"Decline and Fall"
The eternal cycles of growth and depression…
bull and bear…war and peace...
by Bill Bonner
Youghal, Ireland - "We connect the dots. Like seeing constellations in the night sky – Orion’s Belt, the Big Dipper, Las Tres Marias – some are obvious. Others are harder to see, with faint stars…far in the distance. But always, there are patterns… growth and depression…bull and bear…war and peace. Decline and fall. Some of them are very long patterns. Our friend, Chad Champion: "Since the founding of the Federal Reserve in 1913, the U.S. has lived through 3,000 percent inflation. A dollar equivalent back then is worth about 3.2 cents today! And to make the situation worse, the “over-population” of money has reached unprecedented levels since 2008. The Fed’s balance sheet has exploded. It went from just under $1 trillion before the Panic of 2008 to just under $9 trillion after the pandemic."
Rome wasn’t built in a day. And it will take a long time, we presume, to bring America to its knees. But the two parties – the stupid party and the evil party – are doing their best, coming up with programs that combine the worst of both. Here’s another friend, Jeffrey Tucker, explaining what happened in the crisis of 2020: "As for 2020, that was a disaster for the ages, the single worst policy decisions by the Fed in its entire history.
In the course of a few days, the Fed eliminated reserve requirements, introduced a huge range of new lending systems, bought every dollar of debt that the Treasury could create, and, over two years, unleashed the terror of $6.5 trillion on a demoralized public that was initially excited for the benevolence. That charity turned to dust once the inflation started. Now, it’s all gone, and we’re dealing with three straight years of real declines in median family incomes."
Power and Wealth - There’s another age-old pattern. As a nation/state/empire ages its ruling elites sit at the pinnacle of power and wealth. No matter which direction they look, it’s downhill. They become fearful…everything is a threat – a virus, a bear market, Russia, China…the future itself.
One of the funniest things to happen last week was that the free thinkers in Congress voted overwhelmingly to ban TikTok. One of the reasons given was that lawmakers thought the app was ‘dumbing down America’s youth.’ Really? Not Facebook. Not the New York Times. Not Paul Krugman. Not Morning Joe. Not the US Congress. Not the public schools. Not the parents who let their children waste their time with electronic gadgets. Neither Biden nor Trump. Nope.
Typical of a late-stage, degenerate empire, members of Congress are eager to protect themselves from anything new. Another claim made against TikTok is that it may collect data that could be used against us. What data? Where is it kept? What do they do with it? How would it be used against us? What damage could a Chinese-owned app do that our own insipid media cannot? The politicians have no idea, but they’d send troops to TikTokLand…if they knew where to find it.
‘Throw the Bums Out’ - Still another pattern: over time, ruling elites are prone to becoming corrupt and incompetent (stupid and evil). They favor war and inflation, partly as a way to keep the future from happening and partly as a way to continue to transfer more wealth and power to themselves. The increased supply of war and inflation leads to a decline in their value. Eventually, the elites cannot win a war (e.g. Vietnam, Iraq, Afghanistan, the Ukraine)…nor control inflation.
In theory, a democracy is supposed to solve the problem of decay at the top. The voters are supposed to ‘throw the bums out,’ and elect new, more vigorous leaders. But where are these new leaders? In smallish communities, democracy seems to work. But in practice, in a large government, the political parties, Congress, the administration, the press, Wall Street, powerful donors, lobbyists, organized special interests, and the firepower industry all lock arms to block change. You end up with geriatric leaders and disastrous policies.
Blow Up - Who really wants a rematch between Biden and Trump? We all know who they are…what they are…and what they will do. And what they won’t do. And neither of them, neither the fool or the knave, will face up to the most obvious crisis in America’s history…or avoid it in the most obvious way.
Here’s Bloomberg: "Rogoff Says Biden, Trump Favor ‘Blowing Up’ US Debt." Harvard University economics professor Kenneth Rogoff said both President Joe Biden and his predecessor and challenger Donald Trump risk sending US debt levels into dangerous territory as Washington fails to grasp that the era of ultra-low interest rates won’t come back. “Biden’s speech suggested blowing up the debt... We have really no idea what Donald Trump will do, but that’s what he did last time he was president — good guess he will do it again,” Rogoff said, referring to widening fiscal deficits when Trump was president 2017-21."
Since the last major financial crisis – 2008-2009 – the feds have added a staggering $25 trillion in new debt. And they’re on course to add another $16 trillion according to their own budget projections – over the next 10 years. If they don’t change course soon….there will be Hell to pay. What that Hell will look like, we will discover along with everyone else. But it is sure to include more inflation and more war. Stay tuned."
