive and well. And what has intrigued us lately is neither the process (which we’ve been tracking for 20 years)… nor the recipients of the stolen loot (Wall Street, the rich, the insiders, and the Deep State)… nor the victims (the public, Main Street, taxpayers, and consumers). No. What we’ve been looking at recently is the profiteers – those who understand, like Cantillon, that the fix is in… and figure out how to profit from it… Ever since the announcement of the Greenspan put (wherein the Fed practically guaranteed that it would fight stock market turndowns), investors have been able to buy with a plausible assurance that the Fed was at their backs. Most of them had no idea what was going on. “Don’t fight the Fed” is one of the best-known sayings on Wall Street. Most people thought they were just being wise to pay attention to it. Mom-and-Pop investors bought stocks… with satisfactory results. More sophisticated players went into the bond market… front-running QE on a leveraged basis for much higher profits. And some put the easy money into long-shot tech gambles, such as Uber, Snapchat, and Peloton – counting on even easier money to send prices higher. And now, the most sophisticated of all – the big players – are working the repo market too. Repo Madness When yields in the overnight “repo” (repurchase agreement) market shot up last month, the Fed blundered in… vowing, once again, to do “whatever it takes” to keep the cash flowing. And then, each time the Fed offered more repo credit… more and more people were waiting for it. The first offer was oversubscribed (more demand than supply) by 4.3 times, our colleague David Stockman reports. The second by 4.8 times. The third saw 5.5 times as many bids as offers. And the last one was up to 5.7 times. Yes, the players are lining up. They’ve now figured out how to front-run the Fed’s repo madness. They are borrowing money at rates that are now 50 basis points below the September inflation reading of 2.35%, not including food and energy. For the moment, at least, they take the money and enjoy the party, confident that the fix is in… and there’s plenty more where that came from. Our advice: Don’t stay too long. Regards, Bill POSTCARDS FROM THE FRINGE: STARING UP THE BARREL OF A GUN Maria’s Note: Maria Bonaventura here, managing editor of the Diary. A few months ago, Tom Dyson started telling you the story of how he came to work with Bill and Dan Denning (Bill’s coauthor on The Bonner-Denning Letter) in Baltimore. If you missed the beginning, catch up here, here, and here. And read on to find out how Tom went from staring up the barrel of a gun on a freight train… to writing newsletters with Bill and Dan 15 years ago… By Tom Dyson, Editor, Postcards From the Fringe I was in the “well” of a 48-foot container carrier, wedged next to a weathered blue COSCO container. The cop stood on the platform above, pointing his gun down at me. Big railyards have cops patrolling the yard, keeping the drunks and thieves out. Typically, when they catch a hobo, they administer a beating and then throw the hobo in jail. They’re railroad cops, but hobos call them “bulls,” and they’re the hobos’ worst enemy. “Get your bag and get off the train,” he said… Let’s fast-forward for a moment here. I’m writing this story to you from China. Seventeen months ago, my family and I threw away all our things and converted all our savings to gold. We’re traveling around the world, living like gypsies. But this isn’t the first time I’ve done this… In 2002, I became convinced that gold was going to rise. I put all my savings into gold futures. I even convinced eight of my mother’s work friends and some college buddies to buy gold futures with me. I was right about the gold price, but not about the futures. A story for another time… Anyway, as part of my research on gold, I found Bill’s daily e-letter. At the time, I was working at Salomon Brothers, in London, for the repo desk. Each night, I’d print off Bill’s email and read it on the train home. It felt so clandestine… so subversive… so exciting. I loved it. I quickly realized I didn’t want to work at Salomon anymore. I wanted to work with Bill. So I wrote him and told him I’d quit my job and would work for him for free if he’d give me a job helping with his e-letter. At the time, only three employees were working on it, and there wasn’t a place for me. I quit my job at Salomon anyway and decided I’d go find some adventure. I said goodbye to my family and friends, and I flew to Mexico City without any money or credit cards. I spent the next three months living like a tramp, sleeping outside, eating scraps, and catching free rides. (I hitchhiked, I hopped freight trains, and I even caught an illegal ride on a cargo ship.) I was in Atlanta, on a container train, waiting for it to leave the yard, when I heard footsteps on the gravel… then on the ladder… and found myself staring up the barrel of the bull’s gun. The bull made me sit on a rail while he checked my background. Then, he checked my pack to make sure I wasn’t a thief or a graffiti artist. “Now get the f*ck out of my freight yard,” he said finally. “If I see you again, I’m going to put you in jail.” So I went to the Greyhound bus station and caught a bus to Birmingham, Alabama. I had a friend there who could put me up for a few days. While I was there, I got an email from Addison Wiggin, Bill’s managing editor. “There have been some changes,” it said. “We need a new managing editor. The job’s in Baltimore, but you’ll need to come to Paris for the interview. Are you interested?” To get to Paris, I’d need to hitchhike from Alabama to Mexico City, fly to London, shave, put on a suit, and take the Eurostar train to Paris. “Yes!” I replied. “I’ll be there as soon as I can.” I slung my backpack over my shoulder, said goodbye to my friend, walked onto the westbound on-ramp to Interstate 10, and stuck out my thumb. To be continued… – Tom Dyson P.S. The experience I had on I-10 was so terrifying I will never hitchhike again. I’ll tell you that story soon… P.P.S. I share these stories – along with my thoughts on the global economy – in my e-letter, Postcards From the Fringe. I send a new one out every weekday, and I’d love to have you onboard. Just enter your email address here to sign up. FEATURED READS WeWork Founder Walks Away Unscathed?
Investors finally realized that WeWork doesn’t work. The company forced its disgraced founder and CEO to step down. But, as Bill shared with us yesterday, he’s still leaving a billionaire… Corporate America Fears President Warren
Bill predicts that Elizabeth Warren will be the next U.S. president. But as she rises in the polls, corporate America is not happy… The Pin That May Burst the “Everything Bubble”
Bill believes we are living in a “Fin de Bubble” period. Now, Dan Denning, his 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 Today, one Dear Reader comments on all the renovating Bill has been doing on his home in Ireland… Bill, with all your money, why are you torturing yourself by buying a place that’s a disaster?? I love Ireland, but would never spend the time and money to live there… Well, maybe if the house wasn’t in too bad of a shape. You must have a wonderful wife who would agree to doing that. – Dorothy L. And, turning back to politics, another weighs in on the feds’ interference in the markets… Of course Trump is using the presidency to increase his own wealth. Don’t they all? He sends signals to his Wall Street one-percenter cronies through his statements and tweets, and everybody cashes in, including himself. And just look at Congress, whose members have shielded themselves from insider trading laws to increase their wealth. How many leave office poorer than when they entered? They’re all insiders. – Arthur S. Do you enjoy do-it-yourself projects, like Bill? How long will the fix stay in? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… Big News from Trading Legend Jeff Clark For the past 36 years, I’ve used options to help people make millions of dollars. So you may be surprised to hear that I’m making a big change. For the first time, I’m telling people to start trading a small group of tiny stocks. That’s right… not options, but stocks. Why on earth am I doing this? After all, don’t options offer you the biggest bang for your buck? I explain everything here… 
Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. | 
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