Dear Reader, Does this sound familiar? ‘The world we’re living in today is so different. It’s a time of Brexit, Donald Trump, and the rise of the far right. Democracy is under threat. We’re in an age of authoritarianism.’ What. A. Load. Of. Bollocks. Only a moment of logical thinking tells you why. And while I’m sure you are more than capable of working it out for yourself, I’ll give you my take on it in a minute. But first, let me explain what got me onto the topic. It was a Bloomberg op-ed article written by former New York Fed boss Bill Dudley. He is now a senior research scholar at Princeton University’s Centre for Economic Policy Studies. I wonder how much the kids at Princeton are paying to be brainwashed by his nonsense? Anyway, Dudley’s article is a thinly veiled plea to the Fed. He wants it to use monetary policy to stop Trump from winning the next election. As Dudley outlines, he is opposed to the trade war, and considers it bad policy making: ‘Officials could state explicitly that the central bank won’t bail out an administration that keeps making bad choices on trade policy, making it abundantly clear that Trump will own the consequences of his actions.’ Hey Bill, you do realise that you weren’t elected by the people to make these calls, right? Even if he does, he doesn’t seem to care… ‘There’s even an argument that the election itself falls within the Fed’s purview. After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.’ Did you get that? ..............................SPONSORED.............................. .......................................................................... Typical gibberish from a phoney elitist, showing his contempt for democracy. He clearly thinks US citizens are so stupid they may re-elect Trump in 2020. He wants the Fed to mobilise against this risk. This isn’t about whether you agree with Trump or not. That’s a side issue. The central point is whether you agree with democracy or not. A democratic process saw Trump elected in 2016. The phoney elitists who didn’t like how democracy worked back then tried to make the case that the Russians helped rig the election. Two years of investigations into that yielded nothing. So now it’s devolved into ‘Trump is a racist’. You know your critics have run out of ammo when you’re labelled a racist. Part of Trump’s election platform was to bring back the manufacturing jobs that were lost to China in the 2000s. The elites aren’t used to politicians delivering on their promises. They expect democracy to work for them, and the stupid masses just have to suck it up. And because democracy threatens their gravy train, they’re mobilising assets to take Trump down. The left-leaning mainstream media is one of these assets. It’s constantly working against Trump. Which is why Trump calls it the ‘enemy of the people’. Now, Dudley wants to get the Fed on board too. You may be wondering why, in the world’s greatest ‘capitalist’ economy, most of the media is left leaning? It’s a good question. The answer is that the US economy is only quasi-capitalist. It’s a highly centralised economy (massive federal government, banking, media and tech concentration) which means the powerful interests in charge of these sectors want to preserve the status quo. Left of centre politics endorses government involvement in the economy and regulation to ‘improve’ outcomes. If you’re an advocate for the status quo then you’re going to support the left. Those who hold right of centre political views believe that government involvement in the economy and people’s lives should be minimal. They just want to be left alone to get on with their life. This brings me back to the initial statement at the start. The age of ‘Trump, Brexit and the rise of the far right’ is a narrative pushed by leftist media and their business and political backers because they don’t like how democracy has worked out for them. Trump was democratically elected. Brexit was the result of a democratic vote. How is this a ‘threat to democracy’? The elites are simply indignant that populations around the world, including Australia, are electing conservative governments, not interventionist, high taxing socialists. They’re terrified that people are actually waking up to the fact that democracy, for so long, was designed to enrich the 1%. The Rum Rebellion proudly and loudly speaks for the 99%, whatever side of the political spectrum you stand on. But we unashamedly believe that the government is never going to be the solution to our problems. We all need help from time to time, and some of us need it more than others. But in most cases, you are the solution to your problems. The more we realise that, and stop relying on others to ‘fix things’ for us, the better our society will be. Cheers, | Greg Canavan, Editor, The Rum Rebellion |
| ..............................Advertisement.............................. DON’T WAIT to claim your copy of End of Australia |
If the next market crash is 50% or 60%, will your retirement be OK? What if you lose your job…do you have sufficient cash reserves in place? What if property values fall more than expected…do you have enough equity to avoid a bank foreclosure? Will the banks themselves — and the money you have deposited in them — be safe? What if the government cuts back on entitlements…will you make ends meet? Vern Gowdie’s new book helps you work through the answers to these questions. And it gives you a simple-to-follow plan. To claim your copy of The End of Australia, click here. |
---|
| ..........................................................................
The Feds Can Print Money, but They Can’t Print Time By Bill Bonner, Bill Bonner’s Diary, POITOU, FRANCE Stocks are still near all-time highs. Unemployment is at record lows. The expansion, which began 10 years ago, is now the longest on record. A prudent investor should expect these conditions to change. World trade is slowing. Bonds are signalling a recession ahead. The entire spectrum of US Treasury bonds is now trading below 2% yields, with $17 trillion of bonds worldwide with yields below zero. No one knows what that means, but it appears to be the largest bond bubble since the 15th Century. (High bond prices = low yields.) In the stock market, volatility has increased; each headline or tweet about the trade war with China seems to bring on a twitch. Inevitable sell-off Here at the Diary, we believe that Mr Trump wants to settle up with the Chinese, proclaim victory, and win re-election in 2020. But wars can take on a life of their own; Mr Xi may not want to play along. Meanwhile, investors have learned that it pays to front-run the Federal Reserve. They believe the central bank will come forward with lower rates and probably quantitative easing, too. This may mean another big ‘melt-up’ in the stock market before the inevitable sell-off arrives. But as always, nobody knows anything. That is the immediate outlook, but let’s step back further… Simpleton’s fiction We began writing this Diary 20 years ago. Until then, we’d been primarily focused on building our own little publishing company. We didn’t really know much about economics. So we simply applied common sense and tried to connect the dots between what was going on in the financial world and what we could learn from reading the great classical economists — Smith, Bastiat, et al. Oh…how our poor, long-suffering dear readers must have cringed as we stumbled and erred…sometimes wrong, sometimes right…and always in doubt. Little by little, the dots came together. We didn’t know any more than they did. So we discovered the world of economics together. But it took a long time. You can’t really develop a sensible or useful view of an economy by spending a few years in school or in a library. An economy is much more complicated than that. It’s a natural thing…and like all nature’s creations, it is infinitely complex…a vast and intricate tableau that can’t be fully rendered in numbers nor reduced to only two dimensions. It is not merely supply and demand…bid and ask…growth or recession. Nor is the ‘economic man’ at its centre anything more than a simpleton’s fiction. In theory, he is supposed to rationally calculate where and how he will get the best deal for himself. In practice, he is a real man…a mess of prejudices, misapprehensions, and contradictions. Punch in the face Getting a handle on economics requires more than books and theories. It needs poetry, psychology, and (as Mike Tyson remarked) a punch in the face from time to time. In our case, we still had the bruises from starting a business and working at it for more than a quarter of a century. Raising six children and operating a small farm helped, too. (You can get away with BS when talking to earnest adults, but spouses and children see right through it.) Economies do not exist in a vacuum…nor do they take their shapes from an academic’s imagination or a politician’s promises. Which is why so much of what you hear from academic economists (who often have no idea of how real wealth is created)… …or from politicians (who have spent their whole lives destroying wealth rather than creating it)… …or from Wall Street shills (who want to separate investors from their money) is so puerile and hollow. Dumb ideas One of the dumb ideas now making headlines, for example, is that governments should take advantage of extra-low interest rates to borrow money and ‘invest’ it. Respectable economists believe it. Democrats believe it. Republicans believe it. And the public believes it, too. ‘Even if it produces very low rates of return,’ they will say, ‘it will pay off in the long run’. But anyone who has been in the real business world knows that you can go broke many times before the long run finally arrives. And just because interest rates are low doesn’t mean you’re not going to lose a lot of money on a dumb project. Producing a profit is hard work. Everybody is against it. Employees want higher wages. Suppliers want higher prices. Customers want lower prices. It’s almost a miracle that there’s anything left. People on the assembly line are not expected to know how their employers make profits. But often the corporate executives themselves have no idea either. Nor are even the most diligent and intelligent entrepreneurs able to recognise the obvious weaknesses in their business plans. As for investors, when the wind is at their backs, they will put their own hard-earned savings into the most preposterous contraptions that ever got off the ground…and lose every penny when the turkeys crash. Government employees — with no experience with real businesses or investments, no skin of their own in the game, no incentive to produce a profit, no knowledge of the industry they are entering, and conflicting goals that often have nothing to do with getting a decent return on investment — are very unlikely to succeed. It is much more likely that the ‘investment’ funds will be completely wasted. Foolish government ‘But wait,’ the economist will say…‘when the cost of capital is zero…what difference does it make? They might as well try’. Wrong again. Real capital — savings, time, resources — is precious. The feds may be able to print up an infinite quantity of ‘money,’ but they can’t print time. And when time (and other real resources) is wasted…there’s no way to get it back. Of course, at first the loss is barely noticed. We live in a rich country in a rich world. We can afford some boondoggles and waste. But the nonsense tends to accumulate. As people see others getting paid off by a foolish government, they get in line. The payoffs increase…the claptrap multiplies…and people get poorer. Glorious future And here is another thing that you can’t learn in school and almost no politician or professional economist will admit. An economic system is not a machine. There are no levers you can pull to make it work better. There are no knobs that the PhDs at the Fed can turn. Breakthroughs in DNA sequencing or communications technology may produce booms and busts in an economy, but they won’t change the nature of the economy itself. Nor will they give humans any way to control it. An economy is a moral system. We don’t mean ‘moral’ in the sense that you will go to Hell if you don’t save your money. It’s moral in the sense of ‘the moral of the story’. If you spend more than you earn…borrow too much…loaf…squander your resources…falsify your prices…counterfeit money…pay people to do nothing…start wars…block trade…and overregulate, bad things will happen. Always have. Always will. The technical world may march forward into a glorious future of everlasting progress. But the economic world merely goes ’round the block and slips on the same banana peel every time. More to come… Regards, | Bill Bonner, For The Rum Rebellion |
| ..............................Advertisement.............................. He predicted Japan’s 1989 economic collapse, the dotcom AND subprime busts, as well as the populist wave that brought Brexit and Donald Trump…all well before the mainstream media. Now controversial economist and bestselling author Harry Dent returns with a chilling warning for Australia and Australians… ZERO HOUR Click here to learn more | ..........................................................................
|