"Poverty Is the New Wealth"
by Bill Bonner
POITOU, FRANCE – "We check the financial news… Both the $1 trillion “infrastructure bill” and the $3.5 trillion “human infrastructure” budget moved along in Congress… And stocks hit new record highs on Friday… after what was reported as a “blowout” jobs report. That is to say, we are making progress. The delusions grow more extreme. The bubble gets bigger. And the day that it will all blow up comes closer.
When will that day come? We don’t know. But next month comes the “benefits cliff.” Soon after, the moratorium on evictions expires. So do the feds’ unemployment boosters… And U.S. debt now stands at $28.43 trillion. That leaves just $0.07 trillion of spending before it bumps into the new debt ceiling – $28.5 trillion – put in place on August 2. From Business Insider: "Treasury Secretary Janet Yellen on Monday warned congressional leaders that a failure to raise the federal debt ceiling will cause “irreparable harm” to the economy as Congress barrels towards the deadline to fund the government and a potential spending battle."
The easiest way to ruin a man is to give him money. And with so much money headed their way from the feds, millions (perhaps the majority) of Americans now depend on it just to make ends meet. Where this leads is the subject of today’s commentary.
How to Be Anti-Fragile: Yes, we are still looking at the Brave New World ahead… and trying to find the connection between owning nothing… and just-in-time transactions…and the old home place.
Owning something outright gives you a margin of safety. You don’t get “put out” of your own house when you can’t pay the rent. When you lose your job, a romance goes sour, the economy goes into recession, inflation gets out of control, the president goes nuts, Congress goes AWOL, and your business goes bust – a mortgage-free home gives you a place to lick your wounds before starting again. You can spend long hours sitting in front of an open fire… raking the coals… and puzzling it out…“What went wrong?”
Savings make you anti-fragile, too. They give you the most precious thing of all – time. Time to think. Time to recover. Time to wait out a crisis… and figure out what to do next. When you have savings and a roof over your head, you are not desperate. You don’t need to sell your time, hour by hour, as unemployment climbs. You don’t need to refinance your mortgage at higher rates. You don’t need a bailout from the government when a crisis hits. In other words, “just-in-time” financing may be fine when everything is going well. But it’s a good idea to have some assets of your own, just in case.
Who Needs Wealth? As for wealth… Who needs it? “People come to think what they need to think when they need to think it,” is one of our old dicta here at the Diary. So we assume that people whose real incomes are falling need to believe that they didn’t really need to own anything anyway. They can get a job… and depend on the feds to maintain full employment. And if they need a house… a car… or a vacation, they can borrow… rent… lease… or share it. The geniuses at the Federal Reserve will always keep interest rates low, won’t they?
It’s the new “subscription economy,” where everything becomes a “service” and only the elites have real assets. You don’t really want a home, do you, Dear Reader? You just want someone to provide you with a place to live. A service, not an asset.
You don’t really want to own a car either, do you, Dear Reader? You just want a service that will take you where you want to go. And, of course, you don’t want to own a share in a company; you can gamble on “stonks” at Robinhood. Watch baseball games on your barn-size TV screen… vote in national elections – what else do you need?
Poverty Is the New Wealth: Besides, poverty is becoming the new wealth. A man who eats a Beyond Meat burger feels superior to one who eats a real steak. A fellow who rides a bicycle looks down his nose at the guy in his big, fossil-fuel-burning automobile. And everybody with a double-wide can now feel he’s got one up on Elon Musk’s tiny new house. Having a small carbon footprint will be more important than a big bank account.
Pucker Up: And socially, a vaccination may be a better point-scorer than a wine cellar. In the news recently was this gem: "Actor Jennifer Aniston is defending her decision to drop friends and acquaintances who won’t say if they are vaccinated against COVID-19 after questions on social media about the move. The “Friends” and “The Morning Show” star said in an InStyle magazine interview published this week that there was still a “large group of people who are anti-vaxxers or just don’t listen to the facts.”
We don’t know what facts Ms. Aniston is talking about. There are scientists who think everyone should be vaccinated. Others think it is a mistake. Both are reasonable opinions. Neither is a fact. But if we want to stay on Ms. Aniston’s good side, we will take the jab.
And if we want to sign on to the “new normal,” we will have to go along with the whole poverty-is-good, just-do-what-they-tell-you program. We will select our personal pronoun… take the knee… park our old gas guzzler… get vaccinated every six months… sell the house… strip down…and pucker up whenever the elite bends over."
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