| By Bill Bonner Tuesday, September 8, 2020 – Week 26 of the Quarantine When summer’s gone Where will we be? Where will we be? Where will we be? Morning found us calmly unaware Noon burned gold into our hair At night, we swim the laughin’ sea When summer’s gone Where will we be? – Summer’s Almost Gone, by The Doors Summer has come and gone. And another birthday, too. That makes it 72 times in our lifetime the leaves have grown heavy with the late-summer dew. And 18 times national presidential elections absorbed the public’s attention, like an obnoxious drunk at a cocktail party. It marks a complete interest rate cycle, too. Interest rates hit a cyclical low in the late 1940s. Once again, just over three score and 10 years later, they seem to have reached another epic low. Deep Breath We were born after a spell of hysteria, brought to a rapid and emphatic close when the U.S. dropped the A-bomb on two Japanese cities. By then, the world was exhausted from two world wars in 30 years… and fed up with the “isms” – communism, socialism, Nazism, totalitarianism. It was ready to take a deep breath and go back to normal. Besides, “the bomb” was soon in the hands of the Soviets, and the price of stirring up trouble suddenly seemed too high. It was time to settle down and get back to work. People go crazy from time to time. Back in the 1930s, it was Europe and Japan that caught the fever, while the U.S. remained largely immune. This time, it might be the other way around. | Recommended Link | | You're Invited: Teeka's Newest Pre-IPO Recommendation Revealed On… Bloomberg reports, "Red-hot IPOs are creating a new billionaire every week." But here's what the media is NOT reporting… This millionaire-making market is no longer for the One Percent. Across America, everyday folks are quietly making seven-figure fortunes. Military vets, painters, even masseuses. And tomorrow at 8 p.m. ET… IPO expert Teeka Tiwari will show you how to finally gain access to these lucrative deals… And how just one pre-IPO deal in what Forbes calls the "most profitable sector" in America could make you one million dollars or more during this historic IPO boom. It's all happening at the Set for Life Summit tomorrow. | | | -- | Strange Events Birthdays put us in a reflective mood. We try to remember what it was like before… and wonder, have things really changed so much? Or is it just us? Of all the things we’ve seen in our 72 flu seasons, the events of the recent six months are surely among the strangest. Never before has the economy been shut down to try to prevent a virus from spreading. And never before has any government tried to offset the damage by passing out so much free money (which it “printed up” especially for the occasion) – including paying many people more than they made on the job. This year, the federal government will spend two dollars for every one dollar it collects in taxes – a first. Its deficit will reach almost 20% of GDP – another first. Only once before in our lifetime did a president panic so completely and give in to such bad advice. That was 49 years ago… when Richard Nixon briefly imposed wage/price controls and permanently imposed a fake (unbacked by gold) dollar. That was the closest equivalent to last week’s proclamation by Donald Trump that henceforth, he would set the terms of rental contracts himself… specifically telling renters they didn’t have to pay their rents until after the election. The political gain is obvious; there are as many as 40 million renters who might vote, but only a handful of landlords. The long-lasting harm is incalculable. Landlords typically have expenses, too – notably, mortgages. If they can’t collect their rents, they can’t pay their mortgages. And then, the banks take losses… and on up the financial food chain. The losses do not go away… they just get moved around. How many hand-to-mouth renters will be able to catch up on four months of unpaid rent in December? How many will walk away instead? Deeper Damage But the deeper damage is to the system itself. Free enterprise depends on two things: property rights and private contracts. Conservatives used to believe that the government’s real job was to protect the former and enforce the latter. And if you can overthrow private, win-win contracts because the unemployment rate is over 8%... or because a virus is on the loose… what can’t you do? What contract is safe? Who will want to invest, knowing that a conniving government might ruin the project with a presidential decree? And what next? A Revolutionary New Force Set to Create 818,236 New Millionaires Over the Next Three Years… Hysteria Now, the summer has slipped away, leaving us calmly unaware that anything has changed. Yet, it is so different. The hysteria is still upon us. The looney Left Wing is sure we are all sinners, who can only be redeemed by “taking the knee,” tearing down statues, and reconstructing the nation from 1619 on up. The delusional Right Wing hopes to hold on to our “conservative values” with armed vigilantes, flag-waving, and restrictions on Chinese imports. But the real source of America’s success is already a goner. The government no longer even pretends to respect its limits, and the economy is now managed by the federales themselves, bureaucrats. And all agree, left and right: whatever economic jam we’ve gotten ourselves into… we can print our way out of it. Time to Reflect And here, 5,000 miles away from Washington, on Labor Day… still “quarantined” by the Argentine government… we sat on our stone veranda and recalled a wooden porch… long ago. Our father was still wearing a uniform in the summer of 1948. He had been posted to Goose Bay, Labrador. Master Sergeant William Bonner asked permission of his captain to come back to Maryland to attend the birth of his son and namesake. But the answer came back in the negative. “You were there when the keel was laid; you don’t need to be there for the launch,” he was told. So Mother was staying with her parents, near Annapolis, with a two-year-old girl already and another baby on the way. Maryland Route 2, now a busy thoroughfare, was a gravel road back then. It ran from the tobacco fields along the Western bank of the Chesapeake, where the first colonists arrived in 1634, up to Annapolis, and then, on what became Governor Ritchie Highway, all the way to Baltimore. But the two ends were vastly different. There was no electricity in our house. No running water, hot or cold. No central heating. And air-conditioning had scarcely been invented, much less brought to the homes of Southern Maryland. The summer of 1948 was hot. But under the shade of a tall oak… sitting on a rocking chair on the front porch, drinking a glass of lemonade… it was a languid, serene heat… rich in odors… intoxicating… sensuous. And what a delight it must have been when the heat broke in September. Looking for the next tech cash cow? This is it. Civil War Veteran We lived in that house many years later. We added electricity, plumbing, central heating, and insulation. But we could never recover the magic of the place before modern conveniences made it more comfortable. It was so overgrown, the wisteria had worked its way in between the lap-siding… and bloomed in one of the bedrooms. The outhouse, too, was covered with vines – honeysuckle and morning glories; you could barely open the white-washed door. And behind it was a remarkable treasure. In a heap of vines so thick that in summer, nothing could be seen through the leaves, there was the fallen-down house of a “Civil War veteran.” This part of the state had deeply southern sympathies, probably because the tidewater was fairly flat and suitable for the kind of field crops that made slavery (barely) profitable – tomatoes, melons, and corn on the eastern shore of the Chesapeake, tobacco on the western side. So, when the war broke out, the young men from both sides of the bay rushed to the Stars and Bars, taking their horses with them. Our grandmother’s great uncle, Zacharia, did so… and came back a damaged man. He spent the rest of his life in the little cabin. But by the time we came along, the cabin was a shell, held up by trees and vines. We could still go inside, but carefully… The floor was rotten… and so were the steps that led to a tiny bedroom on the first floor. The window glass had long since disappeared, and the rotting frames provided easy access for black snakes, which loved the place. Before But why are we reminiscing? We don’t know, exactly. But something important has changed – maybe in us… maybe in the world. Maybe over seven decades. Maybe over only the last seven years. We’re trying to figure out what, exactly. So we are remembering what it was like… before COVID… before Trump… before the War on Terror and the War on Drugs… before the fake dollar, the fake boom, the fake “conservatives” and the fake recovery… before air-conditioning and automatic transmission… before the internet and working remotely… We’re remembering people long dead… and a time when they wore face masks only if they were going to rob a bank… And we are trying to imagine what it must have been like for our mother, sitting on that porch 72 years ago, rocking her newborn son to sleep… …calmly unaware of all that was to come… when the summer was over. Regards, Bill
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FEATURED READS School Closures Cause Massive Hit to U.S. Economy
The Organization for Economic Cooperation and Development has calculated the projected economic consequences of U.S. school closures due to the coronavirus. The results are staggering and not only include current GDP loss but long-term education losses as well… Tom Dyson’s 2020 Financial Predictions
Bonner-Denning Letter contributor Tom Dyson has written extensively about the weaknesses he sees in the U.S. financial system in his daily e-letter, Postcards From the Fringe. In case you missed it, last week he compiled five of his top financial predictions into one place. You can read what those predictions are here… MAILBAG Praise for Friday’s Diary, “Coming Soon: A Counterfeit Economy”… Congratulations. After a week of Trump bashing, you are back to doing what we’ve come to expect from you: good, common-sense analysis of the U.S. economy. I didn’t read a thing that I don’t agree with. Now that you’ve laid out the problem, provide a solution for those of us who aren’t wealthy. This is what professionals do; it’s what I was required to do as an engineer. Looking for your recommendations on a way forward for the whole country. – Benjamin W. As usual, you clarify a complex economic environment with fresh and entertaining insight. Even when I disagree with you, your humor and humility make it impossible for me to be angry. That’s one of my problems with Trump and his followers – absolutely no sense of humor, and not an ounce of humility. – Gary M. Meanwhile, others suggest some real social underpinnings in today’s political arena… I voted for Trump in 2016; as it stands right now, I’ll vote for him again. The sad part of my story is that I haven’t voted FOR a candidate in a very long time. It is always the same – the lesser of two evils. Your analysis of Trump (and the Democrats) was spot on. I can’t find any flaws in it. Your comment about Mustafa Kemal Atatürk really hit a nerve with me. Back in the early ’70s, my college friends and I frequented a bar in our small Midwest town. This bar had a framed picture of JFK hanging over the bar. I didn’t think much of this at the time – I was raised in a VERY Democrat household, and I hadn’t been out in the world long enough to form my own opinions. I can’t recall ever seeing a picture of a single U.S. president hanging in any public location, except this one. This might (or might not) say something about the Kennedy legacy. Just a thought… – Paul G. The concerns you bring to light are legitimate, although hard to hear. I consider myself more of an Independent with conservative leanings. There is really no arguing that both political parties have lost their collective minds and no longer seem to be willing to do the hard things necessary to, albeit slowly, halt the downward spiral that is the American economy. But the collective American people share the blame. We’ve become a nation of greedy, impatient people wanting what is easy. That makes us susceptible to the powerful who are more than willing to hand us free and easy to feed our addiction, because it guarantees their hold on power. Until Americans are willing to break that addiction and go back to a work ethic that says you work hard for what you earn, you are thrifty and save for what you want, and you only vote for solid thinkers who can offer real solutions to community problems, we cannot return this country to a sound and solid footing. The future for us is to once again learn everything we once knew to be true... the hard way. It won’t be pretty. – Mike W. What “solutions” might remedy America’s financial situation? Does collective America share the blame for the failing economy, as Mike believes? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… Judge Pirro vs. Washington elites Washington politicians and insiders tried to keep this future $22 billion cash cow away from you. But they never imagined the ruthless Fox News host Judge Pirro would catch wind of their scheme. Grab some popcorn, get yourself comfortable, and enjoy this epic takedown… Go here to watch! 
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