| By Bill Bonner Wednesday, February 10, 2021 RANCHO SANTANA, NICARAGUA – Early August, 2020. Was that some kind of hinge point? The end of an era? If so, it’s time to dump anything that depends on a stable U.S. dollar – bank accounts… insurance policies… annuities… bonds. But it’s early days… and this kind of rollover is often not confirmed for years. No Need to Worry Besides, there’s nothing to worry about. At least, that was the line coming from the White House at a recent press briefing, via Jared Bernstein, a member of the Council of Economic Advisers. “Janet Yellen is our Treasury secretary. She knows a little something about inflationary risks,” he reassured us. But relying on Janet Yellen to protect us from inflation is like asking Stevie Wonder to drive a school bus; it’s asking for trouble. And it’s why August 2020 could turn out to be such an important date. Since then, bond yields – an important early warning of incoming consumer price inflation – have been going up. The yield on the 10-year Treasury, for example, has more than doubled from its August 2020 rate of 0.52%. [Featured: Firm That Predicted 9/11 Issues Urgent Warning: Move Your Money Now] After 40 years of lowering inflation and bond yields, the tide may have turned, in other words. If so, in the years ahead, we will see a huge wave of job losses and bankruptcies, as businesses, government, and consumers are forced to refinance debt at higher rates. We’ll see retirement savings – often resting on a bed of U.S. Treasury bonds – collapse. And we’ll see consumer prices rise… as real incomes go down. “Don’t worry about it,” say the experts. The thinking, if you can call it that, is that the economy is performing “under capacity.” That means there is plenty of slack that must be taken up before prices can rise. People are not fully employed… factories are quiet, etc. They expect no upward price pressure until everything is going full bore, pedal to the metal. Only then, goes the logic, do business or labor have any “pricing power.” Things need to get better, they believe, before inflation takes hold. Two Routes to Inflation Inflation happens, grosso modo, (according to the classic Quantity Theory of Money) when the supply of goods and services goes down compared to the supply of “money” that bids for it. That can happen in one of two ways. Either the economy heats up (cyclical inflation)… and businesses need more labor and raw materials to keep up with the demand. Shortages then arise. Everyone tries to keep up with the whirlwind of getting and spending, leading to higher prices… Or… the other possibility (systemic inflation) is that the economy cools down. Fake money, false price signals, regulation, bubbles, giveaways, and COVID-19 shutdowns could simply cause a cutback in buyable output… while the supply of available money continues to rise. [Featured: The #1 Tech Stock of 2021] Closer Look So let’s look more closely… Last year, the output of money – as measured by the Federal Reserve’s balance sheet – rose by $3.25 trillion. The output of goods and services, on the other hand – as measured by GDP (even somewhat faked by a huge increase in government spending) – fell by $300 billion. This looks like “systemic” inflation to us. Another way to look at it… Goods and services are produced by people who work. The number of hours they work (setting aside productivity increases, which are very slow) is a good measure of output. Well, since the crisis of 2008-2009, the total number of hours worked in America is practically unchanged. But the Nasdaq – a rough measure of how much hot money is coming into the stock market – is up 500%. | Recommended Link | Elites Moving to Desolate Islands – Why?
Former President Trump… Tech moguls like Zuckerberg… Gates… Musk… High-profile politicians and executives… Barack Obama among them… Even pop celebrities like Kim Kardashian… They're ALL securing the most bizarre… remote… "offshore" properties you can imagine. To learn the concerning reason they might be doing this–and what it means for you… | | | | Wacky and Weird And then, there’s the unbridled wackiness of it all. Two weeks ago, the GameStop saga played itself out… in all its tinseled mania. And now, The Wall Street Journal reports that since Elon Musk said Tesla had bought $1.5 billion worth of bitcoin, and that the company would soon begin accepting bitcoin in payment for its autos… the market value of the two of them together – bitcoin and TSLA – rose $110 billion on the news. Go figure. What we figure is that there’s so much loose change under the seat cushions, it’s becoming uncomfortable to sit down. Look for prices for just about everything to rise as the real economy – the part that actually produces goods and services – cools down… Regards, Bill
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Technology is continuing to rapidly evolve and is changing the face of our day-to-day lives. Tech expert Jeff Brown shares two trends you should watch… to not only keep up – but to also potentially profit. MAILBAG A dear reader appreciates the Diary for its “cold, hard truth”… while another laments the future of the U.S. and the damage they see inflicted on the American Dream… Bill, I get a kick out of your articles. I’ve grown up Republican and still am. But I also realize that Republicans aren’t the answer for everything. Some believe their choice of political party (Dem. or Rep.) has all the answers and will “stop all these horrible and unspeakable injustices infringing on us.” Either way, your words are true, and sometimes, truth hurts when it hits close to home. How boring it would be if we didn’t have any feelings to step on. God gave us feelings. Sometimes, they feel good and sometimes, they hurt. If we had no feelings, we’d all have the joy of living a socialist lifestyle, where everybody shares and there is nothing but rainbows and sunshine. Look at China and see how happy those people are! If you believe that, then I’ve got a used car to sell you. My wife and I have done well for ourselves so far. We’ve worked dang hard for it. We haven’t looked for any handouts along the way. And we’re still working. If a man doesn’t work, then that man doesn’t eat. This country could fall, and socialism is there with its hand out and fingers crossed on the other hand behind its back. With a smile, of course! So keep hurting those feelings, Bill! I don’t read your articles for warm, fuzzy feelings but for cold, hard truth. Greatness is achieved with God, honesty, and truth. Anything but that will fall… hard! – Casey S. Responding to the question about the future of America, our dear USA, I cannot see any way out of the financial and cultural failure of our country. Now, it seems that the Biden administration is guiding us quickly closer to the edge, with the flurry of Executive Orders that are job-killing and with financial consequences that affect, or will soon affect, all of us. It is puzzling to see, and rather confusing, since the negative short-term and long-term outcomes of many of these orders are obvious to most people, but not the leaders. One wonders what the plan might be, if there is one. Our national debt continues to be ignored, as money is borrowed and printed as if the bill will never come due! Our cultural values are being eroded with the “cancel culture,” race is used as a political tool, the family structure and values are losing importance. So many things that divide versus bringing us together. Yes, there are still kind and caring people in our society, but the overall culture of noise, anger, blaming, political agendas around cultural practices or personal freedoms, coupled with the isolation and loss involved with this pandemic are doing serious damage to what we refer to as the “American Dream.” This did not just happen suddenly. There has been a drift left incrementally, as we have been let down by those whom we elect to serve the best interests of our country and people, and by complicit media. Power, control, and elite separation have been moving us toward the debacle we see today on so many fronts. Reminds me of Ben Franklin’s comment when asked what the Congress had done working on the Constitution: “We have given you a Republic. It remains to be seen if you will be able to retain it.” – Betty S. Next, one dear reader takes issue with Bill saying that “Donald Trump was the first American president in nearly 50 years not to start a new war”… Trump indeed did not start a war. But there were empty but dangerous threats, proxies, and taunting of adversaries – Iran, China, Yemen, North Korea, and perhaps other threats we know nothing about. I would not be comfortable saying he did not start a war (which is true), BUT he was probably very close to making a mistake on a grand scale. – Lyndon B. Meanwhile, in response to Bill’s theory that we are “Dumbing Down,” another dear reader worries about the future of the next generation… And how will toddlers learn language skills when non-verbal facial expressions are covered up and hidden from view? Will they learn to read eyes better than anyone? Or will they suffer from communication inadequacies? And since they will spend their formative years never being hugged by anyone other than direct family, what long-term effect, if any, will that entail? Does anyone think about these things anymore? Or care? – Kevin W. Is COVID-19 accelerating a decline in the American Dream, like Betty believes? Are you concerned, as Kevin is, with the development of today’s toddlers within the COVID-19 environment? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… This Piece of Tech Is Powering a $30 Trillion Megatrend See this piece of tech this man is holding in his hand? It’s part of a new $30 trillion trend that’s set to dominate this decade. When you click here and watch a demo… You’ll see why this is BIGGER than blockchain, artificial intelligence, 5G, robotics, and the Internet of Things… COMBINED. Warren Buffett, Jeff Bezos, and Elon Musk are all in. Do they know something that you don’t? Click here for the details. 
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