BALTIMORE – “Ike and Dick Sure to Click” was an exciting election slogan.
Their Democratic opponents, Adlai Stevenson and Estes Kefauver, had their snazzy campaign jingle, too: “Adlai and Estes… They’re the Bestes.”
Surely, the men behind these slogans had their private hungers and perversions. But they kept them to themselves.
The 1956 presidential election campaign was a dull affair.
Google “Adlai Stevenson’s wife,” and you will get only the barest biographical information.
But Google “Melania Trump” or “Heidi Cruz”… oh la la! Just be sure there are no children around.
It’s all out in the open now. This is the most entertaining election in U.S. history… and the first episode of Reality Democracy, in which the only apparent goal – or effect – is to get the ratings up.
When we were in grammar school, the teacher told us that “anybody in this classroom could grow up to be president.” We looked around the room with dread and foreboding. But now it looks as though she was right.
But this election ought to have a very salutary effect on the public: No one will ever take an election seriously again.
On Easter Sunday, we met a smart man who confessed to having voted for Donald Trump in the Florida primary.
Of course, we wanted to know: What was he thinking?
More on that in a moment…
A headline in yesterday’s paper jolted us away from the election.
“Japan’s hard-up retirees turn to crime,” begins the headline in the Financial Times.
After years of QE (quantitative easing), ZIRP (zero-interest-rate policy), NIRP (negative-interest-rate policy), and Abenomics (Japanese prime minister Shinzō Abe’s stimulus-focused economic policies) – which is to say, all the standard deviations of modern central banking – older Japanese people must now break the law… to get “free board and lodging behind bars.”
Is this what is coming to the U.S.?
“Yes,” is the safe answer.
Japan has been ahead of us on this entire trip. Its stock market crashed in 1989. That led to a Great Recession, which the authorities fought like the Imperial Army defending Okinawa. Japanese policymakers invented QE… and for 26 years, they’ve held interest rates near zero.
Shinzō Abe became prime minister specifically to end Japan’s quarter-century-long slump. He failed.
The “three arrows” of his Abenomics platform – fiscal stimulus, monetary easing, and structural reform – seem to have driven the defenders even further to ground.
It should, by now, be obvious to everyone that William McChesney Martin was right.
As the ninth chairman of the Board of Governors of the Federal Reserve, he was the man on duty during the election cycle of 1956.
And he was the man responsible for “normalizing” interest rates, after the Fed’s war-time deal with the Treasury to help fund the deficit with ultra-low rates.
Some feared this would trigger economic calamity. But Martin saw clearly what his homologues of the 21st century would rather go blind than see:
Under the hard choices left to us in wartime, we had to dictate even some of the smallest details of our economic life, but that strait jacketing of the economy is wholly inconsistent with democratic institutions and a private enterprise system…
In a Free Market, rates can go down as well as up and thus perform their proper function in the price mechanism. Dictated money rates breed dictated prices all across the board.
He then described the consequences of what would become the Bernanke-Yellen Money Dictatorship:
[W]e would have no reliable safeguard against the erosion of our savings, our pensions, our life insurance policies – the capital upon which the institutions of private enterprise rest…
So far, Mr. Bernanke and Ms. Yellen seem to have the matter under control.
We see no erosion of the value of our financial assets. Instead, stocks and bonds have gone up in price.
But the companies behind them are now encrusted with crony barnacles like an old boat. The boat slows… and rides lower and lower in the water. Real capital formation declines… productivity sinks… wages stagnate…
And then, you have people who get poorer, not richer… and silver-haired crooks… desperate to be behind bars, where they find warm beds and old friends.
Mr. Martin, who lived to be 91 years old and died in 1998, would have understood it.
But let’s return to our intelligent friend, casting his vote in the primaries for Donald J. Trump:
“I know him well. He’s a friend of mine,” he began.
“A lot of the things he says you can’t take literally,” he replied under cross examination.
“Like that wall. He’s not going to build a wall. The Mexicans aren’t going to pay for it. But it’s a great image. It’s one that sticks in your mind.
“You get lost when you talk about trade policies and export account deficits. People don’t know what you are talking about. And they take you for another Hillary Clinton or some other Beltway Insider. Blah, blah, blah… more of the same.
“But the wall is a strong image. It announces that Trump is different. And he’s going to protect the American people. That’s all it’s meant to do. It’s not meant to be taken literally.
“That’s why Donald Trump is a genius. He’s able to communicate in a different way. The wall image tells people what they really want to know, without getting lost in details.
“He’ll do things differently. And that’s why the cronies and the Deep State are so afraid of him.”
BY CHRIS LOWE, EDITOR AT LARGE
Today’s chart shows why this is likely to be a temporary blip… rather than something more long-term.
It looks at changes in the gold price all the way back to 1975, when the U.S. ban on private citizens owning gold ended.
As you can see, March has been, by far, the worst month for gold since 1975. On average, it has fallen by just over 1% for the month.
By contrast, the best time for gold prices is from the start of August to the end of September. This is followed by the December-through-February period.
Gold Above $3,000?
A top commodities expert says gold prices will eventually move past $3,000… and that now is the time – perhaps the last time for more than another five years – to cash in.
Fund Manager PIMCO: Central Banks Are the Problem
Analysts at PIMCO are skeptical whether further central bank “stimulus” will be effective. They also worry that central banks could be responsible for “significant downside risk” for stocks.
The Most Lucrative Decision You’ll Ever Make
What’s the single most important decision you can make as a wealth builder? It’s not what stocks to buy… or even how to build a balanced portfolio.
As you may know, Chris Mayer is the newest addition to the Bonner & Partners team.
We’re hugely excited to have Chris on board. From 2004 through 2014, the recommended portfolio at his Capital & Crisis letter earned average annual returns of 17.5%. That compares with average annual gains of 8.6% for the S&P 500 over the same period.
Unsurprisingly, Chris has built one of the most loyal readerships in our industry. And we’ve heard from a lot of those loyal readers in the last several weeks…
I am a subscriber to the (former) Agora letters Mayer’s Special Situations and Mayer’s 100x Club.
It appears that Mr. Mayer will no longer be authoring those letters… or at least we have not had an update in a while. For you to pluck him out of Agora Financial… and to start a new letter under a different label owned by you… and to leave subscribers of Mayer’s Special Situations and Mayer’s 100x Club hanging is at least inconsiderate and definitely rude if not unethical. I thought you were made of better stuff.– Carl J.
Chris Lowe comment: Thanks for the note, Carl. We like to think we’re made of better stuff, too. So we’re offering anyone who had a subscription to Mayer’s Special Situations or Mayer’s 100x Club a complimentary 12-month subscription to Chris’s new letter.
It’s called Bonner Private Portfolio. We’re confident that Chris’s readers will see another decade of outsized gains. In fact, we’re so confident that Bill will be following Chris’s picks with his own family money.
We’ve been working on the letter since January… And we’re preparing to launch it next month. If you were subscribed to Mayer’s Special Situations or Mayer’s 100x Club or you were a member of Agora Financial’s Financial Reserve as of January, you’ll automatically receive a complimentary 12-month subscription to Bonner Private Portfolio.You’ll receive your first issue on April 26.
If you’d simply like to learn more about the upcoming launch – and start receiving Chris’s free content – follow this link to add your name to the list.
One point of clarification: Bill didn’t “pluck” Chris out of Agora Financial. That is not the way Bill – or our business – works. As Chris told subscribers:
I’ve known Bill for nearly a dozen years. And I’ve been a reader of his for even longer. He’s a great writer, a perceptive thinker, and an inspiration to me. Bill has also been one of my biggest fans.
I’ve been helping him invest his family office portfolio. And I’m excited to join him and the rest of his team full time. It’s a great fit.
We agree. And we think you will, too.
The publisher at Agora Financial took to the streets of Baltimore to demonstrate how easy his newest investment strategy is.
In this entertaining video, he shows two people with absolutely no investing experience how to make $127 in the market in less than three minutes.