Guest Post by Bill Bonner
I used to try to get things done by saying “please.” Now, I dynamite ‘em out of my path.
Former senator from Louisiana, Huey Long
YOUGHAL, IRELAND – This morning, an Associated Press headline caught our eye.
“Conservatives agitate for change after GOP loses the House.”
What? We didn’t know there were any conservatives left.
Trump’s Party
Among the many things we were wrong about was our guess two years ago that Mr. Trump would end up starting a new party – like Juan Perón or Emmanuel Macron.
We figured the conservatives in the Republican party would resist his brand of reality TV politics, and that he’d have to break away and begin a new movement.
Instead, he remade the GOP in his own image. The party – which used to favor a conservative agenda of small government and balanced budgets – is now ready to go along with anything Mr. Trump proposes.
But there has never been anything conservative about Donald J. Trump. He is bigger than life, and willing to go where no president has ever gone before.
Parallels can be found in history, in foreign countries mainly – particularly in Latin America – and in some of America’s most baroque provinces (Huey Long comes to mind).
But Mr. Trump is sui generis… at least in the White House.
In another era, The Donald would have been taken no more seriously as a candidate than a showman like P.T. Barnum or a matinee idol like Rudolph Valentino.
And if, by some fluke, either had been elected, he would have been a mere entertainment – a real boost to journalists and the media, but of little other significance.
Major Role
But Mr. Trump did not get elected by accident or by fluke. And he did not come along at a time when things were moving along nicely.
Instead, we believe he has a major role to play in the historical swing of the U.S. economy from mistake to catastrophe.
Trump was voted in because the common American has been getting ripped off for the last 40 years. During that period, the main… and often only… asset the typical person had to offer – his time – declined in value.
As we have shown in this space, he now has to labor for two to three times longer to buy an average car or an average house.
As for paying his share of the national debt… or his share of total debt – forget it; he will never be able to do it. He hasn’t enough time.
And while the typical working stiff grew poorer, other people – the elites, the one percent, stockholders, insiders, the well-educated and well-connected – got rich. In inflation-adjusted terms, the Dow is up 760% since 1978. Real wage growth has gone nowhere.
Using time as the ultimate measure of wealth, today, the top 10% are so wealthy that they can command about four times as much of the laborers’ time as they could in the 1970s.
Voters didn’t necessarily see it that way… But they felt that something wasn’t right. And they voted for Mr. Trump to do something about it. “Make America Great Again,” they pleaded.
Alas, the president did not understand the challenge and missed his opportunity to do anything about it. America could only be made great again by returning to the conservative principles that made it great in the first place – limited government, limited deficits, limited wars, and limited bureaucracy.
Instead, the president increased the deficit and diverted attention with public feuds, border walls, and trade wars.
And now, with the Democrats in control of the House… and Mr. Trump in control of the Republicans… the opportunity is gone. There will be no real reform of any sort.
Which, of course, is just what the insiders were hoping for.
$20 Trillion Loss
The trouble is, change is coming anyway. It is the change Mr. Trump couldn’t stop… and few will welcome.
It is the change that happens when $35 trillion of excess, unpayable debt runs into a wall of rising interest rates.
The collision comes in the form of a huge sell-off on Wall Street. What we’ve seen so far are only faint hints – like the grumbling of Vesuvius – of a much bigger collision still to come.
Wall Street analyst, Dr. John Hussman:
…the Fed created yet another yield-seeking bubble that has encouraged vastly expanded indebtedness in every sector of the economy, and has set U.S. equity market investors up for a likely loss in excess of $20 trillion in market capitalization in the coming years.
A $20 trillion market loss? Preposterous. […]
Unfortunately, that’s how valuations work over the complete cycle. That’s how it was possible to correctly project an -83% loss in tech stocks in March 2000, and a loss in the S&P 500 of about -50% at the 2007 peak. When you’re pushing $40 trillion in U.S. equity market capitalization, the highest multiple of U.S. GDP in history, a loss of half of that capitalization over the completion of the cycle is a conservative estimate. It’s certainly not a worst-case scenario.
Also, remember from the 2000–2002 and 2007–2009 collapses that Fed easing does nothing to provoke speculation in periods where investors are risk-averse, because in a risk-averse environment, safe liquidity is a desirable asset rather than an inferior one.
Yes, change happens, whether you want it to or not.
And change is natural… and healthy (a “correction” washes out mistakes).
But the story doesn’t end there. That $20 trillion market loss will come out of the pockets of the rich… the Deep State… and a certain D.J.T.
And here is where we predict Mr. Trump will make his real mark on history. The president will not say “please” to the Fed. He – along with the Democrats and the new Republicans – will dynamite the obstacles out of his way…
And… well… we’ll see what happens next…
But our guess is that you won’t like it.
Oh, I think we may like it quite a bit.
Great post, HR
Bam. There it is. Right there.
Remember what they did to JFK and others when they attempted the same thing.
No one challenges the bankers and wins, not no one. Below is only a partial list of CB assassinations.
Assassinated by the central bankers, and or the Federal Reserve:
1. Abraham Lincoln;
Created the Greenback currency outside of the bankers control. The United States, in 1862, was coming off what is known as the Free Banking Era from 1837-1862. President Andrew Jackson, who survived an assassination attempt of his own on January 30, 1835, vetoed the renewal of the 20-year charter for the Second Bank of the United States — which was controlled by international bankers. His life and presidency were cut short on April 15, 1865, when he succumbed to a bullet wound to the back of his head.
2. James Garfield;
President Garfield became only the second president to be assassinated in office, when he was shot on July 2, 1881 (he died six weeks later). A widely distributed quote from Garfield two weeks before his assassination explains why patsy Charles J. Guiteau pulled off the deed: “Whoever controls the volume of money in our country is absolute master of all industry and commerce…the entire system is very easily controlled, one way or another, by a few powerful men at the top.”
3. William McKinley;
The panic of 1893, allowed J.P. Morgan, one of the original banksters, to bail out the entire industry, merge all the different companies, and create a monopoly for himself. A few years later, he also bought up and merged all American steel companies. Though President McKinley’s campaigns were funded mostly by Morgan, he started to have a change of heart about his policies during his second term. His Gold Standard Act of 1900 would ultimately curtail the “free money” printed by central bankers such as Morgan, and would control inflation. He was shot twice in the abdomen in Buffalo, New York, by Leon Czolgosz on September 6, 1901. He died a week later.
4. John F. Kennedy;
The Lee Harvey Oswald/magic bullet theory tied to JFK’s death has been long debunked by movies and common sense. Kennedy’s biggest impact on America as a whole was his signing of Executive Order 11110 on June 4, 1963. It gave the U.S. Treasury the power to print its own debt-free money for the first time since the Federal Reserve Act of 1913. This would obviously interfere with the Fed’s currency monopoly in the United States. Kennedy was shot dead five months later.
5. Andrew Jackson; (Attempted assassination)
(the 7th President of the United States from 1829 to 1837), runs the campaign for his second term in office under the slogan “Jackson And No Bank!” This is in reference to his plan to take control of the American money system to benefit the American people, not for the profiteering of the Rothschilds. On January 30, an assassin tries to shoot President Jackson, but miraculously both of the assassin’s pistols misfired. President Jackson would later claim that he knew the Rothschilds were responsible for the attempted assassination.
6. Rep. Louis T. McFadden;
“We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve banks”. ~ Rep. Louis McFadden – June 10th 1932, from the congressional record. McFadden in 1933 would even introduce articles of impeachment for the Treasury Secretary, two assistant treasury secretary’s the board of governors of the Federal Reserve and the officers and directors of the 12 regional banks…The impeachment was rejected by a vote of 361 to 8 and McFadden would pass away in 1936 under suspicious circumstances leading some to believe he was poisoned.
7. Muammar Gaddafi
A declassified email sent on April 2, 2011 to then Secretary of State Hillary Clinton reveals the invasion of Libya was launched to prevent Muammar Gaddafi from establishing a pan-African currency based on Libya’s gold Dinar. During the invasion of Libya analysts argued Gaddafi planned to stop selling oil in US dollars and demand instead it be traded in gold dinars. Prior to the invasion Gaddafi urged other African and Middle Eastern nations to follow suit.
According to the document posted on the US State Department website advisors to Saif al-Islam Gaddafi, the second son of Muammar Gaddafi, told sources the Libyan government held 143 tons of gold and a similar amount in silver valued at more than $7 billion. The gold and silver was to be used to establish an alternative currency to the French franc for African Francophone countries.
In addition to preventing Libya from breaking away from French monetary domination, Sarkozy wanted to “gain a greater share of Libya oil production,” increase French influence in North Africa and dash Gaddafi’s “long term plans to supplant France as the dominant power in Francophone Africa.”
8. Saddam Hussein
In Iraq suffered a similar fate after he announced his country’s oil would be sold in euros, not dollars. “Sanctions and then a US invasion followed. Coincidence? Hussein’s idea would have strengthened the euro, but Gaddafi’s idea would have strengthened all of Africa in the opinion of hard-money economists.
“The party – which used to favor a conservative agenda of small government and balanced budgets “—Delusional description of the GOP..
Bonner is a never-Trumper with delusions about old-guard Conservatism. Besides his obvious obsession with Trump ( who seemed to have little to do with the points he was trying to make) the article was pretty spot-on for him.
the common American has been getting ripped off for the last 40 years. During that period, the main… and often only… asset the typical person had to offer – his time – declined in value.”
“As we have shown in this space, he now has to labor for two to three times longer to buy an average car or an average house.”
Says it all. A 4th grader in math can figure this out. Simple math shows more moochers are popping out more welfare kids just for the freebies. Eventually, they consume more than is produced. WHere we are now, with little manufacturing and no skills and no equipment or factories pushed out overseas. When it hits, there will be nobody with knowledge, skills, nor any equipment or factories. Seems pre planned to me, so the elites like locusts can move onto Africa (wealthy resources withignorant young healthy laborers). They didnt want to leave the usa with any means of recovery to cause them competition once these locusts move on.
All the politicians know this and all are trying to get theirs while they can before the collapse. I said it before many times. THe best and safest thing you can do is run for an office and get yours while you can. Maybe when it blows you are in a powerful office and your family is on the right side of power and like those in power in China they are feared, revered and protected and very wealthy, even the little city mayors there. Everyone else is pecking for grains of rice for sustenance.
We are up against wealth that thinks in generations. Most of use think in weekly pay checks. So easy to be outplayed because its like they can see the universe with telescopes and we commoners see with our naked eyes about 200 yards away. Trying to describe the universe to a commoner is like trying to get them to see the sjw, antifa, socialist ,ovement and what it will do to the usa is fruitless. Best to either find a cave until its over or get a telescope…….
Not being in that upper 10 percent, do you applaud their accomplishments or call them thieves ? Does hard work still pay off ? Becoming educationally proficient – does it increase your chance of improved living ? Choosing a business venture – what are the true odds for success today ?
The pendulum will swing when disparity is the norm. Time is the most valuable thing any person has, but somehow never appreciates
Another think inside the box . First off he conflates nominal deficits with real deficits. If the purchasing power is going down over time the value of the bond upon maturity is less.
Leaving that aside, like so many blind squarely looking for an acorn, misses it. The weakest link in the country in terms of debt is the student debt debacial.
Reversing the tax cuts will reverse the velocity of money which has just recently ticked up.
How does he or anyone for that matter, propose those loans be paid back if there are no jobs?
The weakest link is still the Federal Reserve. That a committee of self interested academic pointy heads and banksters can decree rates that should be the self evident discovery of the market of 7+billion souls is akin to blasphemy. It is criminal.