| By Bill Bonner, Chairman, Bonner & Partners BALTIMORE, MARYLAND – Paul Adolph Volcker: RIP. Word reached us yesterday morning that Paul Volcker, chairman of the Federal Reserve during the Carter-Reagan years, was dead.
RIP Paul Volcker, the last honest Fed chair A shame. We had just decided to contact him in the hopes of arranging a private conference – as we did with former Fed chair Alan Greenspan a few years ago. We wanted to know what he really thought… of the Fed today, of negative interest rates, of uncontrolled debt. Most of all, we wanted to know if he had any regrets… …about launching the funny money system in 1971… …or about saving it in 1980. But now, it’s too late. The dead hold their peace. We have only the public record – just like everyone else. So let’s look at the record… and offer a salute and a warning: even the best public servants can make a damned mess of things. | Recommended Link | | If he loses, there will be more people starving this December On Wednesday, December 11, 2019, one of the greatest traders ever to live is going to do something he’s never done before… Something you will surely want to witness… Something we’ve never seen demonstrated this way before… He’s going to attempt to generate $70,000 or more – in just a few hours – just from trading. Care to see for yourself if he can pull it off? And how you could use his secret yourself, to generate $200,000 in the coming year? | | | -- | Last Honest Chairman Volcker was the last honest Fed chairman. He said what he thought. He did what he said he would do. No mumbo-jumbo about “inflation targets,” the “wealth effect,” or the economy being “in a good place.” When Volcker spoke he meant what he said. And when he vowed to end stagflation in 1980, investors should have paid attention. But back then, even we didn’t believe it. We had worked in Washington for the previous seven years and were already in the spirit of D.C. degeneration. When a public official made a claim, we assumed it was a lie. And when he officially denied something, we knew it was true. Already consumer price inflation had risen over 10%; we expected it to go even higher. Gold rose to $800 an ounce – 21 times its 1971 price. Popular commentators, such as Howard Ruff, predicted that it would keep going up… even to $5,000 an ounce. Once an inflationary spiral gets underway, there’s no stopping it. At least, that was the thinking in conservative/Austrian economic circles. By taking gold out of the dollar system, Milton Friedman, Paul Volcker, and the Nixon administration had opened the gates of Hell. Now, it was “Inflate or Die.” Either the feds continued with their EZ credit, big spending ways. Or, the economy would suffer a recession, which would be politically unacceptable. | Recommended Link | | “How I retired at 42 – By Quitting Stocks” This retirement strategy doesn’t involve stocks, bonds, real estate, or any “conventional” retirement vehicle. “If you’re willing to get out of your comfort zone, this could be the perfect approach for you.” – Retired Millionaire Jeff Clark | | | -- | “Saved” by the Fed Or so we thought. But we didn’t know Paul Volcker. And our thinking didn’t include a “save” by the Fed chairman. In January 1980, after nearly a decade of the new paper money system, stocks were dissed everywhere… You could buy all 30 Dow stocks for just 1.3 ounces of gold. As for bonds, they were mocked as “certificates of guaranteed confiscation.” Volcker had pledged to turn it around, to beat inflation. He gave investors the “Volcker shock” treatment, putting the Fed’s key rate at 20%. And it worked. Inflation, as measured by the Consumer Price Index (CPI), was over 13% for 1980. Three years later, it was under 4%. Still, investors were slow to get the message. The Dow was around 850 in January 1980. If investors had seen what was coming, they would have gone all-in… driving up stock prices quickly. Instead, they loitered and lollygagged, not sure what to do. In nominal, post-1971 dollars, the Dow was at about 850 in July 1982. It took almost two years before the stock market began its historic rise. (The old money saw the change immediately. By July 1982, stocks were already up 75% in pre-1971 dollars at $35 to an ounce of gold.) Inflate-or-Die Economy But investors had good reason to hesitate. By 1981, the Volcker shock had created the worst recession since the Great Depression. Can you imagine what would happen today if the Fed put its key rate at 20%… and house-buyers found themselves paying 18% on their mortgages? Volcker was attacked by Democrats and Republicans alike. His effigy was burned on the Capitol steps. Ted Kennedy proposed abolishing the Fed. At any moment, it looked as though President Reagan might crack, and cut him loose. But Reagan backed Volcker. And Volcker didn’t flinch. It was an “Inflate or Die” economy. He didn’t merely let it die, he pressed the pillow to its face. | Recommended Link | | Take a good look at this dollar bill… Because this could be the last time you see one… Due to radical changes to our financial system taking root. Top lawmakers just returned from a private meeting on Capitol Hill… And frankly, it’s shocking the mainstream media hasn’t picked up on this yet. But you can get all the details you need to prepare for this massive change – as well as profit from it … | | | -- | Funny-Money Standard Volcker had good reason to want to stop stagflation. He was partly responsible for it. Business Insider: During his time in the Nixon administration, Volcker served as undersecretary for international affairs. As part of the role, Volcker helped the US move off the gold standard, which redefined the international monetary system. Volcker had helped to build the new money system, in other words. By 1980, the monster had already done to the U.S. economy more or less what the Japanese had done to Nanking. The new paper dollar system was in shambles… and Volcker was the only person who could save it. He did what he said he would do. And that was a shame, too. For now we see that Volcker was fighting a battle that should have been lost, not won. By re-establishing the pseudo-integrity of the paper money system, Volcker actually set the stage for an even bigger disaster. Game Over Did he have any doubts? Yes. As early as 1994, Volcker said: [I]f the overriding objective is price stability, we did better with the nineteenth-century gold standard and passive central banks, with currency boards, or even with “free banking.” A quarter century later, the game was over for Paul A. Volcker. Taking a final look at the scoreboard, he must have seen a big win. But we wonder… Did he finally regret his role, either for establishing the funny money standard in 1971… or saving the system in 1980? We’ll never know. But even if Volcker didn’t regret it, we surely will. Stay tuned. Regards, Bill Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. FEATURED READS We Haven’t Seen a Real Boom After the Last Three Recessions
Longtime Diary readers aren’t strangers to talk of economic downturn. So it may surprise you to hear that, for the first time since the Civil War, the U.S. is closing out a decade without falling into a recession. It’s too early to rejoice, however… Is Trump a Threat to Economic Growth?
Last Wednesday, Bill criticized President Trump’s trade war “bazooka.” And he isn’t the only one. Veteran political analyst Richard Haass says Trump and his policies stand directly in the way of economic progress… MAILBAG Last week, Bill wondered if POTUS is the “most innocent creature ever to nest in the White House.” And many Dear Readers are unhappy with Bill’s take… I personally thank God for Trump, otherwise we would be completely down the road to ruin. By no means is President Trump some perfect savior. I didn’t vote for a priest or a pastor. Yes, he says some things that I cringe at, but he loves our country and is absolutely the man we need in that office. I signed up for financial advice, not to hear globalism or hear how wonderful China is when it murders its citizens every day of the week. The only reason China is powerful is because it stole our technology, or bought it from greedy tech firm owners who treasure money more than their own country that provided the freedom to develop and sell their products. Yes, President Trump was naive about just how evil the Deep State was and still is, but he is the only one doing something about it. His own party is worthless with a few exceptions. He works harder than anyone actually trying to save our country; God knows he didn’t need the money! So y’all keep criticizing and voting for the socialist Democrats and see if you prosper under their “leadership”! – Jack J. The devil’s greatest strength is that he fools people into thinking he is harmless and innocent.Trump is neither. He does what seems like foolish things. He tweets his rants for all to see. He rages at things only he seems to see. Beware, Bill, Trump is a narcissist and sociopath extraordinaire. He wants things and demands things with definite purpose. It is not random acts of ugliness. He knows what he doesn’t know and has experts to tell him how to get what he wants. He has a collection of sycophants at his disposal 24/7. They want to stay close to the power. He wants to dictate his power – and does so all the time. Just like the kings of old, Trump uses his power to instill fear. He does not care about consequences. He demands what he wants, and heads will roll if he is denied what he wants. He expects obedience and those who use good sense do not last well against his wrath. Damn the torpedoes, full speed ahead. It seems obvious you have feelings for the man. That’s OK. Just try to think way back when a president acted presidential. Meaning, they colored inside the lines of law and the Constitution… Oh, and also inside moral, ethical, and dignity lines as well. And yes, even integrity. That is not Trump, and never could or will be. This guy is a marshmallow and has no courage or strategy. – Tom B. Is President Trump working hard to “save our country,” as Jack says? Or is he simply a self-serving narcissistic sociopath in office for himself, as Tom believes? Write us at feedback@bonnerandpartners.com. And if you’re an Early Stage Trader subscriber, let us know: Did you lock in a gain with Jeff Brown’s recommendation, Synthorx (THOR)? Jeff is our longtime go-to tech expert. And he just handed his subscribers an early Christmas gift… THOR, one of the recommendations in his Early Stage Trader model portfolio, shot up around 170% yesterday. That brought the total gains to around 430% – enough to turn every $5,000 invested into $26,493 – in just five weeks. Congratulations to Jeff… and all the Early Stage Trader subscribers who acted on his recommendation. If you locked in a gain with THOR, we’d love to hear from you at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… Why is Jeff Brown destroying this Amazon Echo Dot? Put simply: There’s a new game in town. It’s a brand-new way to invest in the technology sector… But it has nothing to do with the hottest new tech stocks… or the biggest trends in tech like 5G or AI… It’s an advanced algorithm Jeff created that exploits a strange anomaly found only in one small subsector of the tech market. It’s crazy accurate (near perfect)… and so far it’s uncovered mind-blowing, once-in-a-lifetime gains like 494%… 617%… 884%… 1,008%… 2,293%… 6,367%… even 11,764%. It’s practically guaranteed you’ll never hear about it from those “talking heads” on TV… In fact, the only place you can learn about it is right here. Click to see what Jeff Brown has up his sleeve… 
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