Why “national security” makes us less secure

[Bill Bonner's Diary]( Why “National Security” Makes Us Less Secure By Bill Bonner, Chairman, Bonner & Partners [Bill Bonner] GUALFIN, ARGENTINA – TrimTabs, an investment research firm, reports that stock buybacks are running at twice the rate of this time last year. Corporation managements are taking their tax cut money and delivering it to shareholders… and to themselves. Recommended Link [LIVE TONIGHT: Free Cryptocurrency Emergency Broadcast]( [image]( For the first time in five months, expert Teeka Tiwari is putting on a major cryptocurrency event. The last time he did this, you could have made 1,592% in two months. [Click here to register for free]( -- Skin in the Game For several years now, corporations have been the biggest source of demand for their own shares. The number of shares outstanding goes down. The share price goes up. The higher stock prices make shareholders richer and also help managers hit their compensation targets. Their lobbying paid off. Everybody’s happy. But don’t expect this to help the working stiff… or the real economy… or the real prosperity of the average American. And don’t expect the tax cuts to “pay for themselves” by making stock investors richer. It doesn’t work that way. Real economic progress is made by willing participants with skin in the game doing win-win trades with real money. Lobbying the feds for favors, handouts, protection, and win-lose deals doesn’t help. That is, it might help you… but it won’t help others. Recommended Link [The EXACT Date Gold Soars to $10,000]( [image]( By March 31, a new law will take effect that changes everything about the price of gold. Overnight, it will impact: - 1.3 BILLION People - 82 Billionaires - And 24,000 TONS of Gold Within a matter of hours, we’ll see a buying frenzy that sparks an ascent to $10,000 gold. But you must take action now, and specifically on one obscure gold trade. [Click here for the full story]( -- Deep State Hack Meanwhile comes word that the Trump administration has fired its top diplomat, the oilman Rex Tillerson, and put the Deep State hack, Mike Pompeo, in his place. Tillerson reportedly referred to Trump as a “moron.” The moron seems to have had the last laugh. But brains don’t have much to do with what goes on in Washington anyway. What counts is cunning, and Mr. Trump has plenty of it. The president also scotched the biggest takeover deal ever proposed in the tech sector. Broadcom was set to take over Qualcomm. But POTUS blocked the move, citing “national security” reasons. Broadcom and Qualcomm are both in the semiconductor business and both source their supplies and talent from all over the world. But Broadcom, which originally sprang from Hewlett Packard, put its headquarters in Singapore. This made it a “foreign company.” Qualcomm stayed put in San Diego. And so, the deal is off. Recommended Link [Kansas farm boy discovers rare technique to milk Wall Street for Millions]( [image]( 1 transaction he found turned a very small stake into $64,250 in just 48 hours. His track record across his newsletter career includes 389 winners and counting… with 82 triple-digit windfalls… and 298 double-digit gainers. Just look at some of his recent plays… - 185% in 1 day - 139% in 5 days - 118% in 1 day - 186% in 1 day - 200% in 8 days - 400% in 1 day See why some are calling this the “most effective moneymaking technique” they've ever seen. [Click here to see it explained…]( -- More Swamp Deals National security was also the reason given for the trade barriers imposed on steel and aluminum imports. Markets for both are wide and deep. There is no reason to think America’s security would suffer if a single country cut us off; we could just buy our steel from one of dozens of other suppliers. But national security probably had little to do with either move. Instead, these are more swamp deals… [We already showed]( how the trade restrictions help some cronies… but hurt almost everyone else. Now, in blocking Broadcom’s takeover of Qualcomm, we see the fix was in again. Bloomberg reports: Well before Qualcomm Inc. confronted a hostile takeover bid from Broadcom Ltd., the San Diego-based chipmaker laid the groundwork for support in Washington by outspending its rival by nearly 100-to-1. Qualcomm spent $8.3 million in 2017, while Broadcom spent $85,000, according to federal lobbying disclosures. Qualcomm disclosed spending on issues including immigration, international trade, taxes and antitrust, among others, showing how it amassed clout in Washington. It’s unclear how much of Qualcomm’s money paid for lobbying against Broadcom’s bid. Qualcomm spent about $2 million a quarter, according to the disclosures, increasing slightly in the fourth quarter. Broadcom’s unwanted advances started in November. Qualcomm’s widespread lobbying operation marked a sharp contrast with the effort made by Singapore-based Broadcom, which instead sought to curry favor with President Donald Trump and offered to move its headquarters to the U.S. That was in exchange for winning approval for its purchase of Brocade Communications Systems Inc., a substantially smaller deal. For Reasons of National Security The cronies always find the “national security” rationale useful. But it is dangerous. The military is pure win-lose. The more you have – except in rare circumstances – the worse off you are. In the 1930s, for example, Japan’s military-industrial complex got control of the government. Spending money on military adventures is always a losing proposition economically. But it can be hard to stop. The head of Japan’s central bank, Takahashi Korekiyo, resisted. He cut government spending in 1935. Then he was assassinated by the military in 1936. Japan has few raw materials. So for “national security” reasons, it decided to take over much of the Far East, from China down to Singapore. They called it the Greater East Asia Co-Prosperity Sphere. Rather than buy resources on the open market in win-win trades, the Japanese – led by their security industry – forced win-lose deals on their neighbors, with an eye to taking control of the oil fields in Indonesia. This had predictably bad consequences; the neighbors resisted. Aiding the resisters was the United States of America, which cut off oil exports to Japan as war fever heated up. Then, Japan faced a major choice. It could back down, accepting that it would have to play by the rules of civilized, win-win commerce. Or, for reasons of national security, it could bomb Pearl Harbor. This latter course is the one it chose. With the generals and war-industry cronies waving the flag and whooping for war, it was inevitable. But the results were less than satisfactory; in terms of “national security,” the Japanese couldn’t have made a worse choice. Within six months, the U.S. fleet had scored a major victory at the Battle of Midway. After that, the Japanese had little chance of victory. And by the time they finally surrendered, the home islands were in ruins, Hiroshima and Nagasaki were nearly obliterated by atomic bombs, and the national security of Japan was in the hands of the United States of America. Regards, [signature] Bill MARKET INSIGHT: BOND YIELDS KEEP CLIMBING By Chris Lowe, Editor at Large, Bonner & Partners [Chris Lowe] Yields on short-term Treasury bills are climbing. That’s important because borrowing costs throughout the economy “feed off” Treasury yields. As yields rise, so do the rates on consumer and business loans with similar lengths. [Chart] As you can see, the yield on a 3-month T-bill recently hit 1.7%. The last time this happened was back in 2008. – Chris Lowe FEATURED READS [Why One Commodity Investor Is Hoarding Cobalt]( by a Russian billionaire, one commodity investor has been hoarding an obscure metal for years. Here’s why… [The Surprising Way Companies Pad CEOs’ Salaries]( of the world’s largest companies are some of the most highly paid people. But what you might not know is that these executives also regularly receive hundreds of thousands of dollars in “stealth compensation.” [The Best Place to Find Value in Today’s Overvalued Market]( speaking, stocks are expensive. But that doesn’t mean that there aren’t pockets of overlooked value. Chris Mayer shows you how to spot them… MAILBAG In the mailbag, comments on [Bill’s recent battle with a serpent]( Killing the snake was a win-lose deal for the Bonners. (Probably some secondary gain for Bill, but quoting scripture won’t redeem the loss. Nor was death the punishment first delivered.) – Tea C. You’re good at financial analysis and, apparently, not great at living away from “civilization.” That appears to be a non-venomous snake from the limited photograph, and if it was chasing the rat, it helps keep the population in check, especially if you’re not there most of the time. It should’ve been left alone, easily captured, and put outside, in my opinion. – David Y. Bill, that looked like a harmless variety garter snake – very beneficial in keeping your “ratons” from epidemic populations… Just saying… – Kerry D. Why don’t you stay in Argentina and stop bragging about what great wealthy people you are? – Richard R. That is a pretty snakeskin. You should have salted it and brought it home; it would have made a great-looking belt, plus the story to go with it would have been great cocktail party stuff. I mean, none of your friends could have topped that. Cheers. – Rusty S. Meanwhile, [the reason why $38 trillion could disappear from the U.S. economy]( has gotten some readers thinking… Bill, thanks for your insights and comments – they always bring a smile to my face… It’s my understanding that, even after Wall Street “loses” $38 trillion, things will continue to be “out of whack” because we have as currency not the dollar, but the FRN (Federal Reserve Note) – a promissory note. So it looks like we’re doomed to continue paying for debt, e.g. a gallon of milk, with more debt, e.g. a promissory note called a “Federal Reserve Note.” As they used to sing on Hee Haw way back when, “gloom, despair, and agony on me…” – Rick D. Bill, I am a bit confused. I just subscribed to one of your company’s services in February. I’ve been following Jeff Brown’s recommendations with spectacular results. Your whole company is based on helping people to invest. Yet almost every day, you are predicting a massive crash. So what do I do? Liquidate all my positions and hold onto cash? Or convert it to gold? Are your partners, like Jeff, mindful of the looming crash and recommending with that in mind, too? I don’t want to be greedy or stupid, but I haven’t been with you guys long enough to know the level of caution included in their recommendations. Based on what I am hearing from you, I should ask for my $3,000 back, cancel my subscription, and liquidate my portfolio. I am not being sarcastic – I really want to know what your team collectively is recommending. – John B. Editor’s Note: As Bill has written many times, he is an economist, financial writer, and businessman. But what he is not is a stock picker. Bill leaves that task to investing experts like Chris Mayer and Jeff Brown. Chris and Jeff use their decades of expertise to find individual, fundamentally valuable, companies with the potential for long-term gains. These are investing opportunities that can stand the test of time and grow no matter what happens to the broader stock market. IN CASE YOU MISSED IT… Tonight is the night… At 8 p.m. ET, one of the world’s top cryptocurrency experts, Teeka Tiwari, is hosting a [live webinar](. Anybody who attends will learn why a “second boom” in cryptocurrencies could be imminent. And this one could be even bigger than the run-up we saw in 2017. [Get all the details by signing up for free right here.]( [image]( [Bonner and Partners]( © Bonner & Partners 55 NE 5th Avenue, Suite 100, Delray Beach, FL 33483 [www.bonnerandpartners.com]( This e-mail was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Customer Service Bonner & Partners welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. 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