| By Bill Bonner Friday, February 12, 2021 RANCHO SANTANA, NICARAGUA – Let’s summarize… Herewith, the Dummies’ Guide to our Diary. To begin, picking up where we left off yesterday… Can any government really make tomorrow better? Answer: No. That’s why “the government that governs best, governs least.” Markets and economies are natural things. Left alone, they evolve… they innovate… they run into problems and find solutions. Allowed to happen… the future reflects the choices, bugaboos, fantasies, and desires of billions of people… all getting and spending… all making deals with one another… some erring… others having flashes of genius and moments of spontaneous kindness. Putting them all together… and letting them do what they will do… what do you get? Tomorrow! | Recommended Link | What’s Going On?
Former President Trump… Tech moguls like Zuckerberg… Gates… Musk… High-profile politicians and executives… Barack Obama among them… Even pop celebrities like Kim Kardashian… They’re ALL securing the most bizarre… remote… “offshore” properties you can imagine. To learn the concerning reason they might be doing this–and what it means for you… |
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Rank Absurdity But why can’t the feds make it better? (And here, Dear Reader, you are getting a mini course in political philosophy worthy of a dead Greek.) Tomorrow can take many different forms – so many that predictions about it are almost always wrong. The great conceit of the political class – including all the many insiders, power brokers, media celebrities, elite Deep Staters, Biden and Trump supporters, and those who actually control our government – is that they can know what’s coming… and make it better even before it gets here. This is rank absurdity, for obvious reasons. First, they can’t predict the future any better than anyone else. And it is obviously impossible to improve something when you don’t even know what it is you’re improving. Second, all they have to work with are fake money and real weapons – either force or fraud, in other words. Neither has ever proved useful for creating a better world. Au contraire, always and everywhere, the more they were brought to bear on a society, the worse the outcome. The fake money is what we’re watching. We’ve seen that it distorts and misleads. It never can, never has, and never will produce an improved future. [Featured: Firm That Predicted 9/11 Issues Urgent Warning: Move Your Money Now] Silly Season Our second observation of the week: We’re in a bubble… thanks to the Federal Reserve’s fake money. Stocks are way overpriced. And you know what that means… Something will come along to prick this bubble. Poof! A lot of fake wealth will disappear. Dear readers are advised to get out of the markets… or make sure they have some bubble insurance. Our sidekick, Dan Denning, elaborates in our recent Bonner-Denning Letter (if you’re a paid-up Bonner-Denning Letter subscriber, click here to read), but the easiest bubble insurance is simply to sell high-priced stocks – especially the tech superstars – and buy gold, real estate, or other “hard” assets. As we saw in yesterday’s Diary, stock prices, generally, are “off the charts,” by many measures. This is classic bubble territory. Taken all together, stock valuations are more than twice their “normal” level, implying at least a 50% loss somewhere in the future. Yes… and it’s the “Silly Season,” when people begin to think that things that couldn’t possibly be true for a single minute will be true forever. “Printing press” money can make stocks more valuable. Sure it can. And if the government, which is already headed for another record deficit, gives away money… that will “stimulate” the economy. Sure it will. And we don’t need to worry about inflation because our new Treasury secretary Janet Yellen knows how to deal with it. Sure she does. | Recommended Link | | Elon Musk’s Next Big Bet: S.A.V.
He revolutionized online payment processing with PayPal…. He is revolutionizing space exploration with SpaceX and the auto industry with Tesla. And now, Elon Musk is getting ready to unveil his next big project. S.A.V. will change everything…. and make a lot of people rich. |
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Taken for Granted Third: People are getting very tetchy about everything. A bunch of low-IQ yahoos break into the Capitol, and they call it an attempted coup d’état. Russia and China are up to something… We know they are… We just don’t know what. And as for the fake money… people come to rely on it. Does it really make sense to give people “stimmy” checks? Previous generations would have taken it for absurd. But this generation takes it for granted. They expect bailouts… and giveaways… And they get damned irritated if they don’t come. More than that, they plan their lives around the bubble. They depend on the price of bitcoin to build their dream house. They need low interest rates – zero, in real terms – to refinance their mortgage and other debt. They expect to retire early on their pot stocks. They think that if they all close their eyes and wish hard enough, all their preposterous, malign dreams will come true. [Featured: The #1 Tech Stock of 2021] Youthful Skepticism And they don’t appreciate anyone who dares to contradict them. We recall in 1999, we suspected that the dot-com revolution was more like the mob invasion of the Capitol than a real revolution. Readers wrote to heckle and moan. They were counting on their dot-com profits. Again in 2007/2008… nobody wanted to hear that “house prices don’t always go up.” Then, the average house was selling for more than the average person could afford. But many people thought they had a right to “an ATM machine in the bedroom.” They bought houses with “cash out” mortgages and then “took out equity”… and lived on it. And now…? Again, we have the advantage of being privy to a whole company full of analysts and advisors… and feedback from thousands of dear readers. Many people – even those who are otherwise sane – are convinced that these stock prices – especially for tech companies – represent a New Era, where “trillion-dollar” companies will make True Believers rich. Maybe we are too old. Or maybe the True Believers are too young! Most of them are under 40, which means they were born after the last major bear cycle ended (in 1980). Tesla – a $10 stock? Inconceivable. The Blockchain – BS? Not possible. Stimulus – fake… foolish… and futile? Oh c’mon… You’re kidding, right? Far Out But we’re not kidding. And now, we’re seeing a kind of zaniness all up and down the capital structure. Take individual stocks – GameStop, Tesla, and Tilray come readily to mind. Nobody in his right mind could think their market valuations represent a fair calculation of future earnings discounted to present value. They’re all basically losing money… and probably always will. Tilray – are they joking? What is a company that produces nearly half a billion in losses on only $200 million in sales worth? Nothing. Zero. Squat. And yet, pot-addled “investors” gave it a market value over $10 billion this week… What can we say? Far out, man… And look at bitcoin. In the early stages, people thought of it as a bet on a new money system, in which the cryptocurrency – despite having no physical existence, but limited by mathematical wizardry – would prove superior to gold. That could still turn out to be true… Or, it could turn out that the price action in bitcoin is really just another of the many puffs of smoke coming out of the Fed’s Vesuvius. When this baby blows… bitcoin could go with it. Stay tuned for more of what we think we know now… on Monday. Regards, Bill
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FEATURED READS Congressional Budget Office Releases Its 2021 Deficit Projection
In the 2020 fiscal year, the U.S. deficit rose to more than $3 trillion, thanks to government-approved stimulus measures and money-printing. The Congressional Budget Office says the 2021 fiscal year deficit will be lower, but will still top $2 trillion… not including any new stimulus. What California Real Estate Can Teach Any Investor
Like Bill, our colleagues at the Palm Beach Research Group understand the importance of tangible assets – those you can invest in, and still protect your money. California real estate, they say, is one of those. And it can teach you one crucial lesson... MAILBAG Dear readers give their take on Thursday’s essay, “The Future Can Wait”... Government produce? That’s funny. The quality of character and intellect in the typical politician is somewhere between Charles Manson and Bernie Madoff. (Or a mix thereof.) Ok… Intellectually, I overpoured. They will literally kill you, stealing their way to feather their proverbial nests. They will never stop until their scorched-Earth policy lands on their doorsteps. How do we do that? – Lloyd B. Not that I am a full believer in capitalism or socialism. But your quote says only half the story. In America, and indeed the West… When political campaigns are funded by corporations, unions, and non-profit goo, the future is ruled out. And on the other side of the fence… The rule of the party and the party rules… or something like that… Thus it looks like we are all doomed, no matter what side of the fence we sit on. – Lyndon B. Bill Bonner’s insight and wisdom are always welcome gifts to my day. If our leaders read Bill, they don’t show it. – Cinda A. Meanwhile, another dear reader is concerned for the next generation’s intelligence and development within the COVID-19 environment... It’s child abuse for sure, physical and psychological. The education system is already designed to dumb children down, depriving them of oxygen and social contact at the same time, which seems like it’s really going to compound things. I don’t know what sort of school Bill’s grandchildren attend. Perhaps it’s one of the ones that still follows the classical trivium – grammar, dialectic, rhetoric… a system that was great for centuries. If not, and if Bill’s daughter is also in any way unsure about the school environment, then I thought she might really get something out of doing some reading about education (that she may not have had reason to consider before now). John Taylor Gatto is a great place to start – maybe Weapons of Mass Instruction: A Schoolteacher’s Journey Through the Dark World of Compulsory Schooling or Dumbing Us Down: The Hidden Curriculum of Compulsory Schooling. John Holt is full of interesting observations about how children learn (or don’t) when in the classroom, as well as what they learn that isn’t intended as part of the lesson, e.g. comparison and competition. He also discusses how to create hierarchies to kind of “ground” the stress of coerced schooling by passing the pain on to someone lower down the chain, how to avoid the teacher’s eye, how to fail… Anyway, just a thought. No judgment implied either way. – Charlotte E. Is the U.S. public education system harming children, like Charlotte believes? How can the U.S. protect its kids from “dumbing down”? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… The 3-Stock Retirement Plan: How to Retire Rich From Just 3 stocks “This plan helped me change my life. Now, for the first time, I’m revealing how it works… and I’m even giving away the names and tickers of the 3 stocks you need to get started.” – Millionaire Trader Jeff Clark Show me the plan and the 3 stocks. 
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