Time to get hosed!

[Bill Bonner’s Diary]( Time to Get Hosed! By Bill Bonner Thursday, May 6, 2021 [Bill Bonner] YOUGHAL, IRELAND – Yesterday, we saw that some investments inevitably go bad. People make mistakes. The private world of win-win deals routinely corrects them. Death, divorce, default, destitution – many are the ways it sets things right. But the public world… the world backed by tanks and armed police… the world of wars and sanctions… regulations and money-printing… uses its considerable might to resist correction. No matter how stupid… no matter how wasteful or harmful to the public weal – [government programs are rarely and reluctantly discarded](. Recommended Link [Welcome to an empire of debt]( [image]( Our credit system is currently sitting at $68 trillion. It’s the largest debt ceiling in the history of the world – in fact, it’s more than twice the value of every single home in America put together. It’s the most crucial part of our economy. And despite stagnant wages and rising costs, America still appears to be getting richer and richer (at least on paper). And there’s the problem… This massive credit system is about to collapse. But this system has a dark secret about where they’re going to get money to pay off this massive debt. This will affect EVERY American citizen! [Click here before it’s too late.]( -- The Definition of Eternity Dear readers who doubt this is true are invited to recall the real nature of government. It is an organization that has only one real goal – to protect and promote the people who control it. And as we’ve seen, illuminated by the great Italian economist Vilfredo Pareto, it is [always controlled by a small segment of the society]( – the elite. We’ve seen also that the “investments” made on behalf of the public most often benefit only the elite. And, protected by their beneficiaries, errors persist and accumulate. Even the most temporary and woebegone government agency becomes eternal. Crises – forgotten by the public for decades – still trouble the sleep of well-paid agents of the federal government. Programs that should have been a source of shame and embarrassment continue indefinitely, while the people who put them in place – who should have been bankrupted… run out of town on a rail… or at least had the good grace to resign from office, or like German general Erwin Rommel, to accept the cyanide pill – stay proudly at their posts year after year. Elections are supposed to “throw the bums out.” But apart from a few headliner acts, the show remains little changed… with the same clowns, misallocating the same resources, over and over. [Featured: Trading Legend Shares His Latest Breakthrough]( How It Ends And yet, as American economist Herbert Stein remarked, things that can’t go on forever must come to an end. But how? When? Those are our questions for today. And we won’t beat around the bush. The answer is this: Deprived of regular hygiene, public life gets dirtier and dirtier… until finally, we all “take a bath” on the feds’ bad investments. We pause to back-fill… Errors – even in public life – are usually limited by money. The feds may want to spend $2 trillion on infrastructure… or on climate control… but they lack the means. This forces them to make trade-offs… hard choices – cutting here to spend there… raising taxes… or borrowing. Raising taxes tends to upset those who pay them, imposing a barrier that politicians are reluctant to cross. And even when Congress passes a tax increase, it doesn’t mean that the feds will actually collect more tax revenue. People duck and dodge. Even without cheating, they change the way they do business and how they spend their money. In the end, tax revenue, as a percentage of GDP, tends to stay fairly constant, as tax rates rise or fall. And borrowing brings its own problems. First, a dollar must be earned before it can be saved. Then, it must be saved before it can be borrowed. This century, federal deficits have far outstripped GDP growth and savings rates, which is why the feds have had to resort to the printing press. Besides, even when there is money available from private lenders, borrowing by the feds will “crowd out” private borrowers, driving up interest rates, depressing the economy, and putting voters in a sour mood. It is only because our fake-money system permits the feds to spend so much, without depleting savings or raising taxes, that they can make so many bad “investments.” (An important note: As prices begin to rise, the Federal Reserve will come under pressure to “taper” off its money-printing ways. Most likely, next month, as higher inflation rates are reported, we will see some fireworks at the Fed… and in the markets… Stay tuned.) Recommended Link [USA Today: “One of Wall Street’s Best Kept Secrets”]( [image]( They are completely unknown to 99% of everyday Americans… But there’s a reason some of the smartest Wall Street billionaires – including Warren Buffett – swear by “untouchable” stocks: - One study found they have a long history of crushing the S&P 500 by 10X… - And never going down by more than 10% in a year when markets crash. Impossible? Unreal? [You’ll want to see the proof for yourself…]( -- Extraordinary Scrubbing In addition to the bad investments on existing wars – against terrorists, poverty, recessions, bear markets, and drugs – the Biden Administration has proposed an additional $4 trillion to do battle against temperature changes and viruses… as well as [allegedly improving the nation’s families and its infrastructure](. Some of these proposals will be adopted. Money will be misspent. Debt will increase. And the grime will grow thicker and greasier than ever. With no routine way of cleaning it off… an extraordinary scrubbing will be needed. [Featured: The One Big Threat You Face in 2021]( Wars, revolutions, economic collapse – the ways in which elites are finally punished… and their bamboozles eventually corrected… fill the history books. They’ve been explored by historians and catastrophists such as Edward Gibbon, Arnold Toynbee, Oswald Spengler, Joseph Tainter, Peter Turchin… and many others. Each has his own theory… his own “spin”… on the issue. Some emphasize foreign competition. Others focus on the degeneration of the elite themselves. Some lay the blame on economic mismanagement or resource depletion. Others insist the real problem is a moral failure. Joseph Tainter put forward the idea that governed societies are fundamentally problem-solving organizations. Each problem requires a solution. Each solution adds costs… and increases the complexity of the organization. Eventually, the complexities and additional costs become unbearable; the society collapses. Recommended Link [Who’s Been Running America Since January 20th? Hint: NOT Obama, Joe Biden, or Kamala]( [ad_img]( Starting January 20th, radical changes swallowed America. New proposals were written on how the country should be run… what should be done with houses and assets, savings in the banks, and retirement accounts. Biden and Kamala Harris have honored the plans of these faceless men and women writing these new rules. But you can fight and win. Here’s how… [See Uncensored Story Here.]( Parasitic Living Another way to look at it is that the elite is fundamentally parasitic, living off the labor of others. As time goes by, more and more people naturally wish to join the elite. They learn to speak the language of business schools and The New York Times. They send their children to college. And then… the college graduates feel entitled to an elite lifestyle, and take their places on Wall Street, in the government, a university, or a non-profit organization. Thus are more and more people turned into quasi-rentiers, contributing little to the real wealth of the society, while relatively fewer remain to make the plumbing work. Here at the Diary, we pretend no precision. Our analysis is broad-brush… like a barn door painted by a blind man. During our own lifetimes, America’s elite has degenerated greatly. Funded with almost unlimited fake money, it has become arrogant, corrupt, and incompetent. And now… caught in an “[inflate or die]( trap… its “investments” become more desperate and less productive than ever… And since the elite controls both soap and water… the dirt builds up. And then, we all get hosed. Regards, [signature] Bill --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=FUBAR). --------------------------------------------------------------- FEATURED READS [The U.S. Birth Rate Is the Lowest It’s Been Since 1979]( United States’ birth rate fell in 2020, for the sixth year in a row. That decline was 4%, noted across all races and ethnicities… thought to be accelerated by the COVID-19 pandemic and other significant factors. [Why Wall Street's Investment Labels are Worthless]( part two of this series, industry veteran Kris Sayce unpacks Casey Research founder Doug Casey’s unique investment angle, called the “10 x 10” approach… and explains why you should resist Wall Street’s attempts to label the kind of investor you are. MAILBAG A dear reader thinks Bill missed the mark in his essay on [taxing the rich]( but another thinks he was spot-on… No way will the rich allow their puppets in Congress to do them harm – it’s all heavy on the Kabuki-style theater! There will be loopholes galore, and the quo will remain status. Nor will the “poor” or middle classes pay more – they are the ones who actually will take to the streets, as we have seen last summer, for far less offense than having their taxes raised. No, what has happened is that the elite, ruling class has discovered that they can print as much money as they want WITHOUT raising taxes or worrying about the debt. Idiots like economist Paul Krugman think that with “borrowing” costs so low (thanks, Fed), we should pile on way more debt. After all, they’ve been doing it for a decade or more, and nothing bad has happened... – Brian H. You always bring a light into my day! Your comparison of the two systems, government and private capital, was just what I needed. You slid around the issue but made it clear that we are all going to get screwed. Even the families that are going to get the childcare funny money will blow through it and then wonder how they will pay for their groceries that have gone up 20-50%, or more. Gas in Michigan just went up to $2.99 a gallon from $2.59. Welcome to America! – Alan C. Will Americans struggle financially even with government stimulus, as Alan believes? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… [Free stock pick]( There’s nothing extraordinary about this stock… except it continues to have the potential to generate money. And today, master trader Jeff Clark is giving away its name and ticker, completely free. [Get it here.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. 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