| By Bill Bonner SAN MARTIN, ARGENTINA – “One country, two systems,” says colleague Byron King. The phrase was used in the 1980s by Deng Xiaoping to describe China’s special relationship with Hong Kong and Macau. Now, says Byron, it points to a dangerous fault line in America. There are two systems. One is a fraud… and the other is a rip-off. More below… | Recommended Link | World's Best "All in" Speculator Captured in Cape Town… The world's top "all in" investor was captured in this photo by a drone, sitting in a meditative pose on this outcropping in Cape Town, South Africa. Mainstream investors turn their nose up at him, even though he's British banking royalty. But perhaps they're jealous of what he's accomplished. He nailed the "best performing investment" of 2000–2010 according to the Telegraph. And he made a fortune from Bitcoin, buying it below $10 in 2011, right before it climbed 302,000%. What's his next big move? He just went “all in” again. | | | - | Choose Your Side Here in Argentina, we live under one of the strictest lockdowns in the world. Perhaps the Argentines really do believe in the Lockdown Theory… in which you delay deaths of a few by stopping normal life for the many. Or, maybe the new socialist/fantasist government is eager to destroy the economy completely so it can rebuild it in another form. We don’t know. But the economic rut on the pampas is getting deeper. And, like the U.S., the Argentine government has only two options: honesty or larceny. And like the U.S., it will choose the second one. This, of course, will just make the hole even deeper… perhaps catastrophically deeper (à la Venezuela)… but we will see. Strange Activity Detected in Secretive Layer of Stock Market. Meanwhile, yesterday, friends from nearby Cafayate got permission from the chief of police to come visit. We’ve been here now for 11 weeks, with the airports closed and no way to get out. Suddenly, a door was open… “We chartered a plane to take us down to Buenos Aires,” one of our American guests explained. “And from there, we’ll get a plane to Miami.” “The flight to Buenos Aires was almost fully booked… but some seats are opening up. Lots of people are dropping out. They’re watching the news from the U.S. on TV and thinking they would be better off here.” “I don’t want to go back, either,” said a member of the group. “I just get so mad when I read the news. It’s just one idiotic thing after another. It’s as if you have to pick sides. And both sides are awful.” Conservatives versus liberals… New York Times versus Fox News… red states versus blue states… racists versus fascists. Choose your side. Gun up! Americans are encouraged to square off against each other… while the real enemy steadily advances, unrecognized. | Recommended Link | | Worse Than the Middle Ages? It's 2020… and bacterial infections are killing people at a rate similar to the Middle Ages. Yet we're using antibiotics made in the 1980s to treat them. These antibiotics are terribly ineffective today. Even dangerous to rely on. The CDC warns 2.8 million Americans will be affected just this year. It's why the FDA fast-tracked the approval of the most powerful antibiotic in nearly 40 years. It could be ready to hit the market in just a few weeks. When that happens – big money could be made. One simple move today could translate to a 12x windfall in just hours. | | | -- | Fraud vs. Rip-off We have two financial systems in America. Byron King explains that “one economic system does work for many people. But the other system has failed people whose numbers now total into the tens of millions. It’s a recipe for disaster.” One system is a fraud. In it, the Dow rose 500 points yesterday… and the Nasdaq 100 hit a new high. Altogether, stocks are up 40% from their COVID-19 Crash bottom… and the stock market, compared to GDP, is now at an all-time high. The other system – in which most people live and work – is a rip-off. It’s the Main Street economy, which has been deprived of real investment, good jobs, and genuine wealth-building capitalism by order of the feds. The Atlanta Fed says the U.S. economy has been cut in half. Barry Ritholtz: The real time GDP running estimate of U.S. economic activity is half of what it was 3 months ago. As of June 1, the Atlanta Fed is nowcasting that economic activity in the United States, as measured in GDP, is minus 52.8%. This top financial expert just returned from a private meeting with members of the Senate Financial Services Committee… NPR adds: Americans are skipping payments on mortgages, auto loans and other bills. Normally, that could mean massive foreclosures, evictions, cars repossessions and people's credit getting destroyed. But much of that has been put on pause. Help from Congress and leniency from lenders have kept impending financial disaster at bay for millions of people. But that may not last for long. If you’ll recall from yesterday, these “two systems” can be measured by looking at the results. In one system, the 20% at the bottom have lost 25% of their wealth in the last 10 years. In the other, according to the Federal Reserve’s figures, the top 10% are up about 75%. Dollar Noose Here at the Diary, your editor is happy to be on the upper decks. But he knows the silk pillows won’t do him much good if the whole ship goes down. And what’s this? A fire down below? The people at the top may be perfectly comfortable with the fraud system; it makes them wealthier. But there is already trouble below deck. And as the real economy sinks, a lot of people are going to get angry, even if they don’t understand how they’re getting ripped off. Then, what can the feds do? They’ll try to placate the bottom 90% with the same fake money they used to enrich the top 10%. That will mean switching a lot of the “stimulus” from Fed-based monetary policy – which goes to Wall Street and the 10%… to fiscal deficits, which end up on Main Street and in the hands of the 90%. And then, instead of inflating stock, bond, and real estate prices, the fake money will give a lift to consumer prices, too. However, Dear Readers are reminded that inevitable does not mean immediate. Don’t hold your breath, in other words. The U.S. dollar is still the world’s go-to money in case of financial instability. And our guess is that a lot of instability is coming. Other countries have embarked on financial suicide missions similar to the U.S., printing money to cover their deficits. Many of them – Argentina, in the lead – will blow up their currencies before the U.S. And then, their citizens will seek safety – in the dollar, of course. | Recommended Link | | 597x more powerful than iPhone technology? You're looking at a new chip that's 597x more powerful than the one in the iPhone X. And it will soon unlock some amazing new "apps" on your phone or tablet. Like "virtual" assistants that are almost identical to humans… and can book your restaurant reservation while you play a round of golf. One expert says it could be "the biggest breakthrough since the microchip in 1959." For investors, it means an incredible new opportunity… A chance to participate in a $15.7 trillion boom. Alongside Google, Amazon, Oracle, and just about every major company in America. | | | -- | Steaming Business Here in Argentina, the printing presses are already running hot… …and the black market currency traders are already doing a steaming business, taking in pesos by the thousands… and trading them for dollars. This demand for America’s fake money (in preference to the gauchos’ fake money) is likely to keep the value of the dollar high… despite the feds’ money-printing. But at some point – your editor is not fool enough to say when – those fake dollars will be revealed to be every bit as worthless as that $20 counterfeit bill that George Floyd tried to use to buy a pack of cigarettes. And then, the two systems will blow up, too. Stay tuned… stay alert… Regards, Bill
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MAILBAG A scathing response from a dear reader following Wednesday’s essay, “The Knee on All Our Necks”… To whomever reads this, please let me express how appalled and disgusted I am that you would use something as tragic as George Floyd’s death as a comparison for what you believe to be happening in our economy. George Floyd is one of many who lost his life at the hands of people who see his skin color and automatically assume his life is not worth preserving. The only difference between what this country has done to black and brown people historically and George Floyd is we had a camera. We have a country and economy that cares more about making money than the life of a human being, which is evident in your headline, but also in the statement, “We are appalled. Yesterday, we saw that, soon, it may not be only Blacks who want to set fire to police stations.” Let me explain that the “Blacks” are not the source of the chaos going on, nor are they the ones setting police stations on fire, but that all would depend on your source and perception of us. The fact that you can even issue an article that says, “The Knee on All Our Necks” with a smile next to it is the problem. The profiting from others’ pain that fuels the injustices in our society and economy is the mindset that causes people like George Floyd to be killed. Who wrote this and thought it was OK? – Maurice M. Meanwhile, other dear readers talk Trump… and COVID-19… Trump is a false savior for many many reasons. It’s amazing that people don’t see – or won’t see – what’s really happening. After Trump’s administration ends (if it does), we will all be in a world of hurt. God bless America… We will need it. – Dorothy L. I am very thankful that you play no positive role in my health, and I’m aggravated that your negative opinions only strengthen those of the mentally diminished among us. – Neil W. I’m not necessarily disagreeing with you about the wisdom of the public policy response to COVID-19, but you are way off base with your assessment of its threat to healthy people under 60. Yes, the large majority of deaths are people over 70 or with pre-existing conditions. But there are plentiful cases of those in their 30s and 40s with no health problems ending up on ventilators, many dying. I am aware of one man near my hometown, 41, with no pre-existing conditions, who has had both legs amputated and his lungs seriously damaged. He’s in and out of comas. This isn’t an exception. And it is frankly disturbing to be so dismissive about an illness wiping out large numbers of people in old-age homes. There are homes around our area where over half the residents have perished, dying in their own feces due to lack of care, unable to be comforted by family because of the virus. I know you’re trying to stake out ground, but it isn’t like you to be so certain about a subject on which you are not an expert. – Gary M. Does America care more about the economy than human life, like Maurice believes? What reasons may Trump be a “false savior,” as multiple dear readers have suggested? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… The Reason Why These Rare Stocks Will Keep Surging in 2020 These stocks are part of a small group that popped 425%, 706% – even as high as 953% – because of an extraordinary event. Life-changing gains, no doubt. Investors made a killing on these stocks. It's happening again with this trade war thanks to China's ignorance. You now have a small window of opportunity to learn how to get in if you're prepared to take swift, decisive action today. Because the most "perfect" of these rare stocks have been found. In this video, you'll see the remarkable story of why this tiny company could potentially surge 1,127% within months. Click here to learn more. 
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