YOUGHAL, IRELAND – The press was abuzz this weekend with comments on the killings in Gaza.

We do not normally take an interest in the affairs of the region. It’s none of our business… there’s nothing we can do anything about… and since Israel has been the focus of so much of the media’s attention for our entire lives, we’re tired of it.

But today, exceptionally, in this Pentecost season, we turn to the Holy Land; there may be something we can learn – or at least something that will upset dear readers.

Irritating thoughts, like grains of sand in an oyster, can turn into pearls of insight… or cause dear readers to leave us.

Risk of Abundance

Abundance, not scarcity, is the big risk. Rich men and beautiful women have too many choices; they can treat people badly and get away with it.

And nothing ruins people faster than getting too much money with too little effort. Few bank robbers, lottery winners, or sports stars can resist the temptation of extravagance, luxury, and excess.

In a few years, they’re broke.

Whole nations have succumbed to abundance.

Spain stole the gold and silver of the New World… and was the basket case of Europe for the next 300 years.

Hairdressers in Zimbabwe walked around with billions of Zim dollars… and couldn’t buy a ham sandwich.

And the U.S., with the wretched good luck of having the world’s reserve currency, spent money it never earned, running up nearly $20 trillion (in today’s money) worth of trade deficits, thereby exporting its jobs and wrecking its Main Street economy.

But if “too much” is a problem in the money world, is “too much” perhaps a problem in the political world, too?

Power corrupts. Has Israel, backed without limit or scruple by the U.S., been corrupted by too much power? And what about America itself?

Dark Side

The questions came to us as we read the weekend reports. Israeli soldiers shot people who couldn’t shoot back.

A few Jewish intellectuals, with their sense of shame still intact, thought they had gone too far: “We’ve gone over to the dark side,” they said.

Going over to the Dark Side seems to be what people do from time to time. They get out the thumbscrews and the waterboards.

They slaughter without fear of retribution. They lie, cheat, and steal without worry because the fix is in.

Jews have the bully power in the Middle East. Worried about Iran getting weapons of mass destruction? Israel already has them up the wazoo. Worried about Russia influencing U.S. elections? Nobody does it better than Israel.

But does that mean that Israelis have become the bad guys?

In Israel itself, some think so. Recalling a more innocent era, Israeli writer Uri Avnery writes:

I was a member of the National Military Organization (the “Irgun”), an armed underground group labeled “terrorist.”

Palestine was, at the time, under British occupation (called “mandate”). In May 1939, the British enacted a law limiting the right of Jews to acquire land. I received an order to be at a certain time at a certain spot near the sea shore of Tel Aviv in order to take part in a demonstration. I was to wait for a trumpet signal.

The trumpet sounded and we started the march down Allenby Road, then the city’s main street. Near the main synagogue, somebody climbed the stairs and delivered an inflammatory speech. Then we marched on, to the end of the street, where the offices of the British administration were located. There we sang the national anthem, “Hatikvah,” while some adult members set fire to the offices.

Suddenly, several lorries carrying British soldiers screeched to a halt, and a salvo of shots rang out. The British fired over our heads, and we ran away.

Gun in the Other Hand

But now, the gun is in the other hand. Palestinians demonstrate. Israeli snipers do not shoot over their heads. Reports cited more than 2,000 casualties and 63 deaths – all Palestinian.

Not that we’re taking sides. We have no dog in that fight. We’re just wondering.

“Civilization is restraint,” said Freud. Or something like that.

But it is not just self-restraint. We get along and we go along. We don’t do unto others, generally, because we’re afraid they might do unto us.

It is not abstract virtue that makes us good, in other words… it is fear of jealous husbands, determined creditors, and the Huns.

But what if we knew they could do us no harm? What if you were a giant in a race of pygmies? What if you had an AK-47… and your enemies were unarmed? What would happen to your civilized restraint then?

Among the comments arising from the Gaza incident were some pointing the finger at the U.S. The U.S. president’s daughter and son-in-law seemed to approve of the Israeli government.

Rather than condemn the killings, the U.S. blocked an international investigation. What gives? Have Americans become “bad guys,” too?

After the fall of the Berlin Wall, the U.S. stood alone. It was the “end of history,” as one public intellectual proposed.

America was #1 – the ne plus ultra of the 20th century. By comparison, the whole rest of the world was just one big “sh*thole.” And the U.S. could blast any part of it back to the Stone Age.

Power was unbalanced and disproportionate. It was take… with no give. It was live… but not letting the other guy live.

We could invade Iraq, but the Iraqis couldn’t invade us. We could target extremists for drone assassination while we slept in peace.

And why not?

Paraphrasing former Secretary of State, Madeleine Albright: “What good was it to have so much power if we didn’t use it?”

Therein lay the fatal temptation…

More to come.

Regards,

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Bill

MARKET INSIGHT: THE REAL CRYPTO WINNER

By Joe Withrow, Head of Research, Bonner & Partners

When it comes to cryptocurrencies, the mainstream media typically focuses on bitcoin.

But it’s ether – the digital asset associated with the Ethereum blockchain and the world’s second-largest cryptocurrency – that has nearly doubled in less than two months…

That’s the big story today as we compare the returns of ether to those of bitcoin since the start of April, when both the crypto market and the U.S. stock market hit a short-term bottom.

Chart

As you can see, Ethereum has gained a whopping 72% since April 1.

That’s compared to a 17% gain for bitcoin… and only a 5% gain for the S&P 500.

Ethereum’s popularity stems from the fact that it is a decentralized platform that enables developers to build applications on top of it.

For this reason, most initial coin offerings (ICOs) – where new blockchain projects raise capital – run on top of Ethereum… and more than half of all crypto transactions now take place on the Ethereum blockchain.

– Joe Withrow

P.S. Regular readers know that Jeff Brown, Bill’s chief technology analyst, is very bullish on ether and the Ethereum blockchain. But if you want to profit from the emergence of blockchain technology, you don’t have to buy ether on an exchange. Jeff recommends you do this instead.

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MAILBAG

In the mailbag, the debate on the virtues of capitalism rages on…

I’m replying to Larry B’s response to my capitalism critique. He points to charitable giving by the rich as being a significant, unrecognized source of social funding – certainly exceeding the tax contributions of the bottom 30%.

Last point first, our society decided a long time ago that people and corporations with high incomes would contribute the largest share to fund what the government (i.e., the people) has set as spending priorities. So it wouldn’t surprise me that the charitable contributions of billionaires exceed the taxes of those making under $30,000 per year.

One of government’s primary roles is to prioritize the spending of Americans’ hard-earned tax dollars based on the wishes of Congress (again, the people). This is what charity can’t accomplish. A billionaire or a church may have a favorite cause – a disease, a hospital – but these “thousand points of light” don’t magically meet all social and infrastructure needs. Not even close.

Charities would never have organized to build a railway across the continent. Not even big business was able to do this without loan guarantees and other assistance from the government. Charities could never have built a Social Security system to give the elderly some small piece of mind. They would wait until a person was destitute and then perhaps help them. And charities have no power – and often no incentive – to pass laws restraining capitalism from fraud… from poisoning air, soil, and drinking water… or from laundering Russian mob money.

– Gary M.

The lively exchanges between those defending and those decrying capitalism are focusing on the results rather than the means by which wealth is created. Not everyone – and to date, no government – is adept in the simple mechanics by which wealth is created. This is why most individuals work for the rare, but essential, wealth-makers. Regardless, without capital and risk-takers who use it so ably that their revenues consistently exceed expenses, there can be no quibbling about whether the ensuing wealth is used selfishly or generously.

– Jim R.

Have an objective look at the functioning of a national socialist system in governing a country. Nationalism is creeping in again because the “internationalists” have gone too far in that communism is working with them.

– Tony T.

Meanwhile, advice for Bill’s home renovation project…

Chinese people never buy homes that had someone die in them. So you better get the local bishop to come over with a gallon of holy water and his biggest crucifix and Bible and do an exorcism of that haunted house and the land around it. Then, buy some “Leprechaun B-Gone” at the local version of Home Depot.

I’m not kidding. If it’s well water, check the well for toxins. Bring in bottled water to cook until you do. I hate septic tanks. Check those while you are at it. Often, tree roots invade septic lines and plumbing, which can result in backed-up and overflowing toilets while you sleep. At least there are no snakes in Ireland – except the two-legged kind.

– Patrick V.

IN CASE YOU MISSED IT…

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