| By Bill Bonner, Chairman, Bonner & Partners BALTIMORE, MARYLAND – Even the most beautiful flower dries up and dies. Even the most gifted athlete, if he lives long enough, shuffles and stoops. All living things bend, corrode, and decay. Don’t blame us. We are part of nature too, not creators or designers of it. We do our best just to figure out how it works. Beginning of the End We’ve seen that all bubbles pop… all booms end… and all bull markets on Wall Street turn into bear markets. Empires, like all things in nature, have life cycles, too. They are born, they grow to be fat and sassy. Soon, they are too big for their britches. Inevitably, the buttons pop. Pretty soon, you can’t take them out in public. Americans began expanding their empire from the get-go, always pushing further and further west. By the late 1600s, they were at the foothills of the Appalachians. By the end of the 1700s, they were on the Mississippi. And by the middle of the following century, they were traveling from coast to coast in railroad cars. They conquered territory from the Indians… bought it from the French and the Russians… beat back a schismatic attempt at independence by the southern states, and gained huge territories from the Mexicans, by hook or by crook, depending on how you look at it. By the end of the 19th century, they already had an imperial possession halfway around the world – the Philippine islands – and were ready for the heyday of American hegemony… the 20th century. That’s how the empire got its start. When it will meet its finish is anyone’s guess, but we think we know when the beginning of the end began. By the late 1990s, the fake money (begun in 1971) had already obscured the honest price signals of a capitalist system. And by then, too, the feds had put their noses into almost every nook and cranny of the economy – with the Federal Register growing by 50,000 pages of rules and regulations every year. | Recommended Link | | Silicon Valley Visionary: “This Will Be the No. 1 Tech Stock of 2020.” Jeff Brown is a tech investor known for his incredible success rate. In fact, he’s invested in 111 different tech startups… and made money on 95.3% of them. Like Intabio, which developed a groundbreaking system to test biopharmaceuticals. Jeff’s stake is up 900%. Or ShapeShift, which Jeff got into very early… As of today, he estimates his investment is up 25,000%. He made 743% in three days on InfoSpace! And now, he’s just released the details on his number one tech stock for 2020. | | | -- | Great Decline When the 21st century began, the U.S. was already tilting into advanced middle age. The war on poverty had been going on for 36 years… the war on drugs had been in business for 29 years. The fake money system, too, had been around for more than a quarter of a century. The imbecility and absurdity of its dumbbell policies – like too many shots of whisky, too many cigarettes, and too many cream-filled donuts – was catching up to it. After 1999, the U.S. declined (against other nations) by almost every measure. Per-capita wealth, infant mortality, life expectancy, freedom, business climate, equality; you name it, the U.S. was no longer No. 1. In terms of GDP, after WWII, the U.S. had 35% of world output. That number fell gracefully, until 2000. Then it fell hard, to only 19% today. And in 2009, China became the world’s largest exporter. Now, a decade later, look out your window because another milestone is passing. Asian economies now account for half of the world’s GDP. The value of America’s capital stock fell, too. Judged by the real money that we had before 1971 – measured at $35 to an ounce of gold – the Dow tumbled 84%. It has subsequently recovered… but only to about half its previous high. Along with a big drop in stocks, after 1999 came a big deterioration in U.S. government finance. It is hard for us to imagine today, but just 20 years ago, the feds ran a surplus. And forecasters predicted that the surpluses would continue… wiping out the entire U.S. debt within 10 years. It didn’t work out that way. The U.S. government debt was still under $6 trillion in 1999, with a $125 billion budget surplus. By 2008, there was $10 trillion of federal debt… and a budget deficit of $450 billion. Then it got much worse. Last year, the Trump Team logged a deficit of $1 trillion… which pushed the national debt up to $23 trillion. Corrupted by Fake Money What went wrong? For one thing, the Republican Party, typically the guardian of the nation’s finances, went AWOL. Corrupted by the fake money, Republicans came to believe that “deficits don’t matter.” “Balanced budgets” became artefacts of the past. For another, the much-heralded Internet Revolution turned out to be a flop. Electronic communications proved a great source of entertainment and distraction, but not of the profits and productivity that paid the bills. Looking back on it, the Clinton years were a sweet spot in U.S. history. Private vice triumphed over public debauchery. Rather than stirring up trade wars… threatening foreign governments… or twisting the Federal Reserve chairman’s arm for lower rates, Mr. Clinton wisely retreated to the closet, where he did lewd and lascivious acts with a White House intern. But there was more to it than that. Fake money was already queering the economy and Alan Greenspan’s fake interest rates were already perverting the stock market. Mr. Clinton enjoyed a booming economy and a rising stock market; his great virtue was that he was too preoccupied with his own dissipation to stop them. And only a few months before the Arkansas governor took office, the U.S. got one of the greatest gifts in history: its arch enemy, the Soviet Union, threw in the towel. The Cold War was over. Sad Consequences The end of the Cold War should have liberated at least $200 billion in military expenses. But by then, the military industrial complex – the one that Dwight “Ike” Eisenhower warned against – already had enough members of Congress in its pocket to protect its budget. The Deep State – a loose and spontaneous, bi-partisan group of insiders, lobbyists, donors, think tanks, academics, politicians, and bureaucrats – was only a threat in Ike’s administration. By 1990, the threat had become reality. So, after a brief pause, military spending continued to rise. Meanwhile, the funny money continued to distort and disrupt the U.S. economy… so much so that another bubble – this one focused on housing – blew up in 2007-2008. We’ll look at the debris from that blow up next week. We’ll also look at the sad consequences of failing to bring the armed wing of the Empire’s Deep State under control. In the 21st century, those two failures led to the most knuckleheaded disasters in American history. Tune in Monday… Regards, Bill Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. FEATURED READS The Future Belongs to the Middle-Aged
This year the median age of America’s population will be 38. To understand this trend of aging demographics – and its consequences – we can look globally… where industrial advancement, politics, and migration have similarly shaped other countries. Catching Up on the Quantitative Easing Crisis
In December, Bill explained how government manipulation, especially with quantitative easing (QE), is detrimental to an economy already on unstable footing. Now, Forbes writer John Mauldin exposes QE for the wickedness that it is… and echoes Bill’s economic crash concerns… Bill’s, Dan’s, and Tom’s Wildest Predictions for 2020
Bill has a strong prediction for the new year: an overhauled tax system based on our carbon footprint. Read on to hear from him, as well as his colleagues Dan Denning, Tom Dyson, and nine other financial industry experts on what they think is in store for 2020. MAILBAG Yesterday, Bill offered a glimpse into his time with family over the holidays. But one Dear Reader wasn’t amused by Bill’s take on what he called “the interdictions of the modern age”… I hope that your children and grandchildren don’t read (/absorb) your writings. They would be better off for it. Or at least ask more questions about what is going on around them. Dealing with indoctrinated family can be frustrating. I also had head-shaking moments over the holidays. The biting of one’s tongue at times is essential. – Harry W. While another Dear Reader reflects on his limited use of technology, after Bill shared his No. 1 suggestion for 2020: to turn off and tune out… I grew up in a home without a TV – back in the ’60s – and I can’t begin to recall all the times I was unable to understand references by my classmates to shows, ads, etc. that they saw on TV. But by not having a TV, I read. As a senior in high school, I calculated that I had almost certainly read more than a thousand books at that point in my life, and I have continued to read. Today we are retired, and still don’t have a TV in the house. I do spend quite a bit of time on-line on my computer, but my phone is still only used for calls and texts. I value my time when screens are not demanding my attention, because it gives me time to think and reflect. A lot of my time on-line is still spent reading things I choose to read, rather than responding to all the prompts and pushes that come my way. Thus, my knowledge and perspective continue to expand. Mark Twain is reported to have said: “If you don’t read a newspaper every day, you are uninformed. If you do read one every day, you are misinformed.” The amount of misinformation has expanded beyond measure since his day, but time to read various points of view and think about them – to evaluate them in the light of experience and what I can state with confidence is likely true – helps me to avoid many popular memes and themes. I especially enjoy your musings, because I feel you are a kindred spirit. I love your theme, “Sometimes right, sometimes wrong, but always in doubt.” I look forward to more musings in the coming year. – Gordon F. Are you taking Bill’s advice to turn off and tune out as we welcome the new year? Should Bill have bit his tongue over the holidays, as reader Harry W. suggests? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… Jeff Clark Just Revealed His New “Spring-Loaded” Trading Method During Jeff’s exclusive trading event, Jeff brought out an ordinary spring to illustrate his “S-Force” Trading Method. You see, in its resting state, the spring doesn’t do anything. But with the right catalyst, it can soar higher. Jeff’s strategy works the same way. So what’s the catalyst Jeff’s found that can send stocks soaring as high as 200%… 800%… even over 1,000%? Find out here. 
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