| By Bill Bonner, Chairman, Bonner & Partners BALTIMORE, MARYLAND – The U.S. economy approaches the end of 2019 with a stable heartbeat but increasing signs of dementia. Unemployment (mostly in low-paying “service” industries) is low. GDP growth is still positive, if slowing. The Dow is still near the tippy top of its range. And the Federal Reserve is once again pumping fake cash into the financial markets. Perhaps it’s because marijuana has been legalized in so many states… …But most people think things are looking pretty good. According to Mr. Trump’s tweet last week: “Everyone’s getting rich…” “And I’m working my ass off,” he added, as if to suggest that there was a connection between the two things. By Hook or by Crook Occasionally presidents help SOME people get rich. By hook or by crook, most often the latter, some people are able to parlay their connections to the White House into some serious money. After all, that’s what the Deep State is all about. Some get contracts for weapons systems. Some earn big bucks as lobbyists. Some rake in the dough by offering “access.” And, of course, the president himself often cashes in, after his time in Washington, by giving speeches, selling books, and other showboating. This week, for example, Trump sweated up another trade war – this time with Brazil and Argentina. “What did we do?” the stunned Latinos asked. We don’t know either. But a tax on imports from South America is very unlikely to make everybody rich. Even U.S. metal manufacturing workers are unlikely to see much gain. The Wall Street Journal reports this morning that there are now 1,500 fewer jobs in the sector than there were when the tariffs were first imposed. And average Americans will simply pay more for things made of steel and aluminum. Still, before the feds knock over the milk bucket, they make sure to ladle out some cream for their crony friends. From Friday morning to Monday afternoon, stock in U.S. Steel (X) gained a dollar. The president is, after all, Politician in Chief. And politics is all about taking away from some in order to reward others. Making EVERYONE rich is not part of the program. Never has been. Never will be. | Recommended Link | | 5G is still in its infancy. Invest now. 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. | | | -- | Weakening Economy Meanwhile, our survey of the numbers shows a generally weakening economy – with slower growth in almost every important category, from final sales to manufacturing jobs to capital investment. It was the slowness in manufacturing that was blamed for yesterday’s small stock market decline. The CNBC headline: “Dow drops 200 points after worse-than-expected manufacturing data” Bloomberg adds detail: America’s industrial heartbeat remained faint in November as a measure of manufacturing contracted for a fourth straight month against a backdrop of weaker orders and subdued production. Stocks and the dollar fell, while Treasuries rallied. The Institute for Supply Management data on Monday showed the factory purchasing managers’ index unexpectedly declined to 48.1, near the expansion’s low point, from 48.3. The median forecast in a Bloomberg survey of economists called for an improvement to 49.2. Readings below 50 indicate activity is shrinking. But the trade warriors thought they saw some good news. The U.S. trade deficit for October shrank by $5 billion, down from $70 billion in September. Oops… not such good news after all. It narrowed because imports fell, not because exports increased. In other words, Americans bought less from overseas than they did the month before. Why? Probably because they had less money. But of course, there is more to the story. And if we step back far enough, we’ll be able to see it more clearly… “Not QE” For the benefit of new readers, we outline the important financial events of the last 50 years: In 1971, the U.S. left the gold standard and began issuing “funny money.” Consumer price inflation rose quickly. And measured in pre-1971, gold-linked dollars, the stock market collapsed. The Dow lost 98.5% of its value over the next 9 years. In 1980, Paul Volcker made a heroic stand against inflation. He won the battle and set off the current boom, with lower and lower interest rates over the following 39 years. Stocks rose in both real- and funny-money terms. Following the crash of ’87, the Fed began manipulating stock prices with the famous “Greenspan put.” Until then, the Fed saw its role as “taking the punch bowl away” when the party got out of control. Thenceforth, it simply added more alcohol. In 1999, stocks reached an all-time high. It took more than 40 ounces of real money – gold – to buy the Dow. Compared to 1971, stocks were twice as high. With the new century came a correction – for America and its stock market. The Fed fought the stock decline with a 500+ basis point (5%) cut in interest rates. Stocks rebounded in nominal dollars, but continued to fall in real, gold-backed 1971 dollars. In 2001, George W. Bush announced one of the most blockheaded moves in U.S. foreign policy history. His War on Terror has so far cost the nation $6.5 trillion… with plenty more to come. This expense, along with the need to support stock prices and America’s retiring baby boomers, made the country dependent on funny money. In 2008, another major correction cut stock prices in half. Again, the Fed countered with a 500+ basis point cut, along with a $3.6 trillion dollar asset buying program (quantitative easing, or QE). Again stocks rebounded in funny money, but continued to fall in real money terms until 2011. In 2015, the Fed decided to begin “normalizing” interest rates and reducing its holdings of bonds (quantitative tightening, or QT). It never got its key rate above 250 basis points. In 2018, a modest 15% correction in nominal stock prices caused the Fed to panic and abandon its “normalizing” policy. The following year it lowered rates three times. On October 3, 2019, a rumor circulated that the Fed would restart QE. Five days later, Jerome Powell confirmed that it would enter the “repo” market, “but don’t call it QE,” he said. Stocks went up. By November, this “not QE” was adding money to the markets at the rate of $1.5 trillion per year – more even than during the crisis period of ’08-’09. The president can work “his ass off” all he wants; it’s the Fed’s fake money IV that keeps this vegetable alive. Regards, Bill Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. ECONOMY INSIGHT: THE FED’S FUNNY MONEY CATERS TO THE TOP 10% By Houston Molnar, Analyst, Bonner & Partners As Bill mentions above, making everyone rich is not part of the Deep State program. And today’s chart illustrates that… It shows the tug of war over the share of wealth since 1989. And it shows that when the Federal Reserve runs to the aid of the economy, the wealthy come out on top. You can see that the wealthiest 10% (green line) of Americans have been pulling ahead of the bottom 90% (black line) for the past 30 years… 
This chart also shows what happens to the wealth gap after recessions (gray bars). As you can see above, the wealthy initially take a hit from tumbling share prices during a recession. That’s because the top 10% own 92% of the stock market. But the pain of falling share prices doesn’t last long for the elite… The Fed soon runs to the aid of the rich, the bankers, and the hedge fund managers. After the bets sour and the market tanks, the Fed rushes to the market’s aid with fresh stimulus. Take the Fed’s intervention during the financial crisis of 2008. The S&P 500 fell 57% and the Fed ran to the market’s aid. As Bill points out, it pumped nearly $4 trillion into the economy and slashed rates 500 basis points. These easy money policies drove stock market assets owned by the insiders even higher. All while weakening the dollar… and leaving the average Joe’s savings account worth less and less. But as Bill has said before, the party won’t last forever. The gap between the haves and the have-nots keeps growing. But at some point it has to reach a breaking point. After 10 years of growth, that can’t be far away. – Houston Molnar FEATURED READS The Way to Get Out of Debt Is to Borrow More
Bill recently wrote about America’s debt problems. But it’s not just the U.S… The global economy is being stifled by mounds of debt. And some experts believe the only way to revive it is to continue borrowing… Stocks Retreat From Record Highs
Black Friday and Cyber Monday sales showed promise. And with a jittery stock market, it may be up to consumers, not stocks, to keep America’s economy afloat. Stop Trying to Be a “Master of the Universe”
Former $1 billion hedge fund manager Larry Benedict shares a simple insight that has made him successful as a trader over the past 35 years… MAILBAG A few Dear Readers are unhappy with Bill’s take on the Thanksgiving holiday… The negativity and cynicism of this article is beneath you. You do get cynical, but I have never read anything from you before that was so extremely so. In terms of the Puritans or Pilgrims, these were real people, not sourpusses. Amazing that you see them in only one dimension. They left for America because of persecution. Their witch persecutions and other things are not the summation of their lives and culture. The writings of William Bradford do not fit your one-dimensional description. Instead of seeing Thanksgiving cynically as a cultural myth, can you POSSIBLY see it as a positive contribution to our culture? I think often of a slogan that numerous catalogs have emblazoned on t-shirts, etc. The slogan is: “There is always, always, always something to be thankful for.” In my life, I have often had to look for what to be thankful for. Being thankful in difficulty has helped me greatly, and I am glad for a holiday that reinforces that. I remain astonished at your judgmental attitude. It is the antithesis of thanksgiving. – Mary G. I liked the title of your article today but you missed some important points of history that predates most of your comments. – Bil B. Was Bill’s cynicism over the top, as Mary says? Was his historical recollection inaccurate, as Bil asserts? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… [10x Trade Alert] Oval Office Drops $340 BILLION Cannabis Bombshell! Aspiring Pot Stock Millionaires Urged To Act Now. Former hedge fund manager and Wall Street insider Teeka Tiwari just got big news from an investigative reporter with special access to the White House. “If what I just heard is true – and it’s since been covered by 21 reputable sources, including insiders at Barron’s, The Wall Street Journal, and Fortune… Then a brand-new batch of pot stock millionaires will be made in the coming weeks. And, with one simple move, you can be one of them.” Click here for the full details on Teeka’s incredible discovery. 
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