| By Bill Bonner Thursday, August 20, 2020 – Week 23 of the Quarantine SAN MARTIN, ARGENTINA – A dear reader, Mario P., challenged us… “Bill, I think you are full of it. ‘Money stolen from the public…’ Give me a break! Yes, there are people who are making a lot of money illegally or unscrupulously, but not all rich people are thieves. Get a grip.” Okay. We are on the case. Rich people have gotten a lot richer. We want to know where the money came from. But before we begin our investigation, let’s clarify the charge. We didn’t accuse rich people of stealing the money… We said they were the “recipients” of the loot. There’s a big difference. We may enjoy watching a murder mystery; that doesn’t mean we want to kill anyone. | Recommended Link | | Facebook's founder never saw this coming… When Facebook's mega-billionaire sat down before Congress on October 23rd… For over six hours of grueling testimony about his company's plans for a digital currency called Libra… He surely never imagined that one of the panel's top-ranking Republicans, Rep. James F. Hill of Arkansas, would be giving him incredibly lucrative advice. But he did – with a tip that could ultimately be worth millions to lots of regular American investors. Don't worry if you missed it. | | | -- | Two Choices And here, we’re rubbing up against an important question. Reducing the issue to its bare essentials, there are only two choices. Money is either gotten honestly… or dishonestly. Which is it? And framing the discussion further, we’ve seen that the Federal Reserve can successfully inflate Wall Street prices at will. We calculated that, over the past 30 years, Fed intervention in the stock market has given the average family of four in the richest 10% of the population an extra million dollars. That family did nothing wrong. But the money it got was fundamentally dishonest. It came from the Fed’s counterfeiting program, not from honest work. Long Wait Let’s look at one example to see if this makes sense. Yesterday, tech giant Apple’s market cap cruised over the $2 trillion mark. Here’s Reuters: Apple became the first publicly listed U.S. company with a $2 trillion stock market value on Wednesday, as Wall Street investors put aside challenges to its iPhone ecosystem in favor of bets it will only prosper more in the post-coronavirus world. That makes Apple’s market cap higher than the GDP of 178 foreign countries. Even Canada – in an entire year – doesn’t turn over that kind of money. It also puts the company’s P/E ratio at 35. So based on current earnings, if you bought the whole company, and put every dollar of earnings into your pocket, you’d have to wait until 2055 to get your money back. The FINAL Wave of 5G Millionaires Starts Any Day Now. Real Wealth The problem with technology is that it doesn’t stand still for that long. Apple is a great company today. Tomorrow, who knows? Thirty years from now, will people still be using Apple phones and tablets? Or, like Digital Equipment, Kodak, Wang, Sperry, Control Data… the list goes on and on… will it be forgotten? You can’t blame investors for buying Apple. But the company is now worth $1 trillion more than it was five months ago. Where did the money come from? The answer given by Wall Street is that sales are “surging,” thanks to the tech bonanza during the COVID shutdown. This would allow investors to anticipate a more ample stream of future earnings. These earnings, of course, are real wealth… honest money! In other words, they say the company is actually worth more. | Recommended Link | | BUY NOW Big T has just discovered his next big pre-IPO recommendation! The terms of this deal are incredible: You can get in for just $0.75 per pre-IPO share. And you do NOT have to be a wealthy, accredited investor. IMPORTANT: This deal's funding round is set to close this Friday. Potentially as soon as September, it could IPO on the Nasdaq (or the NYSE)… And make early investors a fortune. If you want to learn how to get in… | | | -- | Full Weimar But Apple’s current price does not plausibly reflect expected earnings discounted to present value. The company’s revenue has been growing at less than 3% per year, on average, for the last four years. Even the “surge” of the last quarter left its profits lower than they were for the same quarter two years ago. We suspect most investors are not doing a careful analysis. Instead, it is more likely that a lot of the 10 million investors who opened accounts at stock trading app Robinhood are admirers of Apple products… and don’t know any better. And we also suspect the levitation of the stock market in general, and Apple specifically, is the work of the magicians at the Fed… They’ve been at it for 30 years – cautiously, at first… and now, they’ve gone Full Weimar. This Revolutionary Tech IS the #1 Investment of the Century. Very Effective This monetary “inflation” by the Fed seems to be very effective in the stock market. The Fed puts money into Wall Street – lent at rates below the level of consumer price inflation. Prices rise. Had not the Fed backed up the bond market in September… and even more in the COVID-19 Lockdown… Apple stock would probably be less than half what it is today. The extra $1 trillion would vanish. That may lead you to say that today’s stock prices are “fake”… that they are not real… or that they could be cut in half tomorrow. You would be right. But as long as the Fed continues to interfere, an investor can sell his stocks at their “fake” prices… and use the money to buy real things. That is, he can buy the plumber’s time… or his 1967 Corvette… or the bread the baker just brought out of the oven. | Recommended Link | | Get ready for an "aftershock" of March crash The man who predicted the 2020 crash… the 2008 crash… and the 2011 gold crash… now warns the coming months could either make you a fortune, or victim to the worst one-day decline since March 16. "Most people will never see it coming," he says. | | | -- | Rotten System Has he “stolen” these things? Of course not. But the whole system is rotten. The stock market investor ends up in possession of wealth that somebody else earned. In effect, it is property stolen away from the public with fake money. The seller may feel he’s gotten a good deal. The buyer may be happy, too. No charges will be filed. No one will go to jail. But ultimately, trillions of dollars’ worth of real wealth is changing hands – bought with unearned, counterfeit money. Somebody’s getting ripped off, in other words… …though he may never understand how. Stay tuned… Regards, Bill
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MAILBAG One dear reader says COVID-19 lockdowns are specifically detrimental to young adults… while another suggests the country thinks only of its present needs… Lockdowns are harmful to the lives of people in the present, and also to their futures, especially those who are struggling to build towards future economic stability. The economic damage to ordinary working folks – as well as social isolation – is horrific. The rate of reported depression and suicidal thoughts reaches as high as 25% in polls of those in their twenties. And their anger at “old people,” i.e. retired, so not without income, is obvious on social media. – Everyll R. Sad to say, our country has had it, “too good for too long.” We’ve become (mostly) soft and unwilling to tough-it-out and make the right (long-term) decisions for the country as a whole – and for its future growth and development. We’ve become too focused on the “present moment” at the expense of the “future” ones… I hope enough of us can come to our senses soon and make some better long-term decisions. – Randy S. Meanwhile, one dear reader argues that higher up-front costs (lockdown, government stimulus) for COVID-19 prevention may mean less spending in the future… While COVID may only kill at the same rate as the Hong Kong or Asian flu before it, this rate is – at least, partially – a result of the lockdown. Additionally, we all have some flu antibodies, whereas COVID is a brand-new shock to humanity. How high could mortality, therefore, go? And at what rate do we THEN decide to take drastic action? The ounce of prevention always seems expensive because the pound of cure is hypothetical. (I remember thinking that a billion or so per year pre 9/11 to maintain no-fly zones over Iraq was expensive. If only we knew.) – Robert M. Have Americans become too focused on the present moment, as Randy believes? Is COVID-19 prevention worth the higher up-front costs, as Robert suggests? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… Rare FDA Ruling Opens the Gate for Chance at 12x Gains in Hours Thanks to an unusual ruling by the FDA, shares of this cutting-edge biotech company are now set to go much higher. How high? One of America's top biotech investors believes you could see 12x gains in a matter of hours. Sound far-fetched? It wouldn't be the first time this happened… See the proof right here. 
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