BALTIMORE – Yesterday, the S&P 500 hit a new all-time high.
And the Dow is now less than 100 points below its record close.
If you haven’t sold yet, dear reader, this may be one of the best times ever to do so.
We welcome new readers to our monthly publication, The Bill Bonner Letter, with a simple insight: Markets are contrary, pernicious, and downright untrustworthy.
Just when the mob begins to bawl most loudly for stocks… the market sets its trap.
Longtime Diary sufferers will be quick to straighten out the record. We’ve warned that stocks have reached a peak several times over the last four years.
Each time, we thought we saw the writing on the wall… and each time, we were mistaken. We raised our Crash Alert flag.
But the poor ol’ Black and Blue just fluttered in the wind, as stock prices rose ever higher. Eventually, it became so tattered, we took pity on it, folded it up, and put it away.
In the interest of full disclosure, as well as reputation hygiene, we saw a bear market coming in 1999 and 2007, too.
We were right then.
But lately, we’ve either been dead wrong… or dead early.
Which just goes to show what a four-flusher Mr. Market can be…
He (helped by the Fed’s EZ money policies… and the Greenspan-Bernanke-Yellen “put”) has driven prices higher and higher… even as the global economy slows down.
And we’re not talking about a regular, unimportant slowdown. We’re talking about a slowdown of a special variety – one caused by deep trends that cannot be easily reversed.
For one, most of the major economies face a demographic challenge. They have more old people to support and fewer young people to support them.
Then there’s the problem posed by the zombie-crony complex. New readers may not have heard of the ZCC, so we will explain.
“Zombie” is a generic term we use to describe people who live at other people’s expense.
People who get food stamps, people who push papers for the government, people who collect “disability” or medical/pension benefits beyond what their contributions would justify – all are zombies.
In today’s world, there’s a zombie on every street corner.
As former Republican presidential hopeful Mitt Romney was famously overheard saying, almost half the population has been zombified. And as he discovered, there’s no point in trying to win a national election by running against zombies: They vote.
You don’t want to run against the cronies either; they have the money!
Nowadays, it’s a little mixed up. But in the old days you could rely on the zombies to vote for Democrats. They lived in the Maryland suburbs of Washington; the cronies lived in the Virginia suburbs.
Today, you cut someone off in heavy traffic on the Washington Beltway, and you don’t know who is giving you the finger – a crony or a zombie.
In the media, you hear a lot about the fight between them – red states versus blue states… Dems vs. the GOP… Hillary vs. “The Donald.”
But it is largely a mock battle, designed to give the impression that there is something really at stake.
Who will rule the country? What direction will it take? It depends on which group wins the election, doesn’t it?
What is really going on is a bipartisan collusion to transfer the nation’s wealth from the people who earned it to the zombies and cronies.
The zombies get a few handouts… crumbs under the insiders’ tables – as their payoff for not causing trouble. Meanwhile, the cronies make deals among themselves for the real money.
One gets a subsidy for growing sugar. Another is able to force people to buy health insurance (whether they want it or not). Another sells the Pentagon a fighter jet that not even the generals want.
You can find zombies in every McDonald’s in America. But go to dinner at Assaggi Osteria in McLean, Virginia, and you will dine with cronies.
Cronies get favors from the government by pretending to offer some useful service. Like running a prison. Or building weapons. Or developing a website for education bureaucrats.
There are fewer cronies than zombies, but the cronies have more money.
They buy influence with political contributions… job opportunities… speaking fees.
Retired generals used to “fade away,” as General MacArthur put it. No more. Now, they become cronies, lobbying Congress for more military hardware… and more money.
Together, the cronies (elected and unelected) and the zombies form a permanent “shadow government” that, for ease of identification, we call the Deep State.
This description of our government is so at odds with what we learn in school about “checks and balances” and democracy in action that we are reluctant to believe it.
It sounds like a dark conspiracy bred in the hottest fires of Hell.
But there’s nothing surprising or clandestine about it. There are always people who figure out how to game the system. They play the angles. They understand how it really works.
Vilfredo Pareto, the great Italian economist, called them “foxes.”
No matter whether you think you have an absolute monarch or a constitutional republic, the foxes eventually capture the real power… and then wield it.
During the reign of Louis XIV, the foxes gathered around Versailles like moths around a flame. They were excused from taxes. They got to collect tolls and import fees. They found hundreds of ways to make the system work for them.
Now, you find these people in the Washington, D.C., suburbs and a few enclaves of high-income cronyism, such as Lower Manhattan.
The den of foxes known as Wall Street deserves special attention.
Further Reading: A shadowy group of unelected insiders has already taken over our money system, Wall Street, the Pentagon, and the White House itself. And now it’s pushing us toward a historic financial crisis that’s likely to be even worse than the meltdown of 2008.
But in his new warning about the Deep State, Bill exposes the dark side of American power for all to see.
By Jeff Brown, Editor, Exponential Tech Investor
Imagine being able to communicate with anyone in the world without having to learn another language. In less than five years, that will be a reality. Thanks to real-time translation devices that use advanced artificial intelligence technologies.
After years of development, Skype, which was acquired by Microsoft (MSFT) for $8.5 billion in 2011, launched Skype Translator this January. The product is currently available on Windows-based computers and supports real-time translation between English, Spanish, French, German, Mandarin Chinese, Italian, Portuguese, and Arabic. Other platforms and languages will follow soon.
I’ll acknowledge the platform is not perfect yet. It performs most accurately when users speak clearly and avoid slang or colloquialisms. That said, it’s already accomplished something spectacular. The combination of those eight languages allows about 2.4 billion people to communicate with one another… for free.
The artificial intelligence technology Microsoft uses in its Skype Translator is collecting data 24 hours a day from user conversations. So it can learn and improve its translation capabilities on the fly. Think about that: Its translation capabilities are improving every day at an exponential rate.
Google is doing something similar with Google Translate. Its conversation mode provides real-time speech translation in 32 languages, and its text translation supports 103 languages.
But what happens when you interact with someone face to face and neither of you speaks the same language?
A small, private company recently caught my eye… Waverly Labs. It is developing a revolutionary product for real-time translation called Pilot. Its product is a small wireless earpiece. All you have to do is place it in one ear and begin your conversation. The device will translate the foreign language into your native language.
Pilot – Waverly Labs’ earpiece translator
The product connects wirelessly to an application on your smartphone. The application allows you to toggle between languages. It can even support conversations with multiple people speaking different languages.
Pilot is scheduled for a May 2017 launch. It supports English, Spanish, French, Italian, and Portuguese. Next year, it will add many more languages.
The combination of speech recognition technology, artificial intelligence, and wearable electronics makes something long envisioned in the realm of science fiction a reality… a universal translator.
The wearable technology market is forecasted to be worth $34 billion as soon as 2020. It is a key investment trend I’m researching… and one that will create incredible investment opportunities in the next few years.
P.S. There’s a huge change coming to the stock market… One that could send shares of "safe" blue chips like Apple and Microsoft plummeting. But I want to show you exactly what’s happening and how to prepare for it…
That’s why I’m hosting a special online (and absolutely FREE) training event later this week. To make sure you don’t miss out, go here to register now.
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To kick off today’s Mailbag… some great feedback on Amber Lee Mason’s rapid-fire Q&A with world-renowned tech expert and angel investor Jeff Brown.
Just wanted to thank Jeff Brown and Amber Lee Mason for a terrific “speed round” today. Really interesting and informative. Cheers to you both!
– Bill T.
This was great – thanks!
– Sandy D.
Wonderful session. I nearly missed it and just by accident happened to turn on my computer. Is it possible to give us a day’s notice by e-mail next time? Thanks.
– Chris M.
Chris comment: To listen to the Q&A – which includes Jeff’s personal investment advice on Amazon, IBM, Apple, and eight other popular tech companies – go here.
In the meantime, staying with the theme of technology, lots of thoughtful feedback on yesterday’s Diary – “Helping Robots Find Jobs.”
Bill’s letter about robots taking over human labor is accurate. Who hasn’t made phone calls only to have them answered by a pleasant-voiced, automated system?
No matter how annoying this is, it is the preferred answering method by most entities today.
Jeremy Rifkin wrote The End of Work back in 1995. It expounded on the trend toward fewer human beings performing routine behaviors. I still have the book on my shelf. Maybe it’s time for a re-read.
– Brian B.
As robots take more of our jobs, we have to think about what happens to all the replaced humans… and the loss of tax revenue.
Robots would have to be taxed to pay the idle workers’ upkeep to keep them from storming the barricades. Any thoughts of what the future looks like with millions of idle souls milling about?
– Erich K.
Robots are not as efficient, or as productive, as you might think.
They are expensive to setup and operate. They need a trained programmer. They need to be rebuilt at least once a year, by trained technicians. They require, a continuous, repetitive, production, type situation. If the power goes down, they crash. The list goes on, and on.
– William C.
They found a good use for a robot in Dallas the other day. But now the Dallas police have to buy a replacement robot. Technology is making inroads in a lot of different professions.
– Woody S.
Even an unsophisticated Joe like me knows where this will end up. They’ll have to come up with robots that spend money because none of the humans will have jobs from which to earn $$$ to spend on what the robots produce.
But even if we have robots that spend money, they will have to learn to kill people because if they don’t learn to do so, they will be working just to keep us human alive.
Of course, if they can learn to do this, they can learn a lot more. They might just get smart enough to replace all of us humans – including the ones that make them and buy them.
That may not be such a bad thing, come to think of it.
– Luis A.