Friday, July 31st, 2026

Bill Bonner, from Poitou, France

In the news this week was Kevin Warsh, the new Fed chief. He and his FOMC had to make a decision on the key lending rate charged to member banks. On Wednesday, they announced a pass. The New York Times:

Fed Leaves Interest Rates Unchanged, Despite Three Votes for an Increase

Kevin M. Warsh, the Fed’s new chairman, vowed to fight persistent inflation without offering specifics about whether that would include raising rates.

The last time the Fed beat inflation was forty years ago. But controlling inflation when you have less than $1 trillion in debt...with stocks already on the floor...is one thing. Getting control when you owe $40 trillion, with stocks at an all-time high, is another. Inflation has been running at about twice the Fed’s 2% target rate for nearly five years. They are in no hurry to stop it.

Also in the news are the latest trade figures. Recall that ‘reciprocal tariffs’ were meant to wipe out the trade deficit, by shifting more industry to the US. When the plan was announced investors freaked out and the whole nutty program was downsized. And then, the Supreme Court declared it illegal and it was downscaled again.

For a giddy moment, it then looked as though what was left of the tariff program was working. Imports declined dramatically...and briefly...in 2025. But now, they’re up again, with a quarterly net which is worse than it was before the tariffs began. Mish Talk:

Trump’s Tariffs Didn’t Improve the Deficit but Did Increase Consumer Costs

Another policy belly-flop? Maybe. But Trump’s historic mission is to weaken the empire; it is as if he were parting the waters of the Red Sea.

And what’s this? What happened to that Golden Age? The Wall Street Journal:

US economic growth slowed to 1.5% in second quarter

Our guesses about how these dots connect will be found correct...or we will eventually be shown to be a fool. Either way, we will accept the judgement of history. But it’s the Primary Trend that counts. And we believe, for interest rates, it is going up. After an entire generation, the bottom in yields was hit bottom on March 9, 2020 with the 30-year Treasury bond yield at 0.99%. Now it’s 421 basis points higher.

Bonds have been a death trap for the last six years. But, in a world of ignorance, how can we possibly know what the long-term direction — bull or bear, up or down, long or short — will be?

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Markets drift and flutter. They do not tell you where they are going. They publish no flight plans. They provide no GPS signals or road signs.

What star do we steer by? What helps the poor guesser to guess right? First and foremost, the markets themselves. They obey the basic laws of motion. Up is still up; down is still down. And there are limits to both.

When a market is near an all-time high, the upside is mostly on the downside, if you know what we mean. Governed by what may be the most reliable law in the universe, things tend to oscillate, up and down, with a ‘mean’ or ‘normal’ somewhere in the middle. The planets do not wander around the sun; they follow predictable orbits. So do markets mostly stay in their lanes.

In July 2020, the real yield on Fed Funds loans was NEGATIVE 6%. And that was after 40 years of declining yields. The Fed was giving away money...and paying people to take it. Investors could barely believe it. In their bones, they knew it couldn’t last.

They knew they should get out of bonds as fast as they could...but...but...prices had gotten so high...and been rising for so long...that it began to look as though markets no longer functioned...that bonds had left their orbit and were now headed out into space, to a distant solar system far, far away.

“Gravity is not just a good idea,” they joked with each other. “It’s the law!” But gravity didn’t seem to be working at all. Had the law been repealed? Did it break down? Was this truly a ‘new era?’ Investors held on...waiting for even higher prices.

Then, of course, gravity was suddenly the law of the land once again. In August, six years ago, for the first time in four decades, yields began an upward march (and prices marched off in the opposite direction). Bondholders were thrown back to earth — with their worst losses in history. And as far as we know, interest rates are still going up. The Wall Street Journal:

The 30-year U.S. Treasury yield rose to a 19-year high of 5.238% on Thursday after the Federal Reserve kept interest rates on hold, but left the market pondering about its future path.

And stocks?

Where is the gravity there?

Stay tuned.

Regards,

Bill Bonner

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Thursday, July 30th, 2026

Bill Bonner, from Poitou, France

First, we are working in the dark. Figuratively most days. But today, literally. The windows and shutters are closed.

There is a ‘heat emergency’ in our area. The temperature yesterday afternoon hit 102 degrees. This may pose no threat to the lizards of Death Valley, but here almost no one has AC. Instead, old people are told to stay inside, guzzling water, so the authorities won’t have the expense of hauling them to the morgue.

This is the fourth heat wave to hit Europe this summer. People are beginning to think the planet really is heating up.

You can throw a baseball as hard as you can; more than likely, it won’t go to the moon. But how likely is it that ‘global warming’ turns out to be an accurate description of coming weather?

Let the feds have their delusional certainties. Here at BPR, we stick to guesswork and probabilities…sometimes right, sometimes wrong, always in doubt.

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Meanwhile, in the stock market, the clouds gather and disperse.

Investors celebrate paper gains by buying vacation homes. Or, they hang their heads and curse the market gods. And the most up-beat IPO of all time – Space X -- turns into the biggest loser of all time, with more than $1 trillion of market value evaporated in 45 days. Pity the poor retiring investor. He should have known better.

And today, we try to ‘know better’ by looking at things that – sometime in the future -- we will wish we had known now.

The world’s biggest borrower is now in hock for nearly $40 trillion...and will never pay it back. That is almost a certainty. More likely than not, the gods will want their pound of flesh. But from whom? When?

It’s all part of the great rhythm...the beat that goes on...and on...and on. Everything corrects. Everything regresses to the mean. From ashes to ashes...dust to dust. And the dollar will go to whatever godforsaken hellhole all paper currencies end up — blowing through back alleys like plastic beer cups after a block party.

There is something consoling about it. Whatever you’re worried about, it will soon be gone. One way or another, every debt will be settled. All stocks become worthless. All empires are destroyed. And all people die.

‘He should have gotten more exercise,’ they murmur over the coffin. ‘He should have listened to his doctor.’ ‘He should have lost weight.’ ‘The poor man should never have bought SpaceX.’

But sooner or later, he was going to die anyway. As are we all.

Yesterday, we kept vigil over the tech sickbed. IBM lost 25% of its value in a single day. Google will be hit hard by its losses on SpaceX. Tesla too.

They were all bound to ‘correct’ sooner or later...now is as good a time as ever.

And how about the US empire? Is now a good time for it to regress to the mean? Donald Trump is doing a good job of leading the regression. But how do we know it is not just a huge head-fake...with the real decline not coming for many years?

Well, we don’t know. But the federales are doing all they can to bring the empire down now. And no matter what path they choose, at least in the medium term — two to ten years — they are almost sure to stumble. Yahoo! Finance:

Total federal debt stood at $39.065 trillion as of January 1, 2026, according to the Federal Reserve’s GFDEBTN series, and is on pace to cross $50 trillion before 2030. The stock has grown by roughly $16 trillion since 2020. The bigger issue is the vintage of that debt. A large share of that debt was issued when the 10-year yielded under 2%. As that paper matures, Bessent has to reissue it into a market where the 10-year yields 4.67% and the 30-year yields 5.15%. Every rollover raises the ongoing carrying cost of the national debt.

The US government has made the same ‘mistake’ as Google and Oracle — it squandered its cash. It raised nearly $40 trillion, net — borrowing it from relatives, friends, and enemies...while counterfeiting a few extra bills in the basement of the Treasury.

What did it do with the money? What ‘investment’ of public funds did it make that would repay the loans?

Let’s look at the portfolio results. The Iraq war? The Afghanistan war? All of those billions in weapons to Israel? The attack on Iran? Where’s the profit?

Or how about those half-century War on Poverty and War on Drugs programs? (Even the most recent iteration has produced no bottom-line gains. Esquire: ‘Turns out, we blew up all those boats in the Caribbean for nothing.’) Or the DEI initiatives? Or the loans to college students and grants to universities? Or the billions in funding for better medical care? Where’s the payoff?

If the rate of return on the $40 trillion were just 5%, there would be plenty of coin to pay the interest...and pay down the principal. Instead, there’s nothing. And now, the total is approaching $50 trillion by 2030, when the Feds will likely have to come up with $2.5 trillion just to cover the interest.

Where will that money come from? No uncertainty there...it has to come from somewhere. And since all those ‘investments’ they made over the last thirty years have been ruinous failures, the only way they’ll be able to pay the interest is either by cutting down on current spending...or borrowing more money. Inflate or die. There is no third way, no matter what TV quack tells you otherwise.

We’re back to probabilities. Which is more likely?

Take your time to think about it, dear reader....and about the people who will make the decision. And the context. Will voters give up Social Security and Medicare benefits to protect the fiscal virtue of the Republic...for their grandchildren’s sake? And what about the feds — Democrat or Republican...will they stand up to the big lobbies to save the dollar...or will they save their own political necks?

We don’t know for sure. But we wouldn’t bet on the dollar…and we’ll whisper a prayer for the grandchildren.

Regards,

Bill Bonner

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Vol. 5, Issue 8

By Tom Dyson

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Wednesday, July 29th, 2026

Bill Bonner, from Poitou, France

Some things are more likely than others. The daily solar system rhythm — morning, evening, night — will almost certainly continue. So will the rhythm of life itself — birth...life...death.

We saw that wars have rhythms too — they have beginnings and endings. But in between...when you start a war, you open the gates of Hell. Who knows what will come out?

But today, we sway to the rhythms of the investment world – and pet the Hellcats that dance in its back alleys.

Look at IBM...such a great company. My Investing News:

Picture a retiree who accumulated IBM shares over 30 years and treated them as the quiet, dependable corner of a taxable portfolio. The reasoning seemed solid: IBM is a Dividend Aristocrat, raised its quarterly payout for a 31st consecutive year in April 2026, and has paid uninterrupted quarterly dividends since 1916. Yet the reliability of the payout did not make the stock price stable. IBM shares plunged 25.2% on July 14 after a rare warning about preliminary second-quarter results. For retirees, the lesson is not that IBM suddenly became worthless. It is that even a celebrated blue chip can become a dangerous retirement anchor when one company occupies too much of the plan.

What went wrong at IBM? Forbes:

The historic decline followed a letter from Krishna to IBM investors on Tuesday, in which Krishna said about the company’s “disappointing” second-quarter performance: “What played out was worse than our expectations. We did not adapt and move quickly enough.”

And ‘poof,’ there went nearly $70 billion.

That, of course, is part of the rhythm. Now you see value...and now you don’t.

The same disappearing value story is happening throughout the tech sector. What matters, at the end of the day, is cash. Either you have it or you don’t. Google, for example, is making more of it than any company in history — $112 billion in the last quarter. But the stock is going down.

Why?

Because its cash is vanishing. The latest company report showed free cash flow negative by $6 billion. Where did it go? It was ‘invested’ in AI infrastructure.

Tesla, same story. The stock fell 15% after the company announced a loss of $1.1 billion in cash. There, too, the money (earned from selling automobiles) was spent on AI infrastructure.

When the cash goes out the door, investors dive out the windows. Charlie Bilello makes this comparison:

Apple has generated $129 billion in free cash flow over the past year while Oracle has burned $24 billion.

Their stocks have followed the fundamentals: Apple is up 56% over the past year, trading at an all-time high. Oracle is down 52% over the past year, trading at a multi-year low.

Investors are starting to draw a line on AI spending.

Apple’s discipline is being rewarded. Oracle’s overspending is being punished.

SpaceX is in a class by itself. But it still follows the well-trod path — up...and then down. And it connects some dots for us. Part of the reason for Google’s stellar Q2 earnings comes from reporting a $99 billion-markup in the value of its AI investments, especially Anthropic and SpaceX. Anthropic remains a private company.

But since its high on June 16th, SpaceX’s value has been cut in half — that’s $1.5 trillion, more or less, gone ‘poof.’ Some of that loss will show up on Google’s next quarterly report. The company will have to take a portion of its capital spending as ‘depreciation,’ and recognize the decline of its investment.

Later this year, on December 9th, most of the ‘lock ups’ will be released. Then, a crescendo of selling — from the clerks and cleaners as well as the honchos — should hit SpaceX like an asteroid.

Look out.

Regards,

Bill Bonner

Tuesday, July 28th, 2026

Bill Bonner, from Poitou, France

‘A man’s gotta know his limitations.’

--Clint Eastwood, Magnum Force

There’s a war on...oil is going up. No...it’s a glut situation; look for a lower oil price. Hold on...now it’s going up again. OilPrice.com:

Less than a month ago, analysts were warning of a looming glut of crude oil as tanker traffic via the Strait of Hormuz began to recover amid a U.S.-Iran ceasefire. Within days of these warnings, the ceasefire was a painful memory, missiles were flying again, and now Yemen’s Houthis are striking tankers in the Red Sea, which makes two blocked oil chokepoints and a very real danger of a global recession.

No, wait. It’s going back down. Reuters:

Oil prices tumbled more than 5% on Monday after the U.S. and Iran paused strikes over the weekend following two weeks of attacks, raising hopes of a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait of Hormuz.

We don’t need any more evidence. The facts are in. The jury has its verdict:

“Nobody knows anything.”

We write in humble praise of ignorance. What we think we can know is unbounded. What we actually know is very limited.

And stocks? What do we know? Investors must judge US stocks as beyond the reach of war...or bankruptcy. The Dow, for example, is still near an all-time high.

Wars are not necessarily good or bad for stocks. It depends on the situation. At the outbreak of WWI, US stocks lost about a third of their value. But in the two days following the outbreak of WWII, they were only down 7%. And after 9/11 they were down only about 11%.

Industries adjust to a wartime economy. They take orders for new materiel, the factories belch smoke, profits increase, and prices go up. Wars are fundamentally inflationary; you don’t worry about the long-term damage done by money printing, not when you’re in a shooting war. You can’t even stop to wonder why you’re shooting at all, not when your blood is up. War takes on a tit-for-tat life of its own.

‘What...a US soldier was killed? We’re gonna bomb those bastards back to the stone age!’

And then, inflation, at least at first, boosts sales and earnings...and stock prices.

Even losing a war can be good for an economy. France didn’t know its limitations in the run-up to the Franco-Prussian war. It invaded Germany on July 16, 1870. Two months later, the French suffered a military disaster. Emperor, Napoleon III, was captured and his whole army ‘hors du combat.’ France surrendered and was condemned to paying five billion gold-backed francs in reparations. To make the payments, it issued treasury bonds with a 6% yield.

This huge burden — equal to about a quarter of French GDP — was intended to cripple the French economy for decades. But once again, nobody knew anything. Bond sales were over-subscribed and the reparations payments were made ahead of schedule.

Then, something even more unexpected. Money went across the Rhine to Germany...where the un-earned increases to its money supply caused consumer price inflation. And then, Germans used their new money to buy French-made goods. France wasn’t crippled at all; her economy boomed.

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The Belle Epoche, 1880-1914, was France’s Golden Age. Haussman rebuilt Paris. Industrial technology increased output. Wages rose. Luxury goods were most widely shared. The French had never had it so good. It was a time of abundance, growth, and prosperity.

And just when everyone came to believe that it was permanent, along came Gavrilo Princip with a pistol in his hand.

Each war comes with its own jackassery. WWI was a disaster for all the major combatants, save...maybe, the US. But in the economic turmoil following the war’s end, investment money poured into Wall Street and prices rose...to what the leading economist of the day, Irving Fisher, called a “permanent high plateau.” Once again, the genius didn’t know half of what he thought he knew. The plateau cratered in 1929 and the US entered the Great Depression.

The US has been involved in a number of wars since the end of WWII. In none of them did it misjudge its limitations so greatly as it did in its attack on Iran. In bombing the Persians, it chose an enemy that controls a vital oil shipping lane. And as the conflict widened, the Houthis threatened to block another vital oil shipping corridor. FDD’s Long War Journal:

The Houthis announced a complete maritime blockade of Saudi Arabia on July 20. In response, a growing number of vessels are rerouting to avoid the Bab al-Mandeb Strait, the southern Red Sea chokepoint near Houthi-controlled territory, demonstrating that the shipping industry is taking the threat seriously. However, the Houthis have not yet targeted vessels or port infrastructure to enforce their blockade.

If the two passageways were blocked...or even partially blocked...the effect on the world economy could be devastating. So far, the Iranian blockade has had little impact, largely because there were sufficient stocks of oil waiting beyond the Strait of Hormuz. Emergency reservoirs were tapped and there has been some slack in demand as a result of higher prices. Still, WTI crude traded at more than $110 a barrel in April. Now, it’s down to $82 this morning. Does this mean the threat has passed?

‘Nobody knows anything,’ sayeth the sage.

But some things are more likely than others. When you go to war you open up the gates of Hell. Who knows what monsters will come out?

And when you spend more than you earn, year after year, the financial hellcats will soon be clawing at your back.

Stay tuned.

Regards,

Bill Bonner

Bill Bonner, from Poitou, France

“Just stop talking about it.”

—Morgan Freeman, on how to get rid of racism

In Anne Arundel county, Maryland, 1960, children slouched back to school in September as they always did. It was hot. And, as usual, the farm boys got an extra two weeks’ grace, to help bring the tobacco into the barn, before bending to readin’ and writin’ in the classroom.

But this time it was different. There were three little black faces — girls — walking down a hallway that had never seen anything but white faces. We were there, just entering the 7th grade.

The Black girls were brave. And grim. They didn’t walk; they marched, shoulder to shoulder, as if braced for an attack.

No attack came. Instead, some of the White children plastered themselves against the walls as if the girls might give them cooties. Nothing was ever said.

And after two days, the excitement of integrating Southern Junior-Senior High was over. The girls became schoolmates...and friends. And over the next few years, the school became completely integrated.

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But today, we follow up from last week, looking at how ‘isms’ are used to bulk up political power.

We’ve seen that people always like some people more than others. We’ve seen too that they will act upon their preferences — such as not going into a ‘bad neighborhood’ at night.

Racism? In Baltimore, on Martin Luther King boulevard people frequently roll up their windows and lock their doors. Is that racism?

Then, along come leaders who start ‘talking about it.’ And they do so for a reason. They cry ‘racism’ or ‘antisemitism.’ Or ‘fascism.’ Or many other ‘isms.’ These are used to mold the mob’s opinions and pry open the Treasury door.

For many years, America’s leaders maintained that the African race could be held in chains simply because they were African. They were not considered fully human. The powers-that-were promoted the idea of chattel slavery because, presumably, it was beneficial to some of them. They were racists...and proud of it.

Later, slavery was abolished and political leaders found another way to leverage the ‘racist’ allegation. They turned African Americans into a special class, entitled to special benefits and privileges. Oppose the preferential treatment and you were labelled a ‘racist.’ Prior to the Emancipation, African immigrants could be worked on plantations without wages.

Then, beginning in the 1960s, they could be given wages without setting foot in the cotton fields — not just with a few token seats at universities, but also as clients of a vast bureaucracy, including DEI ‘consultants’ and War on Poverty foot-soldiers. Whether it did Black Americans any good is a matter of debate, but it provided plenty of juicy jobs for White — and Black — employees.

No one would say so out loud, but undergirding the whole operation was the lingering ‘racist’ prejudice that African Americans couldn’t be left alone, like everyone else. They were a special group in need of either the whip of the slave driver...or the bounty of well-meaning bureaucrats.

As Dan wrote last week.

Through a steady flow of government cash to NGOs, institutes, and thinly disguised government entities, children are indoctrinated early...and slowly rise to levels of prominence (via promotion from those already in place) to fundamentally change the purpose of the institutions they now control (the media, the schools, the military, business, government, religion). Everything becomes a crusade to right historical wrongs, and to redistribute money and power from the oppressors to the oppressed.

But the oppressors and the oppressed mostly stay where they are. More than half a century of the War on Poverty, for example, has left us with about the same proportion of poor people as we started with.

The arresting thing from our point of view is that almost anything can be used to identify a special group, turn the public against it, and deprive its members of rights, liberties...and sometimes, their lives. It doesn’t have to be a matter of race. It could be religion. Or culture. Or political opinion.

George W. Bush led off the 21st century with his claim that there was a group of ‘terrorists’ who needed killing. The ‘terrorist’ label proved remarkably elastic; he found them even in Iraq, a country not known for sponsoring terror of any sort. But with this new ‘racist-like’ distinction, all you had to do was accuse someone of being a terrorist and suddenly they could have their bank account shut down, their passport revoked, and their wealth seized. Or, they could simply be murdered.

Joe Biden edged toward making MAGA supporters a proscribed group in his ‘blood red’ speech. Fascists were already beyond the pale. MAGA was ‘semi-fascist,’ said Biden.

Donald Trump added drug importers to the ‘terrorist’ list. Then, with no judicial review — no trial, no evidence, no rebuttal, no presumption of innocence, no jury — people were executed. They were not entitled to equal protection; they were subhuman.

And just last week we got a new category of villain. The White House:

Today, the Trump Administration convened senior officials from governments around the world to launch an unprecedented global offensive against the transnational threat of Radical Left terrorism.

Under the leadership of President Donald J. Trump, far-left extremism will be treated with the same seriousness and ferocity the world has long reserved for jihadist terrorism.

Oh boy...

An age-old pillar of the rule of law tells us that you are judged not on who you are, but what you do. But a racist hunter...an anti-semite vigilante...a terrorist fighter...a religious crusader, full of ersatz confidence and unquestioned conviction, doesn’t need to find crime. The crime is just being a member of the target class. Then, the whole group can be marked for extinction.

Stay tuned.

Regards,

Bill Bonner

Research Note, by Dan Denning

Poor old Google (parent company Alphabet). Last week the company ‘beat’ estimates on second quarter earnings. But the stock fell 7%. In the fine print, the company reported capex of $205 billion. For the first time since 2004 when it went public, the company reported negative free cash flow for the quarter ($5.9 billion).

Google is ‘all in’ on AI. And that costs real free cash flow (or, increasingly, borrowing from the bond market). You can dress up earnings. But revenue is harder to finesse. The market’s reaction to Google’s earnings ‘beat’ shows that some investors are thinking about how rich price-to-sales ratios are for the tech companies. They’re thinking more about whether that capex will generate higher earnings in the future.

That matters this week for the entire market and the biggest tech stocks. Microsoft [MSFT] and Meta [META] report on Wednesday. Then Apple [AAPL] and Amazon [AMZN] report on Thursday. In the midst of all that, the Federal Reserve’s Monetary Policy Committee meets in the middle of the week.

A hike? Or cut? Or neither. Stay tuned.

Sunday, July 26th, 2026

Laramie, Wyoming

By Dan Denning

You want to know something that didn’t make the news last week? The heads of Private Credit at BlackRock and Blackstone both resigned. For separate and personal reasons, of course. And it may not mean anything. But those are a couple of interesting ‘dots’ that may be connected. Why?

Cast your mind back to the to the long hot summer of 2007. The Bear Stearns High-Grade Structured Credit Strategies fund was in trouble. The fund was packed with mortgage backed securities and collateralized debt obligations—heaps and heaps of housing-based debt. Only problem? The fund, Bear Stearns said, had almost no remaining value left.

Then, a few weeks later, another Bear Stearns fund—the High-Grade Structured Credit Strategies Enhanced Leverage Fund also effectively went to zero. Two funds. Chock full of debt, one full of leverage. Early warning signs.

Twelve months later, the S&P 5000 was down 18.7% and the Dow Jones Industrial Index was down 18.1%. Twenty four months later, the S&P 500 was down 39.3% and the Dow 37.4%. The Big Loss had arrived.

This is not to say that Private Credit is the new subprime. But it was a little concerning last week when several investment banks floated the idea of ‘wrapping’ private credit on their books into securities that could be sold to investors as if they were investment-grade bonds. Because that worked so well for retail investors last time around.

For our paying subscribers, we’ve recently incorporated credit spreads as one of five Pre Crash Indicators to follow. These are market-based signals that may trigger a mean-reverting correction in stocks (all of the valuation metrics we follow are in the 97th percentile or greater based on historical data…meaning US stocks have never been so over-valued).

I ran the chart above this morning just for fun. It’s an exchanged traded fund with a twist. It tracks the Markitt iBoxx Liquid High Yield Index (basically high yield corporate bonds). But the ETF is 2x, meaning it aims to double the performance of the underlying index (in either direction). It does so using exotic financial instruments and derivatives.

It’s not a widely traded or terribly liquid ETF. But I wanted to go past the usual suspects (HYG, JNK) to see if there are any earlier outlier signs that also suggest all may not be well in the world of private credit and leverage. UJB has been bobbing along at the top of a channel and recently traded down to its 200-day moving average.

Geopolitical events get all the airtime. For example, the Strategic Petroleum Reserve (SPR) is down to around 311 million barrels. News reports this weekend are that Iran rejected several cease fire offers from the Trump administration. No deal.

The reports speculated that the Mullahs want to see what happens when the SPR hits or exceeds its ‘operational’ threshold of 300 million barrels (about two or three weeks of drawdowns, at this pace). The Mullahs think they’ll get a better deal if oil is at $120/barrel, the Strait of Hormuz is still closed, no traffic is moving through Bab al-Mandeb on the Red Sea, and the SPR is at its lowest level since 1983.

Bab al-Mandeb apparently means ‘Gate of Tears’ in Arabic. Like in the summer of 2007, we may have passed through that gate this week in the credit markets. And when the credit market weeps, the stock market follows. Does the Fed know all this?

We’ll find out later this week when it meets. In the meantime, enjoy all our best research published this week at BPR.

Until tomorrow,

Dan

P.S. ‘Real’ interest rates are barely positive, meaning monetary policy is not currently ‘hawkish’. You get the ‘real’ rate of inflation by substacting the year-over-year rate of change in CPI from the Fed Funds target rate.

As Investment Director Tom Dyson pointed out earlier in the week, war is inflationary. It’s hard to imagine that with oil at $90/barrel the Fed would raise interest rates this week, though. Why?

That would raise ‘real’ interest rates and put a shock through capital markets already twitchy about private credit and valuations. The Fed never makes mistakes, of course.

Friday, July 24th, 2026

Laramie, Wyoming

By Dan Denning

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Friday, July 24th, 2026

Bill Bonner, from Poitou, France

Here it comes — yes — the “r” word. That crackerjack, all-purpose, instant thought-terminator: Racist!

Our meditations on race have precious little to do with our meditations on interest rates or the fevers of the stock market. But they have been penned up in the barn so long, snorting and pawing, that we judged it safer to let them out before they kicked down the door.

And, like wokism and antisemitism, ‘racism’ plays an important role in dividing ‘The People,’ and uniting the central planners and busybodies against them.

Let the subject of immigration be raised, and the word “racist” comes trotting along at its heel, as faithful as a spaniel. Here is the freshest specimen, from CBS:

A disgruntled tenant executed three people over a Twin Cities parking dispute, the charges say. A 30-year-old St. Paul man stands accused of shooting three dead inside a leasing office over a quarrel about a parking garage.

And the man charged? One Tsegaab Binnesu. The name tips you off. But the press did not want to say. Nobody cares whether he chews meat or greens, whether his eyes are blue or brown, whether he kneels in a Protestant pew or a Catholic one. The pith of the story is that he is a thirty-year-old immigrant out of Egypt — and that, once more, a lawless newcomer has gunned down peaceable citizens.

Is it “racism” to say as much? The charge is hotly, indignantly denied. But it all hangs upon the definition of the word — and it is precisely there that we slip into a bottomless bog from which no man emerges with clean boots.

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The thought fell upon us Sunday, after an unlovely encounter of our own with immigrants. African, Middle Eastern, or some blend — they were the very folk of whom the English used to say that “the wogs begin at Calais,” a “wog” being any homo sapiens who does not ‘look like us.’ Menaced by them on the road, our first thought was the ancient, reflexive one: they have no business here.

And yet they have more business here than we do. We are a mere visitor, an American who has lived in France, off and on for many years. Our tormentors, by contrast, enjoy the blessing of some post-colonial treaty or family tie that grants them the right to live in France, to draw upon her housing and unemployment subsidies, to make use of her free universities and hospitals...and to cast ballots in her elections.

Still — some people “fit in” better than others, and our three antagonists plainly had no wish to fit in at all. They announced, rather, their intention to “terrorize the bourgeoisie,” into which tribe they had placed us.

Most of us are at ease among those whose attitudes and behaviors are familiar and predictable. White people gravitate to white neighborhoods. Jews to Jewish ones. Alcoholics feel at home in bars. The Chinese keep to Chinatown.

Are the whole lot of them racists?

But we all have our prejudices — pets and peeves, bugaboos and darlings. A fellow might announce, with perfect candor, “I don’t care for Koreans.” Or “I don’t like kinky hair.” Or “Give me a redhead.” Does that enroll him among the racists?

If so, then racists we all are, every mother’s son, for it is flatly impossible for a normal human animal to go through life without preferences. It is discrimination – choosing the restaurant with the best chef and the builder who does the job on time, for example – that is the piston power of progress. And the man who surveys the whole of humanity with one blank, undiscriminating stare — as though we were so many interchangeable peas — is no model citizen, but a curiosity fit for a jar.

Even upon bended knee, “I love you because your kisses are just as sweet as everyone else’s” is unlikely to carry the day as a proposal of marriage.

No — we are all different, and the man who denies it is either a professor or a fool. And even small differences can work large effects. Between the Mount Vernon Club in Baltimore and West Baltimore on the far side of Howard Street lies a distance of scarcely four blocks — but you would not care to cross it, and certainly not after dark.

If the mere noticing of such differences makes racists of us all, then we may as well pitch the word into the ash-can, for you cannot indict a man for being precisely what every man is.

But what if we do not merely notice — what if we act upon what we feel? What if we decline to cross Howard Street? What if we steer clear of places stocked with the “wrong” sort of people? And yet — who among us does not hunt for the neighborhood where he feels at home? And where is that? Why, among people like himself!

In our own long and undistinguished career, we labored beside teams from England, India, China, and points beyond. We bore none of them the least ill will. But with some we got along better than others. All spoke English…but it was often difficult to get a point across. Were we racists for preferring to work with those we best understood?

And recall “redlining.” The notion was that lenders drew rings round the districts they cared not to serve — because, presumably, the borrowers therein did not pay them back. Redlining acquired its evil odor when it came out that those districts were peopled largely by “minorities.” ‘Racism!’ shrieked the earnest press, sniffing out a sinister motive.

Yet it strains belief that a profit-hungry institution would turn away a sound customer for the color of his hide or the street of his residence. Redlining was, in all likelihood, nothing more than a crude device for trimming the ledger of bad mortgages not for keeping groups of people without a roof over their heads. But the “racist” charge stuck and red-lining was outlawed.

But if neither noticing differences…nor acting on them…suffice to make a man a racist — what does? Have we been flogged so hard as “racist” that the calumny has lost its sting?

On Monday we will take a look at real racism. Not redlining. Not the harmless preferences of ordinary people. But something a good deal nastier.

Stay tuned.

Regards,

Bill Bonner

Bill Bonner, from Poitou, France

‘What they’re doing with immigration is a disaster.’

—Donald Trump on the Old World

What’s wrong with Europe?

The Conversation:

In recent local elections in the United Kingdom and Australia, right-wing populism has appeared to be on the march. The most successful transformation of far-right populism in a large European country has been Giorgia Meloni’s Brothers of Italy. It won the most votes in the 2022 election and leads a right-wing coalition government.

The success of the ‘right wing’ can be largely attributed to the failure of the ‘left wing.’ In preview, we believe both wings flap in dreadful harmony...both headed for the same municipal dump.

People look to government to give them something they couldn’t get on their own. The feds can enforce reasonable rules at home and provide a reasonable level of protection from foreigners. But despite claims to the contrary, they can’t make people wealthier. That was where the Europeans seem to have gone wrong. Military protection seemed unnecessary. It was either provided by the US...or not worth having. That left European politicians managing what was, in effect, a vast, compulsory insurance pool. People pay into the system. The government takes a cut and then returns the rest, according to its view of who should get what. Public housing, medical care, college educations — all are given, ‘free,’ to the people who pay for them.

One way to deliver what appears to be a good return to voters is to borrow it from them. Investors regard government bonds as assets, not liabilities. And taxpayers do not see government borrowing as what it really is – a delayed form of taxation. Thus can the feds afford to offer ‘benefits’ beyond what taxpayers believe they pay for.

That is why, led by the US, they switched to a fake money system in 1971; it permits them to borrow and ‘print’ more money. When the European Union was set up, member states agreed to a limit on deficits — a maximum of 3% of GDP. But the Euro area has exceeded the limit for many years. And the US too. America’s deficit is approaching 6% of GDP.

As long as GDP, productivity, debt and populations were growing, the program seemed to work tolerably well. People paid in one dollar, drew out two, and voted for more.

But now, growth has slowed...cradles are empty...and the cost of accumulated debt has gone up. Younger generations, late to the Ponzi party, miss dessert; they only get to wash the dishes. Their tax payments must cover current expenses...pensions and medical care for their elders...and interest on debt used to give those same geezers more ‘benefits’ than they deserved.

It is a swindle, pretending to be social contract. People don’t necessarily understand what is going on, but they feel it. And they don’t like it...so they look for alternatives, and for someone to blame. The ‘hard right’ and the ‘looney left’ both offer targets.

The two choices are similar, in the US as in Europe. Neither are honest. Neither are effective. Both transfer more and more power and money to the political authorities. Voters choose their poison. It’s Mamdani or Trump. Welfare or war. Or, both!

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One of the most combustible elements of this ‘conversation’ is immigration. It condenses the fumes of material failure into a heady brew of distilled resentment. The ‘left,’ generally, wants more newcomers. They believe the new arrivals will vote for their giveaways and help keep their Ponzi health and pension programs in business. The ‘right’ wants to get rid of immigrants, believing that they steal our jobs, drain our tax revenues, and degrade our quality of life.

We thought the ‘right’ may be onto something on Sunday when three ‘immigrants’ approached as we made our way through Evreux. One folded his hand into a pistol and pretended to shoot us. It was not a serious threat, but it was unsettling. ‘Who are these people,’ we wondered; ‘What are they doing here?’

Pete Hegseth spoke to the questions when he attended this year’s 82nd anniversary of D-Day in Normandy.

The iPINIONS:

On Saturday, at the ceremony marking the 82nd anniversary of D-Day, Hegseth warned that European beaches are being “stormed by different dangerous ideologies.” He conjured images of men arriving by boat on the shores of Spain, Italy, Greece, and Bulgaria, then challenged Europeans to do something about that “invasion.”

Recent events have too – where immigrants have committed crimes, often on video – have gotten native mobs, in Belfast and Dublin, riled up to the point of attacking anyone who looked like he didn’t belong there. And many people think there is something at stake that goes far beyond crime or money. They believe their culture...or ‘western civilization’ itself...teeters on the edge.

This is, of course, familiar ground to US audiences. Team Trump referred to immigrants as ‘rapists and murderers.’ Politicians and influencers paint an ancient, but still lurid, picture...the dark beast, blood dripping from his teeth, the poor white maiden swooning in his arms as he intends to ravish her.

They are the ‘worst of the worst,’ says Trump.

Statistically, there is little proof of it. But statistics don’t stop a mob when its blood is up.

More to come...including, yes, the ‘r’ word. Stay tuned.

Regards,

Bill Bonner

Wednesday, July 22nd, 2026

By Tom Dyson, Investment Director

Read more

Wednesday, July 22nd, 2026

Bill Bonner, from Poitou, France

It looked like a scene from Hell. Charred skeletons of trees. Blackened grass. Burnt-out fields. And thick smoke.

On the left were the gendarmes blocking a turn. Straight ahead was heavy smoke. Daily Times:

Nearly 40,000 hectares of forests and vegetation have burned across France since the start of 2026, Interior Minister Laurent Nunez said. The damage has already exceeded last year’s total…Nunez said the burned area has also surpassed the level recorded by this stage in 2022. He described 2022 as an exceptional wildfire season. Hundreds of firefighters remain deployed to contain active blazes.

We’ve been in these parts for three decades. We’ve never seen anything like it. But stuff happens, doesn’t it? Isn’t that as good an analysis as we are likely to get?

We were on our way back from a wedding in Normandy. The two principal actors – bride and groom – pledged not to disappoint each other. That pledge, too, sometimes proves hollow. But we count on each other to do the right thing…and hope for the best.

Just as we got close to home, a huge pillar of smoke rose up. It might have been TV coverage of the latest bombing of Iran. But it was our own farm. And it appeared to be on fire.

“Everything is super dry,” our handyman later explained. “All it takes is a spark and you’ll have a major fire on your hands. So, you’re not allowed to do anything that might set one off. No backyard barbecues. No fires in the fireplace. You can’t even mow the lawn.”

Everything was so parched, it didn’t look like mowing would be necessary for a long time. But…

“Why can’t we mow,” we asked.

“Because the blade might strike a stone, give off a spark, and cause a fire.”

It seemed unlikely, but Damien insisted that even unlikely things happen from time to time. And one of them was happening right now.

“No, it’s not on our property yet,” Damien clarified. “The wind shifted. The fire goes across the dry grass and then gets into the woods. But about ten of the local farmers came out on their big tractors. They plowed a firebreak that should stop it from getting to us.”

A minute later, the ten tractors thundered by the house…unpaid, unthanked…on their way to the next emergency.

Two water bombers flew over the fire and dropped their loads. Smoke continued to billow up…but then, a few minutes later, it grew less threatening. By evening, only a wisp was seen, curling up to the heavens as if from a supernaturally big cigarette.

“The fire’s been burning for a few days,” Damien reported. “But I think it is now under control. It’s still burning, but under surveillance.”

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Stuff happens. We move on to other stuff. Most of the headlines focus on the war. Fox:

Trump weighs full-scale return to war after Iran launches new missile attacks

Chief foreign correspondent Trey Yingst reports on new Iranian missile attacks across Bahrain and drone launches over Jordan following a tenth night of U.S. strikes. Former National Security Council Director Rich Goldberg analyzes operations in the Strait of Hormuz after Central Command escorted 900 commercial vessels carrying 450 million barrels of crude oil.

We count on our president to do the right thing. But has the spark already been struck? Will the war be out of control…how much will it destroy before the tractors arrive?

The price of oil – to the moon? Lines at gas stations a la 1973? Nothing at all? Hard to know, but probably not good.

And how about the stock market? Stuff could happen there too. Our grandfather used to tell us a story that passed around Baltimore during the Crash of ‘29. A desperate man jumped out of a 10th story window. (You could still open windows back then.) As he was falling past the 3rd floor he was heard to say: ‘Well, I’m alright so far.’ That sweet lullaby came to a sudden end two floors down.

By almost any metric you use, stocks are near the highest levels ever – once again on the 10th floor or higher. They could go up, of course. And maybe AI could power a whole new economic boom.

But another fory years of rising stock prices? Much more likely, but by no means guaranteed, is a sell-off. Back in the 1870s railroads were the AI of the day. They were expected to make investors richer than ever. But in the Panic of 1873, railroads failed, banks failed, lumber companies failed…all the components of the boom hit the sidewalk. And the resulting depression lasted for the next six years.

And then, twenty years later, another railroad bubble burst. Railroads were considered such good investments that the public poured money — usually by buying bonds — into new railroad construction. Track mileage, the rough equivalent of AI data centers today, doubled in the 1880s. Actual freight traffic, and revenues, could not keep up. The bungee-like tether – connecting investors’ fantasies to real world output -- stretched.

What could the railroads do?

They didn’t have enough income to pay past debts. So, they began that immortal ‘dance of the doomed.’ They issued new debt to pay the old debt. It wasn’t long before investors refused to lend more money and the whole bubble went flat. Five hundred banks went broke. Unemployment in Michigan reached 43% and 15,000 businesses failed, including the Union Pacific, Northern Pacific and Santa Fe railroads. The resulting depression lingered until 1897.

Stuff happens.

Regards,

Bill Bonner

Research Note, by Dan Denning

Everyone knew about the $1.35 trillion in ‘hyperscaler’ debt. That’s free cash flow the big tech companies have been pouring into servers and GPUs in order not to fall behind in the AI race (this transfer of free cash flow has driven up the chip stocks in the Philadelphia Semiconductor Index 73% year-to-date and 117% in the last twelve months).

But the $1.65 trillion in hidden debt was ‘known unknown.’ Now that it’s known, what difference will it make? A quick review of the last capex/debt booms might help quantify the risk to investors.

In the last boom/bust in tech and American housing, off-balance sheet debt was ‘hidden’ in SPVs, special purpose vehicles or layered together in complex debt securities that traded like bonds and were rated highly by the ratings agencies. This gave them appearance of safety, while disguising the risk in the underlying assets/collateral.

The whole process understated how much risk individual companies (like Enron) were actually taking…and how much debt and leverage were actually in the financial system which other parties were exposed to but unaware of. When the market found out, the resulting loss of confidence triggered a massive correction.

Is it different this time?

Well, the ‘hyperscalers’ have the cash. And the assets are real (GPUs and servers). But will the investment in AI capex pay off? At some point, the ‘hidden’ debt will have to come back on the balance sheet (where it will begin depreciating and taking a bite out of free cash flows).

But more to the point, the investment will have to pay off. AI will have to ‘be a thing’ and find a ‘use case’ to justify the trillions spent on the infrastructure . And that is the real question: Have the ‘hyperscalers’ over-invested in capacity today the same way the railroads overinvested in the 19th century (and the same way all investment manias over-invest in the tech of the day)?

If they have, is there the same level of ‘systemic risk’ today? Nvidia (the big recipient of all those free cash flows and capex) trades at 19 times sales. Google: 9.99, MSFT 9.53, and Amazon at 3.59. If the debt doesn’t pay off these widely owned and market-leading stocks will be further re-rated…to reflect lower cash flows and ROIs in the decade ahead. As the chart below shows, the S&P 500 itself trades at a record relative to sales.

Tuesday, July 21st, 2026

Bill Bonner, from Normandy, France

If you think you understand what is going on, you don’t know what’s going on.

—Quantum theory

We arrived in France on Thursday evening. And we have much to report. A marvelous wedding...a wildfire headed for our farm...small towns where you won’t feel welcome...

But first, an update.

We’re still waiting...for clarification. Is gold ready to bounce back...or in a serious, long-term decline? Is the stock market going to correct, or not? Are interest rates and inflation really going up? And where is POTUS going...with more bombs abroad...and more doubts about free and fair elections at home?

These questions float like dark clouds on a hot, Texas afternoon. A bolt of lightning, a downpour, or even a twister could come from any of them, any time.

Until we find out differently, we’ll stay in the shelter of our Maximum Safety Mode. And we’ll presume that the Primary Trend remains the same — lower real (in gold) stock prices. Higher yields and lower bond prices. Stubborn and rising inflation.

We’ll also assume that the Macro Hypothesis...that the US empire is overstretched and in decline...is correct, until we find out otherwise. But we’re not really foolish enough to think we know what is going on. We make our guesses. We take our chances. History tells her story when and how she pleases.

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The ferry from Dublin to Cherbourg was smooth and pleasant. Unlike the rough winter crossings, there were almost no waves. No swells. No roll. No pitch. No nausea.

In the summertime, though, there is plenty of commotion. When we took the ferry in February we were almost alone. Over the hum of the big diesel engines the only sound we heard was the soft tinkling of tableware as the truckers ate their solitary dinners.

But on a Friday in summer, there were shrieks of joy from stem to stern. Down on the car decks, the vehicles told the story. There were few tractor trailers. But practically every auto had a bicycle rack or a roof locker. There were also many vacation trailers and (smallish, by US standards) motor homes. Irish families were headed to the continent for their summer holidays.

In Ireland itself, temperatures have still not gone much above 75 degrees. But France, Italy and Spain have already suffered three heat waves — and it still is not even the end of July. The Irish must be looking forward to warmer temperatures and sunny beaches.

We went to a marvelous wedding on Saturday. About 300 guests turned out, all of them spiffed up with suits and ties for the men, elegant dresses — and some remarkable hats — for the ladies.

The ceremony took place in one of Normandy’s great churches, the Collegiale of Ecoui. Built in the reign of Philip the Fair in the 14th century, the building is austere and dreary on the outside. But the inside was elegant and well fitted out with all the usual medieval religious décor.

Norman towns are not very attractive. They were built in the 1800s and early 1900s with hard, dark bricks. They often look like abandoned insane asylums, the kind that provide motivation for murders committed many years later.

But out in the countryside, the houses are more likely built with stone, which ages better, giving them a golden glow in the evening light.

Most interesting at the wedding, however, were the people. They were good-looking, accomplished, Catholic and conservative. It is an important subculture in France -- smart, wealthy, traditional parents with large families. One couple we met had nine children. Others had five or six.

Doctors, military officers, bureaucrats, and business people -- they typically live in the 16th arrondissement of Paris with their summer houses on the coast of Normandy. They are the ‘bourgeois’ who are ridiculed by French comedians and attacked by France’s leftist politicians. On the defensive for decades, they may now be gaining ground.

Normandy was relatively rich in the Middle Ages. It adorned its cities with such grand cathedrals that even today they would be hard to reproduce. The cathedrals at Rouen, Evreux, Bayeux — all are worth a visit. On Sunday, we drove to the grand cathedral of Evreux. The cathedral there was begun in the 12th century...destroyed several times, and rebuilt each time. Now it sits in the center of town, largely neglected...with tufts of grass growing up around the foundation and a wire barrier set up to prevent visitors from getting hit by a falling gargoyle.

Downtown on Sunday, Evreux seems mostly empty. The few people you see on the streets look like recent immigrants from Africa or the Middle East.

Driving slowly down the street, a group of three of these young men gestured towards us. One used his hand to form a pistol and pretended to shoot us as we drove by.

‘Yeah,’ he yelled, amid riotous laughter, ‘we’re going to terrorize these bourgeois.’

The bourgeoisie may have already abandoned downtown Evreux.

More to come...

Regards,

Bill Bonner

Bill Bonner, writing from Normandy, France

On Thursday of last week, POTUS had an important message for us. He rambled even more than usual, but suggested that the election process could be compromised. NPR:

In a 25-minute primetime address from the White House’s East Room that included many baseless claims, Trump said he was declassifying Intelligence documents that he said reveal “shocking vulnerabilities in our election infrastructure.” Those include allegations of Chinese efforts to influence American elections, concerns over voting machine security, and that noncitizens are found on certain states’ voter rolls.

Those who studied the documents say they do not support the president’s arguments. But the real purpose of the address was probably just to see how people would react. What would they do if he really did use ‘emergency measures’ to protect the integrity of US elections...and/or to get the results he wants?

Here’s the situation. POTUS seems to be losing popular support. CNN:

While the latest Quinnipiac University poll showed 27% strongly approved of Trump (in that case, of registered voters), other polls have pegged that number significantly lower. In those other polls, it’s been at 21% (NPR-PBS-Marist), 20% (Fox News), 19% (AP-NORC), 16% (Marquette Law School), 15% (Post-Ipsos) and 14% (Reuters-Ipsos).

In most of the recent high-quality polls, the percentage of Americans who strongly approve of Trump is between 1 in 7 and 1 in 5.

Very few Americans see what Trump is doing and strongly support it.

Is he losing his grip...on his party...or his own frayed rigging? Is it permanent? Or temporary? A real peace with Iran might turn things around. So might a gush of easy money.

The gist of today’s message: Trump may or may not tamper with election outcomes. He will have less reluctance to meddle with the economy. Meddling with the votes is regarded as treachery. Meddling with the money brings applause.

While Donald Trump is still front page, headline news, the markets have their own ancient journals. They have their highs and lows...their bubble peaks and dark bottoms.

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As we mentioned last week, trying for a base hit...a nickel here, a dime there...will probably not make an investor rich. He’ll strike out from time to time too. What he needs is a home run, something he can get into fairly early, nod off, and wake up years later much wealthier. He needs a Primary Trend.

That is what he got from the flower of American industrial capitalism — from the moment Paul Volcker put inflation to flight in 1980...to the moment yields finally found their bottom in July 2020. That trend would have multiplied your wealth — either in stocks or bonds — for four decades. All you had to do was to sit tight.

What are the odds of a repeat performance?

They are probably very low. It is mathematically and physically impossible for asset values to become too far removed from the underlying economy for too long. Instead, they cycle up and down, anchored to the real economy by a long, bungee-like cord. So, if you’re aiming for a long cycle of rising prices, your best bet is to grab ahold of the cord when it is stretched about as far as it can go to the downside, after a long cycle of falling prices.

The Dow was under 1,000 in 1980. But today, it’s over 50,000...higher than ever before. The most likely thing — though hardly guaranteed — is that stock prices will snap back down from here, in real terms, if not in nominal ones...and for a very long time.

Our favorite measuring stick is the Dow/Gold ratio. It measures the Dow stocks in terms of gold. We expect Dow highs worth over 15 ounces of gold...and lows below 5. Now around 13...and still holding gold...we look for more stretch to the downside before we close our eyes and make the big trade — out of gold and into stocks. That could happen either by gold going to $10,000...or the Dow stocks falling below 25,000. Most likely, they’ll shake hands somewhere in the middle.

Just where they meet, though, depends to some extent on POTUS and the Fed. Trying to overthrow the election results might outrage the vox populi. But while most people might disapprove of efforts to manage or deny election results, they would cheer to the rafters any temporary measures that offered them lower mortgage payments.

Most people, endowed by Nature with the earnest faith of a friendly dog, believe an economy is adjustable...manageable...and improvable by Ph.D.-bearing technicians in expensive suits. That touching naïveté is what dug our present hole. Few protested in 1971 when Richard Nixon declared a series of new measures — including wage price controls and taking the US off the gold standard. They thought the economic bigheads knew what they were doing. And the New York Times — then as now, cheerleader for the feds — said the moves would only be necessary “until exchange rates realign.”

They’ve been realigning ever since — almost all countries have raced to devalue their currencies to keep up with the US. If a nation allowed its currency to go up against the dollar, it would make its own goods and services more expensive to foreign buyers and find its high-priced goods shunned on the shelves.

But inflation (the loss of purchasing power) encouraged bad habits — spending money we didn’t have. It was also the real cause of the huge bull markets in stocks, bonds, and gold — 1980-2020. And now the bottom of the yield cycle has been passed and interest rates are going up. And debt has reached such levels — over $300 trillion worldwide — that even a modest twist on the interest rate screw sends the public howling for relief.

The authorities are cornered. Either they throttle back their spending. Or they ‘print’ faster and let the whole system go up in a blaze of glorious inflation later on.

It is either ‘inflate...or die.’ Either allow more credit at lower rates to help cover the interest bill...or the bubble economy shrivels.

Most likely, as bubble death draws near, the feds will inflate...and inflate some more. And they will be heroes...for a while.

Regards,

Bill Bonner

Laramie, Wyoming

By Dan Denning

What’s going to be exhausted first: the barrels, the ballistic missiles, or the bombs?

In our regular communications with paying subscribers, we’ve noted some artificial and some physical deadlines that might determine how long this military operation in Iran may last.

The artificial deadlines are easy to skip. The War Powers Act authorizes the President to initiate military action and pursue it for 60 days without Congressional approval. He can then extend the operation for another 30 days before having to ask permission from lawmakers to continue.

All of that already happened once. The President notified Congress of operations against Iran on March 2nd. Then in late April/early May he said the ‘ceasefire’ effectively terminated hostilities. That appears to be a loophole that resets the statutory clock.

Accordingly, when the bombs began to fall again last week, it was not a continuation of the old war…but the beginning of a new one! The President has 60 days to conduct affairs, then another 30 to extend them, before Congress is required to approve the war that is not a war.

Or we could have another ‘ceasefire.’

Wash. Rinse. Repeat. Forever war. The real physical limit may have a lot to do with the chart below.

The Strategic Petroleum Reserve (SPR) is about three weeks away from reaching its ‘operational limit’ for further drawdowns. The Trump Administration has been pumping out nearly 5.5 million barrels of oil from the SPR per week since the war began. It was a bit less last week, at 2.99 million barrels.

Under 300 million barrels—a level that would be reached in about three weeks at the average rate—there’s no telling how well the structure of the salt caverns in Louisiana that store the oil would hold up. By law, the statutory minimum for the SPR is 252 million barrels. Yet the Department of Energy says that in practice, the reserve could be drawn down to just 70 million barrels if necessary.

The clock is ticking on regular SPR releases. There are also the ‘known unknowns.’ How many ballistic missiles or ballistic missile launchers does Iran still have? How many smart bombs and bunker busters does the US have? Will either of them run out soon?

We’ll find out more this week. In the meantime, please enjoy the summary below of all the research we published last week at BPR.

Until tomorrow,

Dan

Friday, July 17th, 2026

Laramie, Wyoming

By Dan Denning

Prediction: Now that Christopher Nolan’s cinematic version of Homer’s Odyssey is in theaters, the ‘tomato meter’ on Rotten Tomatoes will plummet–below 75% by Monday and on its way to 50% by the end of the month. All the initial ratings, which drove the score up to 98% at one point, were critics who’d seen a screening before the public. Critics are generally elitist line-toers. The Crowd will now vote. And it will be merciless.

The good news is we can now look forward to the final installment of the Dune series as re-imagined by Denis Villeneuve. Aside from some odd casting choices here and there (nothing as unabashedly ‘woke’ as the choices made by Nolan), the first two Dune movies have pretty much stuck to the book: a coming of age story in which a charismatic son avenges a murdered father and unleashes a galaxy-wide jihad on the decrepit, corrupt, and elite ruling order with an army of fanatical jihadist warriors who believe their leader fulfills a religious prophecy about the coming Paradise.

Pretty standard stuff. If you’ve read Frank Herbert’s Dune books, you’ll know that Paul Atreides isn’t the hero. He’s the villain. And even though he thinks he can find ‘a golden path’ to restore justice and peace and order in the universe, he’s wrong. History marches to its own rhythm and appoints each man his role. Paul drenches the world in blood.

The books are a warning. It’s not that power tends to corrupt, or that absolute power corrupts absolutely (as Lord Acton famously said). It’s that power is magnetic to the corruptible. Herbert wrote, ‘Power attracts pathological personalities…Such people have a tendency to become drunk on violence, a condition to which they are quickly addicted.’

We’ll see how the story ends when Dune, Part Three comes out December 18th, 2026. Until then, let us resume with our story about American power, drunk on debt. We’ll set aside liquidity and valuations this week and look at two other variables that affect our investment returns for the next ten years, policy and strategy.

To the extent that the Trump Administration has an actual strategic policy goal, we learned in 2024 that it might look like Stephen Miran’s new global currency re-set, dubbed the Mar-a-Lago Accord. The argument was simple: the use of the US dollar as a global reserve currency made it over-valued. This chronic/structural over valuation resulted in the US running large trade and government (fiscal) deficits.

From an economic point of view, the large trade deficits helped American consumers in the form of low import prices and massive choice in consumer goods, textiles, and food. But it did not benefit American manufacturing nor the inflation-adjusted hourly wages of American workers. Trump promised to get a new deal. A better one.

Miran’s paper said the US also deserved more equitable ‘burden sharing’ for the cost it has paid to protect the global order with massive military spending. American taxpayers pay for this ‘security umbrella’ (mostly by large annual deficits). It benefits Americans in the sense that the world’s goods continue to flow into the US (or did) at bargain basement prices. But Trump wanted a new deal there, too.

Miran’s solution came in three parts. First, punitive tariffs to force bi-lateral trade deals more favorable to American industry and labor. Second, make US defense and security spending conditional on better currency/trade deals. Third, impose fees on the interest payments due to foreign holders of US government debt if trade and currency deals aren’t re-arranged.

Lots of stick. A tiny bit of carrot. And to thoroughly mix the metaphor, no dice. The chart above from the Congressional Budget Office shows the US government collected $195 billion in tariff revenues in 2025. But when the Supreme Court ruled them broadly illegal earlier this year, the government began issuing rebates (it’s not clear to whom, but it’s definitely not consumers).

The Administration does have other statutory authority it can use to impose tariffs and has already done so. But the stick is limp. Tariffs are not going to generate enough revenue to eliminate the income tax (as was very briefly discussed before being discarded). Nor are they going to lead to a broad de-valuation of the dollar like the 1985 Plaza Accord devalued the Japanese yet. Speaking of the dollar.

Here it is. Remember that this time last year, the US dollar was coming off its worst first-half performance in 50 years. Not since the collapse of the Bretton Woods system in 1973 had the greenback fallen by 10% in six months against its international peers.

Of course that was all part of the Miran plan. Weaken the dollar without damaging foreign demand for US government bonds. But the chart above shows that the Dollar Index [DXY] is almost exactly where it was ten years ago. Not stronger. And certainly not weak to the point where US exports would suddenly surge according to the plan.

The available evidence shows there has been no restructuring of the global trade system by fiddling with the dollar’s financial plumbing. Money moves where it wants and where it’s treated best. In the meantime, DOGE didn’t cut $2 trillion in wasteful spending (although it probably found at least that much…and Congress didn’t seem to cut any of the waste DOGE DID find). And with the war in Iran (which Congress has still not declared) military spending will go up 44% to $1.5 trillion if the President has his way.

This is the New Boss behaving a lot like the Old Bosses. No new deal for American workers. No New Dollar. No year in the sun for Main Street. Just more debt for future Americans to pay off and higher financial asset prices for Wall Street now.

The trade deficit has not gotten smaller either. You can see it absolutely blew out in early 2025 with importers trying to front-run the tariffs and build up inventories. Since then it’s been more of the same. Month after month, America importing more than it exports.

It’s been that way for a long time. But the real decline began with Bill Clinton and a Republican Congress passing the North American Free Trade Act (NAFTA) in 1995. US political leaders from both parties made a conscious decision to favor Wall Street and the dollar (the capital account) over Main Street, manufacturing, and trade (the current account).

Deep in the details, the result is creation of one of the largest debtor nations the world has ever seen. The Net International Investment Position (NIIP) of a country tells you whether it’s a creditor or a debtor. It’s the difference between what we own versus what we owe. We owe.

The most recent numbers show the NIIP at a negative $21.2 trillion (liabilties of $66.64 trillion versus assets of $43.37 trillion). And if you can believe it, that was a $600 billion improvement over the net debtor position at the end of 2025. But that improvement came entirely from the increase in the value of foreign assets owned by Americans and not a smaller trade deficit.

A net creditor (like Japan) can afford to run a debt-to-GDP ratio over 200%. It can finance its deficits out of available domestic savings (it saves). The ONLY way a net debtor like the United States can afford to do the same—without seeing a huge spike in interest/rates and borrowing costs–is if investors see the global system as safe, basically fair, and stable.

Yet the whole intellectual basis of the Trump Trade Stategy was to make that order LESS stable….It’s a bold strategy, Cotton. Let’s see if it pays off for them.

So far, it hasn’t. And you could argue that it is un-like Trump to have a complex mechanical plan for restructuring the entire global trading system. He’s a self-styled deal-maker. And he probably thought he could get a better deal using the usual tactics he’s employed over the years—move fast, be chaotic, set unrealistic expecatations, make bombastic announcements, settle for something. Rinse. Wash. Repeat.

Only it hasn’t worked. And that begs the question, IS there a strategy?

Well on that question, the answer is probably ‘yes.’ The idea that tariffs and manufacturing are the source of a nation’s wealth, strength, and security go back all the way to Alexander Hamilton. Writing soon after the Revolution, Hamilton was worried that a nation of farmers and commodity exporters would not be able to stand up to Great European Powers for long. In his report ‘On the Subject of Manufactures,’ published in 1791, he wrote:

Not only the wealth; but the independence and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of Subsistence habitation clothing and defence.

The Trump Administration, through the investment programs at the Departments of Energy, War, Commerce, and Interior, has made a conscious effort to re-shore manufacturing in the nuclear supply chain (mining, processing and refining, next gen reactors), rare earths, and critical minerals. We’ve covered some of those stories in these pages.

Whether it results in self-sufficiency and resiliency in industries deemed critical to national security, only time will tell. The soonest any of the investments might bear fruit, according to my research, is 2028. A lot can happen in the interim.

In the meantime, it’s clear that some people in the US government (and in the industries most likely to benefit from government investment) believe the country ought to have an industrial policy. That industrial policy ought to be linked to various trading strategies. And that done correctly, all that should result in more security, a better and more self-sufficient industrial base, and higher wages for the American worker.

Maybe. It’s an idea. And this is a departure from throwing hundreds of billions of dollars toward renewable energy and hoping for a mythical ‘Energy Transition.’ That resulted in wasted money and wasted time, or at the very least, the lining of a lot of pockets from those closest to the money in Washington.

It’s certainly not the free market as we know it, though, is it? The more important question is will investors and BPR readers benefit from the Trump national industrial strategy, such as it is, and for however long it lasts?

Energy Fuels Inc. [UUUU] is a company we wrote about in May of 2024 (Nero Would Weep). Its White Mesa Mill in Utah is/was the only operating uranium mill in the country. It has a licensed capacity of eight million pounds of uranium per year. It’s the leading US producer of U308, the concentrate you need to make fuel for nuclear power plants.

It is/was a uranium play. But it’s also a rare earth play. Processing uranium is toxic partly because the ore is radioactive. You have to make all sorts of provisions for the dust generated. And you have to be in a jurisdiction/geography friendly to such endeavors. Utah is such a place.

Last month, the Department of War signed a $720 condition loan with UUUU to process monzanite ore at the White Mesa Mill. This might make it (might) a successful domestic producer of rare earth elements. That would fit nicely with the ‘Mine-to-Magnet’ strategy the Administration is pursuing. We’ll see.

The stock chart shows the thrills and perils of piggy-backing on US industrial policy. Without a 50% trailing stop, you would have been knocked out of the position twice since May of 2024 before being in the money. Then you MIGHT have tripled your money. Or suffered some massive drawdowns. It would involve a lot of tactical trading, which is not our bag.

It’s all very exciting. But it’s also well beyond our Maximum Safety mandate. Tempting with play money. And worthy of continued study. But nothing to bet the farm (or the factory) on. Especially at these prices/valuations.

We’re making a few revisions to our dashboards to make them more visually appealing. Here’s an example above. It’s ‘the long view’ of the Buffett Indicator. Record times. Record risk. We’ll stay off stocks on the golden path for now.

Until next week,

Dan

PS We’re also looking at updating the look of the Official List. What do you think? These two images are based on Wednesday’s data (not updated for today’s close). Leave a comment below. We’ll publish the full dashboard, the BPR Reckoning Index, and the Doom Index in the upcoming August Monthly Strategy Report.

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Friday, July 17th, 2026

Bill Bonner, from the W.B.Yeats ferry to Cherbourg

Poor Donald Trump.

He hailed from Queens, not from Manhattan — separated by a few miles, the East River, and a whole cosmos of snobbery. The sophisticates, the intellectuals, the chic folk who had done their time at the Ivy League and paid their annual devotions at the Met, wrote him off as a low-bred clown.

But he showed them, by God.

His father was rich. And hard as a paving-stone. And young Donald learned early the peculiar art of getting on as the son of a rich, hard man: he resolved to be richer and harder still. To that end he engaged a lawyer — Roy Cohn, celebrated far and wide for his meanness and his venom — to tutor him.

“If someone hits you, you hit back 10 times as hard.” There was his code. His formula. His catechism.

The object was to win. By what means? Whatever it takes. By piling deal upon deal. By heaping up money. By slapping his name across the face of everything that would hold paint. And when some New York scribbler pricked him early in his career, Trump fired back the immortal riposte: “I get more pussy than you do.” A real gentleman, as always.

The formula produced, let us say, mixed dividends. The fresh enterprises had a tendency to go bust. The girlfriends arrived and departed like subway trains. And he passed a great deal of time with lawyers — some laboring to keep him out of trouble, the rest laboring, for a fee, to plunge him deeper into it. Honor and Shame Archive:

Donald J. Trump has built a career that is as legally entangled as it is high-profile. From lawsuits over failed casinos and construction contracts to criminal indictments concerning national security and election interference, Trump has been involved in over 4,000 lawsuits — a number unmatched by any other U.S. president in history.

But there was one arena in which the “hit back ten times as hard” gospel paid off handsomely, and that was politics. In business, cooperation pays; a man gives to get...he goes along to get along. But politics is a pure barroom brawl. Trump lost not an instant; he laid into his rivals — “little Marco,” “Pocahontas” Warren. Lindsey Graham he pronounced “one of the dumbest human beings I have ever met.”

It was refreshing. Liberating, even. Gone was the counterfeit respectability, the mincing and the bowing. No more Mr. Nice Guy. There was something strangely heart-warming in Mr. Trump at the zenith of his tawdry power — quick with the insult, sublimely confident, careening along as free and heedless as a runaway freight train down a mountain grade. We happily enjoyed the spectacle...and looked forward to its end.

The climax of the man’s existence very likely arrived in the moments after the election of 2024. For four long years Trump thundered that American elections were a swindle, a fraud, a rigged game. Yet, when the votes were tallied on the 6th of November, 2024, not one syllable of doubt escaped him. That election, mysteriously, had been won fair and square!

Mr. Trump had been given up for dead more than once in his long career. In the early ‘90s it looked a near-certainty that he would go broke. Money Digest:

Trump Shuttle airline to the casinos he opened in an attempt to capitalize on the legalization of gambling in Atlantic City. But by the early ‘90s, he was in dire straits. Trump Shuttle disappeared in 1992, and the early years of a recession sent his other businesses in a downward spiral that left him $3.4 billion in the red.

Trump’s empire of debt was saved by Alan Greenspan, who lowered the cost of borrowing and boosted the value of leveraged real estate. But after his rout in 2020, surely — surely — this time he was finished for good. Convicted of business fraud; compelled to pay out millions to settle a rape charge; impeached; hounded by prosecutors of the enemy party. How could the man claw his way back from that?

And then — lo and behold — up he rose, an angry zombie...undead...loosed from his political grave. He bellowed. He pranced. He barked and he danced. And he won the White House all over again!

A wiser man would have sipped his triumph slowly and then withdrawn, with what grace he could muster, from the public stage. Pushing 80, astride the summit of the world, elected twice to the world’s highest office, there was nowhere left for him to travel but downhill.

Instead, he grasped at immortality. A triumphal arch. A Trump ballroom. “Trump Accounts.” The Trump Kennedy Center. A Trump “Board of Peace” to supplant the UN. His visage upon a $250 bill, upon the passports of the Republic, chiseled into the hard rock of Mt. Rushmore. But it all looked more like unrestrained vanity than celebrations of real achievement.

And while his bullying and bragging made him a champion at politics, at the actual business of policy, of diplomacy, of leadership, he was an unrelieved calamity. And he surrounded himself with the sorriest bunch of incompetent yes-men the White House has ever seen. Two heads are often better than one. But Trump had only his own weary noggin to consult — with precious little genuine knowledge or useful experience stored somewhere within it.

Everything ran on-again, off-again, hostage to the slow grind of the courts or the quick change of the president’s moods. Tariffs, immigration, war — scarcely had the citizen become accustomed to a program than it was reversed, revised, or repudiated. Instead of retiring the national debt with tariff revenue, as advertised, the feds now scramble merely to refund the money they seized in the first place, illegally.

DOGE, deficits, deportations, and the war upon Iran — all have arrived at very much the same destination: a great blast of trumpets at the launching, and then a whimpering neglect once the thing was quietly abandoned, withdrawn, or forgotten.

And now, poor Mr. Trump confronts an enemy that won’t give up, the courts that won’t let up, and elections that could set him up at odds with Congress. Even worse, he faces the one adversary against whom his creed and his training are both useless. There is no deal to be struck. There is no way to hit back even a single time, let alone tenfold. There is no insult on earth that will land the smallest blow.

Each passing day makes him less of what he once was — such as he was — and more of what we are all fated to become. His thoughts hang together less and less. His policies grow ever more incoherent. His speech slides, sentence by sentence, into blabber. Like it or not, he is mortal...and all mortal things decay. Life’s unkind.

Poor Mr. Trump. He climbed so very high. The way down must be particularly painful.

Regards,

Bill Bonner

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Thursday, July 16th, 2026

Bill Bonner, from Youghal, Ireland

We are in the most common situation for investors. We’re waiting.

Waiting for the end of the Iran-US war.

Waiting for the stock market to correct.

Waiting for the gold bull market to resume.

Waiting for the Primary Trend to express itself.

Waiting for the next elections, for the check to clear, for the wine to age and the ship to come in.

Waiting...waiting...waiting.

Waiting is the way to make money — waiting for the right price (you make your money when you buy)...and then waiting for the right time to sell.

You also wait for what ‘ought’ to happen to actually happen.

You wait to be proven right...or wrong. And you wait to make money...or lose it. Charlie Munger:

Wall Street makes money by activity. You make money by inactivity. It sounds simple, but it is the hardest thing in the world to do. Most investors are like hamsters on a wheel — running fast, sweating hard, and going nowhere. They think they are “investing.” I call it “gambling with a tie on.” I call my strategy “Masterly Inactivity.” It’s not about being lazy. It’s about being disciplined enough to wait for the fat pitch, and then sitting on your ass for decades while compounding does the heavy lifting.

But you can’t really ‘sit on your ass.’ Not in the financial world. Every seat, no matter how plush and attractive, has a pin in it somewhere.

You say, “I’ll sit this one out.” But how can you do that? You may be out of stocks, but you must be in something. “I’ll wait,” you say, “until prices are more reasonable.”

But you still have your money. But it is ‘invested’ in something — dollars...or Treasury bonds...or gold — something other than stocks. In the language of Wall Street, you are ‘long’ gold...and ‘short’ stocks. You are still wagering on what the future will bring.

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In other words, it is an illusion to think you are making money by inactivity. You are always long or short. The real difference is that the shrewd investor, as opposed to the amateur or the trader, waits a long time between moves. He sticks with cash and waits...waits...waits for the pitch, slow and straight, and then swings for the bleachers.

And then, if he is smart, he waits, waits, and waits again for the trend to fully express itself. He is always fully exposed — to something. But the big movements — the kind that make your fortune or destroy it — take time to develop.

No point in just trying to get on base, making money with one investment and losing it on the next. You need a home run — something you can get in and stay in....sometimes for 10 or 20 years.

Investors are now in a lather about AI stocks. But are they likely in a major trend that you can stick with? Are they going to be like Berkshire Hathaway, giving investors twice the return of the S&P for over half a century?

Maybe not.

Analysts are beginning to see the problem. Charlie Bilello explains that the leading techs may be in an ‘earnings bubble.’ And it may soon pop:

In the first quarter, just three companies (Google, Nvidia, and Amazon) saw massive gains in the “other income” category from their private investments in companies like SpaceX and Anthropic.

The total of $69 billion in “other income” was roughly 10% of the S&P 500’s overall net income for the quarter. Absent this boost, S&P 500 YoY earnings growth would have been 15% in Q1, well below the reported figure (+28%).

This ‘other income’ is not from their businesses but from the high tech gambles they’ve taken...that, so far, look good. Prices have gone up, even without real profits. These are capital investments; they must soon be added to the depreciation column on their earnings statements — a negative, not a plus. Sometime next year, under pressure from these outsized wagers, the free cash flow that has powered Anthropic, SpaceX et al. will sink to a minus. And their investments will go to bubble heaven.

You can’t really build a major, long-term trend in the stock market on a bubble of tech investment. But when you are in the early stages of it, it can be hard to resist.

Stocks, quoted in gold, have been going down for 26 years. If you had sold out of your stocks in 2000 and simply stuck with gold, you would have approximately tripled your real wealth.

But the apparent inactivity might have been maddening. You would have missed Tesla...and missed Nvidia...and you would have been sitting tight in gold as the Amazing 8 — Amazon, Alphabet, Tesla, Nvidia, Microsoft, Apple, Netflix and Meta — went ‘to the moon.’

Other investors would consider you a loser. Your family would want to know why you ‘missed the boat.’ Even the family dog would no longer look to you for a pat on the head.

And then, came SpaceX. Forget the moon, these fellas are going to Mars. No kidding. That’s the business plan.

An investor was offered one fantastic opportunity after another. Like a married man asked to be a judge at a Miss Nude Universe contest, temptation beckoned.

But just as a prudent man wouldn’t throw over a happy, long-term marriage just to frolic for a night or two with a naked beauty, neither should he ditch a perfectly serviceable investment strategy in order to try to score some fast money.

Whether it’s fast money or fast women, they’re likely to be disappointing.

We have no real evidence of this; we have experience with neither. But we’re still hoping!

Regards,

Bill Bonner

West Palm Beach, Florida

Wednesday, July 15

By Tom Dyson, Investment Director

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Bill Bonner, from Youghal, Ireland

Back in the 1980s, senator William Fulbright noted that 90% of the Senate was controlled by Israel. Today, the total is probably closer to 95%.

That may be an exaggeration. And it may be ‘good’ or ‘bad,’ depending on your point of view. Those who consider Israel’s affairs of great importance will be happy with it. Those who think the Senate should represent the interests of the US, not a foreign country, may find it less appealing.

But it is surely a sign that the US political system doesn’t really work the way it’s s’posed to.

What brings this to mind are the efforts by the mainstream press to make Lindsey Graham into a great American. Mike Pompeo in the New York Post:

With the passing of Sen. Graham, his family has lost someone who loved them deeply. The Senate has lost a believer in that body’s essential role in preserving democracy. Our nation has lost a great patriot and warrior. And I have lost a friend and mentor whose kindness to me was immeasurable.

But it was not the ‘democracy’ of the high school textbooks that Graham was preserving. We will spare readers a real obituary for the dead senator. What no one disputes about him, however, was that he represented the new breed of US politician — representing not his South Carolina voters, but something bigger and more permanent...the major, behind-the-scenes interests that actually run the government.

Those interests prominently include very rich people, big Pharma, defense industries, Israel (not Jews generally, but only those who support Netanyahu’s Zionist agenda), and the federal bureaucracy itself.

For shorthand, we call this not-very-cohesive group the Deep State. Although each element of it has its own hobby horses, it is united behind a primary mission — using the US government to preserve and enhance its own wealth, its power, and its status.

And woe to anyone who dares to put his fidelity to the US or the taxpayers first. The big, out-of-town money will soon flood the press with reasons to vote against him. The Intercept:

[AIPAC] and another pro-Israel group, Democratic Majority for Israel, defeated Reps. Andy Levin, D-Mich., and Marie Newman, D-Ill., who were outspoken in their criticism of unconditional U.S. military funding for Israel. The campaign to defeat Levin marked a significant push from AIPAC to repress criticism of Israel even from Jewish members of Congress.

That was in 2022. More recently, Tom Massie of Kentucky was the target. The local voters were perfectly happy with him...until the Deep State lobbies teamed up against him.

"Well, ultimately, the voters decide,” you might say, “and they’ll get what they deserve.” And yes, they will. But in the midst of millions of dollars’ worth of advertising and professional PR, it is asking a lot for the common folk to tell the difference between a prince from a toad.

And more and more members of Congress — practically all of them — now croak for these special interests, not for the voters who sent them to Washington. They know where the money is. The Congressional Research Service:

Israel is the largest cumulative recipient of U.S. foreign assistance since World War II...To date, the United States has provided Israel $174 billion (current, or non-inflation-adjusted, dollars) in bilateral assistance and missile defense funding.

AIPAC’s goal, generally, is to get more money from the US, which is used to buy more weapons. Much of the money ends up in the defense industry. Some of it was then recycled to Graham.

Lindsey Graham was a good example of the modern, Deep State-approved candidate. He saw the world, conveniently, as a conflict — us v. them. How to win? Bomb them!

This approach did not always work very well, but it may have been psychologically gratifying to people like Lindsey Graham. And it was definitely profitable for the lobbyists.

Money is what makes the Deep State slobber and pant. Bombers and bombs cost money. Bombing Iran, for example, has no plausible benefits to the people of South Carolina. But Graham didn’t represent the people who voted for him. He was a loyal servant, not of ‘The People,’ but of the Deep State that owned him.

Regards,

Bill Bonner

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