Stocks are headed for a thunderstorm

[Bill Bonner's Diary]( Stocks Are Headed for a Thunderstorm By Bill Bonner, Chairman, Bonner & Partners [Bill Bonner] GUALFIN, ARGENTINA – We got up before dawn this morning. We’re taking a cluster of our grapes over to the neighboring ranch, Tacuil. There, Raul – the winemaker – will tell us if the sugar content is high enough to pick them. [image]Don Bill and Don Jéjé inspecting sugar levels [image]An update from Bill: Grape sugar level is ideal. Let the harvest begin! Poor Raul has even more trouble with his originarios (vaguely indigenous people who are claiming land rights they lost in the 16th century) than we have. We think we have a plan for winning our war with the originarios. Stay tuned… Recommended Link [Rare Refined Powder Can Return 10x More Profits Than Bitcoin?]( [image]( Take a look at this image. Bet you don’t know what it is… It’s a rare commodity that’s no longer produced in the U.S… but it’s 100% essential to nearly every item used by our military today. And one major country (not North Korea) is about to use it to sabotage the U.S. armed forces. When Pentagon officials turn to the only company that can supply this powder, shareholders could multiply their money by 10x or more… To learn how to access the name of this company and its ticker, [Click here]( -- Trade War Meanwhile… Bloomberg: Stocks Drop Most in Six Weeks on Trade War Tension The S&P 500 Index sank 2.5 percent, the biggest one-day drop in six weeks, and the Dow Jones Industrial Average lost more than 700 points. As investors dumped stocks, they rushed to the safety of Treasury bonds, where yields fell back toward 2.8 percent, and the yen, which rallied the most in three weeks. “Tariffs mean a trade war and the news has the world’s investors running for the exits,” Chris Rupkey, chief financial economist at MUFG Union Bank. “Those are storm clouds out there, that’s what the stock market is saying and that’s why investors are running for the exits.” Investors, economists, cab drivers, and even members of Congress know that tariffs are bad for business. They raise costs, reduce demand, and stifle investment and innovation. But they are also a time-tested way of rewarding crony industries. “What the tax cut giveth, the trade protections taketh away,” sayeth one commentator. Americans buy goods from China. Now, they will pay more for them, equivalent to a $50 billion tax increase. Recommended Link [NEVER Before Seen: The Aurora Borealis of Trading]( [image]( The Aurora Borealis, or “Northern Lights,” happens when solar particles rip through the Earth’s geomagnetic field and smash into gas atoms. [Something similar exists in the stock market…]( It’s a powerful anomaly called “Quantum.” It appears when 3 major forces collide. As a result, the laws of risk and reward reverse. And the gains that are generated are incredible – both in their return and the speed in which they’re created. - GDX: 129% in 3 hours - SONC: 400% in 18 hours - STRA: 1,285% in 2 days To see where this anomaly will appear next, [Click here to continue reading]( -- But wait. The tax cut was not really a tax cut… it was just a tax time bomb. Government spending went up. Debt went up. When the bomb goes off someone, somewhere, sometime, must pay the cost… somehow. The $50 billion tariff, on the other hand, is real… and it is now. Tariffs on steel and aluminum are coming online, too, beginning today. The tariffs target foreign producers. But reports from the heartland tell us that domestic producers are using Trump’s attack on their competitors to raise their own prices. The Wall Street Journal reports: On Monday, the Metalworking Group of Cincinnati received notice of a 35% increase for American-made cold-rolled carbon steel. Owner Mike Schmitt sent up an SOS on Twitter: “This is a shock. It is unnecessary to be punished by our own government. @realDonaldTrump @senrobportman @RepBradWenstrup. And, yes, this is USA steel not subject to the tariffs.” Biggest Bubble Ever Everybody knows tariffs are bad news. Everybody knows, too, that budget deficits are asking for trouble. One Dear Reader gave us his own estimate of how deep in debt the U.S. will be by 2028. Instead of our $40 trillion estimate, he calculates that the total might be closer to $54 trillion: If you calculate the compound annual interest that would have taken the deficit from $250 billion in 1971 to its current $21 trillion, 47 years later, the calculated rate of compound interest is 9.9%. If you extend that same rate of compounding another 10 years into the future, you get a federal debt of $54 trillion. Recommended Link [D.C. Elites Don't Collect Social Security – They Collect This Instead]( [image]( Vice President Ford: $6,133 every month… Chief Deputy Whip Dan Rostenkowski: $14,667 monthly… California Representative Duke Cunningham: $3,500 a month… Even President Nixon collected from this obscure yet lucrative Social Security alternative. He collected $200,000 a year (in today’s money). As one insider put it: [“This is Social Security on steroids.”]( And now, I’d like to show you the backdoor I’ve just discovered that will allow you to claim what’s rightfully yours. [Click here to find out how]( -- Everybody knows that this is now the second-longest stock market boom in history… and the second-longest economic expansion. Everybody also knows that all expansions come to an end and bull markets always turn into bear markets. What everybody doesn’t know is when the turnaround will come…or who to point the finger at when it does. The Fed, with its quantitative tightening program? Or the Blond Bombshell in the White House, with his tariffs and deficits? Or something else entirely beyond our ken? According to Joe Lavorgna, chief economist for the Americas at investment bank Natixis: In all, total net worth of $98.75 trillion is now 6.79 times the $14.55 trillion in disposable income for households as of the fourth quarter… That’s up from 6.71 times in the third quarter. The previous tops came in the first quarter of 2006, with 6.51, and the first quarter of 2000, 6.12. Those two levels cast ominous signals over the U.S. economy. In other words, this market is the biggest bubble ever. Like a hot air balloon, it floats through the air… right into a thunderstorm. Everybody knows that lightning will strike it sooner or later. Everybody waits to find out when. Regards, [signature] Bill TRADE INSIGHT: HOW BAD THIS TRADE WAR COULD GET By Nick Giambruno, Editor, Crisis Investing [Nick Giambruno] Bill has [already shown]( why a trade war with China won’t Make America Great Again. But some people don’t realize just how bad it could get. A trade war with China is a topic I’ve been following closely. In late February, I told readers of my investing service, Crisis Investing, that… Trump’s Commerce Secretary Wilbur Ross recommended imposing big tariffs on imports of steel and aluminum. He said it was an issue of “national security.” Trump will probably oblige. Only a few days later, news broke that the president would impose tariffs on imported steel and aluminum. The mainstream press called the tariffs “unexpected.” But they didn’t come out of nowhere. You see, Trump knows his supporters are passionate about trade and strongly anti-China. It’s a big reason why he won the election… and could be reelected. But just last month, embarrassment hit… In February, the Commerce Department announced that the U.S. had realized its largest ever trade deficit with China during Trump’s first year in office. (He’d repeatedly promised to shrink the deficit.) Have a look at today’s chart… [Chart] Trump sees the trade deficit as an economic scorecard between the U.S. and China. Now, with a record high deficit, he has a convenient excuse to escalate a trade war. It may already be happening. On top of the steel and aluminum tariffs, President Trump announced another round of tariffs on everything from consumer electronics to shoes made in China; punishment for China’s abuse of American companies’ intellectual property. China won’t take this lying down. The country’s foreign minister has stated that China would have a “justified and necessary response” to a trade war with the U.S. The Chinese have effective ways to retaliate. It’s already been reported that China could soon impose its own tariffs on U.S. agricultural exports including soybeans and live hogs. This tit for tat between the two countries is the textbook definition of a trade war. And it could get worse… China could dump U.S. Treasuries (China is the largest holder of American debt). That could cause severe damage to America’s debt market. It could possibly even stoke concerns over how the U.S. would finance its deficits. China could limit other imports from the U.S. and reduce exports, like iPhones, to the U.S. The Chinese could also harass U.S. companies operating in the country. All the while, American consumers and businesses would be forced to pay more for everyday goods. And then there’s the stock market… If there’s one thing Wall Street hates, it’s a trade war. After President Trump announced his new round of tariffs yesterday, the Dow dropped more than 700 points. It closed 2.9% lower. What do you think will happen to U.S. stocks if these trade spats escalate into full-blown economic warfare? As Chinese commerce minister Zhong Shan said earlier this month, “There are no winners in a trade war. It will only bring disaster to China and the United States and the world.” – Nick Giambruno P.S. I believe there is one more “nuclear option” that China could use in a trade war with the U.S. It could bring the American military to a virtual standstill. However, it could also send one tiny company soaring in value. I recently released an urgent briefing to give you all the details. [Read it here.]( FEATURED READS [More Millionaires than Ever]( U.S. just hit an interesting milestone. The country now has eleven million millionaires, a new record. Regular readers of the Diary won’t be surprised to learn what’s behind it… [More Trouble for Bitcoin]( world’s first cryptocurrency is having a rough year so far. It’s down more than 60% from its January peak. And now, a regulatory agency is targeting one of the world’s largest crypto exchanges. It could mean more trouble for the crypto market. [Proof That the Markets Have Gone Crazy]( stock market is filled with strange, distorted prices. That’s not opinion. Chris Mayer, one of Bill’s top analysts, can prove it… MAILBAG In the mailbag, Bill’s Diary on [why Washington would spend less under a President Sanders]( has drawn some criticism… Your comment today that Bernie Sanders, an acknowledged Socialist, if not a Communist, is beyond the pale and is very offensive to me. I have been voting Republican since Harry Truman was elected to office. Believe me, I would never vote for Sanders. Trump is doing a very good job, thank you. So before you assume I am a deplorable, let me say that I graduated from Washington University in St. Louis, worked in the defense industry for 30 years, and then became a Registered Representative and practiced for another 29 years. So goodbye – Frank T. I am so sorry I ever signed up to you! You are so negative and hateful. You don’t even have the courage to live in the United States, but love to spew hate and criticism. Thank God you got rich off this country before you moved out. Otherwise, you would be enjoying the poverty of your chosen recluse country. – Bruce C. You have got to be kidding! Did you read Doctor Zhivago or bother to watch the movie of same? That is Bernie Sanders! That is communist philosophy at its best! – Jean R. On this point you are delusional. Sadly, you are entirely ignorant of the larger situation on the planet. Do some more research. Perhaps try a different level of source information. – Edwin M. I like Bernie, but he would have been eaten alive with all the corruption in our system. I don’t like any of them, but Trump is there to show us the pervasive illness in our country – he’s the great disrupter. How much will we take before we explode and, out of the ashes, build a new, hopefully much better one? Won’t be a boring ride! Love your columns. – Bobbie R. But other readers can see Bill’s point… I agree that we would be better off with Bernie Sanders in the White House. When Republican and Democratic politicians fight over which side’s policies will prevail, we are usually better off, since little actually happens. When the politicians of one side have the power to prevail, changes usually are made; usually to the detriment of us all. Fortunately, perhaps, the far right and moderate Republicans haven’t been able to agree on many issues, so little has thus far happened to harm us. But that has largely allowed Mr. Trump to rule by edict, just like any dictator in history. Just like his cohorts, Mr. Putin or Mr. Kim or Mr. Xi. – Charles B. Lol! You’re the best! Day after day, you continue to tell us, in no uncertain terms, “how the cow eats the cabbage.” As I’m reading today’s musings, I’m humming the tune “If I Only Had A Brain” from “The Wizard of Oz,” but I’m substituting the word “We” for the word “I”… – Rick D. [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. To contact us, call Toll Free: (800) 681-1765, International: (443) 353-4462, Mon-Fri: 9am-7pm or email us [here](mailto:feedback@bonnerandpartners.com). Having trouble getting your e-mails? Add us to your address book. 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