| By Bill Bonner, Chairman, Bonner & Partners BALTIMORE, MARYLAND – China and the U.S. signed a truce in the trade war yesterday. Kinda. Sorta. CNBC: To be sure, the deal does not remove existing U.S. tariffs on Chinese imports and leaves questions as to how the terms of the agreement will be enforced. The deal is also seen as “fragile” by some analysts who believe additional levies could still be implemented. But kinda and sorta – and another $142 billion from the Federal Reserve on Monday and Tuesday – were all investors needed to push the Dow up over 29,000. As expected, The Donald could never go full Trade War… Too much at stake. Most important, an election. And as expected, after all the sound and fury, little actually changes. Except that the economy weakens and The Swamp (now that the feds manage trade as well as everything else) gets deeper. | Recommended Link | | “Timed Stock Insiders”: EXPOSED! ”Timed Stock insiders”… All have made once in a lifetime gains up to 8,233%. And, starting Wednesday, January 22, at 8 p.m. ET, you too, can be a “Timed Stock” insider. You can ride Timed Stocks to extraordinary gains of 314%… 2,462%… and even 23,200%. In a matter of months. Weeks. And, in rare cases, a single day. | | | -- | Backfiring Trade War As estimated by Moody’s Analytics in September of last year, total U.S. job losses from the tariff war were 300,000. Then, a Fed report followed, concluding that the trade war had “backfired”: A key feature of our analysis is accounting for the multiple ways that tariffs might affect the manufacturing sector, including providing protection for domestic industries, raising costs for imported inputs, and harming competitiveness in overseas markets due to retaliatory tariffs. We find that U.S. manufacturing industries more exposed to tariff increases experience relative reductions in employment… Higher tariffs are also associated with relative increases in producer prices via rising input costs. But you have to give Mr. Trump credit. No matter how claptrappy an idea may be, he holds onto it like a dog with a bone… End of an Empire A report in yesterday’s Wall Street Journal told us that Trump was still considering 100% tariffs on French wine and luxury goods. This comes in retaliation against the Macron government for threatening a 3% tax on big U.S. e-commerce companies operating in France. Another report told us that the Trump team threatened a 25% tariff against European autos to punish the E.U. for trading with Iran. In other words, U.S. trade warriors not only aim to stop Americans from doing business as they see fit, but the Germans and Italians, too. Meanwhile, Peter Navarro, the president’s crackpot economist, argues – also in the Wall Street Journal – that tariffs are a wonderful addition to America’s bully arsenal… and that they need a “fair test”: The economy remains robust, wages continue to rise, and inflation stays muted. Why have the doom-and-gloom forecasters been so wrong? The French must have asked the same question in 1812 when Napoleon’s troops arrived in Moscow. Bonaparte was trying to win a trade war by forcing Russia to stop doing business with England. And everything seemed to be going so well. We don’t take it personally, mind you. But trouble doesn’t exactly step off the 4:15 flight from Montreal, looking for someone holding up a Doom & Gloom sign. Instead, it sneaks across the border. And doom-and-gloomers are always wrong… until they’re suddenly right. Napoleon’s Grande Armée crossed the Neman River and invaded Russia. His 400,000 sparkling soldiers marched in good order – all the way to Moscow. But when the survivors finally crossed the Berezina, on their retreat back to France, there were only 27,000 of them – shivering, starving, and dying fast. And Napoleon’s empire died with them. But let’s turn back to our own situation… | Recommended Link | | FL PhD who made $325,317 this year shares his story A PhD who lives on an island off the coast of Florida has stepped forward to reveal how he made over $300,000 thanks to a rare phenomenon happening in the stock market right now. He’s urging Americans to act while this extraordinary event is still in motion: “Missing out on what’s about to happen is going to be a huge source of regret in the months ahead.” | | | -- | Next Stop: Moscow Yesterday, we explored why inflation is inevitable. We wound up agreeing with mainstream economists and other jackasses who think the Fed did the smart thing on September 17, 2019. On that date, the Fed crossed its own Neman, ending its program of moderate, timid, halting “normalization”… and invading the markets with nearly half a million freshly outfitted new dollars. The money went into the “repo” market to fund the federal government’s excess spending. Yesterday in these pages, we also saw that the feds will need to refinance – “to roll” – $6 trillion of short-term funding over the next six months. With foreigners out of the picture, there is no way that much can be financed honestly. The Fed will have to “print” more money. Setting the pace, in the first two days of this week, it added the aforementioned $142 billion to the nation’s money supply. And as Luke Gromen – whom we quoted in yesterday’s Diary – explained, there’s no other acceptable choice. Had the Fed not stepped into the breach when it did… the thin and exhausted line of defense would have given way. Then, stocks would have crashed. The bond market and the world economy would have collapsed. The housing industry would have been leveled. It would have been like 2008, in other words – only much worse. U.S. stock market investors, for example, have gained some $20 trillion over the last 10 years. Take away Fed support, and most of that money would disappear in a matter of minutes. And once again, the doom-and-gloomers are predicting disaster… your editor among them. On to Moscow! Regards, Bill Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. FEATURED READS Here’s Why the Record-Breaking Economy Has So Much Debt
Euro Pacific Capital CEO Peter Schiff predicted the Great Recession in 2007. Now, he has his eye on the ever-growing U.S. deficit for 2020. When the economy is growing, he says, deficits are supposed to shrink, not get larger… America, Take Notice: Recession Fears Among CFOs Are Rising
Economic sentiment is falling for many CFOs around the country. These business minds say it’s crucial to look at overall activity and not just a ballooning stock market. And history shows their warnings should not be ignored… Your Financial Questions Answered
Bonner-Denning Letter co-author Dan Denning and three other experts answer some of your most pressing financial questions. From why you should hold cash in an emergency… to what rising oil prices mean for gold… read on for their answers. MAILBAG Dear Readers offer their take on America’s decline, following yesterday’s essay, “Two Reliable Ways to Bring Down an Empire”… Really love your work and how your mind works. I wish we had more people like you and Doug Casey in this world. I learn every time I read from the both of you, and this article about bringing down an empire is bang-on, with the accurate detailed description by Luke Gromen with debt, interest rates, mortgages/real estate, etc… When, in your opinion, would you like to see this Monopoly game end? Why should these entities collect money (labor) if they are going to just print their money anyways? I’m not looking forward to the collapse of basically all of society but would rather it reset now, than just making things a hell of a lot worse for the rest of the 90%+ of this earth when the check comes due. I believe they are adding this Monopoly money to not only keep this game playing, but also to fatten the wallets of their family, friends, and business acquaintances so they can live while the rest dig out of trash cans… – Dwayne C. The government debt issue did not start with Trump and won’t end with Trump. In fact, if he is not re-elected and the Democratic-Socialists get in the White House and Senate, that freight train of government spending will intensify along with the taxation of the American people. No government or country I am aware of has a “pure” history for protecting its people and not going astray over time, at least one or more times. Your constant theme is always the same. Too much government spending. So things can be summed up in this: Just buy gold, silver, and other metals and real assets. Hopefully, you can pay for them without incurring debt. P.S. The rest of the world is in step with us (or ahead of us) in racking up debt they will never be able to repay, hoping for hyperinflation or massive devaluation of their currency. – Richard D. Mankind has been at war with his fellow man forever. Just travel through Europe and see the fortifications on every hilltop. Empires had great times while their military stayed strong enough to combat would-be usurpers. Greeks, Persians, Romans, Germans, French, Spanish, English, and many others all had their moment in the sun, until they didn’t. America is no different. Ugliness of religious, economic, and military warfare is everywhere, always has been, and always will be. Self-serving politicians, under the guise of working for the common man, rationalize wars, protect monopolies, and make promises they know can’t be kept, the costs of which debases our currency and pushes us to our ultimate demise. But it is the spirit of the individual that stays alive through all the mayhem. And nowhere is this more evident than in the arts, specifically music, dance, singing, painting, sculpture, literature. These all express mankind’s compassion, love, his very soul that lives through whatever chaos is put upon us. Science, medicine, the legal system, engineering, biology, and research all contribute to improving our standard of living, but it is the arts that best represent our humanness. So practice an art you love, or just appreciate excellence in these fields. Try and accept the rest. – Gordon R. Maria’s Note: Thanks for writing in, Gordon. If you haven’t yet, check out Bill’s essay on how violence can make or break a civilized society. It comes from his latest book, Win-Win or Lose: A Modest Theory of Civilization. Here’s a short excerpt: Bell [an English art critic] wrote in the inter-war period of the early 20th century. He saw the destruction wrought by World War I. He anticipated, correctly, more to come. But he did not draw any broad conclusions from the extreme violence of the era or about how it might connect to the idea of civilization. Instead, rather than worry about how war fits into civilized life, the art critic chose to look at the civilized life he knew and describe it to us. What he discovered is that civilized communities have the time to “think and feel” rather than just work. They concern themselves with art, wit, charm, style, poetry, theatre, music, philosophy, and learning – and not just with getting and spending money. If you’re interested, read Bill’s full essay here. I think you’ll find his conclusions thought-provoking… Would you rather society “reset now,” like Dwayne says? Is it the spirit of mankind that keeps us going throughout history’s conflicts, as Gordon believes? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… Urgent: To Any American Who Owns A Cell Phone If you own a cell phone, then mobile service providers hope you never get to see this video going viral. It was shot in downtown Denver by a multi-millionaire, who exposed sensitive truths about cell phones and 5G. His experiment will strike a bad chord with cell phone companies, I know. But you’ve got to see what this man “leaked,” and what it means for phone users in the weeks ahead. Click here to see this developing story. 
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