| By Bill Bonner, Chairman, Bonner & Partners To everything there is a season And a time for every purpose under Heaven – Ecclesiastes RANCHO SANTANA, NICARAGUA – Children shouldn’t have to learn that Santa Claus doesn’t exist. And some facts are too brutal even for adults. That things go down as well as up… and get worse as well as better… is blindingly obvious to everyone over 55. But it will come as a rude shock to today’s investors. So will today’s insight: that there are hard seasons in human life as well as soft ones. Human life is cyclical. It’s not onward and upward forever. There are recurring patterns. Frost as well as warm breezes. Clouds as well as sun. Science and technology may grow all year round. But in love, politics, war, and money, we flourish in the summertime… and die back every winter. | Recommended Link | | L - E - V - E - R - A - G - E Leverage might be the most powerful word in any language. You leverage your talent… You leverage your education… You leverage your connections… So, why shouldn’t you leverage your money too? |
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Nothing Like the Yucatán Here in Nicaragua, it’s nothing like the Yucatán Peninsula, where we spent the last two days. Here it is dry. There it is humid. Here it is mountainous. There it is flat. Here it is quiet and backward. There it is crowded, modern, and booming. Here we are on the Pacific; there on the Atlantic. Here it is poor. There it is relatively rich and prosperous. There are seasons here, too. In the summer months, it is rainy. In winter, it is dry. And this time of year, the dust blows across the roads and dry leaves accumulate on the ground. We got back to the airport at 10 p.m. In the daytime, we’d have to make our way through heavy traffic, inevitably caught behind a truck, lumbering up a hill at 10 mph while breaking black wind from its tailpipe. But last night, the road was nearly empty. After an hour or so on the Pan-American Highway, we left the blacktop and took a shortcut on a dirt road. There, too, we would normally drive through clouds of dust turned up by other cars and trucks. But with no other traffic, our own dust whirled behind us, coming to rest on the freshly-washed school uniforms hanging on clotheslines near the road. Both Mexico’s Yucatán and Nicaragua’s Pacific coast are attracting more and more U.S. retirees. And this trend – like the rise of Florida before it – may continue for a long time. Rendezvous With Destiny Cycles take time. The credit cycle, for example, can last a lifetime. The last time interest rates were this low was around the time we were born – in the late ’40s. A complete stock market cycle, too, is surprisingly long. But we have to look at them in terms of old money – the gold-backed dollar – to see them clearly. The last major low came in 1980. Then, it took only 1.3 ounces of gold (equal to about $700 at the statutory rate) to buy the entire Dow 30 stocks. Twenty years later the bull market had run its course, hitting a high of over 40 ounces of gold in 2000. That was the high-water mark for U.S. stocks. They never hit such a high before… and never have again since. And there’s still no bottom in sight, 40 years after the last low. Investors and the financial press applaud every up move in the stock market. “Dow 30,000,” they cheer. But to get back to its real level of 1999 – at 42 ounces of gold to buy the Dow – it would have to go to 67,000. Even as stocks go up in new, nominal dollars, gold goes up more, leaving them further behind. And our guess is that this pattern will continue, too… and when the Dow finally finds its bottom – its rendezvous with destiny – it will be under 5 ounces of gold. | Recommended Link | | Raw and Unscripted Video Making Rounds on the Internet E.B. Tucker has something extraordinary that you need to see. It’s a raw and unscripted video of E.B making rounds on the internet. E.B was in Denver investigating a life-changing stock market story. One that will be responsible for massive wealth creation in 2020. What was E.B. Tucker doing in Denver and what was he investigating? |
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End of an Empire According to Sir John Glubb, the imperial cycle lasts 250 years. Maybe so. Maybe not. But the U.S. empire definitely seemed on the downswing after 1999. And once the cycle turns, none of the king’s horses and none of his men are able to do much about it. That is a recurring pattern of history, too – like it or not, empires die. All of them. This week, and the last, we have been chronicling the many promises of the 21st century that didn’t pan out. The dot-coms blew up in March 2000. The Information Revolution buried us under a mountain of data. The stock market headed down… and in real terms is still only at half its 1999 level. The mission, whatever it was, was never accomplished in Iraq. The war in Afghanistan has turned into the longest ever. The U.S. military still hasn’t won a war in 75 years. New technology failed to produce a new boom. The most aggressive Federal Reserve response ever (to the crisis of ’08-’09) yielded only the weakest recovery on record. The Obama election failed to heal racial wounds. The Trump tax cut failed to increase growth. Tesla has still not made a profit. The Trump trade wars made no appreciable improvement in America’s manufacturing sector. The Baltimore Ravens did not win the Super Bowl in 2020. The seasons change, in other words… even for empires. Disappointments accumulate. And MAGA never had a chance. More to come… Regards, Bill Like what you’re reading? Send your thoughts to feedback@bonnerandpartners.com. FEATURED READS Check the Facts: Economies by the Numbers
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Amazon says its Alexa digital assistant will soon be able to pay for your gas without cash or a credit card. All you’ll need to do is tell your smartphone or Alexa-equipped car, “Alexa, pay for gas”… MAILBAG Mixed responses after Bill took a dig at the Pentagon’s misadventures in Iraq and Afghanistan... I totally disagree with you about the competence of our military and its commanders. The mistakes made in the Middle East wars, including Afghanistan, were made by the commanders-in-chief, i.e. the presidents, not by the generals. The first Gulf War was fought and won in a very short time. The mistake – and it was a whopper – was that H.W. Bush kowtowed to the Saudis, who paid for the war, and left the enemy commander, Saddam Hussein, in charge of Iraq. It is a fundamental mistake to do this, and we paid for it by having to fight the second Gulf War to get rid of Saddam. But this war was mishandled by W. Bush, who crippled his generals and his troops by trying to lead from Washington. He wound up extending the war by two years, costing hundreds of thousands of Iraqi lives needlessly, and in the process fostering the radical Islamist movements. Then came Obama, who actively tried to tear down our military and build up the terrorists. Trump has a military school background and will not make these mistakes. But I agree with you that the costs are extremely high. If we could get over our world-policeman attitude, then maybe a renewed sense of America’s place in a more peaceful world might re-emerge. – Benjamin B. How right you are! We spend way too much money on cropping up the military and its fat cat generals. Our return on this “investment” has been below zero for many, many years. We do not need to be the world’s policeman. We can’t even handle the backward political situation in our own backyard, i.e. Washington, D.C. Enough is enough!! – Allen S. Mr. Bonner, Your points on all the useless wars of recent decades are well taken. I agree. But if you believe what you write, you should be at the head of the line denouncing all those who enable and support Trump, especially those in Congress. Under Trump, the military has been fattened so much it is likely to burst and take all of us with it. – James S. Meanwhile, after one Dear Reader asked Bill to keep his politics out of the Diary, another disagrees… As a rule, I have not agreed with Bill’s views, but I have found them interesting. They cause me to examine my views. So far, Bill’s views do not always shine brightly. But I benefit from the experience, and our democracy benefits when all of us look at others’ points of view. I hope Bill does as well. – Cheli M. Does the U.S. have a harmful “world-policeman attitude” as Benjamin suggests? Should Bill keep his politics out of the Diary? Write us at feedback@bonnerandpartners.com. IN CASE YOU MISSED IT… He Refused $100 million. New Viral Video Reveals Why He Did It… Legendary stock picker Teeka Tiwari – who picked Apple way back in 2003… and Bitcoin in 2016 – was recently asked to manage $100 million… But he refused. Why? Because he recently discovered what he believed will be his single biggest investment winner… A novel technology (not 5G!) the World Economic Forum believes will grow 295,762% over the next 7 years… And Teeka wants “the average” guy to get a shot, too. “This shouldn’t stay in the hands of the elite only,” says Tiwari. As you’ll see in Teeka’s new exposé, his reasons for doing this are personal. And it could lead to a stunning $1.6 million windfall… See Teeka’s Personal Story here… 
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