| By Bill Bonner Thursday, May 28, 2020 – Week 11 of the Quarantine SAN MARTIN, ARGENTINA – Amid the many errors and scams perpetrated by Powell, Mnuchin, Trump, Pelosi, McConnell, et al., one stands out. In their Bail Out Everything Act, aka CARES, like a neighborhood loan shark, they sent out the message: “Need cash? Come and see us.” Dear Reader, you already know the story to date. Here, we sneak up on it from a different angle. How come, we wonder, the working stiffs put up with it? Their incomes haven’t increased in 45 years, while the rich have gotten much richer. They’ve lived paycheck to paycheck… until three months ago. Then, thanks to the feds again, the paychecks stopped coming. How come they don’t revolt? | Recommended Link | World's Top Biotech Investor Releases Urgent Buy Alert - It's a rare type of biotech stock, some currently trading for just dollars a share.
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| | | - | Crony Economy For the last 10 years – or longer – Wall Street and big business have been in high clover. But it’s been barren ground for the average working man. Big banks, big business, and big investors have been able to get credit from the feds at or below the rate of consumer price inflation. The EZ money acted like Miracle-Gro in the stock market; prices rose 300%. But the economy, in which the little guys live and earn their money – suffered a long drought, growing only a piddly 50% in 10 years. And even that small gain was purchased at a cost – in additional debt, including business and private debt – of $25 trillion. In effect, the feds transferred trillions of dollars from the average public (including the unborn) to the moneyed elite. Mr. Trump maintains that this was the greatest economy ever. But it was a mirage… and a fraud. The capitalist economy was perverted into a crony economy. Lobbying paid off. Borrowing, too. The insiders could borrow money at ultra-low rates… and use the money to jack up their own shares and bonuses. Forget investing in new plants and equipment. Forget hiring more labor. It takes years to build a new factory, train new workers, develop new products, and master new markets. Why take the risk? In an era of disease, this "new cure" could be one of the most powerful medical technologies of our time. And why wait for a payoff? You can borrow – in some cases, below zero, in real terms. You can buy back shares… declare a dividend… pay performance bonuses… all in a few months. This was the new way to do business, financed by the friendly folks at the Federal Reserve. Yes, the working classes and the left-leaning press grumbled a bit. But few really understood what was going on. And as long as the stock market was going up, nobody really cared. Most of the voters, like the president himself, thought the nation was booming. | Recommended Link | "SHEEP BRAIN-20" Pandemic Is Next Coronavirus will end. But a new "epidemic" is just getting started… It's "sheep brain" disease. And it could cause far more damage than coronavirus. "Sheep brain" is spread by the dangerous belief that government "stimulus" will solve real economic problems – with no dire consequences. Obviously, coronavirus is a serious health risk. But the $2.2 trillion stimulus plan poses an even bigger threat to your retirement savings. One independent research firm has discovered an alarming fact about the new bailouts. It turns out, politicians are dusting off an 87-year-old plan developed during the Great Depression… The plan called for "unlimited" money printing as part of a radical scheme to make a more "fair and equal" society… But former congressional staffer Dan Denning says there's a darker motive… A radical faction inside the government is using the current crisis to shove through a nightmare agenda that – if successful – could end financial freedom in America. There's still time to protect your wealth. But this window of safety is closing. | | | - | Worst Policy Ever And now, with 43 million unemployed… the grumbling gets louder. Menacing, even. In desperation and frustration, voters might even elect Joe Biden. But the feds are no dopes. They’re applying the same techniques that worked so well with the cronies to silence the proletariat. That is, they are paying them off. As strange as it seems, the Paycheck Protection Plan does more than protect a man’s income. Instead, it enhances it. In the phony 2009-2019 recovery, almost all of the new jobs created were in soft, low-wage sectors, such as hospitality, leisure, and healthcare. Much of it was only part-time… and temporary. And as it happened, those sectors were the very parts of the economy laid low by the C-virus hysteria and the Lockdown response. Amazing 17-Second Video Reveals Key to Tech Fortune… So, along come the feds, promising to “replace” the lost income. State unemployment benefits of $400 per week, average, are already not bad for many of these workers. Add on the $600 per week that the feds are chipping in and you have an income which, in many cases, is more than double what the fellow was earning before the crisis. Many wage-earners are delighted to be laid off – they make more money! In some states, New Mexico and Maine, for example, the total take-home pay for not working averages about 135% of the pre-crisis wage. In other words, millions of Americans – and not just crony corporations – are turning to the feds for their money. Which makes this perhaps the worst policy ever devised by the U.S. government. Who will want to go back to work… and earn less? Workers will be reluctant to return to the office or the factory floor. (There might be germs there!) This will obviously delay a recovery. And they will expect higher pay (thus reducing employers’ desire to take them back). What to do? | Recommended Link | Available Now: New Retirement Blueprint from America's Most Trusted Options Trader For the past 36 years, Jeff Clark has helped people retire wealthy… But he hasn't done it the usual way. He uses options. Options probably seem risky. Reckless, even. But his options strategy is different – unlike anything you've probably seen before. It helped him retire at 42. And thousands of others have used it to make $10,000… $100,000… even $1 million or more – in some rare cases. Which is why he's offering his never-before-released blueprint… and a year of his guidance… for just $19. | | | - | Another Payoff Here come the feds with another payoff. Stansberry’s Thursday Morning Market Snapshot reports: White House economic adviser Larry Kudlow recently said the administration is interested in back-to-work bonuses for the unemployed. He mentioned $450 per week in addition to any wages those individuals would make. This would be a replacement for unemployment benefits that will soon expire. The current legislation adds $600 per week to unemployment benefits. It has raised eyebrows because employers have complained it encourages employees not to return to work. The combination of pay hikes (>$) and less output (<GDP) will lead to inflation and slower GDP growth. More damaging in the long run, average Americans will now begin to see the feds – not honest work – as the best source of wealth. Financial Fantasyland Yes, Dear Reader, we are witnessing the cronification of the American proletariat. Where does this lead? For a look at the future, we turn again to the pampas… where the gauchos are pioneers in Financial Fantasyland. In preview, the Argentines defaulted last week… for the ninth time overall… and the third time this century. When it comes to economics and politics, the Argentines don’t mess around. They play Russian Roulette with a bullet in every chamber. Just to make sure. And now, the yanquis have picked up the pistol, too. More to come… Regards, Bill
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FEATURED READS Protect Your Money in a Post-COVID-19 World Bonner-Denning Letter editor Dan Denning believes the only way to move forward safely in a post-COVID-19 world is by disconnecting from the central bank and investing in gold. Here, editor Chris Lowe explores both gold and bitcoin as avenues to protect your wealth... MAILBAG Dear readers have harsh words for Bill regarding COVID-19… and his political musings... Seriously, Bill? You actually don’t see the picture, which is rather impossible to believe you don’t see. You are trying, as usual, to dumb down Trump, and, in this, totally disregarding the issue of idiotic political lockdown to create drama around it. The game you are playing is crude for your caliber of “sophistication.” Why don’t you acknowledge that liberals are playing a dangerous economic game, and that they would rather see the country destroyed by locking their already mismanaged states than Trump winning another term (which he will, in spite of all your guys’ dreams)? So sad to see your soul being sold to the lowest human emotion of hate. – Teresa B. Who in the world do you think you are addressing with your asinine and extremely cynical comments?? Clever and witty maybe, but thoughtfully constructive they are not. Please stick to your comments about the ranch, the economy, and investing. I value your handling of those topics very, very much.. – John R. Meanwhile, other dear readers enjoyed Bill’s story yesterday, in which he successfully scaled the mesa... Bill, writing of your climb to Pena Punta and your subsequent findings brought back memories of visiting Pompeii in my Navy days. Though the “climb” to Pompeii wasn’t nearly as colorful as yours, your findings from a civilization long passed echoed the calls I heard from the stores, bath houses, and amphitheater of the buried city. Great post. You should consider writing as a profession. Can’t wait to see the return leg photos and description. – Myles R. What a well-written story of your exploration of the mesa. Having traveled extensively throughout the world, I was always looking for slightly off-the-beaten-path day trips. You’re so fortunate to have an adventurous wife/partner and to enmesh yourselves into the local/native populous. What fun… and ongoing learning experiences. Love it. Keep writing and sharing your experiences in Argentina. – Robert C. Would liberals prefer to see America “destroyed” than re-elect President Trump? Is Bill’s commentary no longer “thoughtfully constructive,” as John says? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… Rare FDA Ruling Opens the Gate for Chance at 12x Gains in Hours Thanks to an unusual ruling by the FDA, shares of this cutting-edge biotech company are now set to go much higher. How high? One of America's top biotech investors believes you could see 12x gains in a matter of hours. Sound far-fetched? It wouldn't be the first time this happened… See the proof right here. 
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