Great victory for the American people… or just another fraud?

Bill Bonner’s Diary

Great Victory for the American People… or Just Another Fraud?

By Bill Bonner

Bill Bonner

SAN MARTIN, ARGENTINA – Another rough day in the markets. And another “great victory for the American people.”

The Dow fell yesterday. Driving stocks down was the unprecedented carnage in the oil market. West Texas Intermediate oil was selling for MINUS $39 a barrel. Experts at Bloomberg say the price could fall to MINUS $100.

In theory, if your swimming pool were empty, you might buy a couple truckloads of oil. The average pool will take about 20,000 gallons. That’s nearly 500 barrels of oil.

So if you filled your pool, you’d get paid $19,500. Then you could wait until things get back to “normal”… and sell your oil, say, for $20 a barrel… and pocket another $10,000.

Or you could just learn to like swimming in black goo.

Swamp Stimulus

It’s deflation now… inflation later.

Oil is below zero. Money too. Like oil, in some places you have to pay someone to store it for you.

And as things get crazier and crazier, you may soon be able to buy a house for less than nothing (a negative rent). Then, it is only a matter of time until stocks trade below zero, too.

Yesterday, they were headed in that direction.

Then came the news that the feds had agreed on another bi-partisan SwampFiller program. Bloomberg:

Senate Passes $484 Billion Interim Economic Stimulus Package 

At the rate things are going, the money will be gone by the end of next week… comfortably ensconced in the pockets of insiders, chiselers, and cronies coast to coast.

But don’t worry. There’s more where that came from.

There are too many oil companies producing far too much oil. But Donald Trump proposes to lend them more money. The idea is to pay them NOT to produce:

I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!

Stunning Fact About the Top 2 Stocks During COVID-19 Crisis…

And even though the latest bailout has not yet been passed, there’s another already on the way. Here’s Bloomberg again this morning:

The Senate sent a $484 billion package of new pandemic relief funds to the House for likely approval Thursday, as lawmakers and the Trump administration began turning their attention to the next round of stimulus for a stalled U.S. economy.

“We have a great victory for the American people,” House Speaker Nancy Pelosi said after the Senate acted. “But we certainly need to do more.”

The “more” is where the inflation comes in.

It’s one thing to fake out investors with quantitative easing (QE) and fraudulent interest rates. It’s another to dump trillions in helicopter money on what’s left of the Main Street economy.

In the former case, you get higher stock prices. Everybody’s happy. In the latter, you get higher consumer prices. Who’s happy then?

But for now… we’re still in the deflation phase. And yesterday’s news of coming inflation did little to lift stocks. The Dow still settled down 631 points. Only 23,018 left to go!

$10 Trillion Blunder

Meanwhile, research and statistics continue to pile up… hinting that the Trump Administration has made a $10 trillion blunder in its handling of the C-virus.

New studies show that the virus moves faster than expected… infects more people than expected… and kills fewer of them than expected. It acts, well, like a regular virus… not like The Plague.

Typically, a virus gets passed around the schools in winter. Children come home with runny noses. Parents soon have colds, too. Then, when they visit grandparents… the old folks are doomed.

The “old man’s friend” is how they used to describe pneumonia. It came along, just in time, before the old fellow’s condition – mental or physical – became too embarrassing.

In the case of the C-virus, the most reasonable course of action is merely to warn people… and let them take precautions. That is about what Sweden has done.

The U.S. took the more heavy-handed approach – it imposed curfews, shut-downs, and economic stoppages on everybody.

A Sneak Peek Inside Apple's 5G iPhone?

In closing the schools, it prevented children from learning (assuming the schools serve any useful function at all), but it also prevented the children from building up the immunity that will prevent the disease from spreading.

In closing the economy, it prevented people from earning a living, which means it prevented them from earning the “wealth” that we all need to live on.

The result is a man-made economic catastrophe. No one knows how much it will cost – in real output only. But current estimates are running around $10 trillion.

And that’s not counting the economic damage done by the feds’ bailouts and money-printing… or the losses in the asset markets. U.S. stocks alone are down about $5 trillion since early February.

Great American Fraud

Had only the vulnerable old people been locked down, the damage would have been minimal. Old people are mostly retired… or can work from home… It is no great loss if a few Walmart greeters have to stay home.

But the U.S. has lost more young workers than older ones. Here’s a tweet from Ezra Klein:

52% of Americans under the age of 45 have either lost their job, been put on leave, or had their hours dramatically cut as a result of the coronavirus pandemic, compared to 26% of people over the age of 45.

Almost all young people… and the huge majority of people in their 30s, 40s, and 50s… live by the “sweat of their brows.”

That is, they earn money by selling their time.

They make no money when they’re not working. They add no wealth. They learn no skills. Time – their most important asset – has been stolen away. Their lives have been impaired.

Along come the feds and tell them, “No sweat… we’ll give you money.” The Paycheck Protection Program pretends to make them whole by replacing real time with fake money.

A great victory? Nope. Just another fraud.

Regards,

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Bill

Like what you’re reading? Send your thoughts to feedback@rogueeconomics.com.

Note From the Publisher

You’ll notice a kind of “cosmetic” change in your Diary subscription.

Don’t worry. You’ll still get absolutely everything you get right now. But going forward, Bonner & Partners will be called “Rogue Economics.”

Longtime readers will recognize the idea of rogue economics…

Bill launched the Diary of a Rogue Economist in 2013, to just a few thousand subscribers, when he formed his own boutique publishing business.

Over the last seven years, his daily diaries (which became Bill Bonner’s Diary in 2015) have reached millions of readers. And his small, niche business has grown into one of the largest and most successful publishers in the industry.

As part of that growth, we’ve introduced new voices…

Diary readers regularly hear from tech expert Jeff Brown, world-traveler Tom Dyson, famed speculator and “anarcho-capitalist” Doug Casey, crypto guru Teeka Tiwari, longtime trader Jeff Clark, commodity analyst Dave Forest, and many others…

In other words, we’ve been sharing more than just Bill’s ideas. And it’s time for our name to reflect that.

Otherwise, nothing will change. You’ll still find Bill – his stories, insights, and wisdom – where you always have. It’ll just have a slightly different look.

And you can expect more unique ideas from other big thinkers in our pages.

Best regards,

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Amber Lee Mason
Publisher

P.S. As always, let us know what you think – good or bad. You can now write us at: feedback@rogueeconomics.com.

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MAILBAG

In today’s mailbag, Dear Readers question Bill’s coronavirus numbers and those leading the fight against COVID-19, and thank Bill for his economic insights…

Bill, I usually love your commentary and that you spare no one. You have no political favorites, and your disdain for the Federal Reserve is both shared and appreciated. Recently, though, your math has been questionable, only surpassed by your lack of understanding medicine.

As someone who worked as a Registered Respiratory Therapist for eight years, I know the health care system would be overloaded and broken beyond repair, long before 50 million Americans even got sick with COVID-19. So the death rate would probably be much higher, as it is not as simple as just hooking someone up to a ventilator. Staff gets tired, they get sick, and they lose drive and energy. I remember what it was like back in my 30's working two 16-hour shifts back-to-back. I can't imagine what it would be like for three to four weeks or more.

On April 13, you claimed 2.7 million people die in America each year. And that 60,000 more dead would just be a 2% increase over that number. You state that we are shutting down the economy to save a small number of people from this virus. Yet, with social distancing being practiced by 90% of Americans, there are still 640,000 confirmed cases and 31,000 dead as of Thursday, April 16. Based on confirmed cases, that is a mortality rate of 4.8% (unless CNN or John Hopkins lies).

– Mark S.

I know that Trump is a buffoon. I'm beginning to have serious doubts about Dr. Fauci, even though, as a scientist, I tend to come down on the side of science. That said, I'm not going to choose sides in regards to the forced lockdown of America.

– Dale A.

I’ve been reading Bill for about six years, along with Dan and Tom when they joined as well. I started buying physical gold back then. About two years ago, my wife and I purchased a 50-acre beef cattle farm. Our very own bolthole. Then the Coronavirus hit and the outside world has turned upside down. But here on the farm, we are too busy mending fences, feeding cows, and birthing calves to even notice the shutdown.

I just wanted to say thank you to Bill and his crew. With their writing (both with the newsletters and books) I started thinking a different way. I now have my gold, my bolthole, my rental properties, and my sanity. I’m 52 years old and I feel I am set for the next 52. Now I gotta figure out how to get in the wine business!

 

– Scott S.

Is Bill missing the mark is his coronavirus analysis, as Mark believes? Have you purchased gold or acquired a bolthole as a result of Bill’s Diary? Write us at feedback@rogueeconomics.com.

IN CASE YOU MISSED IT…

Coronavirus Will End, But… America's Financial Repression Is Just Beginning

Chances are, the coronavirus won't be the end of humanity. But one former insider says…

The Fed's reaction could soon mark the "end of retirement."

Even if you've saved $500,000… $1 million… or more.

The Feds just unleashed "unlimited" money printing… and now, $10 trillion is set to flood into the economy.

The unprecedented $2.2 trillion response to the COVID-19 shutdown allows politicians to look like they are "doing something." But if printing money could actually make people better off…

Venezuela and Zimbabwe would be the wealthiest places on earth.

Dan Denning – a former congressional staffer – says all this "free money" is guaranteed to make things much worse. Especially if you have money saved for retirement.

In fact, Denning famously predicted this outcome three years ago. At the time, it seemed a bit crazy – so few people listened. Now, his prophecy is impossible to ignore.

If you have any cash set aside in the bank or a money market account, it's critical you pay close attention to what he has to say, before it's too late.

There's still a lot you can do to protect yourself – but there isn't much time…

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