Friday, August 21st, 2026
Bill Bonner, from Poitou, France
There goes the neighborhood. Up the river from us in Ireland...comes another rich guy. The Irish Times:
With a rumoured pricetag of between €20 to €30 million, Strancally Castle has been bought by Meta giant, Mark Zuckerberg and his wife, Priscilla Chan. This morning, The Irish Times reports that the 440-acre estate was sold several weeks ago from Michael and Giancarla Alen-Buckley to the Zuckerbergs.
We already have one billionaire next door — James Dyson, the vacuum cleaner fellow. The last thing we need is another one. Helicopters overhead. Lights on the river. Black vans with ‘security’ agents. The big billionaires lower the quality of life — even for themselves.
Mark and Priscilla are surely a nice couple. But when we see them carrying their silverware and linens into Strancally Castle…it will be time to leave.
Also lowering the quality of life is Scott Bessent.
Scarcely 24 hours had passed when speculators realized they had been fooled. They had bid up prices (lowering yields) on 30-year bonds on the strength of Treasury Secretary’s pledge to intervene in the market. He is going to buy the long bonds. Of course, he has no money, so he will have to sell short-dated paper to buy the long-dated paper. Which is to say, he proposes to make your mortgage cheaper and your credit cards more expensive. For a few moments it seemed as though he might convince speculators to play along. But then...ABC News:
Bond yields jumped Thursday, erasing the declines stemming from the Treasury Department’s unusual intervention in the debt market a day earlier.
In early trading, the 10-year Treasury bond yield rose as high as 4.71%, its highest level since Tuesday. The 30-year yield spiked to as high as 5.627%, rising just above the level yields were at when the Treasury Department’s action Wednesday.
The real problem is neither long rates, nor short rates, but the sheer tonnage of paper itself. The very same day that Bessent announced his plan to manipulate interest rates the feds elsewhere announced another milestone — federal debt weighed in at $40 trillion. The Committee for a Responsible Federal Budget:
For perspective, it took nearly 200 years for America’s gross debt to reach $1 trillion for the first time in 1981. At that time, President Reagan told the nation in a televised address, “If we as a nation needed a warning, let that be it.” Jumping to America’s 250th year, we are spending more than that just on interest payments on our debt. And other warnings signs are flashing too, with debt held by the public recently exceeding the size of our economy, the deficit-to-GDP ratio running twice as high as where it should be, and interest costs exceeding our national defense budget. $40 trillion of debt doesn’t exist solely on the government’s ledgers; it is felt throughout the economy and finds its way to the pocketbooks of people one way or another. The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad.
Since Independence Day, July 4, the US has added more than a half trillion to its debt. Over the last 12 months, $3 trillion has piled on — more than ever before....and during the last three years, Zuckerberg has gotten about $100 billion richer.
Those facts are not neighbors by coincidence. Everything, every asset class...every shopping decision...and every dollar has been distorted, stretched...twisted, puffed up and corrupted. Everything gets crushed under a huge mass of fake money and paper wealth.
And there is the aforementioned Bessent. He says the Treasury doesn’t intend to:
‘Mitigate episodes of acute market stress.’
And yet, that is exactly what he is trying to do...in the worst way...at the worst time. Instead of signaling strength, he admitted weakness. Instead of demonstrating his ability to control yields, he proved helpless.
You’ll recall that the US could borrow, in 2020, at below 1% interest. It might have locked-in the whole pile at the lowest rates in human history...and forsworn deficits forever. Had it done so, today, just five years later, the situation would be entirely different...with $28 trillion in debt (rather than $40 trillion) and an annual interest bill of $378 billion (rather than $1 trillion+).
And now...facing rising interest rates all over the world...and a US debt headed to $50 trillion in a few short years...Bessent says we will ‘grow our way out’ from under the debt pile. But over the last twelve months, US debt grew six times faster than GDP.
One preposterous flim-flam after another. Bessent aims to keep rates on the long end down. Because it’s the 30-year bond that determines mortgage rates. And people with mortgages...or who want them but can’t afford them...vote.
And now that Bessent is unloading his tacky furniture in the mortgage market…and joining the local bridge club…
There goes the whole neighborhood.
Regards,
Bill Bonner
To end the week, don't sell any GOLD. Per Charlie Morris: Gold is a zero coupon perpetual bond with no credit risk, and no counterparty risk, issued by GOD!"
Enough said.
Jim Marshall
There's not a man, or woman, or canine, who was alive in 1981 when the acknowledged debt of the United States of America broke the then-unimaginable $1 Trillion barrier, who believed, or even fantasized, that someday, that acknowledged debt number would grow beyond 40 times that amount. Such an outcome was simply inconceivable. And yet, here we are, and apparently just getting warmed up. To add insult to injury, the Treasury of the Secretary tells us that we can "grow" our way out of our debt. Everyone knows that is what people in the 50s used to call "bosh". If you're not "worth" today 40+ times what you were "worth" in 1981, you have not kept up with inflation. 90% of us are Wiley Coyote chasing the Road Runner, and we've just run off the edge of the cliff and are momentarily suspended in space, but we know what's coming, because it must come. I just can't believe it; it exceeds credulity. Best always. PM