| By Bill Bonner Monday, May 18, 2020 – Week 10 of the Quarantine Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves. – William Pitt the Younger, former British prime minister SAN MARTIN, ARGENTINA – “No pure-paper money has ever survived a complete interest rate cycle.” We wrote that about 20 years ago. Now, we will see it put to the test. In the Panic of 1857, the yield on the U.S. 10-Year Treasury Note rose to 6.6%. It took a lifetime for it to reach the next top, in 1920. Then, another 61 years passed before the next top came along. In other words, these are generational trends. One generation learns. The next forgets. In a week, we can forget where we left the car keys. A couple weeks later, and we’ve forgotten where we left the car. Forty years on, and we can scarcely remember – or even imagine – the 15% mortgage rates of 1980. And what has happened to the “bond vigilantes” who used to sell U.S. Treasury bonds at the first sign of runaway deficits? Surely, they are in wheelchairs, unable to recall their own names, much less how they lost their fortunes betting against the bond bubble. And if the pattern holds, in a few years, we’ll regret not having locked in today’s low mortgage rates… if we can remember them! After this downdraft has flattened the economy, interest rates (and consumer price inflation) should begin to rise. In another 20 years or so, rates should be reaching for another generational top. Perhaps you’ll have to pay 15% for a mortgage. Or maybe it will be more like 50%. Or mortgage lenders could be almost out of business, as they already are in Argentina. If you want to buy a house there, you’ll have to pay cash. | Recommended Link | | Man who warned of 2020 Crash issues new prediction On Wednesday, May 20th, the man who warned about the 2020 crash will issue his biggest new prediction since 2019. He famously wrote, "Expect a bearish meltdown" back on May 29th, 2019. He explained why stocks were a terrible investment… and why he was putting his life savings into a trade some said he was foolish to consider. Sure enough, the Crash of 2020 came along. He's now up $200,000, with the biggest gains still to come. He expects to make millions altogether, by doing something you've probably never seen before. | | | -- | Relearning the Lesson Yes, it’s back to school. Now, we learn – again – why, for 180 years, U.S. dollars were linked to gold, rather than simply to promises from the U.S. government. In a nutshell, it’s because the generation of 1791 (when the U.S. dollar first appeared) knew something the generation of 2020 has forgotten: Power corrupts. And the power to create “money” is so irresistible that no race, no nation, no genius, and no government official has ever resisted it for long. Imminent FDA Approval Could Send This Tiny Biotech Soaring. Sooner or later, a “necessity” arrives… Usually, it is a “war”… or the threat of insurrection. (Rudolf von Havenstein, in charge of German money-printing in the Weimar Republic, said he had to do it to head off a Bolshevik Revolution. Instead, he got the Nazis!) And now, it’s Rudolf von Powell who’s cranking hard on the printing press. In April, the federal government ran a deficit of more than $730 billion. That’s $1 billion every hour, Saturdays and Sundays, too. | Recommended Link | | Take a good look at this dollar bill… Because this could be the last time you see one… Due to radical changes to our financial system taking root. Top lawmakers just returned from a private meeting on Capitol Hill… And frankly, it's shocking the mainstream media hasn't picked up on this yet. But you can get all the details you need to prepare for this massive change – as well as profit from it … | | | -- | Nationwide Catastrophe What’s the necessity? First, they created an impaired economy, already on fake-money life support. Then, they shut it down in order to stop the spread of a virus. As a result, sales, profits, earnings, jobs, tax revenues – all are collapsing. We’ve already seen that the Universal Lockdown was one of the most monstrous mistakes ever made by public officials. The odds of death are 1,000 times greater for an 80-year-old man than for a 30-year-old female. It would have been relatively easy to protect the vulnerable groups (including your editor) until the threat had passed. Simply tell them the truth! Stunning Fact About the Top 2 Stocks During COVID-19 Crisis… Most of the codgers are already retired anyway. Retiring from public life would be a piece of cake. It would have cost the economy very little. Instead, the feds – led by know-nothing Donald Trump and know-it-all Anthony Fauci – took on a challenge… and turned it into a nationwide catastrophe. Business came to a halt for wide sectors of the economy. Unemployment heads to 25%. GDP sank by roughly 10% in April – a figure not seen for the last 100 years. And Detroit is now on pace to deliver fewer new cars than it did in 1916! Rents can’t be paid. Auto leases can’t be paid. Mortgages can’t be paid. Even utility bills are likely to go unpaid. | Recommended Link | | America's #1 Investor Makes Stunning Discovery at Trump Tower… Since 2016, Teeka Tiwari has trumped the stock market. His investment recommendations have averaged 154% per year. That’s 10 times the S&P. And 81 times the average investor, according to JP Morgan! However, one investment Teeka just uncovered could top them all… It involves President Trump, billions of dollars, several large banks, as well as Warren Buffett. As well as a MAJOR upgrade to our credit and debit cards. Teeka, who correctly picked the last two “investments of the decade,” is declaring this his top pick for the 2020s. | | | -- | Biggest Losses Retail sales figures for April show the biggest drop in 70 years. And the biggest losses are in one of the only sectors to show substantial growth over the last 10 years – hospitality. Bar and restaurant incomes, for example, have been cut in half. One out of four restaurants is not expected to ever reopen. Airlines, cruise lines, bars… tourism… thousands of businesses are calling their lawyers; “Uh, how does that Chapter 11 work, exactly?” Private schools and universities, too… towns, counties, and state governments… households – Chapter 11 is going to be the most searched-for term on Google. From Baltimore – a city already on the brink before the arrival of the C-virus – comes news that two of our favorite restaurants have gone out of business… And our grandson’s Episcopal day school has closed its doors – after 73 years! A letter from the school director told his parents that enrollments had plummeted as parents were either reluctant to commit for the Fall term… or didn’t have the money to pay the tuition. Real Catastrophe Neither Wall Street nor Washington has even begun to reckon with the damage. But all of that is just prelude to the real catastrophe. Next up: We find out that printing fake money to cover the losses is an EVEN WORSE idea. America’s paper money system began on August 15, 1971, when Richard Nixon somberly announced the end of the Bretton Woods system that fixed the U.S. dollar to gold. We’re 49 years into it already. In 10-20 years, the cycle should be complete. By then, prices should be rising at 50% or more per year. And if we’re right, the fake dollar – the green piece of paper that is in your wallet – should be history. Stay tuned… Regards, Bill P.S. Our colleague and friend Tom Dyson has taken all of his money and invested it in the one asset that he believes will be safe from the coming catastrophe – gold. On Wednesday night at 8 p.m. ET, he’s going to tell us all about how he’s going to make this strategy work for him… and his family… for years to come. We’ll be joining Tom on the line. We’re eager to hear what he has to say. Perhaps you should, too – Tom believes that what he has to tell us could change our lives. Click here to reserve your spot. P.P.S. Now into our tenth week in quarantine… and with the nearest liquor store over an hour’s drive… Elizabeth and I are lucky to have our own supply of wine from the vineyard. It keeps us going…  Like what you’re reading? Send your thoughts to feedback@rogueeconomics.com. FEATURED READS This Gold Strategy Can Protect Your Wealth for Generations Regular Diary readers know that Bill is a goldbug. But our editor isn’t the only fan of the yellow metal here at Rogue Economics. Right now, our world-traveling colleague, Tom Dyson, is “all in” on gold. In fact, he has put almost $1 million of his own money into a strategy that you can now utilize to protect your wealth. Learn more here… Crash 2020: You Can Use Options to Protect Your Portfolio So far during the coronavirus crisis, options trader Jeff Clark has made 270% in one trade alone. And he has an impressive track record of predicting and profiting from times of crisis – including Black Monday in 1987, the tech crash of 2001, and the Great Recession of 2008. Want to know his secret? Click here. MAILBAG In Friday’s Diary, “Roundup Time in Gualfin,” Bill wrote about catching the originarios who damaged and stole property from his ranch. Dear Readers offer a solution… Have enjoyed reading your account of living in lockdown. Would you be able to get any game cameras that activate on motion? You could place them around your rebuilt home and cattle facilities. If you hide them well, you could get the photo of the people responsible and provide proof for the police. Just a thought. Thank you for your great newsletter, I have enjoyed it for years. May not always agree, but you always make me think! – Marc D. May I politely suggest a game camera? Used in the U.S. for monitoring wild game sites and deer feeders. Infrared night vision optional. That way, not only do you know who, you have photographic proof for a likely unmotivated prosecutor. – Robert R. I have had similar experiences here on my farm in Uxbridge Ontario, Canada. Mostly with poachers and illegal dumping. The best solution is to deploy a number of game cameras. My experience is to deploy some which are easily seen… and which are aimed at a nice large general area… perhaps a valuable piece of your cattle shoot, etc. These will be stolen, of course, however, they are really just the decoy. Another more discreetly placed camera should be placed so that is aimed toward the camera which is going to be stolen. Thieves are stupid. They will return to the scene of the crime, and they will perceive the low-hanging fruit as an easy crime. With some good placement, you will get some great photos of the culprits in action with the “hidden” cameras. Good hunting! – Gregg M. Regarding catching the vandals: Outdoor stores and online outfits (Cabela’s...) in the U.S. sell battery powered camouflaged cameras designed to be left unattended outside. Hunters use them to see what game is in the area. They are often triggered by motion. They usually record pictures to an SD card or something similar. Maybe a solar-powered added outside light would help the picture quality. The cameras would have to be secretly mounted or the vandals would obviously destroy them... Therefore this technique would likely be a one and done, and couldn't be repeated. Good luck!!! – John D. While other Dear Readers offer their two cents on the coronavirus lockdown… As an actuary, I disagree with your analysis. You needed to lock down certain areas like metropolitan New York and surrounding suburbs because everyone missed the fact that it was here and spreading like a wildfire. However, a large majority of the country could have tried to stay open. But, I would have been extremely careful where large, congested cities were involved. Plus, you are discounting the fact that this could have been a lot worse if people kept traveling in and out of NYC, Boston, Philadelphia, Detroit, Chicago, Atlanta, Dallas, Houston, Las Vegas, Los Angeles, and San Francisco. People congregating in Vegas and then going home could have made this a real disaster. – Richard C. You are correct that the lockdown was the wrong answer. Power grab? Politicians testing the waters? Stupidity? I don’t know. But I’ve seen people who regularly claim that the FDA, Big Pharma, USDA, etc, cannot be trusted, and yet take the virus bait hook, line, and sinker. They happily hide in their houses, waiting for the “all clear.” I can’t understand it. But I’m deeply troubled by the people’s reaction. The sudden trust; the snitching; the “holier than thou” attitude. Anyhow, I plan to get back to normal. But I wonder if you’re correct, that a vast number of people will continue to walk around in fear, masks on their faces, stooped, scared. Cowards. – Antonio N. Thank you for the excellent commentary. I agree with you that shutting down the economy for this virus is/was ill advised. As a CPA, I can tell you that doctors are usually bad business people and even worse economists... that is why they hire people like you and me. Therefore, they are the last people to consult for those types of decisions. The health consequences for the U.S. population will be worse than the virus, and even more so for the global population. According to the UN, about 9 million additional people will starve to death because of this shutdown. How can that be a better result? I always find your commentaries to be entertaining, informative, and thought-provoking. Even when I don’t agree with your arguments, which is not often, you make me question the rationale of why my position is different. Isn’t that how you learn and discover the truth, to look at the other argument and question your own thoughts, even if you stick to them? I would rather tell what I think is the truth and accept my criticisms, than to bow to pressure and sell my soul and my morals. Keep up the great commentaries. – Joan M. Are “game” cameras Bill’s best option for catching the guilty originarios? Are those who wear masks after the coronavirus lockdown ends, cowards, as Antonio believes? 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… Go here. 
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