The question on the table is whether your editor is a “dolt” for wishing for a short, sharp depression

Writes Diary reader Steve S.:

Bill, you’re a dolt. For some inexplicable reason you believe a system crash will “fix” everything.

Why on earth would a crash do anything but make us all poor and have to start over?

Surely, you aren’t suggesting something/anything will be “learned” by the credit-happy idiots in charge that could result in a bona fide recovery.

Deadwood in Charge

Reading the email, we find opinions mixed. Even we can’t make up our mind.

Some readers are sure that wanting a depression is just about the dumbest thing they have ever heard.

Others are more open-minded: Maybe a depression would be a good, quick, and clean way to clear out the deadwood.

But we don’t really have to worry about it. The deadwood is in charge – in Washington and at central banks all around the world.

And it is not about to permit an episode of what economist Joseph Schumpeter called “creative destruction” – not when it is what needs to be destroyed.

Instead, it will rage, rage, rage against the dying of the light… and cause even worse mischief.

On this subject, when we venture onto subjects other than the markets, readers will often complain. “You should stick with something you know something about,” they write.

Today, we reassure dear readers that we don’t know anything about the markets either.

So, with an equal measure of ignorance, we take up a three-part series on something only distantly related to the markets: The Good, the Bad, and the Ugly. It’s a lesson in how to spot the real criminals in a world where everyone is a law-breaker.

Fools and Knaves

What prompted this was Senator Rand Paul’s performance in the Capitol last weekend.

Single-handedly, he blocked an extension of the NSA’s snooping program.

You can divide Congress into two groups: the fools, who are just not clever enough to understand what is going on, and the knaves, who are too clever by half.

Between them, the cronies have a field day… duping the former and conniving with the latter.

Rand Paul’s father, Ron, never fit into either group. Maybe Rand doesn’t fit either…

Ron Paul couldn’t be bought. And he was smart enough to see that the do-gooders weren’t doing any good – except for themselves.

If we had a beef with Ron, it was that he lacked cynicism. We often wanted to ask: What’s a nice guy like you doing in a place like this?

It was as though he didn’t see the sordid scenes going on around him… and wouldn’t stoop to notice the sleazy motives of his fellow representatives.

He was always for liberty and the Constitution… and that was it. It was as though he thought he had been elected to defend the liberty of his constituent voters.

What they really wanted was something else – power, status, and other people’s money. But Ron ignored it… like one ignores the character flaws of an old friend… and continued on his lonely mission.

Surely, Rand must have learned from watching his father.

But what?

He grew up in a political world – full of stuffed shirts and empty heads.

Did he learn how to work with this crumbly, second-rate clay and shape it into the world he and his father wanted? Or did he learn how to get along by going along… and maybe become more successful, at least in Washington’s terms, than his father?

A Bogus Threat

We had our doubts.

It seemed as though the apple had fallen… and then rolled far from the tree. But then, this past weekend, despite howls of protest, Rand did his father’s work.

The Patriot Act was an embarrassment from the get-go. How could a people who valued their liberty give it up so readily?

The terrorist threat was gaudy and spectacular, but never serious.

Statistically, we Americans are more likely to be killed by our own children than by terrorists. We are more likely to starve to death. Or die after tripping over furniture.

And for every American killed by a terrorist, there are about 100 who are gunned down, run over, or Tasered to death by their own police.

Still, eavesdropping was sold to the public as a way to head off terrorist attacks.

How many attacks did it thwart?


The Washington Times reports:

FBI agents can’t point to any major terrorism cases they’ve cracked thanks to the key snooping powers in the Patriot Act, the Justice Department’s inspector general said in a report Thursday that could complicate efforts to keep key parts of the law operating.

Inspector General Michael E. Horowitz said that between 2004 and 2009, the FBI tripled its use of bulk collection under Section 215 of the Patriot Act, which allows government agents to compel businesses to turn over records and documents, and increasingly scooped up records of Americans who had no ties to official terrorism investigations.

So we salute Rand Paul. Good on you. In the long march to a police state, the feds were forced to take a small step back.

This example made us think about other people doing good work. (Who says we are always negative!)

There are millions and millions of people who do good work every day. Few of them get their names in the paper. They clean their homes. They drive trucks and analyze stocks. They weld steel and teach children.

The saints are all around us… unnoticed.

More to come…



June 05, 2015
Paris, France

Publisher’s Note: Once again, Market Insight editor Chris Hunter is presenting at today’s annual private meeting of members of Bill’s top-tier family wealth advisory, Bonner & Partners Family Office. But he’ll be back with us on Monday. For now, here’s one last excerpt from Bill’s newest investor presentation.

By this summer, the Federal Reserve was already supposed to be raising its interest rates…

Only now the consensus is that they will keep rates low at least till the fall…

In fact, the IMF just suggested waiting until 2016! Bloomberg:

The Federal Reserve should delay raising interest rates until the first half of 2016, the International Monetary Fund said as it cut its U.S. growth forecast for the second time this year.

And frankly I don’t believe they’ll raise them then either…

Because we’re already starting to see dollars being drained from investment funds

In just one week $7.2 billion disappeared from U.S. stock funds… the ninth major withdrawal in the last 10 weeks.

Just one fund has already seen $38 billion pulled out this year… To compare, the previous record for withdrawals, set in 2009, was just $20 billion.

And Wall Street’s already on edge…

A note from a Bank of America analyst is now warning, “Correction risks will grow in the absence of fresh inflows in the coming weeks.”

It’s not yet clear where this money is going, but billionaires are thought to be hoarding an average of around $600 million in cash each…

What is clear is that cash dollars are already skyrocketing in value…

060515 DRE dollar

As we get closer and closer to this crisis… I fully expect more and more restrictions on your ability to deposit, to withdraw, and to use your own cash.

In fact, we’ve already seen this happening in Europe…

Just recently a Swiss pension fund tried to withdraw a very large amount of cash from its bank… with the idea of storing that cash in a guarded vault instead…

The bank refused to give the fund its money.

And when the pension fund complained, the government backed the bank! In fact, it admitted that it had been “recommending that banks with cash demands … act restrictively.”

And it’s already starting to happen here in the U.S.…

Meanwhile, the state of Louisiana has just banned cash in all secondhand transactions…

That means you can’t go to a garage sale, buy a used lawn mower, and pay for it with dollar bills…

Even some in the mainstream media have started to notice what’s going on. Bloomberg has reported:

There’s a surge of creativity around ways to drive interest rates deeper into negative territory… As this new world takes shape, cash becomes pivotal.

P.S. Unfortunately, many Americans suffer from what psychologists call a “willful blindness” about the coming monetary shock. That’s why Bill has taken the extraordinary step of putting together a special report about the disturbing shock he sees coming.

The facts you’re about to see may seem incredible. But they are all true. Access Bill’s report here now.