| By Bill Bonner Wednesday, September 9, 2020 – Week 26 of the Quarantine SAN MARTIN, ARGENTINA – We are reminiscing, trying to recall what it was like – life before the internet. And before COVID. Before Tesla. Back when life was “normal.” But remembering is like opening an old box of photos; you don’t necessarily find what you were looking for. Instead, you often find what you need to see. And how we doom-and-gloomers suffered back then, when life was “normal.” The U.S. budget was balanced (briefly). The country was at peace. We went to the office to work… and to stores to buy things. It was so calm and tolerable; we only got through it by anticipating the tragedy ahead. And we weren’t disappointed. By our reckoning, the gaudy show began about 20 years ago. Since then, we’ve had bubbles… bailouts… bombs… and bumble-dumble leaders, who’ve caused nothing but trouble. And now, it’s getting worse. | Recommended Link | | Trade Alert! Former Hedge Fund Manager's Newest Pre-IPO… Forget the frenzy over initial public offerings (IPOs). Because the bigger gains come when you get in BEFORE companies go public… pre-IPO… This year alone, pre-IPO shares have soared as much as: 3,405%… 50,400%… 130,650%… Even 499,000%! It's extraordinary, and not the norm… but they are happening right now. $1,000 in one of these deals could have built an entire nest egg. $10,000 and you'd be set for life. Which is why it's urgent you attend former hedge fund manager Teeka Tiwari's LIVE event tonight at 8:00 p.m. ET, where he reveals details on his next recommended pre-IPO deal. | | | -- | Massive Drop But we’ll come back to that. Let’s first look at the financial news. Tesla fell 21% yesterday… leading the market down. Even Zoom dropped nearly 5%. From CNBC: Stocks fell sharply on Tuesday as another massive drop in tech put the Nasdaq Composite in correction territory and led to the S&P 500’s worst three-day stretch in months. The Nasdaq Composite dropped 4.1% to end the day at 10,847.69. Tuesday’s drop put the tech-heavy Nasdaq down 10% over the past three days. It marks the Nasdaq’s worst three-day stretch since August. The Dow Jones Industrial Average plunged 632.42 points, or 2.3%, to 27,500.89. The S&P 500 slid 2.8% to 3,331.84. The broader-market index was down nearly 7% over the past three days, its worst three-day stretch since June. September is typically a bad month for stocks. This one is shaping up to be no exception. As to whether this selloff will continue, we have no opinion. Mr. Market can do what he wants. A Revolutionary New Force Set to Create 818,236 New Millionaires Over the Next Three Years… Bawdy Spectacle But as to what the Federal Reserve will do if stocks continue going down, we have no doubt. It will react, seeking to upstage Mr. Market… with a fan dance that exposes plenty of fake flesh and arouses investors’ animal spirits. The Fed has been rehearsing for more than two decades. The show is not likely to disappoint this time. But what is new is that the federal government itself has gotten in on the act. It is now doing for Main Street, more or less, what the Fed did for Wall Street. That is, misleading it… falsifying it… and corrupting it. Today, the U.S. stock market no longer reflects an intelligent, price-sensitive allocation of capital or a wise use of Americans’ savings. It, like the U.S. politics behind it, has become a delirious, bawdy spectacle paid for with trillions in fake money from the Fed. And every time the party sags, with investors cashing in their chips and heading home, the Fed comes in with a whole new show… more risqué… more daring… and more expensive than ever before. | 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 … | | | -- | Numerical Mischief But while the Vegas-style extrava-palooza went on on Wall Street, Main Street was neglected, forgotten… quiet. That is, until the government created the COVID crisis. Even now, nearly six months after the declaration of emergency by Donald Trump, 30 million people are collecting unemployment benefits. Mr. Trump now brags that the unemployment rate is down to 8%. But that just shows you what mischief you can do with numbers. In February, there were some 164 million people in the U.S. workforce. Let’s see… if 30 million are now on “unemployment”… to say nothing of the millions who don’t have jobs but who don’t qualify for unemployment benefits… that represents 18% of the workforce, not 8%. Recent data show that these people are unlikely to find jobs anytime soon. There will be no V-shaped recovery, in other words. And no U-shaped recovery either. Instead, we opined last week that it was more likely to be shaped like an L… flat-lining, in other words. People have gotten in the habit of not going out and not spending money. Job cuts are becoming permanent. But Jeff Tucker, economist at the real estate business Zillow, has another letter. He says it will be more like a K, with a few people doing very well… while the others sink lower and lower. Looking for the next tech cash cow? This is it. Moving Out None of this would have been possible during “normal” times – before the internet and COVID-19 changed everything. Before the internet, we worked 10-hour days. In the office by 8 a.m. Out by 6 p.m. Most people worked eight hours. And on weekends? With no laptops to open or iPhones to check, the weekends went by with little thought to the business world. Now, even in our 72nd year and 5,000 miles from the home office, with no commute… and no coffee shops… we turn on our computer at 7:30 a.m. every weekday. It is rare that we turn it off before seven at night… And then, on weekends, too – we “check our mail,” just to be sure there is nothing urgent to deal with. Or sometimes, we “check the news” to see if there is anything going on that we should be thinking about. Now that so many of us can work “remotely,” the big, old, tattered cities are falling further into desuetude. People who can are moving out. Why live close to work if you never go to work? Why live close to nice restaurants, bars, and nightclubs if they are all closed? Moving In Where are people going? To the new “Zoom Towns,” says Tucker. Prices in these smallish towns are rising at 20% per year and more, according to real estate brokerage Redfin. Nationally, home prices are up 8%... while listings are down almost 22%. Rents are falling, too. And rental demand. Zillow says almost 3 million adults, mostly millennials, have moved in with their parents or grandparents. There are a record 32 million of them now living with their parents or grandparents. All of which is part of the K-shaped recovery. Older, settled, prosperous, stock-owning… zooming… people are able to live and work remotely – often in beautiful, safe places far from the maddening crowds. But for younger, more indebted, poorer people… those who work at pick-up gigs or in the hospitality industry… those with no savings… those who live hand-to-mouth… things are not looking good. After all, when you live paycheck-to-paycheck, what do you do when the paychecks stop? And what do the feds do when 100 million voters can’t make ends meet? | Recommended Link | | Enough to supply Tesla for 46 years… Inside this map is the largest discovery of lithium in American history. Tesla could be on the verge of signing a billion-dollar deal for this lithium. | | | -- | Screwed Up It wasn’t like that in the 20th century. That was back when life was “normal.” But back then, young people didn’t have to move back in with their parents… You could go out to a restaurant… You could get a job and earn money (rather than waiting for it to be dropped from helicopters)… You still got mail – on paper! We can scarcely remember it. So, we close our eyes… and invite the past… and try to understand what made it so “normal”… and how the present got so completely screwed up. Stay tuned… Regards, Bill
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MAILBAG One dear reader is deeply offended by Thursday’s Diary, “An Armchair Quarterback Fumbles the Ball”… while two others thank Bill for his analysis… Now that you have scolded everyone, you just demonstrated that you just don’t listen! I have taken seriously all of the great analysis and warnings of the true state of our economy and dollar. But you article took a different turn and veered from financial analysis. You took a very smug approach and made a flurry of personal attacks on our president. You offended me greatly and now, here again, you turn your smugness on your readers because we responded to your personal attacks of the man. All of us have your same concerns of deficit. We are not stupid! Our choice now is to defeat SOCIALISM. – Pattie R. Please keep up your great work and determined quest to tell us the truth, Mr. Bonner. Clearly, some of your readers have been fooled by the great con game of limitation of choices. Should we succumb to the foolish or the ridiculous? You have made it abundantly clear that we are on a road to ruin based on the failure of our leaders to be principled and diligent regardless of their political affiliation. Many folks seem determined to cast the latest political race as one between the compassionate left and the vigilant right. The contest is really between two groups vying to see who can be all things to all people, thereby breaking this two-hundred-forty-four year old republic once and for all. The system has been corrupted for many, many, decades, with only the very occasional attempt at correction, which usually fails to last, as the electorate is too easily bought by the elected (with their own money). People are scared by what they see happening, which is understandable. They just fail to recognize the actual threat because the real monster appears too big to tackle without causing untold suffering. – Chris S. Bill, I look forward to your Diary entries every day. Keep ’em coming. Anyone with what used to pass as an eighth-grade education, who has read this country’s founding documents, would have to admit that currently, this country is, in many ways, the antithesis of the one described in those documents. This is not the founders’ America and it is rightly criticized by those who revere the original ideals. Is a “patriot” one who supports the founders’ ideals or the current regime? One can’t do both with logical consistency. – William O. Meanwhile, another dear reader is touched by Tuesday’s missive, “When Summer’s Gone”… and yet others share their own childhood memories… Thank you, Bill Bonner, for the touching story in yesterday's edition of Bill Bonner's Diary. I always enjoy reading your writings, but this one was especially lyrical to me. Thank you. – Ernestine F. The 70-something people are the richest generation ever to have been born. Look where we have been. My mother rocked her baby during the black outs while warming her feet in the woodstove oven… While the air raid wardens protected the neighborhoods from looting. She traded with war ration coupons… So many pounds of meat, so much flour, a half dozen eggs. Father used his coupons for gas. He traveled about trading with underground stills and transporting my grandparents’ gardens’ huge harvests, exchanging for firewood, pork, and whatever.
Resourceful Yankees, tough and resilient, have melted down to new generations where no one knows where their food comes from and more, sadly, nor do they care. Our profits from those seven decades are dwindling. Our hair falls out, our teeth come out, and we watch the bonfires of our productivity consume our legacies. –Carol W. Your recent musings elicited similar memories rushing back to my mind – though mine were enjoyed on the sandy and oft times muddy shores of coastal Mississippi – just shy of a decade after your arrival. My aunt had an actual log cabin built in the '30s on what was supposed to be a golfer's getaway in Pine Hills, complete with a first-class hotel on the north side of Bay St. Louis. However, as history is replete with stories of vanquished visions, thus, too, became the fate of the coastal refuge. Unlike your home, our “summer vacation spot” had an artesian well-fed pool – always cold – to refresh one at a moment’s notice. But the most memorable event was swinging in a hammock on the screened front porch with one or two other brothers, cousins, or a parent. Times were so much easier then and the humidity and heat – notable in this area – seemed to advise all comers that it was necessary to slow yourself down and enjoy the pine trees, clean air, wildlife, and a cool glass of lemonade. Thoroughly enjoy your ruminations. – Myles R. What do you think an American patriot is? Have you been reminiscing on the past, just as Bill has? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… Will Rare Financial Event Reset U.S. Stock Prices? In 1873, a political shock caused American money to lose 50% of its value overnight. Are savers in danger today? 
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