PORTLAW, IRELAND – It’s been a good week for stocks… and a good week for the Deep State.
On Wall Street, it almost seemed like the good ol’ days, as the Dow rose to a seven-week high and inflation readings remained low.
Investors thought they saw more good things coming.
Deep State stocks were winners. Bank of America rose nearly $1.60 during the week, as of this morning. General Dynamics went up more than $6.50. Raytheon made a $10 gain.
Up on the Hill, meanwhile, Gina Haspel managed to dodge questions about her role in torture and the destruction of evidence.
In a better world, she would probably be swinging from a scaffold with a noose around her neck, not looking forward to a cushy job as CIA director.
But she is being promoted for her loyalty, her long service… and the fact that she seems ready to do just about anything without asking questions.
In Iran, Israeli prime minister Bibi Netanyahu and American billionaire Sheldon Adelson managed to turn up the dial on tension in the Middle East by getting The Donald to nix the Iranian nuclear deal. It was fairly easy; after all, Adelson was one of Trump’s major campaign donors.
We saw how the swamp works yesterday. You want influence; you pay for it.
Trump’s budget chief, Mick Mulvaney put it to the American Bankers Association straight:
We had a hierarchy in my office in Congress. If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.
So now we see how a low-life lawyer like Michael Cohen brought in $4.4 million in consulting fees since Donald Trump was elected: He offered to fix things with his boss.
And we see Iran’s big mistake: It didn’t hire the best lobbyists… and didn’t contribute to The Donald’s campaign. If it had slipped a billion or so in Michael Cohen’s pocket, maybe the president would have declared Israel a rogue state!
But let us pull back the covers to take a gander at the naked Deep State itself.
The term bespeaks a small group of conspirators with a plan to take over the world. But that’s not it.
Not that there aren’t groups of people with their own agenda… and not that they don’t sometimes pull off a coup or foment a revolution.
But when we speak of the Deep State, we refer to a large group of people with very different agendas. The White House… Congress… bureaucrats… experts… think tanks… policy wonks… lobbyists… cronies… zombies… apparatchiks… nomenklatura… hustlers… chislers…
These are the “insiders.” They are the people who control directly, influence, or benefit from the power of the government to force you to do things you otherwise wouldn’t want to do.
Do you want to pay for U.S. soldiers to go on madcap adventures in Africa and the Middle East? Do you want to pay for tenured professors who tell white children to leave the classroom… or promote sex change operations for teenagers?
Do you want to pay so that people can cheat their way onto disability and live at others’ expense?
We didn’t think so.
But that’s the way the system works: The insiders win; everyone else loses.
There are many mansions in this house – on both sides of the Potomac… between the Hudson and East Rivers… and all over the world.
The IMF… the World Bank… a whole host of NGOs – partially or fully funded by the U.S. taxpayer – should be included. Academia, too… along with the military/security complex and the medical/pharmaceutical industry.
Wherever you see the feds at work – there you shall also find the Deep State in all its corrupt glory.
Of course, there are many different factions in the Deep State. Some want more LGBT programs. Others want more veterans’ benefits.
Some want to exclude immigrants, while others want to lure them in with more welfare boondoggles – including a guaranteed annual income.
Some favor Israel. Others are on Iran’s side.
The different members of the Deep State have very different goals. What unites them is that they all share the same way of getting what they want.
Rather than earn their money and status honestly – by providing goods or services to others – they take it from you. It’s a win-lose game, where they can only get ahead by making others fall behind.
As for pulling out of the Iran deal, most thoughtful observers in the Deep State – in the State Department, for example – thought it was a mistake.
“It shows the world that the U.S. can’t be trusted,” they say. “Why would North Korea want to do a deal with a deal-breaker?” they ask.
They think it strengthens the hand of radical Iranian factions and will probably lead to war, led by the aforementioned Israeli prime minister.
But Sheldon got his way. The Donald may not know much about foreign policy, but he knows a top bidder when he sees one.
By Joe Withrow, Head of Research, Bonner & Partners
As Bill mentioned, it was a good week for stocks. The rally helped the Dow claw back into positive territory for 2018…
Today’s chart puts that into perspective. It shows the Dow Jones Industrial Average from January 2018 through today.
As you can see, the Dow spent much of the last few months in negative territory after it plunged 12% peak-to-trough from January 26 to March 23.
But the index has moved steadily higher since then… and a furious rally this week brought the Dow back into positive territory for the year, although just barely.
– Joe Withrow
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In the mailbag, how to get ahead in the swamp is the topic of the day…
It works that way everywhere; pay for play. Always has, always will. Ireland, Argentina, Nicaragua, France, Russia, China, Canada, Japan, etc. Lobbying is the second-oldest profession. I’m not a lobbyist.
– Patrick V.
A well-thought shot at Trump and Cohen. The last paragraph says it all. You are becoming a 21st-century Will Rogers. Keep it up.
– Kevin K.
The Donald really stepped on some toes with the Iranian deal! I spent 26 years raising money for small companies and receiving fees for brokering the deals. In the past two years, Obama, Clinton, and Kerry (among other Democrats) have boasted about “brokering the Iranian nuclear deal.”
Iran was elated because it gave up very little to have sanctions removed, and it received a pallet-load of cash. I ask the question, “Did it receive every Franklin of it? Or did it pay out a brokerage fee, and to whom?” Well… why have Kerry, Obama, and Clinton been scurrying behind the scenes to hold the deal together? Maybe they need to return fees for a deal gone bad. Food for thought.
– Steve B.
Meanwhile, some talk of boltholes, of both the foreign and domestic variety…
I noticed that Nicaragua is looking like a Venezuela wannabe. Are you still involved with Rancho Santana? Is this march toward socialism going to be a problem for this ranch and other private properties in Nicaragua? If you are still involved in this area, I would like to see what you have to say about it in your newsletter.
I was interested in buying property in either Panama, Costa Rica, or Nicaragua for some time; but due to circumstances beyond my control, I missed the boat. Now I’m wondering if this wasn’t a good thing. I find it hard to believe that Panama and Costa Rica would take this direction, but it seems like anything is possible.
– Don B.
I’m a 77-year-old retiree starving in an Alabama Rust Belt town. Thank you for giving us specific location details about your $400,000–$800,000 “bolthole.” When the “fit hits the shan,” I’m going to join the mobs marauding in the Highlands direction. I’ll let the rest of them worry about looking for Bentleys; I’ll head straight for the Subarus! Again, thank you so much!
– Robert S.
Our boss, Amber Mason, just released a strange message to readers…
One of the most secretive investing experts in our business just released one of his best-kept secrets. It’s a secret that helped him see gains of 166%, 182%, and even 225% in 2008 – the worst bear market in recent history.