American progress is slowing down

Friday, 29 October 2021 — Baltimore, Maryland

[5 min read]

Dear Reader,

The question we have been flirting with…coquettishly…shyly…

…is this: Why is the US struggling to make progress?

It is slipping in almost all global rankings. Its growth rate is barely half of what it was in the last century.

And its government is more corrupt, degenerate, and incompetent than at any time in history.

What gives?

The answers fall into two major categories. Either it is the fault of God or of God’s creature, man. Today, we look at man’s role.

No resistance

One of the weaknesses of man is that he tends to greatly overestimate his abilities…and underestimate his own capacity to lie, cheat, and steal.

In its epic battle in Afghanistan, for example, the US elite thought it could turn the local tribes into model Democrats. Even after squandering US$2.3 trillion…and killing thousands of resisters over a 20-year period…the Afghanis stubbornly clung to their primitive ways and the US was forced to withdraw.

In the fight against COVID-19, too, man’s ability to control the situation was greatly exaggerated. He believed he could contain the illness with lockdowns, mask-ups, incessant handwashing, and social distancing…and then defeat it altogether with a miracle vaccine.

Former United States Secretary of State Colin Powell passed away the other week, even though he was fully vaccinated. Had more people been vaccinated, explained the media, maybe he’d still be alive.

But after 20 months…countless indignities…white-hot arguments…jackass finger-pointing…and trillions in collateral damage, COVID-19 still goes around pretty much unchecked.

No difference

And now, it turns out that more vaccines would probably not have saved Powell…because they make no difference in controlling the spread of the disease.

In a study of 68 countries and 2,947 counties in the US, the ‘Public Health Emergency COVID-19 Initiative’ found that:

‘At the country-level, there appears to be no discernable relationship between percentage of population fully vaccinated and new COVID-19 cases in the last 7 days. In fact, the trend line suggests a marginally positive association such that countries with higher percentage of population fully vaccinated have higher COVID-19 cases per 1 million people. Notably, Israel, with over 60% of their population fully vaccinated, had the highest COVID-19 cases per 1 million people in the last 7 days.

‘The lack of a meaningful association between percentage population fully vaccinated and new COVID-19 cases is further exemplified, for instance, by comparison of Iceland and Portugal. Both countries have over 75% of their population fully vaccinated and have more COVID-19 cases per 1 million people than countries such as Vietnam and South Africa, that have around 10% of their population fully vaccinated.’

No surprise

Our beat is neither war nor public health. But if the authorities are so wrong about matters of life and death, mightn’t they also err in matters of money…

…maybe especially so when the error makes them rich?

The elites control the government. The government controls the printing press. Is it any surprise where the printing press money goes? Business Insider reports that the wealthiest Americans now own most of the stock market:

‘The top 10% of Americans now hold 89% of corporate equities and mutual fund shares, a record high.

‘The top 1% alone hold over half of stocks owned by households, according to the Federal Reserve.

‘That means the wealthiest Americans disproportionately profited from the stock market’s strong performance over the last year.’

Here’s more evidence from OpenSecrets.org that the corruption is deep…and bipartisan:

‘House Speaker Nancy Pelosi (D-Calif.) has seen her wealth increase to nearly $115 million from $41 million in 2004, the first year OpenSecrets began tracking personal finances. Senate Majority Leader Mitch McConnell (R-Ky.) saw his net worth increase from $3 million to over $34 million during that time.’

And here’s the chief of the money printers himself, Jerome Powell. The Federal Reserve head attended Georgetown Law Center at the same time we did (though we don’t recall him). Now, after years of apparently trading on the Fed’s ‘inside information’, he is worth up to US$55 million. Truthout has the lowdown:

‘Federal Reserve Chair Jerome Powell sold between $1 million and $5 million worth of stock just before a large stock market crash last year, according to new disclosure filings reviewed by The American Prospect. Powell’s massive sale came on October 1, 2020.’

Distorted traffic signals

You’ll recall the analogy we’ve been using lately — that the rules of a productive, prosperous, and progressive society are like ‘traffic signals’.

They don’t tell anyone where to go or how to get there…they just regulate the flow, keeping drivers from running into one another. When the light is green, you think you can go through the intersection safely.

What are the ‘traffic signals’ of an honest economy?

They are very simple: honest money, free markets, and protected property rights.

You think your money is dependable. You expect prices to be honest, reflecting real supply and demand. And you count on the ‘law of the land’ to protect what’s yours.

But what if the authorities falsified the signals in order to help themselves get rich…while snarling traffic for everyone else?

Wouldn’t progress slow down?

We’ll answer that question: yes.

Stay tuned…

Regards,

Bill Bonner,
For The Rum Rebellion

You’ll be kicking yourself after reading this.

I know I’m certainly playing the ‘what if’ game after reading about this news.

It concerns people who have parlayed a few dollars into millions and, in some cases, billions of dollars in less than a year.

Not surprisingly, it involved cryptocurrency, and most probably one that you have never heard of.

It is called Shiba Inu ($SHIB) and it’s what’s known as a ‘meme coin’. It’s also named after a breed of dog.

Thanks to some incredible marketing and the fear of missing out, $SHIB is now the 11th largest coin by market capitalisation.

The official cryptocurrency jargon for a coin like this is ‘a sh*t coin’, meaning it has no real value or utility. It suggests it also has a limited future, but that doesn’t stop the punters from cashing in.

As you can see from the image below, one fortunate speculator turned US$8,000 into US$5.7 billion!

It’s a staggering amount of money, and because every transaction on the blockchain is traceable, records like these are accurate.

Another punter purchased US$17 worth of this coin and rode it to a US$6.5 million-dollar payday.

This is the stuff of dreams and is the equivalent of winning the Lotto jackpot a few weeks in a row. It’s also a lesson in psychology.

My guess is that individuals like the traders mentioned above are already wealthy. In the case of the first one, they’re probably already a billionaire bitcoiner.

That’s based on my experience with how humans react to windfall gains.

Only someone with huge reserves would hang on to something like $SHIB for a multibillion-dollar ride.

A wealthy person can watch their small investment grow to many millions because their lifestyle or wellbeing doesn’t depend on it. For the rest of us, the temptation to ‘lock-in’ profits often proves too tempting.

The internal sales pressure happens when people double their money quickly. And as the multiples get bigger, so does the motivation to sell.

Where investments don’t generate income for the holder, they are essentially betting that prices will continue to rise. We’ve all heard or read stories of price collapses in stocks, bonds, commodities, and crypto. It also happens in real estate markets when credit is tight, business is slow, or people lose confidence in keeping their jobs.

But right now, it seems you can bet on anything with the expectation the price will go up. That’s the product of too much money sloshing around in the system and a sense of reckless abandon.

It works well...until it doesn’t.

At least for the lucky $SHIB punters, the little bets seem to have paid off big time. That’s if they’ve been fortunate enough to find someone willing to buy the stuff.

It’s known as the greater fool theory!

Enjoy your weekend.

Best,

Cory Bernardi,
For The Rum Rebellion