AIKEN, South Carolina – Up down, down up. The Dow ended yesterday down 189 points… or just over a 1% fall.
Reuters has the story: “Wall Street slides as oil prices hit again.”
But it is the deeper story is what interests us.
What is going on?
Where does it lead?
Which dots should be connected to which other dots?
Most readers surely have better things to do… such as wash their dogs.
We do, too. But each time we try to forget about it, it surges back into our consciousness like a vivid memory of a gruesome accident. The poor driver’s head smashed on the door frame… the caved-in front of the car… the skid marks and sirens.
NIRP is more than just another goofy policy. It is a warning: “Watch out… ice on the road… fog, too… and maybe a police speed trap.”
Today, we draw the line from NIRP to the two most innovative figures in U.S. political history: Donald Trump and Bernie Sanders.
We begin with praise; we’ll see how far that takes us.
Both Donald Trump and his rival Bernie Sanders have a point: The system is corrupt.
Here is business magnate and libertarian donor Charles Koch on Bernie Sanders:
The senator is upset with a political and economic system that is often rigged to help the privileged few at the expense of everyone else, particularly the least advantaged.
He believes that we have a two-tiered society that increasingly dooms millions of our fellow citizens to lives of poverty and hopelessness. He thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field.
I agree with him.
To their credit, neither Trump nor Sanders has been completely captured by the Deep State.
Trump has lots of money. Sanders finances his campaign with small donations from his supporters. It’s Hillary who sucks up the big money from Wall Street and defense contractors.
But politics is never quite what it seems. The slogans are claptrap. The promises are empty. The claims are bogus. And many of the “facts” wheeled out in the debates are proven to be false within a matter of hours.
Bernie bases his candidacy on a theory… which is bogus.
Trump bases his candidacy on a personality… which is a part fraud, part genuine, loveable oaf.
If you met either of them at an alumni event or a bull roast, you would probably find him insufferable – Bernie because he is a hack politician with a one-track mind… and Donald because he is a big-mouthed bore.
Most likely, neither of them understands what is really going on. And almost certainly, neither will want to.
Give up the system of Deep State finance, and Sanders will have less of other people’s money to redistribute.
As for Trump, he will probably go broke…
The presidential election reflects the souls of the people and the state of their union.
On the evidence, in America in 2016, both are in trouble.
Still, Sanders and Trump are the best candidates; at least they are at odds with Deep State favorites Clinton and Rubio.
Sanders’ appeal is obvious. Young lefties know they are getting the short end of the stick. The system loads them with debt… largely to pay off older voters.
They start with student debt… graduate to auto and credit card debt… advance to mortgage debt… and spend the rest of their lives trying to pay it off.
They know instinctively, if not analytically, that politics is to blame. So, they look to politics to get them more of the stick.
Trump’s appeal is a little harder to understand. But he’s a fighter. And his target voter feels beaten up… and unappreciated.
The Mexicans and Chinese take his job. Wall Street (or someone; he’s not sure who) takes his money. And popular TV shows, such as Duck Dynasty and Trailer Park Boys, make him the laughingstock of the entire world.
He used to be able to feel superior to blacks, Hispanics, and other minorities. Now, TV portrays them as doctors, scientists, and police chiefs… and almost always portrays him as a yahoo goofball.
Even worse, the latest studies show that the white working class is dropping dead. No kidding.
According to two Princeton economists, Anne Case and Angus Deaton, from 1999 to 2014, mortality rates for middle-aged whites with no more than a high school education shot up by 134 deaths per 100,000 people.
Why? Drugs? Despair?
Who knows. But The Donald tells them it doesn’t have to be that way.
“I’m just like you,” he says. “I got $10 billion… a hot wife… big buildings with my name on them…”
We grabbed one of Trump’s books, Think Big, to draw a measure of the man.
He describes his business experience. He explains what he did and how he did it. It reminded us of the expression “big man on campus.”
Trump doesn’t think deeply. But he thinks big. He’s not afraid of appearing to be an idiot. He’s not afraid of complications or setbacks, either. His brain focuses on the fight… the negotiation.
There are no win-wins in Donald’s world, only win-lose. And he aims to be on the winning side.
He’s a brawler – big, boisterous, buffoonish. He’s even a sympathetic example of the genre. In any community, he’s the sort of guy who’d be a success. In small towns, he’d have the biggest auto dealership…
“Come on down to Big Don’s Deals! If you’ve got a pulse, we’ve got your wheels.”
If he were here in Aiken, he’d probably have a big modern house on the edge of town… with a swimming pool and probably an indoor arena where his wife could ride horses.
He would be a backslapper and a member of the local Kiwanis, perhaps head of the local school board and often a candidate for mayor or town council.
Everybody in town would know “Big Don.” And for the most part, they’d like him.
It might have gone no further than that.
But Trump was ambitious. He was in Brooklyn, not Aiken. And he knew he wanted to sail across the East River to the Big Apple – that was the real challenge in front of him. What he didn’t know was what he had behind him – one of the windiest money systems the world has ever seen.
It was a system not for creating wealth but for transferring it. And much of it shifted in his direction.
The financial industry, located in Manhattan, the very place that Trump had chosen for his base, was the biggest winner of all.
The credit-money system bailed him out of his bad deals… and helped him make money and build a reputation so large he could run for president.
But the system has a fatal flaw. Credit expands. But it also contracts.
NIRP is a desperate attempt to prevent a correction. No one knows what it will do. But it won’t protect Donald’s fortune forever.
More to come…
Further Reading: It doesn’t matter who wins the race for the White House. As Bill has been warning, the Deep State – America’s “shadow government” – already controls just about every aspect of your life. From health care… to education… to the food on your table… to the never-ending War on Terror, the Deep State is pulling the strings.
In Bill’s monthly letter, The Bill Bonner Letter, he continues to expose how the cronies behind the Deep State have pushed the world to the brink of an irreversible disaster. To find out how that disaster will unfold and, more importantly, how it’ll change your life forever, read on here.
|BY CHRIS LOWE, EDITOR AT LARGE|
Is this the end of the pain for commodities producers?
Today’s chart comes via Josh Brown at Ritholtz Wealth Management.
It tracks the year-to-date performance of stock markets in Chile, Colombia, Brazil, Russia, and South Africa – all big commodities producers – versus the S&P 500.
As you can see, although the S&P 500 has gotten hammered in 2016, stock markets in all five commodities-producing emerging markets have seen gains.
NRIP appears to be similar to an additional tax except this tax is not on earnings it is on savings. Is there a difference? To me the difference is significant.— Manning B.
Hmmm… after reading your latest on negative interest rates, the light clicked on. When we have higher inflation, we have higher interest rates. Now we have negative interest rates which seem to me to be a leading indicator of deflation ahead. Hopefully, not a depression size deflation, but one way or the other deflation.— David D.
NIRP makes sense if you first acknowledge that we are in a deflationary period.— Charles M.
I may be wrong, but in my humble opinion, for the “money issuer” NIRP accomplishes exactly the same as inflation: It extracts seigniorage from the “money user.”
[Seigniorage is the difference between the face value of the money governments issue and its cost to produce – in other words, the profit governments make from issuing currency.]
Instead of doing it the long way by “watering the monetary wine” (i.e., issuing excess money), NIRP, based on the control offered by traceable money being overwhelmingly stored electronically, simply collects a rent from the user of the medium of exchange.
So, NIRP is just seigniorage in a different way, although “le seigneur” gets a better, recurrent deal (rent), instead of a “once off slice” (money issuance).— Alvaro O.
If I have to pay the banks to loan them my money, I think I will just “run” on down there and take all my money back while I can get it. I think most folks will think to “run” to the bank as quickly as possible also. I predict that bank “runs” will become quite popular.— W.E. F
Chris comment: Bill takes a deeper dive into NIRP and what it means for your money in the March issue of The Bill Bonner Letter (due to hit inboxes later today).
It’s all part of the Great American Credit Collapse Bill sees coming. To hear him explain how the whole mess will unfold, listen to Bill’s warning here…
Top Economist: NIRP Will Trigger Surge in “Zombie Lending”
The former chairman of Morgan Stanley Asia, Stephen Roach, is calling NIRP a “final act of desperation” by central bankers. He says NIRP will only cause more unproductive “zombie” lending…
How Ronald Reagan Doomed the Economy
President Reagan’s former budget advisor David Stockman warns a major depression is about to wipeout unsuspecting investors. And he places the blame for the coming calamity squarely on Reagan’s shoulders…
Proof the Majority of American’s Favor a Police State
Apple is losing the public relations battle over privacy. And the issue is not a partisan one either. Both Democrats and Republicans are willing to give up their privacy for security.
Intelligence and investing expert Jim Rickards is urging Diary readers to watch his latest video update.
It reveals the secret strategy Washington has been using to predict market moves – a strategy that helps take the guesswork out of investing. Watch it here now.