| By Bill Bonner, Chairman, Bonner & Partners BALTIMORE, MARYLAND – There are two sides to this debate. On one side are those few, lonely, marginalized fuddy-duddies – such as your editor – who think the human race is still subject to sin and error… …and that every generation has its fads and follies that it takes for eternal truths. (We feel entitled to speak for this group since the others are mostly either panhandling in lower Manhattan or confined to mental institutions…) On the other side, well, are Nobel prize winners… New York Times columnists… future perfectionists… dreamers, schemers, and just about everyone else. They think we’ve entered a glorious New Era with no more need of honest money, free markets, or balanced budgets. | Recommended Link | | Retirement “reset” coming TONIGHT Tonight, retirement will essentially “reset” for thousands of people, overnight. Make sure you’re there when it happens… and see how it could help you make $200,000 next year. | | | -- | Giant Scam Here at the Diary, we think nobody should be manipulating interest rates. Nor should the feds be allowed to counterfeit money… or manage the economy in any way. We further believe that the whole financial experiment, beginning in 1971, in which fake money was substituted for real, gold-backed money… and all the manipulations and management gimmicks since then… will turn out to be nothing more than a giant scam. But that’s not all. We also think that the nation’s economy is racing down that long, lost highway to Hell. And neither the technological wonders of the last 20 years, nor those of the future will meaningfully change the outcome. Wait… We’re not finished. It is the speed of these technological whizzes… and the regular innovations of a capitalist economy… that lead even sober, sensible, intelligent people to fantasize that negative rates… and huge debts… now “make sense.” Writes economist Gale Pooley: Negative nominal internet rates could be perfectly rational. If this is so… what is the cost of carrying debt? Zero? No… It’s negative. In other words, who cares if you owe $40 trillion? In a negative interest world you get paid for borrowing. The more you borrow, the more you make! Or, to put it another way… The risk of lending money out is greater than the risk of holding it in your own hot little hand. Wait… You’re probably thinking, “This is just another sterile, theoretical squabble… Who cares?” But don’t touch that dial. Because this goes to the heart of what’s happening right now. And it prefigures either a Brave New World of abundance… or, the same old world of ignorance and wickedness… | Recommended Link | | Yet ANOTHER Reason NOT to Trust Your Congressman A top anchor from Fox News just exposed the most surprising political scandal of the decade. Fair warning: It may upset you. But when you understand what these DC insiders are up to… it could also help you make a fortune in the months ahead. | | | -- | Conniving With Wall Street So, let’s pick up where we left off yesterday… with Paul Volcker’s departure from the Federal Reserve in 1987. His work done, and inflation tamed, Ronald Reagan replaced him as Fed chair with Alan Greenspan. Only a few months later, the stock market crashed. Greenspan might have stood up straight, like Volcker, and let the chips fall where they may. Instead, he stooped to connive with Wall Street. Greenspan made it clear that there was not only a new man at the Fed, but a new policy. Henceforth, stock market corrections were forbidden. The Fed would fight every one with lower rates. And then, when those weren’t enough, it would roll out the heavy guns – quantitative easing (QE)… and now Repo Madness. That is the current state of U.S. monetary policy. It’s “Inflate-or-Die.” The more the feds pump up the economy with fake money lent out at fake rates, the more the economy needs more and more fake money and more and more fake rates just to keep going. That’s why the Fed has flooded the repo (very short-term speculative finance) market with at least $200 billion in fresh funds since mid-September. | Recommended Link | | Retire Rich with Trump’s Help! [For $1?] Donald Trump laid out his brilliant ideas about America’s financial system in this book long before he was president. He wrote it with the #1 best-selling author in personal finance, Robert Kiyosaki… And it’s designed to help everyday Americans retire wealthy! Click here now to claim your copy for $1. If you only have a few thousand saved for retirement… Or simply want to learn why Trump will win again in 2020… | | | -- | Inflation on Main Street We remind readers that “inflation” refers to this increase in the money supply. It may or may not show up in consumer prices. For the last 40 years, for example, it has mostly gone into stock and bond prices. Take the Dow. It has gone up some 27 times, making the rich – who own more than 80% of the stock market – richer. The New York Times: A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households. And that includes everyone’s stakes in pension plans, 401(k)’s and individual retirement accounts, as well as trust funds, mutual funds and college savings programs like 529 plans. “For the vast majority of Americans, fluctuations in the stock market have relatively little effect on their wealth, or well-being, for that matter,” said Edward N. Wolff, an economist at New York University who recently published new research on the topic. If we’re right, “inflation” will continue… and eventually roll over, from Wall Street to Main Street. Then, ordinary households will face not just relatively lower incomes… but higher consumer prices too. Hot Debate Donald Trump has already increased spending (inflationary) more than any president in the last 50 years. His deficits are roughly twice as big as those of Bush or Obama (inflationary). He insists on lower interest rates (inflationary). He promotes trade wars and trade barriers (inflationary). And he says he wants another tax cut (inflationary). And the Democrats are no better. Some estimates of Elizabeth Warren’s Healthcare for All program, for example, top $50 trillion over the next 10 years. Where would that money come from? It would have to be “printed.” So, no matter who wins the next election, you can expect super-low (perhaps even negative) interest rates, super-high deficits, record levels of debt, and a growing Fed balance sheet (as they inflate the money supply by buying bonds… and maybe stocks… with money they create for that sole purpose). The administration expects the national debt to hit $30 trillion by the end of the ’20s. Our own guess is that it will be more like $40 trillion. Which brings us back to our debate: Brave New World… or Winter Is Coming? Tune in tomorrow… Regards, Bill Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. FEATURED READS Don’t Expect the New Trade Agreement to Bring an Economic Boom
Global trade talks, exploding national debt, and government interference have shaken business confidence… Now, a new North American trade agreement promises to assuage some uncertainty. But studies offer conflicting views about how positive its impact will be… Wealthy Investors Are Pulling Out of the Stock Market
Last month, Bill’s colleague Tom Dyson made a prediction: Over the next decade, stocks will be “dead money.” Wealthy investors are getting on board with that idea… and they’re turning to (mainly) cash investments instead. MAILBAG One Dear Reader was impressed with Bill’s wealth gap analysis… Your editorial on the widening Wealth Gap in America is perhaps the most intelligent, sane, and common-sense analysis of the real state of our economy that I’ve ever seen. I particularly was impressed with the charts of U.S. counties and how it indicates the real state of our economy. Brilliant work! For decades I have been exposing the flatulence in economic indicators our government publishes in an attempt to either shine light on the current occupant of the White House or castigate the prior occupant.
As a college-educated American, I’ve always gauged how well, in my honest opinion, the country was overall by how many of my friends and family were employed and doing well. It pains me to hear POTUS constantly espouse how much he’s done to improve the lives of all Americans, while seeing half of my friends and family either struggle through life due to constant layoffs, while watching each subsequent new job they get paid less and less. Meanwhile real inflation continues to eat away at all our savings or 401Ks.
This is not to say that, as you so succinctly put it, some are doing quite well and getting a tad richer, but the majority seem to struggle more and dig deeper holes for themselves by going deeper and deeper into debt with credit cards just to make ends meet. – Jerry F. While another is “appalled” after Bill wondered if POTUS is the “most innocent creature ever to nest in the White House”… I am appalled by your naive apologies for Trump. He and his supporters such as you are an existential threat to our Democracy. How could I trust your advice about anything again? – Lawrence D. Is POTUS taking undue credit for American jobs, like Jerry says? Is Trump an “existential threat” to democracy, as Lawrence believes? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… 1.9 billion 5G smartphones by 2023. This tiny company stands to profit. Lately, it seems that everyone is talking about 5G technology… But, does anyone really know what it is? 5G will provide users more coverage at a faster rate, especially for power-hungry streaming content like 4k video and VR… Yet 5G is still in its infancy. If you don’t know which companies stand to benefit – like Silicon Valley executive and angel investor Jeff Brown does – then you’re going to get left behind. Three years ago, Jeff predicted Nvidia would be the number one tech stock of that year. Investors had a chance to make 10 times their money on Nvidia. Now he’s singled out one company that makes the device to power the 5G revolution… Taking this breakthrough technology from $0 to $100 billion in a matter of months. Discover details here. 
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