From Riches to Rags
Omicron, inflation and how to ruin a perfectly good economy...
Joel Bowman, reckoning this weekend from Buenos Aires, Argentina...
Any run-of-the-mill politician can ruin an economy. It’s practically written into their job description...
Divide the public over trivial issues... (check!) Distract them from what’s really going on... (check!) Lure them into a state of fear and/or helplessness... (check!) Pretend to offer the only solution to problems you actually created... (check!) Accrue power and wealth to your own elite, self-serving cabal... (double, quadruple, sextuple check!)
And let’s give credit where credit is due; most politicians and career bureaucrats are pretty adept at cruising through the above checklist. Take a look around...
As Bill reminded us this week, the rich have racked up $30 trillion in stock market gains since 2009, due in no small part to the funny money flowing directly from their pals over at the Fed. That money goes first to Wall Street (and the insiders who trade from their positions on Federal boards).
Meanwhile, the average working stiff - thanks to the best efforts of his elected leaders - has gone precisely nowhere. His wages are flat as a millpond, even as inflation eats steadily away at his modest savings. (The Consumer Price Index soared another 0.5% in December, putting yearly inflation at 7%, the highest in nearly four decades. It also marked the seventh straight month that the Biden Administration’s “transitory” inflation has crested 5%... a phenomenon that sent us back to our trusty Funk & Wagnalls to see if we remembered correctly the definition of the word.)
Distracted by anti-racist baby books, body positivity billboards and case numbers of the highly mild Omicron variant, our lumpenproletariat has enough to worry about just making ends meet. He has a job to hold down, errands to run and a wife to disappoint. If his politicians didn’t rob him blind while his attention was elsewhere occupied, they simply wouldn’t be doing their job.
That being said, it takes a special kind of collectivist idiocy to ruin an economy as rich as, say, Australia’s. Two weeks and ~650 days into “two weeks to stop the spread,” and Australia is in the midst of a self-induced mass psychosis. While nations the rest of the world over were dealing with the first “waves” of COVID in their own curious and bumbling ways, the Land Down Under spent the first 20 months gleefully surrendering every civil liberty it could find worthy of the description.
Businesses were shuttered (the city of Melbourne, Australia’s second-largest, at one time held the unenviable record for “most locked down city on the planet”), families were separated (your antipodean editor hasn’t seen his own kin since before the dreaded plague) and borders where slammed closed (Australians cannot travel freely between their own state borders, even today).
All in all, untold billions were squandered chasing so-called “double donut days” (Australia pursued a bizarre “Zero COVID” strategy for months, going so far as to jail people for breaking self-quarantine orders. Once a penal colony...) Night after night, breathless health bureaucrats would appear on television, reporting on single-digit cases in states the size of Texas, scaring citizens witless.
Needless to say, the petrified and browbeaten populace was hardly ready for what came next.
How to go from Donuts to 150,000 in under a month...
“Just two weeks to stop the spread, mate!” (Source: Worldometers)
The picture above represents the fastest case rate increase anywhere in the developed world... and in the most recently jabbed, double-jabbed and freshly boosted nation on the planet.
And yet, precious workers who remain “stubbornly vaccine hesitant” are forbidden from going to work... and school... and parks... and concerts... and public spaces... and hospitals... and - gulp! - even the pub! (See Western Australian Premier’s unlettered ramble here for some idea of the paternal state of affairs in that hermit state.)
Meanwhile, the nation’s extreme and Orwellian contact tracing system, coupled with mandatory quarantine for anyone testing COVID positive (and, until recently, anyone who was even in the same “exposure site” as someone who tested positive), means huge swaths of the nation’s workforce have been benched... just as cases hit record numbers in all states.
Without truck drivers to freight goods... without store and warehouse workers to stack them... without cashiers, clerks, attendants... supply chains begin breaking down very quickly. Even in a country with more head of cattle (28 million) and more head of sheep (68 million) than people (26 million), things can go from bad to worse rapidly.
A dear friend sent this photo from her local grocery store in Brisbane, Queensland. (Fortunately for her, she’s a vegetarian...)
(Photo: So much for the great Australian Barbecue!)
As regular readers of these pages will know, we’ve been monitoring Australia as a kind of “Canary in the COVID Coal Mine” since all this began, warning of what can go wrong when complex economies (even rich ones) cede power to the Central Planner Class.
Amplifying natural disasters with man-made catastrophes is nothing new, of course. Nor is such a phenomenon restricted to “lucky countries.” As Bill and Dan have noted this past week, complex energy markets are breaking down all around the world. From Germany to Kazakhstan to America’s northeast, flatfooted governments and helpless citizens are witnessing the beginning of what we’ve quietly been calling the Winter Catastrophe of 2022.
Earlier this week our Investment Director, Tom Dyson, reminded paid BPR readers to check out the transcript of our recent Energy Briefing, recorded with Rick Rule and Byron King. That conversation - dubbed the Winter Catastrophe - was all about how investors can take advantage of political blundering and bad central planning to benefit from rising energy prices in 2022. Gain access to the transcript by clicking on the link below.
And now, we check in with young Dusty Dyson for an update from the “Hobo Family”...
I’m writing to you from London today. My family and I departed from New York yesterday and we arrived in London a few hours ago. And guess what? We have Covid. We must’ve caught it in New York before we left.
Anyway, we’re fine. It’s like catching a cold. (We’re mostly just tired from the night flight.)
So we’ll spend the next few days in the house, doing schoolwork and watching movies in our pajamas.
My family and I are a traveling family, which means we don’t have a home or go to school and we live in different places.
Last year, we spent the winter skiing in Idaho, we spent the summer in London and we spent the Fall visiting our grandparents and doing a road trip around the USA.
Here we are on the Chesapeake Bay Bridge-Tunnel a couple of weeks ago…
I’m not sure what our plans are this year. My Dad says he wants to take us to Mexico so we can learn Spanish. I’ve wanted to learn Spanish for a long time and also I love Mexican food, so I’m looking forward to that trip.
Until then, we’ll be in London. My big hope this year is to get selected for the local cricket team in my age group. Even though it’s still winter, I’m going to start training so that by the time spring is here, I’ll be ready, unlike last season, when I didn’t even know how to play cricket.
I am also going to learn rugby.
I hope everyone has a great weekend!
From,
Dusty
P.S. My Grandpa loves building model railways but he lives in a small apartment in New York and there’s no room to build a model railway in it. So he designed a special table that comes down from the ceiling on ropes. He’s going to build a big train set on it. It’ll have a town, a freight yard, a mountain range and a beach. It’ll be done the next time we see him. Here we are helping him lay the first track…
And now, an archive of Bill Bonner’s daily missives, from the week past...
Coups d’etat… for Dummies
Media Hubbub, Broken Glass and Mock Anxiety All Round...
What kind of coup d’etat was this? The mob invasion of the Capitol appeared to be just the opposite of a real coup. It was more like a takeover organized by the Three Stooges.
Partner to Power
How the Fourth Estate Betrayed its Charge and Became a Shill for the Elites
Sometime in the ‘90s or early 2000s, the mainstream press became the lead propagandist for the whole elite class who control US public policies. It saw its role as no longer to enlighten or to clarify… but like Pravda, to push the party line and discredit anyone who ventured beyond it.
The Inauguration Speech That Wasn’t Given
Bill summons the ghost of common sense...
My fellow Americans, I have some hard news that we need to discuss. Like any society, we rely on our elites to help with our public policies and to guide us through complex subjects. We have neither the time nor the expertise to figure these things out ourselves.
Hell to Pay
Price spikes, empty shelves, energy cuts... the road to ruin includes many twists and turns. And there are plenty of signs along the way to mislead travelers. It wouldn’t surprise us to see the inflation numbers moderate in the months ahead.
Insider Loot
The elites count their riches... as the public foots the bill
It is opposition that reveals the best way forward, not submission. One side puts forward an idea. The other lets him know what a moron he is. From this exchange of ideas and opinions, a consensus emerges.
And that’s all from us today, Dear Reader. Your editor is trying to stay cool down here in Argentina’s capital, where temperatures are well over 100F.
The government has been subsidizing national utilities as a kind of vote-buying handout for years, so even though electricity is dirt cheap, the power grid is in predictably poor shape.
If we get through the weekend without rolling blackouts, we’ll consider ourselves lucky.
Cheers,
Joel Bowman
 | A guest post by
|
Thanks for the Australian update!