| By Bill Bonner, Chairman, Bonner & Partners If it were done when ’tis done, then ’twere well It were done quickly: if the assassination Could trammel up the consequence, and catch With his surcease success; that but this blow Might be the be-all and the end-all here, But here, upon this bank and shoal of time, We’d jump the life to come. But in these cases We still have judgment here; that we but teach Bloody instructions, which, being taught, return To plague th’ inventor: this even-handed justice Commends the ingredients of our poison’d chalice To our own lips. – William Shakespeare, Macbeth YOUGHAL, IRELAND – At 6:41 a.m. ET yesterday, we learned that “our Country [capital C!] is doing great… We are stronger than ever before, with GREAT upward potential.” That was the official word given out by the White House. And yet, you have read here that the U.S. has been in decline since the turn of the century… with no one and nothing able to break its fall. Which is it? Are we doing “great”… or not so great? Who’s right? The commander in chief… or an unknown scribbler of no importance? Over the next few days, we will lay out the dots. You connect them. New Record The immediate cause for delight yesterday was that the S&P 500 hit a new record… and the Pentagon hit a new victim. As to the second, we have no opinion. No trial was held. No evidence presented. It was never any of our business anyway. And we have no way of knowing if ’twere fair or foul. As to the first, rising stock prices are definitely a plus for those who own stocks. Whether they are good for others is a matter of puzzlement. But wait, a quick look shows that total corporate profits in 2000 were about $600 billion. Now they’re about $1.8 trillion… around where they’ve been for the last six years. Is that great? Remember, they changed the money system in 1971. The old money was tied to gold at the rate of $35 an ounce. The new money floats on a sea of hope and guesswork. But you can’t buy an ounce of gold for $35 today. It will cost you almost $1,500. So, to get the old dollar figure, you have to first calculate how many ounces the current dollar figure represents, and then multiply by 35. In 2000, gold could be had for only $260 an ounce. So earnings in 2000 (worth $600 billion in dollar terms) were equal to 2.3 billion ounces of gold… which were worth $80.5 billion. Earnings today (worth $1.8 trillion in dollar terms) are worth only $42 billion in gold terms. Bump and Grind We reported a week ago that, in terms of gold – our oldest and most reliable form of money – America’s corporations have lost value since 1971. “How could that be?” asked an interviewer. In the short run, there’s a lot of bump and grind in gold values as well as everything else. Gold goes up. And gold goes down. But it doesn’t go away. And over the long term, it tends to give a fairly good measure of what things are worth. We explained… A couple of years ago, in England, they found a cache of golden objects that had been buried for 1,300 years. The objects had great historical value, of course, but the gold still had monetary value too. Back then, they didn’t have iPhones or F-150s, so it is hard to compare purchasing power, but whoever buried the gold was certainly a rich man. And whoever dug it up was also rich. By contrast, we doubt that the person who discovers a cache of dollars or euros in 3300 will feel he has found a great treasure. The gold price of America’s stocks, over a 50-year period, is telling us that they are not as valuable as investors think… and the economy is not as great as Donald Trump believes. But markets and economies are, after all, still cyclical. They ebb and flow, like the tides. The tide was in full flood when The Donald plumped his ample derriere down in the Oval Office. Then, Republicans opened the sluice gates further with their Christmas tax cut of 2017. But now, the tide ebbs away. September’s key indicators were all negative. From retail sales to housing permits and everything in between, all were down… pointing to a recession. The GDP figures offer no comfort either. They’ve gone from a high of just under 5% in the second quarter of 2014… to 2.3% in the first quarter of 2017, when Mr. Trump took over… down to just 2% in the second quarter of this year. And the New York Federal Reserve estimates a further slowdown to 1.91% in Q3 and 0.92% in Q4. Surely a recession lies ahead. And surely, stocks will fall… just as they did after 2000 and again after 2007. Deep Currents Markets and economies breathe in and out. They expand… and they contract. Mr. Trump probably made a big mistake taking credit for the last few quarters of the expansion. He didn’t cause the upswing, and now he may be blamed for the downswing… which he won’t cause either. But this only brings us to the interesting part. Beneath the surface chop, deep currents still carry people, nations, and whole civilizations to glory… or destruction. And there, down low, what hath Mr. Trump wrought? Anything? The next few years, we believe, will not reveal the “GREAT upward potential” that Mr. Trump foresees. Instead, we see banana peels on which we will slip up… sinkholes into which we will fall… and temptations we will find irresistible. “Lock Him Up” Tomorrow… we begin with Mr. Trump himself. What’s up with the impeachment? Is POTUS being “assassinated” by the Deep State, as some pundits claim? Is it a “lynching,” as he calls it? “Lock him up,” chanted the World Series fans at RFK Stadium, almost all of them employed by the Deep State. And we have some other questions too. Why do the wars in the Mideast continue when Mr. Trump vowed to end them? How come gold is telling us that we’re getting poorer when everyone knows we’re “stronger than ever”? And what happens when the next crisis comes… and the Fed has less than 2 measly percentage points to cut… and Washington is already running $1 trillion deficits? We will lay out what we see… You can make of it what you will. Stay tuned… Regards, Bill P.S. Tonight, we board a ferry for the continent. But it is a bad day to venture out on the seas. The wind is howling. The waves are smashing against the cliffs. We thought about canceling the trip… but the gods call us thither. If you don’t hear from us tomorrow, it is because we are too sick or storm-toss’d to write. MARKET INSIGHT: STOCK MARKET INDICATOR FLASHED A “SELL” SIGNAL Maria’s Note: Maria Bonaventura here, managing editor of the Diary. Master trader Jeff Clark just spotted an ominous signal for stocks. It’s been 100% accurate so far this year, and right now it’s urging caution again. Over to Jeff with the details…
By Jeff Clark, Editor, The Breakout Alert The single best short-term market-timing indicator just flashed a “sell” signal. I’m talking about the CBOE Put/Call Ratio (CPC). I look for extreme conditions in the CPC to give us an idea of where the broad stock market might be headed over the next few days. And, so far this year, the CPC has been 100% accurate as a short-term contrary indicator. Here’s how it works… The CPC compares the action in call options to the action in put options. (A call option is a bet that a stock will go higher. If it does, you make money. Put options are the opposite of call options. You’re betting that a stock will go lower. If it falls, you make money.) A reading above 1.20 in the CPC shows extreme bearishness among speculators. From a contrarian perspective, this can indicate a good time to buy stocks for the short term. A reading below 0.80 shows extreme bullishness and could indicate a good time to sell. The CPC closed at 0.78 last Thursday. Traders were buying far more call options than put options. And, from a contrarian perspective, that should lead to weakness in stocks in the days ahead. Take a look at this chart of the CPC… 
The blue arrows on the chart point to times over the past few months when the CPC dipped below 0.80 and generated a sell signal. The red arrows point to when the indicator jumped above 1.20 and triggered a buy signal. Here’s how those signals played out on the S&P 500… 
In every single case, buying the S&P 500 when the CPC popped above 1.20 and shorting the S&P 500 when the CPC dipped below 0.80 was a profitable trade. I don’t know of any other indicator that has been so remarkably accurate this year. That said, I don’t know if this indicator will continue its winning streak. But this new CPC sell signal is enough to keep me cautious this week. This isn’t a long-term signal, of course. So we’re not using it to figure out where the stock market will be several weeks or several months from now. Trader sentiment is far too fickle to provide long-term insight. We’re just looking out several days. And, based on the sell signal that triggered at the close of trading last Thursday, the setup looks bearish for this week. – Jeff Clark P.S. Over the past year, I’ve been testing a trading system that spots bullish breakout moves in a tiny corner of the market – no matter whether the S&P 500 is headed up or down. I’ve seen gains of 100% in two months, 95% in three months, 56% in nine days, 55% in two days, 133% in less than three months, and so many more. These are options-like gains. But this market has nothing to do with options… I recently revealed the details of my new trading system for the first time. And today is your last chance to see what it’s all about. Based on what I’ve seen over the past 18 months, I’m confident that over the next year I can find at least 12 opportunities that produce gains of 100% or more. So don’t wait… Watch my presentation here now. FEATURED READS The Fed Wants to Avoid a “Temper Tantrum”…
Bill is no fan of the Federal Reserve… or its seemingly endless interest rate cuts. Now, Fed chief Jerome Powell has acknowledged a reason for so many consecutive cuts: not wanting to cause a “temper tantrum” in the markets… Challenges Await New ECB President
Yesterday, Bill welcomed the incoming president of the European Central Bank, Christine Lagarde. But as he knows, Lagarde is inheriting a world of problems from the ECB’s current president, Mario Draghi… The Secret to Finding the Most Profitable Trades
Regular readers know Bill sees storm clouds forming over the markets. But that doesn’t mean there are no opportunities to profit. Here’s how to spot winning trades consistently – no matter how bad things get… MAILBAG Yesterday, reader Fred G. said: [Elizabeth Warren] is right about universal healthcare. America already pays more for healthcare than the next several countries combined. Sure, it will mean higher taxes, but they could be made up for by simply transferring the money we now spend on healthcare in military health costs, other programs such as Medicare, unneeded insurance costs, duplication and waste, etc. I suspect universal healthcare might save enough money to start paying down the national debt. But some Dear Readers don’t see eye to eye with Fred… If the U.S. government could run healthcare efficiently, stop overcharges, stop duplicate billings, stop paying far more than the natural market price would be, then YES, we could save billions on healthcare. Enough to pay off the debt? No. And can the government run it efficiently? No. It’s a sad state. Wish things were different. I’m saddened to pay so much for healthcare now, knowing when I retire next year I won’t have any coverage at all. Won’t be able to afford it. – David S. It is obvious that Fred G. has never lived overseas. If he had, he would be singing a different tune. Ordinary citizens under their national health programs have to wait for procedures. Can you imagine a senior citizen having to wait over a year for knee surgery? My neighbor was not mobile and in pain most of the time. Socialism is not the answer to anything. Oh yes, if you worked for the right company, you had private insurance and did not have to wait for anything. I’ve lived overseas in several countries, so I understand more than most Americans. – F.B.L. Would state-run medical care lead to the agony F.B.L. describes? Or could the U.S. government run universal healthcare efficiently? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… ULTRA Gold Stocks: How one specific type of gold stock can outperform gold by 29X Gold’s on fire! It shot up 20% since May, breaking through the critical $1,500 price level. But there’s one distinct class of gold stocks that can deliver a massive 29 TIMES more profit than gold itself. In fact, a few years ago… when gold went up 149%… a gold stock David Forest recommended in this elite class went up 4,329%. 149% is good – but 4,329% is GREAT! Here’s the full story on this small, little-known segment of gold stocks – along with the perfect 58¢ gold stock… 
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