| By Bill Bonner Wednesday, June 10, 2020 – Week 13 of the Quarantine “Defund the police!” Protesters want to cut the gendarmes’ budget. Here at the Diary, we’re all for it. Defund the Federal Reserve, while you’re at it. And the Pentagon… Homeland Security… the Department of Education… the FBI… the CIA… the NIH… Congress… and the CDC. You see where we’re going with this, don’t you? Drain The Swamp! The feds are over-fed. All of them. Sloppy. Wasteful. Foolish. And worse. Big and Bossy The core of the American experiment was that government should be limited and small… It should be The People’s servant, not its master. But now, our government is so big and bossy, it decides who gets what… who trades with whom… what we can ingest… what we learn in school… It even tells us when we can go outside. It undertakes wars against people with whom we have no quarrel. It “sanctions” foreign governments willy-nilly. At home and abroad, it tries to push everybody around. 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So please click here to get the details immediately, and listen to this urgent briefing carefully. | | | -- | Direct Spending In the deepest part of the Great Depression, the Roosevelt administration never ran a deficit of more than 7% of GDP. Now, the Trump administration is headed for a 20% deficit. And even in the middle of World War II, the U.S. government spent only 40% of GDP. In the second quarter of this year, the U.S. is borrowing and spending 61% of GDP. Strange Activity Detected in Secretive Layer of Stock Market. Granted, a single quarter does not a year make. But before the lockdown, the feds were expecting to spend $4.7 trillion this year. Then came an additional $2.2 trillion in corporate and household welfare… with another $1 trillion expected before the end of the summer. This could leave spending for the calendar year at about $8 trillion. In May, GDP was running at about a $16 trillion annual rate. It’s unlikely the feds’ part of that will be less than 50%. Spending Limit And that’s only the direct spending. Add in all the money spent in the private sector complying with the feds’ edicts – tax preparation, regulatory compliance, bobbing and weaving to try to avoid punishment or gain favors – and the part of the economy under the feds’ thumb is probably up to 60% or 70%. And it’s not going back to “normal” anytime soon. In the second world war, the feds took a big piece of the pie – 40%. But it was for a single purpose – to win the war. And when the war was won, the soldiers came home and got to work. The economy boomed, and the feds’ share declined to under 20%. Also, in World War II, Americans paid for the war with real money. They saved. They lent money to the government. And taxes were relatively high. Government spending was limited, in other words, to what The People were willing and able to provide. And when the war was over, federal spending fell… and the government itself contracted. Life went back to normal. | Recommended Link | | Top CEO: "If the Internet was the appetizer, [this tech] is the main course." Source: ITU Pictures It's the most disruptive technology of the decade… Top tech CEOs expect it to create more wealth than the Internet. Robin Li, CEO of Baidu (one of the 10 largest internet companies in the world) says: "If the internet was the appetizer, then [this technology] is the main course." Amazon's Jeff Bezos says "We are now solving problems with [this tech] that were in the realm of science fiction… It is a golden age." But here's the most exciting part for you… Investors in this space already had the chance to see an incredible 737% gain in just 5 weeks. For a short time, you can get in with as little as $257. | | | -- | Real War Today, there’s not going to be a return to normal because there’s effectively no limit on what the feds can print and spend… and never any victory in their interminable wars. Instead, it is just one defeat after another. That’s the point; these are phony wars. Against poverty… drugs… terrorism… COVID-19. They are not meant to be won, but lost. Because the longer they go on, the more wealth and power the Deep State gets. While the media and mobs focus on the struggle between red and blue… liberal and conservative… Republican and Democrat – Joe Biden goes to the George Floyd funeral… Donald Trump visits the police – the battle that really matters is not even noticed. It’s the war between the Deep State – with all its beefed-up military hardware, unlimited funding, and self-serving crackpot ideas – and the people of the U.S. This top financial expert just returned from a private meeting with members of the Senate Financial Services Committee… After the Lockdown Crash, for example, investors judged the value of stocks to be only 65% of what it had been before it. Then, thanks to Deep State (Federal Reserve) funding, the S&P 500 rose 45% – adding about $21 trillion in new value, almost all of which went to the richest 10% of Americans. So, the 10% of the American public that owns stocks – that is, those invested in the Wall Street system – had a big payday. A person with $100,000 invested made about $15,000 per month. Most likely, if the Federal Reserve had not funded the stock market, they would have made nothing… and would be down sharply for the year. Different Levels Over in the Main Street system, meanwhile, those who qualified got a $1,200 check. If they were eligible for unemployment, they might have also gotten about $1,000 a week. This money, too, came from the feds’ inexhaustible supply of fake money. They were funding almost everything and everybody. But not at the same level. Those in the Wall Street system with $100,000 invested got three times as much “funding” as those in the Main Street system. Those with $1 million got 32 times as much. And since those in the Wall Street system – the Deep State elite, Wall Street, the professoriat, the commentariat, the jackasseriat of The Swamp – control the government and the printing presses, don’t expect any “defunding” anytime soon. Regards, Bill
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The price of gold keeps climbing. Amidst global economic uncertainty and expectations of contraction, investors are scrambling to protect their wealth. The only sure way to do that? Buying gold… MAILBAG In today’s mailbag, one dear reader calls out Bill for using the word “we” when referencing himself. He should absolutely quit doing it. Every time I see Bill using the royal prerogative, I think of The Donald, or more specifically, The Donald’s hair. So fake. I suppose Bill is trying to remind us he is in a royal class, far above the ordinary man. – David B. Here, Bill explains why it isn’t the “‘royal’ we”… and why he uses it… Meanwhile, other dear readers continue the conversation on working hard and earning a living, after Joe E. said: There is no excuse in America to be uneducated and poor… There are plenty of opportunities in life to start a minimum wage job and advance if one is willing to give it their best and improve their skills and education. Many people are irresponsible, which almost guarantees them a life of poverty… – Joe E. Totally agree with Joe E. My parents survived the bombs during World War II. After the Soviet Communists took over their country, they came to the U.S. Their families had lost everything. My dad’s parents disappeared during the war, never to be found. Everything my parents had was in a small suitcase. A few dollars in their pockets and the clothes on their backs. Though they were fluent in a couple European languages, they had to learn English. By golly, they did. My dad was an industrious, ambitious person and within five years after arriving here, he started his own business. There was no welfare back then. They wouldn’t have considered it, even if it had existed. There are many similar immigrant stories. Who are the star performers in their schools nowadays? Children of immigrants. With so many educational opportunities available, both online and on campus, there is no excuse for the illiteracy rampant in some communities. When my late husband and I started our business, we worked 10- to 12-hour days, six days a week, for the first two years. We didn’t waste time in front of the TV. We attended, and even sponsored, seminars and workshops. Eventually, we were able to enjoy the benefits offered by our business. But it took a lot of work to get there. – HO N. Hard work often pays off. Forty-eight years ago, I was a single mom who couldn’t even afford government-subsidized housing. Today, my situation is very good. And yes, I worked really hard to get here. But I also had blessings from God along the way, without which I would never have been able to overcome my bad decisions. So it’s often a mix of working hard, recognizing an opportunity when it appears and taking advantage of it, and having a support system that cares for you. On the other hand, I have known people who habitually make bad decisions and whine about the consequences. I think we all make some bad decisions; it’s the nature of human beings. But you don’t have to deny your own culpability and continue making bad decisions. If you don’t learn anything from your mistakes, you have only yourself to blame. And I’ve noticed more and more that people seem to believe they have a right to make bad decisions and be exempt from the consequences. That sort of thinking really baffles me. – Marjorie C. Joe, I can completely understand your sentiment because I can hear myself saying the same things in the past. I have a new perspective now that I would like to share that might change your mind. After watching the militarized police attacking peaceful protestors, it occurred to me that the police are guarding the boundary between “The Haves” and “The Have-Nots,” and they’ve been doing this since the beginning. You and I know which side we are on because our survival depends on it. Even when we didn’t have much (I grew up relatively poor as well), we were likely not deliberately attacked and locked in cages for what, essentially, amounts to normal human behavior. The mostly black and brown men who were killed or forcibly removed from their families and neighborhoods weren’t there to provide the guidance that poor families need to pull themselves out of poverty. Additionally, the “War on Poverty” and the “War on Drugs” have devastated these communities by subsidizing the exact behavior you abhor (i.e. having children out of wedlock, not working, etc.). WE ARE LITERALLY WAGING WAR ON POOR BLACK AND BROWN PEOPLE. Maybe after we’re done killing them and locking them in cages, we can then tell them they have no excuse for the situations they find themselves in. But as long as we are actively arming police to the teeth and making their normal, non-violent behavior criminal, we should expect them to be more than a little upset with us for perpetuating the system that continues to kill and/or cage them. Regardless, telling them they have no excuse is not going to solve anything. – Michael F. Are more people today making poor decisions and evading the consequences, like Marjorie says? Are the police “guarding the boundary” between “The Haves” and “The Have-Nots,” as Michael says? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… Why Did This Millionaire Just Destroy a New 5G Phone? Have you seen this video of a geologist destroying a brand new, $1,400 5G phone? Rest assured, it's not an act of vandalism… Instead, he's blowing the lid off a 5G story the mainstream media isn't reporting on… Including 3 unusual investments that could potentially soar up to 6,000% in the coming months. 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