| By Bill Bonner, Chairman, Bonner & Partners GUALFIN, ARGENTINA – “It’s amazing that any of us survived at all,” said Natalio, sitting in the back seat of our truck, holding on to the passenger grip above the seat to cushion the bumps and turns, as he recalled his life in the Andes. We were driving up through the valley, with bare, stony mountains on either side, and a dirt road snaking through the hills between them. Natalio, the gaucho injured when a horse fell back on him, seems to be recovering. And we’re getting to know him better. | Recommended Link | Revealed for the First Time: Doug Casey’s Most Explosive Securities Doug Casey’s made millions as a speculator. But he didn’t make all that money with just stocks and options. Many of his biggest winners came from a unique type of security that doesn’t trade on the regular stock market… For the first time, he’s sharing all the details in a brand new investment summit. | | | | Worst Investment More on that in a moment… but first, this from Bloomberg: Bloomberg Economics estimates the 5.5 percentage-point drop in the [effective corporate tax] rate led to a 1 percent boost to nonresidential investment, which added a tenth of a percentage point to gross domestic product in 2018. So without the corporate side of the TCJA, growth last year would have been 3 percent instead of 3.1 percent. We only bring it up because, yesterday, we argued that Misters Obama and Trump seem to have made the worst “investment” in human history… adding $10 trillion in debt to get $3 trillion in real growth – the worst economic recovery in U.S. history, even worse than the Great Depression. Today, we see that Mr. Trump’s tax cut… estimated to cost $5.5 trillion over a decade – raised GDP by a grand total of one-tenth of 1% last year… or $20 billion. Just sayin’… But let’s turn back to more serious matters… | Recommended Link | The Plot Against Trump’s America I believe a very serious threat to the Trump administration is on the way, and some Americans are going to get caught in the middle of this mess. I fear that you could be one of them. Millions of people could stand to lose a lot of money… especially if you own stocks, bonds, annuities, or life insurance. Understand, I’m not a prepper. I’m not a “doom and gloomer.” After studying mathematics and philosophy at one of the most exclusive schools in America, I was employee No. 2 at a tech startup during the ’90s internet boom. I went on to become a part of one of the most successful internet media companies in America. But today, I need to share a message with every American I can. Because I’ve caught wind of a big move against Trump. One that’s going to cause massive problems in our financial system. One that could change your life in irreversible ways. | | | | Social Insurance In Argentina, as in America, there is an elaborate system of social insurance designed to protect the working class. Until recently, remote ranch hands were rarely inscribed. The former owner of our farm, for example, maintained an almost feudal system, in which he looked after his own people, but in his own way. If they lived on his land, they were required to work for him for a couple of months per year. He paid them when he had money, which wasn’t often. And he paid in cash, off-the-books. Foreigners, on the other hand, have to do it “by the book.” First, because they don’t understand the informal arrangements. Second, because they are easy targets for the press and local originario activists. And third, because that’s what they’re used to doing in their home countries, anyway. So, when we took over, Natalio was added to the rolls of the public insurance program… and we began making monthly payments for him. And when he was injured, the “system” took over. The trouble was, none of us understands how the system works. And Natalio neither reads nor writes. So, when it comes to paperwork, he needs help. We took him down to the hospital on Friday, to get an x-ray… and help him through the bureaucracy. But we soon realized that we were not able to make sense of it either… so we called our lawyer, who took charge. The long drive, however, gave us time to hear the story. | Recommended Link | D.C. Elites Don’t Collect Social Security – They Collect This Instead 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. | | | | Mythic Place “I was born in Jasimana, over the mountains,” he explained. “They don’t have any ranches there. And no police either. It’s just families with goats, llamas, and wild cattle.” Jasimana is an almost mythic place… over the mountains to the east of our ranch, largely inaccessible. Until recently, there were no schools. No shops. No restaurants. Nothing. Periodically, on the internet, Jasimana is offered for sale… a vast tract of a million acres. And woe to the buyer. If he is fool enough, he puts down a deposit to secure the fabulous property before beginning his title research. Then, he discovers that Jasimana has no title. It is ruled by originarios who have their own customs and understandings; modern land titles are not among them. “My father came over to Gualfin [our ranch] when I was just a boy. So, I never went to school. I just helped my family. Then, when I was 13, I started work on the ranch. So, I’ve been working for 40 years.” Natalio had a satisfied smile on his face. “Back then, we worked two ranches… we raised the cows up here and then took them down to the valley to fatten them up a bit, just like you’re doing now. “But they weren’t the same cows we have today. They were wild, mountain cows. And there were only four of us gauchos. We’d spend all our time on horseback, or on foot, driving the cattle from one ranch to the other… rounding them up… branding them… and sometimes taking care of them. “Nobody raises cattle like that anymore. They were spread out over… maybe [50,000 acres]… up in the hills and out on the range. We couldn’t really take care of them very well, not like we do today. They either survived, or they didn’t. “Sometimes, we’d find one laying on the ground. They eat something… and swell up with gas. We’d go over and stick a knife in their bellies to let the air out. Sometimes they’d survive. Or, we might find a calf being attacked by condors. Usually, it was too late to save them. “Now, we cut the horns off our cattle. It’s just too dangerous to work around cattle with horns. But back then, we didn’t bother. “Somehow we all survived, except for Justo, and he died of cancer.” All Changed “We didn’t have any doctors,” Natalio continued, “or any way to get to a doctor. There weren’t any roads… or any cars… The first car we had up here in the 1970s was when Jorge [the previous foreman] got an old 4-wheel-drive Jeep and learned to drive it. “Before that, once a month or so, we’d take a couple of burros down to town, load them up with sugar, flour, salt, and other things we needed, and come back up to the ranch. It took about 8 hours each way. We enjoyed it, because we got to go to town. “Otherwise, we were out on the range, or in the mountains, for days at a time. We just made a little fire and cooked whatever we had… and spread out our saddle blankets on the ground, with our saddle for a pillow, and a poncho over us. Today, it sounds romantic. But it was hard. Cold. Windy. “We’d be out there – just the four of us, me, Jorge, Nolberto, and Justo – with nothing but our horses. And sometimes a thunderstorm would come up. And there we were… on our horses, out in the middle of a huge valley. “We’d get down into a dry arroyo to avoid getting struck by lightning. But if it rained hard, a flash flood would come down the arroyo, so we had to get out fast. “Nobody does that anymore. I remember, when you came… we went out to [a small valley near the main house] and camped with you. We were just showing you what it was like. We slept on our saddle blankets. And you had those funny things [sub-zero sleeping bags imported from America]. “But we don’t do that much anymore… except when we have to take care of our own cattle up in the hills [each of the ranch hands has his own herd in some part of the mountains. These animals, like the wild cattle of times past, are practically unsaleable. We have not figured out why they still bother with them]. “Yes… it’s all changed. My time is over. The life I’ve known, I mean. Justo is dead. Nolberto and Jorge both retired. And I’m at the end. My own children won’t know the same life… not the one I lived. They all want to go to the city to work. There’s nothing here for them, they say. “And now, I’m worn out. All I can do is the work of the regador [the person who spends all day guiding water around the fields].” Regards, Bill MARKET INSIGHT: BEWARE THE BEAR TRAP By Joe Withrow, Head of Research, Bonner & Partners The snapback rally we have seen since Christmas Eve appears to be normal bear-market behavior… Remember, the S&P 500 put in its 2018 high of 2,930 on September 20, 2018. From there, it fell 20%, hitting 2,351 on December 24. But since then, the index has only marched higher. At writing, the S&P 500 sits at 2,789, up 19% from December’s low. But this is a common pattern in bear markets. That’s the story of today’s chart, which maps the S&P 500’s largest bear market rallies going back to the turn of the century. 
As we mentioned, the S&P 500 has rallied 19% since December 24 – making this the third-largest bear market rally in recent history. The largest bear market rally occurred during the previous bear market from 2007-2009, in which the S&P shot up 24% in less than two months. That led investors to believe that the worst was over. But then the market changed course and the S&P plunged 28% over the next three months – hammering those who mistook the snapback rally for a new bull market. And we saw a similar pattern play out during the bear market lasting from 2000 to 2002. The S&P 500 rallied 21% over the course of six months… Leading investors to believe the bear market was over. But then the S&P 500 dropped 34% over the next seven months – punishing those who got too bullish, too quickly. As we have been saying all year, the snapback rally we are seeing right now could be fool’s gold. History shows that a bear market seeks to punish as many investors as possible… And these snapback rallies are how it sucks them in. – Joe Withrow FEATURED READS Nobody Wants to Bank for the Poor
Banks in low-income areas are closing up shop at a blistering pace. They’re moving down the road to zip codes with a higher net worth. That’s bad news for America’s less-affluent entrepreneurs. Fewer banks… fewer loans… fewer small businesses. For Sale: You
Everybody knows that their online data is collected and sold. But what type of data is being gathered? It’s not just your favorite music or hobbies. So-called “data brokers” know if you’re going through a breakup… if you’re pregnant… if you’re trying to lose weight… and even what medication you’re on. They know you better than you know yourself. And it’s all up for sale. But read also… Sign the Digital Bill of Rights
Do you believe that you ought to have a right to privacy when browsing the web? Do you believe your data shouldn’t be harvested by Silicon Valley giants without your explicit consent? If so, then sign the digital bill of rights. Declare your digital independence today… and spread the word. MAILBAG In the mailbag: Socialist? Capitalist? Which is America? And which way is it headed? Hey, Bill. Perhaps we should all agree on a singular definition of socialism and capitalism. If you call what we have capitalism, then it brings out the worst in greed and corruption. What happens is the elite (the One-Percenters) turn to the rest of us (the middle and working class) to bail them out. When we can get educated enough to make sure that our representatives in government work for us and not for the “elite,” then we’ll have the transparency necessary to carry out the People’s (the rest of us) business of deficit reduction – that, in a way, is socialism. And why do you insist about “the Obama misfortune”? Is it because of what he inherited from Bush that it was a misfortune, but he pulled us out of it? Seems like everyone misses him. He’ll go down as one of the best… – Anonymous It is not capitalism until and unless the whole country is benefiting from it. If not, then the socialized America would be much more preferable! – Ali R. A couple of weeks ago, I became 70 years old. I went into the Army two days after my 17th birthday in 1966. I came home from Vietnam in October of 1968, as a changed person in many ways. I am a patriot, then, as well as now. I would like for you to point out which “impeachable offense(s)” that Michael Cohen charged President Trump with! You are like my most miserable and haughty liberal friends who tell me what is wrong with this country, but with no solutions on how it should be addressed. I can only assume, because you don’t live in the U.S., and apparently don’t want to, you have no answers. You only criticize. – Robert S. If you are so wise and care about this country, get the hell back here and put all that knowledge that you have to work, in order to make this nation better. – James It has come to pass that the Democratic Party has appealed to the idiot vote on the socialist side, and the Republican Party has appealed to the idiot vote on the fascist side. One side has numbers of people, the other has numbers of dollars. Both parties represent big, centralized government by a small group of insiders, and less of the individual freedom, which once made America truly great, no matter the MAGA [Make America Great Again] blather of a certain rightist insider. We are now essentially a totalitarian nation in all but the title, with increasing tightening rules affecting almost everything we do. All for our good, of course. Either we will revolt at the ballot box, which still allows a vote against the entrenched powers of right and left (but we need a centrist party), or we will go down in history as one more failed experiment. Who will take our place? Think about it. – Chuck B. I can’t keep quiet any longer. As a “Brit” who voted to take back some sort of control of my country of birth – a country that has been disrespected and pillaged by Europeans who seem to have some sort of “guilt complex” that they try to negate, by attempting to prove that they are better than the British or Americans who extracted them from the Nazi yoke – I have to say that having read your articles for many years, I wholeheartedly agree with everything you say! My earnest hope is that the fate of these ignorant people will transpire much sooner than anyone envisages! Although I am in my 70s, I still look forward to seeing it all unfold and telling many of my family members, “I told you so!” Keep up your good, amusing, and above all, perceptive work. – Jon U. IN CASE YOU MISSED IT… Something strange is being discussed at the highest levels in Washington… That’s the message from Dan Denning, Bill’s coauthor on The Bill Bonner Letter. Call it socialism… call it financial martial law… call it the death of win-win capitalism. It’s all the same thing. And it’s coming faster than you think. Full story here. 
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