Zombies everywhere

[Bill Bonner’s Diary]( Zombies Everywhere By Bill Bonner Wednesday, May 26, 2021 [Bill Bonner] YOUGHAL, IRELAND – [Yesterday]( we promised a “reveal.” Why do empires collapse? And why do economies decay? Keeping it all very simple… A society prospers or declines depending on how much of its vitality is engaged in providing useful goods and services… …compared to how much is spent grifting… stealing… politicking… and wasting time and savings on zombie companies, wars, and dead-end investments. And appearances can be misleading… Recommended Link [Oops: Major 5G Saga Blows up in Denver, Colorado]( [ad_img]( Don’t be fooled. 5G isn’t here yet. The network caught a glitch it seems. And to clean it up, all the major players seem to turn to one tiny company. In a weird twist, it could be the biggest tech story and opportunity of 2021. To get the gist of this story, you should first see what happened in Denver. One word for it: EPIC! [Click here for full details.]( -- Complete Disaster In the early days of the Third Reich, for example, many observers thought the German economy would be a good model for the rest of the world. Coming out of a catastrophic hyperinflation in the early 1920s… and after dragging the burden of reparations like a ball and chain… Germany nevertheless rebounded smartly in the 1930s. Suddenly, everyone was working and every industrial chimney was belching smoke. But it was a fraud. The German economy had been hijacked by warmongers – drafted in to support Hitler’s fantasies of world domination. Instead of making passenger cars, it was tanks that rolled off the assembly lines. Instead of making commercial airliners, they built fighter jets and bombers. Instead of growing wheat and vegetables for their families… German laborers were needed on the Eastern Front! In the 1940s, when the unemployment rate in Nazi Germany went to zero… workers were forcibly recruited from France and Poland. By then, Germany was “investing” more than half its entire GDP in the war effort. We all know what these “investments” produced – a complete disaster, for Germany as well as her neighbors. [Featured: New Investment “Craze” Hits All 50 States]( Impaired Judgment As a general rule, the more of a society’s energy is “invested” by government (rather than by private investors with a profit motive), the lower the return. Government “investments” are more likely to be either disguised transfer payments… or worse, megalomaniacal crackpottery. In either case, the real return on investment is typically below zero. Over the last two weeks, we’ve noticed that many private investments can also be unproductive. When fake money is handed out like free booze, it’s bound to lead to some impaired judgment. At its recent peak, the cryptocurrency market was worth $2.4 trillion. And of America’s top 1,500 companies, 200 of them – with a combined market value of $2.3 trillion – haven’t made a profit in three years. Cryptos aren’t designed to provide products or services. And money-losing companies subtract wealth; they don’t add it. Together, that is nearly $5 trillion of zombie capital. (Much of it will disappear in the next crash.) Recommended Link [Get the Ticker… No Strings Attached]( [image]( He picked Bitcoin when it was trading for around $400. Since then, it has exploded over 11,000%. In fact his average gain is 344% a year. And now he’s saying this will be the hottest investment of 2021. [Click here and get the ticker… no strings attached.]( -- Connecting the Dots But how can we connect these dots? The misguided investments… the idle minds… the goofball spending? For the first time in the history of economics – you are the first to see it, Dear Reader – we unveil our Zombie Index (ZI). Remember, when people can work, save, invest, and innovate – without interference – they prosper. But when people are distracted, detained, bamboozled, or otherwise prevented from carrying on with their projects, the society gets poorer. And now, our impression is that the zombies are many… They are breeding like rabbits. We think that explains why U.S. GDP growth rates are now at their lowest levels since the Great Depression. Let us see if our hypothesis is true. The U.S. labor force participation rate hit 67% in 2000. Now, it’s down to below 62%. That’s about 7 million more zombies right there. This year, there are about 260 million adults in the U.S. But, according to the Bureau of Labor Statistics, only 151 million are “employed.” That leaves 109 million zombies. An important nuance: There is nothing wrong, morally, with being a zombie. Old people. Sick people. Children. Prisoners. Malingerers… lazy bums… and crypto day traders. Zombies are not necessarily good or bad. But they must eat. And since they do not produce, they must eat what others produce. We hasten to let ourselves… and many dear readers off the hook… adding that a retired person, living off his own accumulated savings, is not a zombie at all. He earned the money… and merely delayed spending it. But that kind of fine tuning of our Zombie Index will have to wait for someone with more than half an hour to think about it. Grossissimo modo, our Zombie Index tells us what percentage of the population is producing wealth… and what part is consuming it. Generally, (this is in no way to be confused with science) the more zombies you have… the lower the wealth of the society. [Featured: Biden, Elites Set to Roll Out Elites’ “Great Reset” of America]( Government Zombies But wait… What about all the people employed by the government? Some, such as firefighters and teachers, do useful work that we would gladly pay for. Most do not. Optimistically, let us say that 80% of government employees are “zombies.” In 2020, there were about 22.5 million on state, local, and federal government payrolls. So we take 80% of these “employed” people – about 18 million – and move them over to the zombie side of the street. It should be added that there are millions more who are honestly employed in the private sector… but who still do zombie work. Accountants preparing tax returns, lawyers… lobbyists… diversity commissars… and millions of others… do not really add to our wealth. But that calculation is far beyond the scope of this little reverie. So is the fact that many people – in and out of government – not only fail to add to output, they actively try to reduce it… by imposing regulations, paperwork, skullduggery, and claptrappery – such as the Federal Reserve’s zero interest rates. As they say in France… “Half the population works; the other half tries to stop them.” Recommended Link [Biden Delivers Sucker Punch To Americans]( [ad_img]( The “Great Reset” started on January 20 with the inauguration of Joe Biden. Between now and the midterms, the American economy could be reshaped forever – and renowned analyst Jeff Brown has found the “lynchpin” to the entire plan. [Go here before this message is removed]( -- Final Tally So, putting the numbers together… out of 332 million people in America, approximately 199 million (109 million unemployed + 18 million “zombie” government employees + 72 million non-adults = 199 million) – 60% of all Americans – are zombified. To these simple numbers we add another important measure. In 2000, state, local, and federal governments together – the biggest source of zombieism – spent an amount equal to 34% of GDP, or about 1 out of every 3 dollars. Today, the number is 44%. That represents a huge gain for the zombies. And it completes our Zombie Index as follows… We add the two ratios together – 60% and 44% – and divide by two, giving us our final Zombie Index reading of 52%… or just over the half-way mark. The French are right! Half the people work; the other half get in their way. For reference, the Zombie Index for the year 2000 would have been about 45%, which confirms our impression: The zombies are multiplying. Regards, [signature] Bill --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Zombies everywhere). --------------------------------------------------------------- MAILBAG A dear reader responds to another dear reader’s take on economics… meanwhile, others disagree with [Bill’s ideas on crypto]( There once was a joke going around that if all economists were laid end-to-end, they could not reach a conclusion. I amended that idea in my presentations to make a point… that if all economists were laid end-to-end, it would be a right, good thing! After I graduated college and joined the real world of corporate business, I began my own self study to find out if there were any economists that made logical sense. I discovered the Austrians and their subjective theory of value, and the impossibility of measuring and quantifying gazillions of voluntary human tractions. Thus, they stuck to known economic truths and so have I. On the farm, we often say to get the hay down where the calves can eat it. I have not bothered to read anything other Austrian thinkers ever since. The rest is simply political claptrap. – John H. I just wanted to expand on John H.’s comment regarding the Austrian School of Economics. I graduated from business school with little respect for the economic discipline. It was difficult for me to take a discipline seriously that didn’t incorporate deductive reasoning nor logic. Like John, I, too, had become exposed to the Austrian School of Economics after completing my college education. I read treatises from the giants of the Austrian School, Ludwig von Mises and Murray Rothbard. I eventually found my way to the Mises Institute, my personal Shangri-La. Obtaining this knowledge profoundly changed my life for the better, both on a personal and professional basis. Shortly after embarking on this intellectual journey, I became really upset with the universities from which I obtained both my bachelor’s and post-bachelor’s degrees. I felt like I had been completely ripped off. I asked myself why the Austrian School of Economics is not taught at U.S. universities. Then, I had my epiphany. The Austrian School promotes laissez-faire economic thought which opposes government intervention. Keynesian economics, on the other hand, embraces government intervention. The government and its meddlers know full well that few people will go to the effort of learning the Austrian School of Economics after completing their college education. Just another perverse example of rigging the system to enrich themselves. Knowledge eventually wins out, so keep exposing the miscreants, Bill! – Craig W. Always a fan of yours but I have to take issue with this one. You are mostly correct in your analysis of crypto but… I have worked hard all my life in a role that helps people. And got paid very little for doing that. I invest in crypto because at my age, 66, and after a life of service, it seems the only way I can generate significant dollars on top of my meagre savings and pension income. I feel guiltless for doing this as, rightly or wrongly, I deserve some extra dosh for my later years. And if I put my small amount of money in a bank, I certainly will not add to my financial wellbeing! So yes, crypto is not “real” money despite the sometimes excellent use cases (e.g. Cardano and Theta) but I don’t care! – Michael B. I enjoy your insightful writings very much. However, I must disagree with you regarding most cryptos. I agree bitcoin pretty much has no value other than as a digital currency. But given how governments all over the world constantly devalue their currencies by printing more money, it will probably be very useful in the future. However, almost all of the other cryptos are not digital currencies; they are software programs. Ethereum (the second largest crypto behind bitcoin) is essentially the “Windows” of the blockchain. The majority of the other cryptos are software applications written with Ethereum’s “Windows” program. They include software for real estate transactions, financial transactions, and just about any type of transaction imaginable. Just as with “real” software, some will make it big and become part of the mainstream while others will fail to be adopted. But I don’t think you can lump all these cryptos together as worthless, having no value and not requiring any labor or human capital to create. And certainly they don’t fit into the category of waiting for a bigger fool to buy the shares at a higher price (except when everything, including stocks, are so overpriced that everything falls into that category). I’m sure when Microsoft, Adobe, and Quickbooks were starting out, you didn't think they were worthless and that people were fools for purchasing their stock, just waiting for a bigger fool to come along and buy the stock at a higher price. So why do you lump cryptos into that category? Cryptos have tremendous value in today's ever-evolving digital world and they will transform how we will do business globally in the future. – Greg M. Will cryptocurrencies transform global business in the future? Or will they create more zombies, as Bill argues? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Zombies everywhere). IN CASE YOU MISSED IT… [Bill Bonner: Shadow-Banned?]( Have [America’s top booksellers refused to carry Bill Bonner’s final book]( You won’t find new copies of Win-Win or Lose at Barnes & Noble… and not a single copy is floating around on eBay. In fact, the only used copy we could find was going for $79 on Amazon. Which is why Bill recently authorized us to take drastic steps to put a copy in your hands essentially free – as part of this limited time offer. [To claim yours, click here.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. 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