Thursday, January 18, 2018
"Stocks Could Fall 80% from Here”
by Bill Bonner
Like a ‘Closing Out Sale’ that never seems to end, people are beginning to think that this ‘Stock Market Surge’ may not be totally on the level. Unlike an honest bull market, it may never end…
Classic top? But in many ways, it looks more and more like a classic top. Stocks keep going up…and more and more investors, getting in the mood, think they will go up forever. The last time we saw anything comparable was at the end of the 1990s.
Then, it was the tech-heavy NASDAQ that had caught fire. It burned hot from 1995 to 2000, with prices up five times. But then, when there was no more furniture to throw onto the fire, it quickly went cold. The NASDAQ fell 80%; the ashes remained cold for the next 10 years.
The flames were only rekindled after the Fed and other central banks added $15 trillion to the world’s supply of dry tinder.
No ordinary market: This was one of three incidents over a 20-year period that reshaped popular attitudes to money, investing, and the markets. First came the ‘Black Monday’ crash of 1987. Then there was the aforementioned collapse of the NASDAQ in 2000. Finally, the crisis of 2008–09 further drove home the point: This is no ordinary stock market. Until 1987, the best way to make money in the stock market was to do careful research and find good companies selling for less than they were worth.
After 1987, the value of this kind of fundamental analysis fell. It didn’t matter anymore how much something was worth. The stock market was no longer functioning as a market for stocks, carefully discovering what each and every one was worth. Instead, it was reacting to something else. And by 2009, fundamental analysis was no longer helpful; it was, in fact, counterproductive. The more research you did - to identify value-rich companies - the worse your portfolio would do.
This may seem impossible. But that is what happened. Value-rich companies with low price-to-earnings (P/E) ratios and little debt underperformed the go-go leaders of the growth genre.
Mr Luskin’s maths: This phenomenon was inadvertently described in last Friday’s Wall Street Journal. Donald L Luskin, a macroeconomic forecaster, wrote an enthusiastic editorial in which he argued that stocks may be high, but they are going much higher because ‘policy changes augur much better earnings in the coming years’: ‘As in 2009, the economy is facing a fundamental turning point driven by profound changes in economic policy. Once again, it’s policy, not valuations, that is determining stock prices.’
Mr Luskin did the maths. At a corporate tax rate of 35%, a dollar of corporate earnings turns into 65 cents after Washington takes its cut. At the new 21% rate, the same dollar becomes 79 cents. That’s earnings growth of 21.5%. If we were advising Mr Luskin, we would suggest he put his calculator down and put on his thinking cap. Out of whose pocket cometh that extra 14 cents? You will say, ‘It comes from the tax cut.’ But since the feds won’t forego a single penny in spending, we must assume they will get it from somewhere else, right?
Where? Corporations, as proponents of the tax cut were quick to point out, do not pay taxes. They just collect them. The money either comes from their employees, their shareholders, and/or their customers. So if the shareholders and/or the employees get 14 cents more, it is almost a dead certainty that the customers will get 14 cents less. Then who will buy the corporations’ products and services?
(Yes, we are aware of the Laffer Curve…and the theory that there is an ideal tax rate out there at which the feds maximize their income, often by lowering tax rates. But first, there is no evidence that it is true. Second, even if it were true, there’s no reason to think the new tax rate is any better than the last one. And third, it seems unlikely that further stimulus, at this point in the business cycle…after $10 trillion of Fed stimulus since 2009…will produce much of anything…except, maybe, more money for shareholders and corporate insiders!)
Rockstar central bankers: So yes…Mr Luskin could be right…as far as his maths and his logic take him. But transferring wealth to shareholders and bondholders is what the feds have been doing for the last 30 years, ever since former Fed chief Alan Greenspan invented the ‘Greenspan put’. By slashing interest rates and talking up the market, Mr Greenspan guaranteed that stocks wouldn’t go down too much, or stay down too long. The Greenspan Era represented a fundamental and dramatic turnabout for the Fed.
America’s central bank was meant to be - and had been - a mostly passive institution. Few people knew who the chairman of the Fed was; few cared. The Fed was not meant to guide the economy…and surely not to enhance it. Instead, it was supposed only to guard against excesses, as Fed chairman William McChesney Martin put it, by ‘taking away the punchbowl’ when the party got too hot. But Mr Greenspan was determined to be a rock star. Instead of taking the punchbowl away, he added more booze!
Stocks went up for the next three decades…as more and more alcohol got dumped into the punch. And now, look around: The world has $233 trillion in debt. Interest rates are barely off the floor. And as much as $11 trillion of debt trades with negative yields. So when the current tightening cycle causes the next crash…the feds will panic, as usual. And, as usual - having learned the lesson over the last 30 years - investors will buy the dip, confident that the feds will come into the market with their cheap sauce. But this time, the bottles will be empty.”
Wednesday, January 17, 2018
"Who Survives and Who Dies When the SHTF?"
"Did you ever wonder about the differences in how people behave in a crisis? Why some people survive and some people die? Are there characteristics that we can nurture now in good times that could help see us through bad times? I’d talked with Selco previously about who lives and who doesn’t in a long-term emergency, and a great determiner is a flexible mindset. In this interview, we go deeper into who can withstand the stress of an SHTF event and who crumbles. Today he shares his insights from the Balkan War.
What were the worst mental stressors during the situation in Bosnia that are probably common in many long-term scenarios? Obviously, it was a situation when violence was very widely used and in a sporadic way (very often without any logic) so people lived under constant physical threat, and also in very poor condition. On first look that was mental stressors, but this part or field of survival is in my opinion very important and commonly overlooked in prepper community, and there is much more to it. It is a huge topic, but we can touch on some of this in the article. I researched it a lot. A few factors were important, and will be important in any future collapse event:
#1) Loss of control: If you are living a normal average life with your family, you have a job, kids go to school, you go to the physician when you are sick, kids eat their favorite foods. There are police for problems, there is law and order, everybody knows its place more or less. You feel that you are in control of your life and lives of your family.
And then one day all that is gone. You find yourself in the world where very often things of life and death are a matter of pure coincidence or luck if you like, or a matter of event. For example, is there going to rain that day for enough water? People had a very hard time of dealing with it, you can be prepared very well to some extent, but also you need to be prepared that for a number of things (big number) you are simply not in control anymore.
#2) Hopelessness: Hopelessness is the big word when it comes to survival, and from my experience, it is hard to beat it. A survival event that lasts for few days, even a week or two, is like a camping trip, something like people go together, share food, help, there are nights spent next to lamps, violence is possible but not widespread because people see that event gonna last only for week or two. Some people gonna take chances and do violence or stealing but the majority is gonna keep it together to the end of SHTF. Events that last for month or two are harder, more violence and harder time, but still, people see that everything gonna go back to normal.
When you are thrown into an event that looks (or you think ) like it is gonna be a permanent or very prolonged condition, rules change. From one side you have people that are not gonna be so nice and helpful to each other simply because they see this is gonna last and they gonna be forced to fight for resources and from the other side you gonna have hopelessness. Most humans need to see cause in order to operate on the proper way, or in other words, in hard conditions people need to see ‘light“ no matter how far it is, otherwise, you might just mentally “surrender“ because it is hopeless to push on.
#3) Re-setting of the values: In normal life, you are, for example, lawyer or clerk, or teacher, or famous writer and then one day the world collapses (let's say because of EMP). In 20 days you find out that you are living in the world where you are valuable if you can quickly and efficiently chop the trees, or pickle vegetables, or repair weapons, or invent a setup to charge car batteries, or simply shoot from the rifle. I am not saying a teacher or writer is useless in SHTF, but values are “re-set“ and simply if you do not have any immediate useful skills you’ll be forced to learn it, and you’ll be forced to understand that your values (knowledge and skills) that you had prior collapse simply may not be valuable anymore. People had problems with this new “value system“.
#4) Responsibility: People have responsibilities in normal time taking care of their families. Those responsibilities are still there when some serious collapse come but because the system is out, all help is out too. For example, you are responsible for you old mother who has high blood pressure problem and there is no doctor anymore, there is no medicine. There is no help from the system for your kid who has special needs, for example. You realize that everything is up to you. Some people simply could not take that. People could not watch their sick kids because they could not help them. Some people would simply “surrender“ or leave everything.
#5) Bending the rules: Most interesting is actually how people would (or not) bend the rules that they had prior to the collapse. A majority of us live by some rules (mental and moral rules) that tells us what is right and what is wrong. It is wrong to steal, it is wrong to harm people. It is right to take care of sick and elderly.
When SHTF you’ll be in a position to “bend“ these rules, simply because you’ll be faced with lot of tough decisions and choices. For example is it right to steal from others if that means my kid’s not gonna be hungry or die from infection? Is it OK to harm other people because of that? How are you gonna mentally live with that? I am not advocating anything here, and I cannot give you suggestions but be sure that you’ll have to bend the rules, and that you gonna be faced with tough decisions. It is up to you how much you gonna bend it. All of the factors mentioned above are examples, and usually, you meet all of them more or less, and in combinations.
What kind of person tended to do better when everything went belly up? First, we need to formulate a definition of “person who tended to do better when everything went belly up.” I know people who were powerful in that time because they had manpower, a role in the black market, for example, they’d sell baby formula to people (sometimes mixed with plaster), or simply rob the people. When war stopped they ended up very powerful and they are still (years after) very powerful. But they are not in my definition of normal people.
We are talking now about ordinary folks, and I use the term “small circle“ when describing how to live in those times. You need to mentally adapt to the fact that you’re gonna have to overcome some serious problems, but what is more important you need to adapt to the fact that some of the problems cannot be solved, some people will not survive, and you still will have to move on. That small circle is your family or your group, and while the world outside is falling apart that does not mean your family needs to fall apart. You will just have to adapt to the new world.
Many people survived hard times, some of them by doing bad things. Others survived but fell apart when they found themselves back in normal times. One thing about who did mentally good in that times is that people who had support from other people (family, friends) in that time went good.
It is very hard to be alone during events like that, especially if it is prolonged, of course, because obvious reasons for example security reasons (guarding home) or simply resources gathering. But when it comes to the mental aspect you need to have support from trusted people (just like they gonna need that support from you) otherwise resetting the values from topic above is much harder, or hopelessness will kick you harder, or simply bending the rules may kick you in a way that you bend the rules too much, and at the end turn yourself in something that is more animal then human.
Do you remember any stories you can tell about specific people who thrived? Ordinary folks usually did not thrive. We all dragged ourselves through that way-too-long period feeling lucky if we were alive, with all parts of the body still there, and with families alive. Everything else was day by day.
I remember this guy, I’ll call him Ed here, he was the man with information. You need to know that it was complete information blackout, and even if you could somewhere find radio most of the stuff that you heard on it (on local languages) was pure propaganda junk. When you find yourself cut off from real information, all that you’re gonna have is a whole bunch of rumors and misinformation, and only then you realize how bad we people are used to having information.
I cannot even remember what kind of ridiculous information I have heard in that times, and I believed in many of them because I kinda needed to believe in that. I have heard (and believed) probably 100 times that peace is coming in 3 days, or new big UN convoy with food for everybody coming to the city tomorrow, big enemy movements there. People need to know. It is human nature. And during very hard times people are simply ready to believe in a lot of things that look like clear nonsense in normal times.
Note: have a means to communicate with other people, CB, radio, satellite phone, ham radio. To hear correct information, it is valuable because of many reasons, and also it is mentally very valuable
Ed was the guy who spread rumors-informations-news, and people would give him food for that information. I believe we all deep in ourselves knew that it is probably just rumor, but “Ed said yesterday“ was some kind of information, something to talk about, something to hope for. Ed survived alone the whole event (pretty rare) thanks to the fact that “he had information.”
What kind of person suffered the most? Survival is about being able to adapt to new things, and those new things are bad mostly. There are many factors here that are influencing how you gonna mentally cope with collapse. A few of those are:
•how prepared you are (how many preps you have like food, water, medicines…)
•how many usable skills you have (natural remedies knowledge, gardening, technical skills, fighting skills…)
•how dependent you are of the system (you are living in city apartment building or in small rural communities)
•what kind of group (or family) you have around you, what kind of skills those people have, how close (trusted) those people are…
These are just a few examples, and even if you have everything above you still need to have mental strength. Or in other words, you may be perfectly prepared survivalist when SHTF just to find that you are falling apart mentally because this new situation is simply not for you.
In my case (I am talking about people who were not preppers at all) people who suffered most were people who failed to recognize the new rules. We had (in that time, in my family) college professor, man that was pretty important in normal times. Students were kinda trembling when they use to see him. When SHTF he mentally fell apart and become useless because he felt that suddenly he become nobody, completely unimportant. Every scum with a rifle was more important than him. It is not about that we could not find a use for him, it is about fact that he was “plugged“ so heavily in the system and when that system was gone he felt there was no sense to anything. He did not want to try to be useful in any other ways. One definition would be that people who are “plugged“ or depended too much on the system had worst time when system disappeared (SHTF).
What are some things that can help a person who is having a difficult time during a crisis? I mentioned that you need to have support from other people, but also you need to have peace of mind. It is easier said than it is done, but yes, faith and religion, or kind of spiritual-mental order helps a lot. I cannot say that religious people had less hard times, but I am sure that religious people went more peacefully through that hard time because it helps you to make sense of everything.
Personally, I had kinda “philosophy“ over the time that went something like “I’ll do whatever I can, and the rest is not in my hands anyway.“ Over the times it grew into “It will be whatever it has to be.“ It worked for me at that time. It sounds simple, but this philosophy helped me through some of the hardest periods because I understood that I can do only “this“ amount of effort, but there were so many things that were way out of my control, and way random. If I worried too much about it I might lose my mind.
It worked for me then, but remember that I was not prepared. Preppers today are more prepared, and by combining that prepping with peace of mind, it makes even more sense. Remember that you need to find sense in life when SHTF. You need to have reasons to push on and on. God, faith, kids, love… you need to have some reason and to stick to it. It can be things like teaching others about herbs, or food growing.
If you do not have good reasons you either end up dead because you stop caring, or simply you turn to an animal just following the most primitive instincts.
What are the things that made people feel better and helped recapture some normalcy? I have to say that drugs and heavy alcohol drinking were in use very much, but not as a means to recapture normalcy, it was more to get lost – to forget reality. You need to have a “vent“- it is different for different people. As I said, for a lot of people it was alcohol or drugs, for me it did not do the complete job and often it was dangerous to get “lost“ in times like that. It was very usual to see people smoking marijuana, people who never even heard of it prior the SHTF.
For me, two things were like “charging my mental batteries“ – music and reading. Music was rare, and it was actually if you stumble on someone who plays guitar, reading was more available, and for me, it was like I was still there but I had escaped to a better place while reading or listening music. In some bad situations I did find myself singing songs, maybe I looked retarded in that moment because of that, but actually it helped.
When you are dirty, hungry, frightened for security, worried for your family, and when all that goes for months, you need something that gonna make you feel fine for some time, not to forget all troubles (like with heavy drinking or drugs maybe) but more like to push all worries aside for a bit.
Note: do not mix alcohol abuse with the fact that it is a great idea to store alcohol for SHTF. Have alcohol for a trade, or drink, but do not try to solve heavy times with alcohol abuse, it does not work.
Small snacks, like candies, are precious things as a mental help. Check today what kind of small things comfort you when you are down or having problems, and count that when SHTF those small things will probably comfort you 10 times more.
Are there specific personality traits that we can focus on now which would help us through a situation like this? A sense of humor! In that time a friend with a good sense of humor for me was worth like 5 rifles or 50 MRE. A good sense of humor is an important survival skill and often overlooked. I am not joking.
And storytelling. We had in our family old man who was guerilla fighter during WW2, and he combined both of these qualities. In hard times, when we were more or less desperate he would tell us stories of his fighting in WW2 – how they fled from the Nazis, how they starved, how they froze in the woods. And over the time it helped. For example, one of us would comment “Oh, there is only one can[of food] today for 5 of us“ and then he would say “Oh, you wimps, it is piece of cake, during the WW2 in the German encirclement I ate my shoe for a week.“ And for whatever hard time in our SHTF, he would have a story of “Oh, you wimps, during the WW2 I…“
Over time it became partly a joke, but also partly a serious thing. Even between each other, when we saw it is a hard situation, we would joke “S..t, this is bad, we are in serious trouble now, call grandpa with one of his “oh, you wimps, during the WW2“ stories. That old guy knew exactly what kind of mental relief we needed – joking and storytelling how someone else had hard times and how he managed to survive. He had a sense of humor, a gift for storytelling, and he had spirit. Thanks to him I grew the habit of using humor in hard situations."
More information about Selco: Selco survived the Balkan war of the 90s in a city under siege, without electricity, running water, or food distribution. In his online works, he gives an inside view of the reality of survival under the harshest conditions. He reviews what works and what doesn’t, tells you the hard lessons he learned, and shares how he prepares today. He never stopped learning about survival and preparedness since the war. Regardless what happens, chances are you will never experience extreme situations like Selco did. But you have the chance to learn from him and how he faced death for months. Real survival is not romantic or idealistic. It is brutal, hard and unfair. Let Selco take you into that world."
Laurence Gonzales, "The 12 Rules of Survival"
Of course you're thinking, "What practical use is this information?
That could never happen here!"
You'd be wrong, very possibly dead wrong, and much sooner than later...
Of course you're thinking, "What practical use is this information?
That could never happen here!"
You'd be wrong, very possibly dead wrong, and much sooner than later...
2002, “Suddenly Yours”
2002, "Sea of Dreams"
2002, "Sea of Dreams"
"The Sleeping Beauty galaxy may appear peaceful at first sight but it is actually tossing and turning. In an unexpected twist, recent observations have shown that the gas in the outer regions of this photogenic spiral is rotating in the opposite direction from all of the stars! Collisions between gas in the inner and outer regions are creating many hot blue stars and pink emission nebula.
Click image for larger size.
The above image was taken by the Hubble Space Telescope in 2001 and released in 2004. The fascinating internal motions of M64, also cataloged as NGC 4826, are thought to be the result of a collision between a small galaxy and a large galaxy where the resultant mix has not yet settled down."
“Try To Remember…”
by Chet Raymo
“In a sleepless hour of the night, I was trying to remember the last name of a person I have known well for more than forty years. When my spouse stirred in her sleep, I asked her. She couldn't remember either. One again I started mentally through the alphabet. "I think it starts with B," I said. Ten minutes later she rolled over and said, "The next letter is R." Bingo! The name popped into my head. Or I should say, "popped out of my head." Because it was in there somewhere, recorded in a tangle of neurons as materially as if it were written on a piece of paper.
There was a time, back when I was a young man, when some scientists thought memory might be molecular - stored as proteins or RNA molecules that have somehow been modified by experience. The molecule theory of memory rested on experiments with worms (I remember the cover illustration on Scientific American). The worms were taught to navigate a simple maze. Then they were ground up and fed to untrained worms, which seemed to navigate the maze without training. Only molecules, it was thought, could have survived the transfer. Those experiments have been discredited. Scientists now overwhelmingly believe that memories are stored as webs of connections between spider-shaped brain cells called neurons. Each neuron is connected through electrochemical connections to thousands of others. According to the current view, experience fine-tunes the connections, strengthening some, weakening others, creating a different "trace" of interconnected cells for each memory.
But truth be told, memory is still deeply mysterious. How exactly are a lifetime of memories stored and retrieved at will? We know how it works for computers, but how for the human brain? What is self-consciousness? What are dreams? This is the primary scientific agenda for the 21st century. In the middle of the night I go fishing, in that sea of potentiated synapses that are the human soul, for a name that becomes ever more difficult to extract as I get older. I troll the alphabet: A, B, C, D… The name is in there, along with a face and more that forty years of interactions. The Nobel Prizes are waiting.”
Graphic: Salvador Dali, "The Persistence of Memory"
“How vast those Orbs must be, and how inconsiderable this Earth, the Theatre upon which all our mighty Designs, all our Navigations, and all our Wars are transacted, is when compared to them. A very fit consideration, and matter of Reflection, for those Kings and Princes who sacrifice the Lives of so many People, only to flatter their Ambition in being Masters of some pitiful corner of this small Spot.”
- Christiaan Huygens, (1629-1695)
X22 Report, “The People Are Going To Be Shocked,
30%-50% Fall In Net Worth Dead Ahead”
Related followup report:
X22 Report, “Q Anon, A False Flag Attempt Is Headed Our Way”
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way."
- Charles Dickens, "A Tale of Two Cities"
"A Tale of Two Cities" (1859) is a novel by Charles Dickens, set in London and Paris before and during the French Revolution. With well over 200 million copies sold, it is among the most famous works of fiction. The novel depicts the plight of the French peasantry demoralized by the French aristocracy in the years leading up to the revolution, the corresponding brutality demonstrated by the revolutionaries toward the former aristocrats in the early years of the revolution, and many unflattering social parallels with life in London during the same time period. It follows the lives of several protagonists through these events. The most notable are Charles Darnay and Sydney Carton. Darnay is a French once-aristocrat who falls victim to the indiscriminate wrath of the revolution despite his virtuous nature, and Carton is a dissipated British barrister who endeavours to redeem his ill-spent life out of his unrequited love for Darnay's wife, Lucie Manette."
Freely Download, in PDF format, "A Tale of Two Cities" here:
“A man who has blown all his options can't afford the luxury of changing his ways. He has to capitalize on whatever he has left, and he can't afford to admit - no matter how often he's reminded of it - that every day of his life takes him farther and farther down a blind alley. Very few toads in this world are Prince Charmings in disguise. Most are simply toads, and they are going to stay that way. Toads don't make laws or change any basic structures, but one or two rooty insights can work powerful changes in the way they get through life. A toad who believes he got a raw deal before he even knew who was dealing will usually be sympathetic to the mean, vindictive ignorance that colors the Hell's Angels' view of humanity. There is not much mental distance between a feeling of having been screwed and the ethic of total retaliation, or at least the random revenge that comes with outraging the public decency.”
- Hunter S. Thompson
"The Aristocratic Illusion"
They’re not as smart as they think they are.
by Robert Gore
"If you draw your sustenance from the government - as an employee, contractor, or beneficiary of redistributed funds - the money you receive comes from someone who had no choice whether or not you got paid. Except for those jobs the government mandates, private sector workers’ compensation comes from employers who have freely chosen to pay it. The jobs they perform are worth more to their employers than what they’re paid, or the jobs wouldn’t exist.
Here’s a new definition of aristocrat: a person legally entitled to take money from other people without their consent. This definition focuses on what aristocrats do and have done throughout the centuries, regardless of their labels.
If you’re an aristocrat, the thought that you’re living on somebody else’s dime may cause psychological stress. All sorts of rationales have been concocted to justify this privileged position. The most straightforward is the protection racket. In exchange for their subjects’ money, aristocrats protect them from external invasion and preserve domestic order. It’s not a voluntary trade - the subjects can’t say no - but at least both sides get something from it.
However, “protection racket” doesn’t have quite the moral gloss aristocrats crave. Deities may not have been an aristocratic invention, but they jumped on the concept of divine favor to justify their position. It makes it harder to oppose the rulers if authority is bestowed by the gods or the government is a theocracy. Ultimately, regardless of rationale, the ideology always come down to: The aristocracy is superior to those they rule. The aristocrats have no trouble believing it; they have to psychologically justify their positions to themselves. The trick is to get the subjects to buy in.
In America, the myth is that the aristocracy is a meritocracy. Merit, in this formulation, means degrees from top academic institutions, and employment with government-aligned private sector firms, nonprofit organizations, and the government itself. Those who emerge from these backgrounds and worm their way to the top are the cream…or so the aristocrats like to believe. It can’t be labelled exclusionary, they claim, because many who make it came from modest beginnings: Truman, Eisenhower, Johnson, Nixon, Ford, Carter, Reagan, Clinton, and Obama.
The best and brightest notion crested with John F. Kennedy’s administration, stacked with Ivy Leaguers and whiz kids. David Halberstam, in his book The Best and the Brightest, asked how all that brain power managed to get us into the Vietnam mess. Hubris was the easy answer: they were smart but too cocky. However, another explanation surfaced, one the aristocracy resisted. In 2016 and 2017 it exploded into the popular consciousness.
These last two years have revealed a simple truth: regardless of résumés, the aristocrats are nowhere near as bright as they think they are. For instance, the identity politics so many have fecklessly pushed completely undermines their own meritocracy myth.
Barack Obama became president because he was black, not because of anything he had done in academia, as a community organizer, or in politics. Hillary Clinton was next in line because she was a woman. Without her husband, the world would have never heard of her. How, as an aristocrat, can you argue for your own special merit when you’ve replaced the idea of merit with race, gender, and ethnicity? An aristocracy that no longer has its mythical basis is left with the blandishments of power and treasure -and the armed might of the state - and is on its way out. The Divine Right of Kings notion died before Europe’s absolute monarchies crumbled.
In their self-congratulatory isolation, enjoying only the support which they had bought and paid for (with other people’s money), America’s aristocrats had no idea that millions of America’s had rejected their pompous posturing. Hillary Clinton couldn’t convincingly answer why she was running for president, yet she was presented as an exemplar of merit and ability. Even many of her own supporters didn’t buy it, but the aristocrats shut their eyes and foisted her on the voters.
Donald Trump’s greatest achievement has been his exposure of the hypocrisy, corruption, and stupidity of America’s aristocrats. Even as he mowed down Republican contenders and it was clear his message was resonating with substantial numbers of voters, they dismissed him. November 8, 2016 shattered for good the myth - in force since Franklin Roosevelt and his New Deal whiz kids - of the exceptional aristocracy.
If the aristocracy is unexceptional, it has no basis for its pretension and condescension. It takes smarts to graduate from Harvard Law School. But it also takes smarts - which the aristocrats either don’t recognize or disparage - to run a business, operate complicated machine tools, fly a jet, harvest crops, design a semiconductor, or build office towers.
The elite don’t even acknowledge that their sustenance comes from the entrepreneurs, builders, and doers they deride. Nothing could have been more symbolically appropriate than the aristocracy’s take down by a businessman who had never held a government job. Most of the aristocracy knows very little about actual business and the world of real work. (Cocktail parties with Silicon Valley CEOs don’t count.) Trump, on the other hand, has had extensive dealings with politicians, bureaucrats, and the government.
Compounding stupidity, the aristocracy bet on Russiagate in a vain attempt to drive out the interloper and preserve its position. The story was so transparently thin that nobody really believed it, but it was all they had and they were desperate. It has boomeranged disastrously, giving Trump ample ammunition for counterattack. It has also destroyed the credibility of the FBI and the Department of Justice.
Even if the aristocracy recovers and drives Trump from office, there’s no going back. The aristocratic illusion has been shattered. Their claims of superiority are nothing more than self-serving screeches of denial. Contempt has replaced whatever respect Americans once had for their rulers. The bought-and-paid-for’s loyalty extends only to the next payday. When the payola ends, chaos begins. Funded as it is by debt and taxes on increasingly restive producers, the payola will end.
A ruling class that has lost its last vestige of legitimacy has nothing but force and fear to perpetuate its rule. The nation will grow more bitterly fractured as the skims and scams fall apart. The American aristocracy had better be sure its surveillance apparatus is in order, that it has the wherewithal to pay the military and police, and that it has infiltrated the populace with trustworthy informants and quislings, if that’s not a contradiction in terms.
Even with all those “assets,” the aristocracy is vastly outnumbered and has no moral force against the disgusted and the enraged, who every year have less to lose. Force and fear are the last refuges of doomed regimes. It all may collapse of its own unsustainable weight or there may be chaos and bloodshed, but regardless of the ultimate outcome, the aristocracy’s days are numbered. And after the downfall, mercy will be in short supply.”
Madame Defarge, where are you now that we need you?
"Sex, Lies, and Alfalfa”
by Bill Bonner
"Our main man in Argentina, Pancho, came to Baltimore last week. Dapper and charming, Pancho has become more than just an administrator for the ranch. He has become a trusted adviser to the family. We began the conversation by explaining why we needed his advice: ‘Pancho, you come from one of the biggest, richest families in South America. You’ve seen all the things that can go wrong. We’re counting on you to help make sure we don’t make the same mistakes.’
‘Yes…we lost all our money over four generations. We finally sold the family business in the 1980s and got $200 million for it. You know how much of that money the family kept?’
‘Zero. By then, everyone was in debt. They had summer houses…winter houses…and spring houses. Ranches…apartments…you name it. Polo fields. Yachts. Servants upstairs and down. Sound familiar?’
‘Uh…sort of…except for the polo fields and yachts. And the servants. But how did you lose so much money?’
‘Well, only one person in the family, my great-grandfather, had a talent for making money. The rest of us had a talent for spending it. There were plenty of bad investments…and bad marriages, too. But Bill, I’m not sure I can help you. I’m one of the ones who knows how to spend.’
Pancho continued with an update from our ranch…
Originario update: ‘I tried to make peace with the originarios [locals claiming native rights to our land]. I just asked for two things. They had to sign our contracts. I wasn’t asking for any rent. We’d forgive it all. But they have to understand and recognize that they’re on our land. And I asked them to take down the fence they put up in our pasture. They refused. I don’t think they ever wanted to settle things.
I went to court and asked a judge for a ruling. I’m not trying to expel them. That’s impossible. But I want the judge to declare that they are not really originarios. None of them were born there. And everybody knows that Rodrigo, the leader, came from Chile. Or somewhere else.
But the good news is that they’re respecting our water rights. We had a very dry winter. We needed every drop of water we could get. And they let us have it. (The little river comes down from the high mountains. Each farm along its course has the right to use the water, but only on specific days. In the past, the originarios upriver have been caught using the water when it was our turn.) We’ve gotten about two and a half inches of rain so far this year. If that’s all we get, we’ll be in another tough drought situation. But we’re all praying for more rain. Typically, the rains stop in February, so we have a little more time.
And this year, we’ll also have San Martín [our farm lower down with more irrigable land]. We’ll have that planted by April and make our first cut in October. And here’s some more good news. The grapes look exceptionally good. It looks like we might get 60,000 lbs…if they’re not attacked by ants…or bees…or parrots or hail. Keep your fingers crossed.
But there is also bad news on the home front. We asked Juan to come down to the lower farm to clean it up and get it ready for planting more alfalfa. He’s down there during the week and goes back up to his house on the weekend. Apparently, his wife started cheating on him with Pedro. So he retaliated by cheating with Lucretia [we are substituting names here…to protect the privacy of our workers]. And as near as I can tell, now everybody is cheating with everybody else. When the priest comes, the confessions take a long time…’
Lopsided sentiment: Meanwhile, back in the USA… Has it ever been this easy to make money? You just buy stocks and wait - a few weeks at most. The Dow is flying; this month, it is setting records. And the only cloud on the horizon is falling bond prices, which we’ll have more about tomorrow…
Our research department tells us that the last time investors were so bullish was 30 years ago — just before the 1987 crash. Today, sentiment is so lopsided, if all the bullish commuters all crowded onto the same side of the Staten Island Ferry, it would never leave the pier. The old-timers say a bull market ends when the last bear capitulates and joins them. He hastens to the optimistic side of the boat. Then, it tips over and sinks.
The end must be getting close. The stock market is listing badly to starboard…and there’s almost no one left on the port side. When will the end come? We don’t know. (Our market-timing advice may be a bit like Pancho’s wealth-building advice.) For us, a crash is overdue. We take it for granted that a big, nasty bear market in stocks is on its way. One always shows up sooner or later. More interesting is what happens next. Stay tuned!”