[5 min read]  Greg
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Hi, Greg Canavan here. I hope you’re enjoying some downtime somewhere. It’s exactly what I’ve advised my fellow editors to do…rest and relax. It’s been a long year, especially for those of us who had to endure Victoria’s lockdown and curfew rules. So a good unwind is required before we get back into it in 2021. So for the next week, you’ll get something different from us here at The Rum Rebellion. You’re probably familiar with the work of Dan Denning, who is a regular contributor to this publication. Dan works closely with Bill Bonner, and writes for The Bonner-Denning Letter, with which you might also be familiar. Bill is one of the founders of Agora, which is the parent company of Port Phillip Publishing, the publisher of The Rum Rebellion. Bill has quite the network to draw upon. One of the recent projects they’ve been working on is the Bonner Private Research Podcast, hosted by Aussie expat Joel Bowman. Over to you, Joel… Dan Denning: The Anatomy of Revolution, Past and Future Joel Bowman As you’ve no doubt read, money printing here in the West has gone into hyperdrive this year, with the US Federal Reserve adding $3 trillion to its balance sheet between February and June alone, taking its total holdings from around $4 trillion to just over $7 trillion. For context, the Fed’s balance sheet back in 2002, after the dotcom bubble had burst, was less than ¾ of $1 trillion. As Pantera Capital CEO, Dan Morehead, noted at the time: ‘The United States printed more money in June than in the first two centuries after its founding. The U.S. budget deficit for that month — $864 billion — was larger than the total debt incurred from 1776 through the end of 1979.’
What might this portend for our own future? Perhaps a look into the past can provide some clues. I spoke to Dan Denning, co-author of The Bonner-Denning Letter, about all this and more in our latest BPR Podcast. Listen to our conversation here. Regards, Joel Bowman,
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What Does the US Look Like in 2021?
By Bill Bonner Before moving on to 2021, it might be useful to better understand what happened last year. Like moving on from a bad marriage, we want to know: What went wrong? So, we are digging deeper into the dementia that was 2020. What a bloody mess! Polite corruption Let us begin, rather au hasard, with yesterday’s big news. In it, we find that former Federal Reserve chair Janet Yellen got paid about $7 million for speaking in whole sentences and reassuring Wall Street that she has the big banks’ backs. Here’s CNN: ‘Janet Yellen made millions giving speeches to Wall Street banks she’ll soon regulate’ ‘Janet Yellen, President-elect Joe Biden’s pick for Treasury secretary, made more than $7 million in recent years by giving speeches to Wall Street banks, major corporations and industry groups.’
Today, defeated congressmen turn into lobbyists, old generals make their fortunes with ‘defence’ contractors, and ex-Federal Reserve jefes cash in on Wall Street. This sort of polite corruption has been so ‘normalised’ and sanitised that its beneficiaries are almost proud of it. Deserved gratitude But look more carefully, and you see the slime. Ms Yellen, for example, focused much of her wisdom on a single big company, Citigroup. The bank paid her nearly a million dollars for a series of talks last year. It was probably no coincidence that this is the same bank that was saved by the Fed during the financial crisis of 2008–09. At the time, Citi was looking at a string of losses adding up to more than $37 billion and already had more than $1 trillion in debt. But instead of failing, as it should have, the Fed (then led by Ben Bernanke…he with the ‘courage to act’) bailed it out, giving it $45 billion worth of Troubled Asset Relief Program (TARP) funds and guaranteeing some $250 billion more of its dodgy loans. Of course, Citi was eager to show Ms Yellen the gratitude she deserves. But that is past…part of the corpse we are now dissecting. And yet, here is where we find the future, too. Michael Corbat, Citi’s CEO, is no fool. He knew that busts follow booms. And he also knew that the Fed’s money printing would be the key to Citi surviving the next one. He knew what to do, in other words. False pretences But let’s not get distracted. We’re taking 2020 apart to try to understand what happened. The Swamp slime grew. But it didn’t grow alone. As you will recall from yesterday, 2020 was the most preposterous year of our lives. Never before have we seen Americans so disgusted with each other. The Speaker of the House and the President of the Senate both had their houses vandalised. The US economy was smaller in December than it had been in January…and the government was nearly $4 trillion deeper in debt, with the Fed ‘printing’ new money at a rate of $30 billion per week just to keep the show on the road. And ’90s pop sensations Jennifer Lopez and Shakira sang together at the Super Bowl. Almost everything that happened in 2020 was done in bad taste, or under false pretences, outright lies, or self-serving delusions. In the presidential election, to take a big example, neither candidate was what he pretended to be. Biden, a big business, big-government apologist all his life, pretended to be a reformer, working for the little guy. Trump, a reality-TV-show star and leveraged real estate speculator, pretended to be a conservative capitalist. Capitalism, we remind readers, is no ‘system’. It’s just what happens when people are allowed to decide among themselves who gets what. Socialism is an imposed system in which the feds make the decisions. Donald Trump increased the reach of the government more than any president since the Second World War, making it more ‘socialist’ than ever before. And yet, many voters thought they saw him on the ramparts of ‘capitalism’, struggling valiantly to hold off the Bolshevik menace. And now, Biden the ‘reformer’ prepares to move into the White House…bringing Janet Yellen, thousands of cronies, and the Deep State nomenclatura with him. The electorate was bamboozled by them both. Going in circles Looking back, the fatal disease began long before COVID-19 struck…even long before Donald J Trump came to Washington. By January 2020, it was well advanced. The economy was then at the tail end of what should have been its longest and biggest boom ever. Yet, instead of making hay while the sun shone, the feds mowed it down. These were the fat years…when the feds should have been paying down debt and laying in stores of surpluses for the hard times to come. Instead, led by a Republican president, they were projecting a deficit for 2020 of $1.2 trillion. It was as if Pharaoh had gotten it backwards, storing up the grain in the lean years and releasing it when the fat harvest came. And here, we pause to make sure we’re all watching the same show. Everything in nature is cyclical. The sun stops shining every day, in other words. People die — even without the coronavirus. Markets boom and crash. Empires decline and fall. That’s just the way it is. Inevitable and ineluctable Yes, everything changes…but the cycles continue. And that’s why we turn to history for instruction. What happened yesterday will probably happen again tomorrow. From a distance, we have no problem identifying the pattern. Flowers bloom. Then they wither and die. But the flower doesn’t see it that way. It thinks it will bloom forever. The lover believes his love will always be beautiful. And the empire is always eternal…until it collapses. The cycles are obvious. From birth to death…from honesty to corruption…from boom to bust. They are inevitable and ineluctable. Where are we? But the problem for us is always the same: trying to figure out where we are — at the beginning or near the end? As 2020 moved along, it became more and more apparent that we were on the downhill slope. The COVID lockdowns…the election shenanigans…the Fed’s money printing…record deficits, record debt…bigger government…Proud Boys and Antifa…bailouts…bamboozles… In short, it was the damndest year we ever saw. And there’s more to come… Regards, Bill Bonner,
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