Pro… con… off the wall – readers’ sentiments were all over the place.
But a clever reader mercifully brought the discussion to an end with this quote from fellow Baltimorean H.L. Mencken:
As democracy is perfected, the office of the President represents, more and more closely, the inner soul of the people. On some great and glorious day, the plain folks of the land will reach their heart’s desire at last and the White House will be occupied by a downright fool and complete narcissistic moron.
All over the world, elections allow the people to express their innermost thoughts and feelings.
This is a big day in Argentina, for example.
Outgoing president Cristina Kirchner is supposed to hand over power to her successor, Mauricio Macri. (If you’re a Bonner & Partners Inner Circle member, you can get the full story from our analysts on the ground in Buenos Aires here.)
But when we looked yesterday, there was dispute as to exactly what time the baton would be passed. And Cristina has let it be known she would not attend the inaugural and would generally make life as difficult for Mr. Macri as possible.
Elections are misunderstood.
On the surface they are contests between zombies and cronies. The zombies (leftists, socialists, Democrats) want lots of little handouts. The cronies (rightists, Wall Streeters, Republicans) want fewer but bigger ones.
All the loot comes from the voters – who willingly give up both their money and their liberty believing that, somehow, they are better off for it.
But the real winner is the Deep State. It usually controls the candidates… and continues to gain power and resources, no matter which side wins.
But the Deep State is not immune to setbacks. On the pampas, it must be worried that Macri may actually believe in free markets rather than markets controlled by cronies.
If so, it may be harder to work with him than they had hoped.
And in the U.S., poor Janet Yellen must be having trouble sleeping again. The Deep State, the zombies, the cronies – all turn their black hearts and beady eyes unto her.
Next Wednesday, she takes center stage again. And with the whole world watching, she’ll make a complete fool of herself.
Yellen is supposed to announce a tiny increase in the Fed’s key lending rate… currently sitting at 0.25%.
Analysts will examine every word. Commentators will report, confuse, and misinterpret her remarks. And the economy and the markets will react.
But they may not react as the insiders hope…
Each generation has its market myths. Each decides what is important and what is not.
The generation of the 1970s and 1980s watched inflation rates and money supply figures.
Investors had been beaten up by the inflation of the 1970s. Then they learned from Milton Friedman at the Chicago School that inflation was “always and everywhere a monetary phenomenon.” So they began to watch the Fed’s M2 money supply figures like scouts looking for early warning of an enemy attack.
The attack never came. The rate of consumer price inflation fell from a high of about 15% in 1980 to its near-zero levels today.
Investors are always looking in the wrong direction. They have to be…
“I’m going home to the U.S. to die,” said an old friend the other day.
“If you know you’re going to die at home,” we asked, “why not stay in Paris?”
Likewise, if investors knew what the future held, it wouldn’t happen that way. They would sell their positions before the top was in, avoiding a crash. And they’d buy before stocks hit rock bottom, never allowing a bear market to fully express itself.
Surprises would be eliminated. Accidents avoided. If everyone knew where they would have a fender-bender, auto-body shops would be out of business!
That is the trouble with the future: It must come as a surprise.
We talk about borrowing as “taking from the future.”
But it’s not really possible. Because the future hasn’t happened yet. It’s just a metaphor for understanding what is going on.
Farmers – at least in the old days – saved some of their corn each year as “seed corn.” This is what they would plant the following year.
And if they ate it rather than saving it, they would have been “taking from the future.” Next year’s crop would be reduced as a result. More today but less tomorrow.
But it is always a risk to take from tomorrow. Centuries ago, fewer seeds – and perhaps less rainfall, or too much rainfall, or too much wind, or hail, or frost – might have meant starvation.
What might it mean today?
We don’t know. The future is always a surprise… especially to people with PhDs in economics.
And now we watch Ms. Yellen.
Acres of print will be devoted to speculating on how much of an increase she will announce… and how it will be followed up.
Guessing about the “pace of tightening” (that is, how soon will the first rate hike be followed by another) and positioning portfolios for tighter money – more dollars, less emerging market debt – are already growth businesses.
Could it be that investors are looking in the wrong direction? Has the future moved on… without Ms. Yellen?
Have stocks already topped out? Are sales already dropping? Is subprime student, energy, auto, corporate, and emerging market debt already sinking?
Have the trains already left their stations, headed to destinations that investors haven’t even thought of?
Could it be that the Deep State’s debt-based financing system is already in trouble? And, after 84 months of zero interest rates and roughly $4.5 trillion of central bank stimulus, can Ms. Yellen save it?
Further Reading: Bill has been warning about the coming collapse of the Deep State’s debt-based financing system. And in his latest presentation, he lays out the frightening details that those in control of the Deep State don’t want you to know. Watch it here now.
“Thinking” computers are closer than you may realize…
This year has been a landmark year for artificial intelligence (AI) – one of the big themes editor Jeff Brown is tracking in our newest publication, Exponential Tech Investor.
As Jeff put it in his recent webinar about how to profit from the next wave of technology breakthroughs:
It won’t be long before your personal AI will be able to take care of the vast majority of menial tasks, such as scheduling meetings, reading and responding to routine emails… even buying and sending flowers on your behalf. I can’t wait for that day. It will free up so much of my time for more productive pursuits.
And as today’s chart reveals, growth in AI during 2015 has been huge.
From a couple hundred projects in 2012, tech maven Google… now called Alphabet (NASDAQ:GOOG)… is running almost 3,000 projects involving a type of AI called deep learning.
And it’s not the only tech big hitter betting on AI. Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN) are also investing heavily in this technology.
As Jeff reveals in his latest investor presentation, breakthroughs in AI will transform the world around us. They will also create once-in-a-lifetime profit opportunities for investors who are properly positioned. Watch it here.
China Is Using a New Fuel Type to Replace Oil, Gas, and Coal
A team of chemical engineers just found a fuel that can power the entire planet for thousands of years. One government official says, “It’s growing so fast it’s going to overtake everything… It could double every two years.”
Big Opportunities to Profit from “Distressed” Bonds
The world’s biggest “distressed” debt investor, Oaktree Capital Group, says that, for the first time in years, there are now lots of opportunities to buy bonds at steep discounts… especially in the energy sector.
A Strong Dollar Hurts China More Than the U.S.
U.S. exports are getting squeezed by a strong dollar. But the biggest loser from the dollar’s big rally is China. Which is why you should expect Beijing to loosen the “peg” between the renminbi and the dollar.
Yet another extended edition of the mailbag to accommodate the flood of responses on Bill’s Diary issues on “The Donald.” (Catch up here and here.)
We are able to include only a small fraction of emails received on this issue.
Are you doing a December readership layoff? Just culling the herd a little?
You doubt and laugh at yourself as much as you doubt and laugh at others. I guess some readers don’t value that.– Chris J.
Great publication, viewpoint, and stirring of the pot. Much enjoyed.– Tekoa D.
Your missives reach me near noon each day and are the makings of an enjoyable lunch! I enjoy each thought and many times, they make my day.
I could agree with one respondent whose ancestors are rolling in their graves. But I believe they had quite a few laps in before Trump declared his candidacy. Well done, keep it up.– Phil M.
As a relatively new subscriber, I continue to be amazed at the reaction of some of my fellow Bonner travelers. Don’t they get it?
Their reactions to your supposedly incendiary comments reflect at best a topical reading. For goodness sakes, folks, put your thinking caps on and read what Bill is saying!
Keep it up, Bill. I really do feel so much better informed about and aware of the world due to your daily note.– John G.
I eagerly await your letter every day. We have elected an outsider here in Guatemala. All are tired of the same old, same old.
I don’t agree with all Trump has to say, nor the other candidates, but he is a fresh breath of air.
Some of your readers need to get out of the USA for a while. I’ve been out for 47 years. This gives one a better perspective.– Wilfred J.
I think it very interesting that half your readers were mad because they thought you like Trump, another half thought you don’t like him, and the third half are just mad. Seems like there’s an extra half in there somewhere, or I need some remedial math tutoring.
Mr. A. Hitler was not a great ironist either. Nor is “The Donald.” Both splendid human beings! (Irony intended.)– Ed H.
Bill had the temerity to deploy some fairly heavy irony. Now, I don’t subscribe to the widely held (by foreigners) view that all Americans have had an irony bypass. BUT the appreciation of irony is certainly not one of their strong points.– David F.
To paraphrase a quote about democracy, “Trump is the worst possible candidate for president, except for all the others.”– Gordon F.
I find it somewhat amusing reading all the mailbag comments. Personally, I am sitting back watching all the theatre and getting a few good chuckles from it all. The Republicans have no one who is competent and the Democrats are trying to be so PC it hurts.
Trump is the wildcard in the deck that keeps everyone off balance, and that is the primary thing that draws people to him. Many people are sick of the PC movement and they see Trump as someone to whom they can relate.
He speaks his mind. This can be both good and bad, depending on your philosophical bent. All I can say is it will be interesting to watch unfold.
Can he survive in the sewerage that is American politics? Only time will tell.– John M.
After reading the letters respective to Trump, I am wondering if your readers know how to read. Maybe I don’t know either. But I saw quite a bit of tongue in cheek in your analysis.
Great presidents were rabble-rousers. But then I don’t think George Washington or Abraham Lincoln were narcissists.
I find it interesting that the minute someone reads something that doesn’t fit their mold or notion of how things should be, they pull the plug or cancel a subscription.
Although it might be self-satisfying to read commentary that confirms our view of life, it surely doesn’t increase our perspective. Oh, and just in case anyone misinterprets this, I think Trump is a panderer. And although I was just going to use the word “idiot,” I think he is anything but.– David D.
I enjoy reading Bill Bonner’s thoughts, but don’t always agree with everything he says.
It astounds me how poor some people’s reading comprehension skills are.
Generally, I find that the more convinced a person is that they are in possession of “The Truth,” the less they listen or appear to think. I would envy them their bliss, but they miss out on the feast that is “subtlety,” “nuance,” “satire,” and “irony.”
We must remember, with compassion, that fully half the people in this world are below average.
– Steven S.
I titter with amusement at every angry letter you print. Have you extrapolated the canceled subscriptions into the future to see when it’s going to be just you and me left?
People seem to be ditching you at an alarming rate! Are you in fact on a mission to clear the decks of humorless, blinkered folk who at a rough guess aren’t as well-traveled as your good self, clinging desperately to the American Dream even as the alarm clock rings and rings?
No, no – hit the snooze button… 15 more minutes please!
– Andrew C.
Keep it up, Bill. All of this reminds me of that quip, “Don’t confuse me with facts. I have already made up my mind.”– Fred M.
Exponential Tech Investor editor Jeff Brown recently flew over from his Tokyo home to lead an urgent roundtable in Baltimore.
It focused on the massive wave of tech innovation on the horizon… what you do to stay secure… and what it means for your investment plans today.
If you are in or near retirement, this research could make a huge difference to your life.
Watch Jeff’s video now and judge the information for yourself.