BALTIMORE – It is a bright summer day outside. A dry breeze sweeps down Cathedral Street and blows away the hot, humid air.

It is hard for us to imagine that anything bad could happen today. But bad things do happen – even on nice days.

The weather was fine when General Custer rode out to the Little Bighorn, too.

Home of the Brave?

Over the weekend, we worked at putting up a board fence – with half-round treated posts and four 6-inch-by-5/4-inch boards.

It was grim work. On a small farm, nothing works as it should. The augur got stuck on a root and sheared a bolt… and the tractor slipped on the greasy clay.

After a few minutes, our shirt was drenched. Ticks were already crawling up our legs. What’s worse, we barely made a dent in the job. In two days, we only got about 20 posts in place… with 130 to go.

Progress was slow. But at least it was real.

We were thinking about cowardice… the kind of cowardice that runs rampant in the Home of the Brave.

The voter, the patriot, the investor, the churchgoer – there are few Muhammad Alis among them. [See today’s Mailbag below for more on Ali.]

Many readers are annoyed with us. Ali was one of the few real heroes of the Vietnam era, we said. How could we believe it?

Ali challenged the system. He said what all of us must have thought: None of us had a real quarrel with the Viet Cong.

But the typical man hides in solemn conceits and flattering fantasies. He would rather die than challenge the system. 

He believes that he is running the country… his sons and daughters, protecting it, are heroes… the Fed will make sure nothing goes too far wrong in the economy… 

And as for God… he’s always on our side.

Culp’s Hill

An expert tells us that the world’s climate is changing. He says he cares. It is not that we don’t believe him; we just don’t know what it means.

Is it good? Is it bad? Will it spoil a picnic? Or increase grain harvests? Is it a fence or a fantasy?

We don’t know. We know only that the sun is shining, right here, right now.

You put up Old Glory on Memorial Day; you remembered those who died in the service of their country.

Yes, of course, you did. But who and why?

Did you remember the soldiers who fought for the 1st Maryland Infantry, CSA? Or the Yankees who killed them?

On a hot summer day in 1863, in the fight over Culp’s Hill near Gettysburg, the Marylanders were ordered to attack. Their commander, Brigadier General Steuart (a distant relative) protested. It would be suicide, he said.  Then, he put his head in hands and cried: “My poor boys!”

More than half were killed.

Which side are you on… or is he on? What “country” do you serve?

Manhattan? Death Valley? The rednecks of South Georgia? Or the home decorators of Marin County? Blue states or red states? Fundamentalist Christians or fundamentalist Muslims?

Watch and Wait

There was not much forward momentum in the U.S. stock market yesterday, either.

Still, stocks remain near an all-time high.

Fed chief Janet Yellen reassured investors. If rates rise, and stocks tank, it won’t be her fault. She’ll bide her time before hiking rates.

And so, we remain in “watch and wait” mode.

It is one of those things economist Herbert Stein must have had in mind. As he famously put it, “If something cannot go on forever, it will stop.”

The Fed cannot stay in a permanent state of emergency. It will have to come to an end sometime.

What is amazing is that it hasn’t come to an end already… and there’s no telling how much longer it will continue.

In the meantime, the claptrap flows, like beer at an Orioles game.

Trump Risk

One of the most prominent (among many) purveyors of myth and fraud is MIT wunderkind and former U.S. Treasury secretary Larry Summers.

Writing in the Financial Times – a bastion of narrative delusion – he takes aim at the presumptive Republican presidential nominee, Donald Trump.

There are many good reasons to think Trump is a mountebank, but none of them seem to occur to Mr. Summers.

Instead, he refers to the “Trump risk,” which he believes measures the damage that Trump would do to the U.S. economy if he were elected.

“The economic consequences of a Trump win would be severe,” claims Mr. Summers in the headline.

But he has no way of knowing what the consequences would be, let alone if they would be severe.

Would they be worse than if Ms. Clinton were elected?

No one knows.

“If he is elected, I would expect a protracted recession to begin within 18 months.”


Look at the numbers. Over the past 12 months, U.S. GDP growth has been falling steadily, quarter after quarter. From 3.9%… to 2%… to 1.4%… to 0.8%.

Within 18 months there should be a protracted recession no matter who is elected to the White House.

Convenient Lies

Mr. Summers also picks up Hillary’s theme: It would be unsafe to have Mr. Trump in charge.

“Who will rest secure with President Trump controlling the Federal Bureau of Investigation and the Central Intelligence Agency?” he asks.

He’s got a point.

But wait, no one should feel safe anyway – no matter who is in the White House. These agencies are plainly out of control… and have been for many years.

Remember, it was rogue elements of the CIA that launched the Bay of Pigs Invasion – apparently, without informing President Kennedy. And that was more than a half-century ago.

Kennedy vowed to “splinter” the organization into a thousand pieces and throw them “into the wind.” Instead, it was JFK who was splintered.

Since then, the Deep State has grown as fast as the credit that supports it.

But that’s the difference between politics and putting up a fence… The bigger the scale, and the farther away, the less we really know what is going on.

So, we resort to convenient lies to fill in the blanks… until the “poor boys” die.




Resource Insight

Jim Rickards, Editor, Rickards’ Gold Speculator

Have you seen what’s happening around the world with gold?

Countries are acquiring the metal at an accelerated rate in order to diversify their reserve positions.

In this note, I’ll explain what’s going on and how this trend amounts to a “shadow” gold standard.

First, let’s talk about the big winners – the real center of gold power in the world. That’s the 19 nations that make up the Eurozone and issue the euro. Their gold as a percentage of GDP is over 4%.

The United States’ ratio is about 1.7%.

Interestingly, Russia’s ratio is about 2.7%…

Russia has more than one-eighth the amount of gold the U.S. has, yet its economy is only one-eighth the size of the U.S. economy, so the ratio is higher. Russia is one of those nations that is acquiring more gold, and it seems set on matching the Eurozone.

Japan, Canada, and the United Kingdom’s gold ratios, on the other hand, are anemic, all less than 1%.

The most interesting case is China…

The official gold reserves of China are reported as of July 2015 at 1,658 tons. Yet we know from various reliable sources including mining production and import statistics that their actual gold stock is closer to 4,000 tons.

(I’ve spoken to refineries and secure logistics firms – people who actually handle physical gold – in addition to official sources, and included their information in my estimates. On the whole there is enough credible information available to support this estimate at a minimum.)

China, like Russia, is acquiring gold so that it will have a comparable ratio to the United States and Europe. The gold-to-GDP ratio will be critical when the monetary system collapses because it will form the basis for any monetary reset and the new “rules of the game.”

In any monetary reset, countries will come together and sit around the table. One can think of that meeting as a poker game. When you sit down at the poker table, you want a big pile of chips. Gold functions like a pile of poker chips in this context. One’s voice at the table is going to be a function of the size of one’s gold hoard.

China’s acquisition of more than 3,000 tons of gold in the past seven years represents almost 10% of all the official gold in the world; a huge shift in gold reserves in China’s favor.

This is big news, and it underlines the idea of a shadow gold standard. China is trying to acquire enough gold so that when the international monetary collapse comes and the world has to recut the deal, China will have a prime seat at the table.

Countries like Canada, Australia, and the United Kingdom with small gold-to-GDP ratios will be seated away from the table, along the walls…

The shadow gold standard is real. That’s why I’ve always advocated for my readers to adopt their own personal gold standard. Holding at least 10% of their wealth in physical gold.

Editor’s Note: But before you invest another penny in gold, make sure you read Jim’s latest briefing. In it, he outlines how one particular investment could turn micro-movements in gold into massive moneymaking opportunities. To see what he has to say, go here now.

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Bill’s praise for Muhammad Ali’s stance against the Vietnam War has prompted a lot of interesting feedback today… including requests from readers to cancel their Diary subscriptions.

Cassius Clay was a coward and a draft dodger who stayed home, declared himself a preacher, and joined the Muslims, while the rest of us went to war. Get it straight.


A veteran sick of do-gooders.


– Ken S.

In your open today (June 7), you inferred that Ali was a true war hero and that Donald Trump and George W Bush dodged the draft and military Service.


Bush was a 1st Lt. in the Texas Air National Guard. And even though Trump was deferred from service, he was a military cadet for five years at the New York Military Academy.


Trump has been accused of being a draft dodger, but to obtain a deferment from service was legal, legit, and reasonable… as more than 15.4 million men did. This link should clear up the confusion in your mind about Trump being a draft dodger.


If my comments are appropriate for your mailbag, feel free to include them. Then if you would kindly cancel my membership, I would appreciate it.


– Reed K.

Muhammad Ali – I give the guy his stripes for his accomplishments. But the slick maneuver avoiding the draft was NOT something I would give credit for in terms of standing up to our government.


I was part of that era. And although I didn’t like Vietnam, it was part of my duty as a U.S. citizen to protect our country and stand as allies with the South.


As you stated… Ali could have taken a non-combative roll in the military and still served his country – and Muslim religion – without conflicting his moral or religious values.


– Gary E.

Muhammad Ali, as described by Bill in today’s Diary should be an inspiration to us all of whatever color. He stood on principal. If more Americans did the same the world could – and would – be a much better place.


Americans in our ignorance and sloth… having become so dependent on government for our daily bread… go along with whatever they dish out. Apparently, we’re more contented to contend for the best place at the trough, rather than stand up for what’s right.


– Mike R.

Spot on. None of us had any quarrel with the Viet Cong. Ali had the courage to say it. And he suffered for his refusal to bend to the will of the state… for saying no to “Massa”… while those who submitted to the involuntary servitude of the draft suffered for their submission to authority and their failure to oppose the real enemy. 


– Tom W.

Your letters are always a bright spot in my day. Always filled with interesting experiences, history, and common sense – which are especially fun when they stir up the masses in your letters column.


I lived in Cherry Hill, NJ, when Ali was there in the early 1970s. So, it was great to have your perspectives on him. “I ain’t got no quarrel with the Viet Cong,” he said. If only the world, and especially the U.S., could follow his advice. Just substitute the words "Viet Cong" for every group of people to whom we’ve brought death, destruction and economic chaos.  


– Kent D.

Two thumbs up Bill. Give us more and bring on the howls of protest. Won’t that be fun to read?


– Anita C.

Amen to your comments about Ali, Bill. I anticipate, as you do, that you will get many negative comments back on this one.


I’m ashamed to admit that I supported that war at the time. We were after all fighting the Communist horde. I didn’t repent of my warmongering ways until this last Iraq war, when it became all too clear to me why this country fights most of the wars it engages in.


I’m a slow learner but hopefully I’m learning.


– Russel C. 

In Case You Missed It…

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