"US Military Rule"
The real political power Congress dare not oppose.
by Bill Bonner
"What I’m describing is military rule…
It’s the inversion of democracy."
~ Mike Benz
Youghal, Ireland - "As you’ll recall from our episodes on Monday and Tuesday…John Hussman predicts, with 99.9% certainty, a big drop in stock prices…particularly the Magnificent 7. His figures suggest an average decline of only 12%. But he bases this on an analysis of the period 1972-2023. This period, however, included the biggest stock market boom in history, boosted by the most successful ‘fake’ (not backed by anything) money system ever invented.
We expect he is right about the likelihood of a stock decline. But he may be wrong about the damage it will cause. In 1990, the Japanese market collapsed by 80%. It still hasn’t recovered – nearly a quarter of a century later. In the US, the Dow peaked out in 1929, dropped 88% and didn’t really recover until 1961. And if you keep track in terms of gold, you could have traded 18 ounces of gold for all the 30 Dow stocks of 1929. By 1980, it only took 2 ounces of gold. And twenty years later, it was at over 40.
All of which is to say that stocks swing up and down dramatically, sometimes a lot more than 12%. This is why, academic researchers believe, the rate of return from stocks should be higher than from bonds. There is a ‘risk premium’ that you get from stocks, theoretically, to compensate you for the big, episodic drawdowns in stock prices. NB: today, you can take 18 ounces of gold and buy all 30 Dow stocks again, just as you could in 1929. So, the real value of the best stocks on the market has not increased over the last 95 years.
Clusterf*ck of Woe
Yesterday, we looked more closely at why the next 40 years will probably not be as felicitous as the last 40…that is to say, the Dow/gold ratio is probably more likely headed to 2 rather than to 40. It may not be the ‘cluster of woe’ Hussman predicts, in other words, but a real ‘clusterf*ck of woe.’
After the funny money was introduced in 1971, the unfaithful dollar seemed to introduce an insidious, infectious disease…faithlessness crept into America’s vital organs. We saw how the elites of both parties try to limit voters’ choices, for example…in order to ‘protect democracy.’ The media has been captured by them too, and used to promote policies that serve their interests, but not those of ‘The People’ they are supposed to serve.
After 1971, marriage rates declined. Young people moved in with their parents. In 1971, you could buy an average house for $25,000. Now, The New York Times reports on a new trend: shrinkflation in housing, with tiny houses of only 600 sq. ft. selling for almost $300,000. Single income families have become rare. More children are born out-of-wedlock…and then, childbearing has declined to the point where, without immigration, the population would decline and Social Security would go broke.
Drug use increased. (Legal and illegal.) The prison population grew. Wages gains ceased. Americans got fatter. Federal debt rose 100 times. And the rich and poor parted company; by 2010, the top 5% earned more than the entire 90% of the population beneath them.
Americans have no dog in the Ukraine-Russia fight. But hundreds of billions of their dollars are used to keep it going. So too are billions of US dollars sent to Israel so it can buy weapons from the US firepower industry. All of which leads us, and Mike Benz, to believe that Congress, the administration, and the press are so deep in the pocket of the firepower industry, they can’t get out.
Gov Spooks and Jackboots: Dwight Eisenhower warned about it in 1961. Today, the danger he foresaw has not only arrived…it has taken a shape even he did not foresee – a silent military coup d’etat. Joe Biden doesn’t appear on TV as ‘Generalissimo Biden,’ bespeckled with medals and ribbons. Tanks do not patrol Pennsylvania Ave. Nor are dissidents rounded up, tortured and killed.
But, says Mike Benz: the military and the spooks rule. Few members of Congress dare to oppose them. Few mainstream media outlets dare to present their situation reports without the opinion of some retired, often disgraced, general officer. And, says Forbes, the firepower industry has become a ‘defining feature of the US economy.’ Forbes: "Congress in December belatedly passed an omnibus appropriations bill for fiscal 2023 including $858 billion for national defense, roughly half of which will be dispersed in the form of contracts to the private sector."
That is, by any measure, big business. In fact, at over $400 billion annually, defense contracts awarded to the private sector are worth an amount equivalent to a quarter of the entire Russian economy.
The Congressional Research Service estimates the U.S. defense industrial base currently includes over 200,000 companies... the bottom line is that the defense industry has become a permanent, in fact defining feature of the U.S. economy.
The US defense budget when Eisenhower issued his famous warning was $47 billion. It’s now over $850 billion – 18 times higher. Even adjusted for inflation, it’s three times what it was during the Cold War. Why? Do we have thrice as many enemies now as then? We send billions to ‘protect’ Europe and Israel. Why? Both are rich and fully capable of protecting themselves.
The explanation is given to us by the aforementioned Mike Benz. The firepower industry has become expert, he says, in using the media to promote its own agenda. We’ll hear from Mr. Benz more tomorrow…and you’ll get more of our Spenglerian view: this time, the West really is in decline."
No comments:
Post a Comment