BUENOS AIRES, Argentina – “What if you were appointed to head the Fed? In your first week on the job, what would you do?”
The question was not exactly serious. Neither was the answer.
“We’d call in sick.”
We are on our way to the family ranch in northwestern Argentina. We’ll spend a couple of days in Buenos Aires… then fly up to Salta.
From there, it’s a six-hour drive, up and over the mountains, on dirt roads – stopping by a cattle ranch to inspect some of our animals – until we finally reach la sala, our ranch headquarters.
It’s been a hard year in the mountains.
Normally, we get about 5 inches of rain annually. But this year, the ranch has gotten only half its usual allotment. All of that moisture falls in January and February. Not another drop will drip on the ranch until next year.
That leaves another nine months of drying winds and hungry cattle.
But that is just the beginning of the bad news… More to come when we report from the ranch later this week.
In the meantime, we return to tackling the world’s problems.
Drought, old age, traffic congestion, meanness, purple drink, bad taste, rap, suburbs, cancer, government, Hillary Clinton, restaurant music, shorts, Facebook, obesity – there are a lot of things wrong in the world.
And most of them are not easily put right.
But there are some problems that could be solved overnight. Economic and financial problems, for example, solve themselves… if you let them.
Almost all the macro-money wounds suffered by the modern world are self-inflicted. Central banks and treasury departments around the world keep shooting themselves in the foot. But rather than stop manipulating the system… they buy another pair of shoes.
If we were miraculously appointed by President Trump to run the Fed, our first act would be to put the gun down.
We would announce that, henceforth, anyone waiting for the next rate hike would have to wait a long time. Because we wouldn’t be making any rate hikes… or rate cuts either. Instead, interest rates would have to take care of themselves. Lenders and borrowers would set their own rates.
But what about if banks got into trouble?
Ah… we’d take care of that too. We’d point out that the Fed would no longer lend to them in an emergency.
Our announcement: “To any bank that runs out of money: Drop dead.”
Then, we would put the entire Fed balance sheet – the more than $4 trillion in dodgy bonds it bought over the last eight years – up for sale.
And we would send layoff notices to the entire staff… telling them to clean out their desks, admonishing them that henceforth they would have to seek honest employment or try to land a job on Wall Street.
Had we the power, we would take one further step: We would declare that Americans could use whatever currency they wanted, that the dollar would once again be exchangeable for a fixed quantity of gold, and that the U.S. Treasury would accept any major currency – including bitcoin – in payment of taxes.
See how easy it would be? All of the heavy lifting could be accomplished before lunchtime on our first Monday on the job.
Then we would slip out the back of the Eccles Building… with luck, just before posse caught up to us.
And yet, those simple changes would eliminate most of the money troubles facing the U.S.
With no further gas coming in, the debt bubble would deflate. Bad investments, bad business, and overpriced assets would all lose air… and disappear.
The dollar would be solid again. It would represent real value, not counterfeit wealth.
Borrowing would be based on real savings, not just more hollow credits.
And – with only scarce capital to work with (rather than an unlimited supply of phony-baloney credit) – investors and entrepreneurs would be careful about what they did with their investments.
They would put capital to work only in projects that increased the real value of America’s assets, rather than those that merely shifted wealth from Main Street to Wall Street.
Admittedly, this would be a lot for the American people to take in. Most people have no idea how the money system works. The credit dollar is all they know. And they still have faith that the big heads at the Fed know what they are doing.
The newspapers and pundits would howl in alarm. Respectable economists would choke on their indignation. Lynch mobs would form. They would call our program “radical” and “irresponsible,” unaware that today’s system is the most radical, experimental, and irresponsible in history.
Our proposals would take the country back to a traditional and sensible money system. People would decide for themselves what kind of money they wanted to use… whether to save it… or spend it… and what price to put on it if they wanted to lend it out.
Would it work?
We don’t know, but we’d like to see someone give it a try.
Further Reading: Unless we revert to the gold standard, more than 40 years of phony-baloney credit is about to unravel faster than you can imagine. And when it does, it’ll bring everything – shopping, banking, investing, etc. – to a screeching halt.
The first step in protecting yourself is understanding exactly what’s going on. That’s why Bill has written an open letter to Americans. It’s an urgent warning about the monetary catastrophe he sees coming and how you can sidestep the worst of the fallout… Listen here.
BY CHRIS LOWE, EDITOR AT LARGE
Negative rates have arrived in the U.S.
According to government figures, the annual pace of consumer price inflation is 2.3%.
Meanwhile, the yield on the 10-year Treasury bond is 1.8%.
After accounting for inflation, that leaves investors “earning” a real rate of minus 0.5% a year on their bonds.
How to Get Rich as Rates Turn Negative
With the real threat of continued low interest rates – or even negative interest rates coming to the U.S. – one analyst says gold and silver could move significantly higher from today’s levels.
Japanese Start to Hoard Cash
Japan’s Finance Ministry is increasing the number of ¥10,000 ($92) notes in circulation. The reason? People are hoarding cash to escape plunging rates of interest on bank deposits.
A Fleet of Trucks Just Drove Themselves Across Europe
Trucks with humans at the wheel are about to become a thing of the past. Last week, a dozen trucks just completed a week of largely autonomous driving across Europe.
Bill’s candid issue, “No Cure for Old Age,” about taking his 94-year-old mother to the hospital prompted a flood of reader feedback. So today, an extended edition of mailbag to accommodate as many responses as possible.
Thank you for this story, I was born at John Hopkins in 1960 while my father was in surgical residency at the time. We left in 1963 for Houston where my father set up his private practice.
I only have faint memories of Baltimore, but your mother’s "visit" seems to have stirred something inside of me. We have buried both of my parents and both were blessed to be allowed to die at home. I will be thinking and praying for you as you walk with her through this experience.– Bill C.
Love your Diary, humor, and content. The one about your mother, today, was great!
My mother passed at almost 94 and lived by herself until near the end. When she was about 90, a granddaughter’s friendly large dog knocked her down and she broke both ankles. Before setting them, the doctor told her she would need a physical, as she had no record of one. When it was complete he told her that she was in very good physical condition for a woman her age.
She asked him, "Do you know why?" His mistake was in taking her up on it. So of course he asked her why and she responded, "Because I’ve stayed away from you guys all my life. My friends my age who see doctors are on lots of drugs and are in terrible condition."– Cal P.
I am one of your many readers. I loved this article. There is nothing more nostalgic than a trip back to the old neighborhood, especially when the neighborhood has not changed, or succumbed to “Urban Renewal.”
When you are old, memories are what keep you going, and provide pleasant moments in an increasingly chaotic and ugly world. You probably made your mother’s day, taking her back to the old neighborhood…
Keep writing. I get the sense that you have achieved a certain condition in life that makes you the perfect commentator for revealing things that others are trying to hide.– David N.
Your mother is a delight! I enjoyed this very much.– Dawn T.
God bless your mother. Great woman.– Chris P.
Kudos to you and more importantly, your Mom. Her spunk is a lighthouse to all older folks and their children (us). May her light continue to shine brightly in your life and others who are fortunate enough to get to interact with her in the days she has left to impart her wisdom and good humor.– Watt G.
Your Mom made my day! Please Thank her for me.– John O.
Hope your mom is okay, Bill. I would do the same, and let her do what she wants and feels good about. It’s a blessing to have her in her 90’s and in this great of shape.– John W.
I was really pleased to read your take on old age. I feel that we must ask ourselves: “At what point do we go from preserving life to prolonging death?”
How funny it is that our culture seems to accept every phase of life except the last one: death. Perhaps the real reason is that there are Zombies making a huge profit of prolonging death. I think it is a travesty how we force our ill and elderly to suffer from our good intentions of keeping them alive when the final phase of life is clearly over.– Aileen
You are to be respected and even honored for supporting your mother’s decision.
In the hospital she would have been put through an invasive, painful and even embarrassing series of procedures that might give the doctors insight into her “conditions.”
Having satisfied themselves that they understand they would have prescribed drugs to alleviate or control the conditions. As the conditions worsen, so does the invasiveness of the procedures. Yuk!
The doctors’ training is to “preserve and extend life.” It is what they do.– MJ G.
Beautiful story. God Bless you and your lovely mother. I was wondering why doctors still ask: “Who’s the president of the U.S.?”
I think they used to ask it because it was sort of one’s civic duty to know things like that. Now what the entire concept of civic duty is passé, maybe they should ask a more topical question, like: "Who is married to Kim Kardashian?"– Skip C.
I laughed out loud after the read “No Cure for Old Age.” That was the best. Cheers for mother! I enjoy both sides of your posts. Hang in there.– Walter B.
Blessings to your mom and hope she stays sharp! A voice recorder where she can remember some stories for your children /next generation may come handy.
I am a physician, and we are trapped into this system (no tort reform, high liability). Instead of talking and examining patients, we are forced to fill all sorts of quality care forms.
There is less and less respect into physician patient relationship. We are “providers” of “health care” and patients are “customers” or “consumers” of “health care.”
But there may be few more surprises down the road. My eldest patient reached 108. One day, she came very excited to my office with a diploma (her 80+ daughter still in good shape was the caregiver).
Once you get past 100, most likely, you will receive a diploma from the president’s office stating “Congratulations! You reached 100.”– Liviu C.
Do you have a personal story to share with Bill and the team about coping with old age… or an elderly relative or friend?
If so, we’d love to hear it. Write us at firstname.lastname@example.org.
If you missed our colleague Porter Stansberry’s emergency gold briefing last Wednesday, it’s not too late to catch up.
Porter’s new online presentation details exactly why he believes gold and gold stocks will soon be worth 10 to 30 times as much as what they’re worth today.