Nobody understood better how to take advantage of mis-priced credit than the money mavens of Wall Street. Speculators borrowed at very low rates — even below the rate of inflation — and bought stocks.
And sometimes Bungees have been known to snap at the bottom. Better hope you're diving toward something soft and survivable, just in case. I'd suggest cushioning for the potential Worst Case Scenario with Gold, Silver, Lead and its assorted "Containers", Water Purification, Long-term Food, a means to produce Green Electricity and Heirloom Seeds - for starters.
I'm still not understanding how the facts of a Contracting Currency coupled with Inflation are NOT directly affecting the increased amounts OF and FOR everything - AND are playing what should be an obvious role in what we are experiencing. As I mentioned a few days ago - shouldn't these conditions have at least a small part in making everything appear overvalued, overbought and overpaid when measured by the same shrinking Dollar - just to stand still?? If true, then things are perhaps not as dire as some assume. Before you scoff - remember how many decades we have been told that the Sky is Falling because of our "Monetary Policy", yet we haven't had the chance to dodge any stars or catch any clouds 𝙨𝙤 𝙛𝙖𝙧 (H/T Rush Limbaugh for the sentiment. RIP) I'm not seeing where Bill takes this obvious (to me) variable into account. Somebody please explain it to me as if I'm a 5-year old.
Of course and as we all know - it's not the Fall that gets ya, it's the Landing.
My wife likes to shop for clothing, she drags me along, I love my wife so I go and in return she lets me go off camping, etc, etc. Point is, since COVID, the quality of goods is down substantially; a lot of it is actually crap. Women’s jackets used to be lined, now you can’t find a lined jacket if your life depended on it. T-shirts used to be good quality and thick cotton, now they are thin cotton that won’t hold up. Hell, same with plumbing and electrical fittings. Maybe there is a lot more stuff, but there is a lot less stuff that went into it all.
Yeah, it's been years we've been warned that things would fall apart. But the signs are there. The couple of medium sized banks failing last year and the Fed having to bail them out and guarantee all deposits to avoid a run on the banks. The repo market freezing up- twice I think. The Fed allowing the banks to report the bonds they owned at face rather than market value after interest rates rose. And the inflation we've had. Which, by the way, comes in a lot higher if you calculate it the way they used to calculate it. Changed in the early 80s, I think. You can find that comparison on line. Central banks buying gold. So lots of symptoms/warnings. Timeline? No idea.
I have watched various bright people try and explain how we're going to get out of the debt morass we've created for ourselves. None of them (please be the first) seems able to name a circumstance where a country as indebted as the U.S. escaped its debt trap without pain. Generally a lot of pain but yes, there are degrees of suffering. If you haven't read the book This Time is Different, please get and study it. All here are certainly aware of what's going on in Argentina and how they got there and are cheering for Mr. Chainsaw, but it's not painless. You can find on the internet a chart showing a relationship between the devaluation of the Roman Denarius and how long an emperor stayed in power. The weaker the currency got, the shorter their reign. Look, my crystal ball is no better than yours, but there doesn't seem to be a precedent for an easy, painless fix.
I'd be more than willing to embark on a complicated, near-lethal path right now if it had a high probability of success. For instance - Hey House of "Representatives" - go back into the back room right now and write a budget for '25 that spends 60% of what you just passed, across the board. It should take about 15 minutes for y'all to come back out and present the new numbers, so that at least checks the "easy" box. Force these "departments and agencies" to live on drastically-reduced amounts you decide to give them, rather than "Historical Norms" that include sickening amounts of theft, fraud and abuse. THAT would be a step in the right direction...
For a specific breakdown of where your money is allegedly going this year:
I wasn't referring to anybody's specific comment here. Just generally talking about the debt mess. To take the historical perspective one step further, the two choices once things get this bad are to cut spending or to inflate the debt away. Politicians have always preferred the second to nobody's surprise. If we cut spending enough to solve the problem, I imagine we'd find ourselves in an immediate depression.
Voters also prefer the 2nd option, I'm guessing as inflation seems random if you don't understand that it's "always and everywhere, a monetary phenomenon".
We shouldn't kick govt too hard, they are representative of the people they represent, and 50% of those people have below average IQ, above average stupidity etc.
How can he say "restoring fiscal health to our nation, reining in reckless spending" with a straight face when the deficit is 2 Trillion pa for the next 10 years? $60 trillion debt?
Thanks Bill! The dow/gold ratio has been coming up a lot in my studies over the last few years and I understand the relevance.
Here's where I am stuck: both dow and gold are dollar denominated. So isn't it possible that ratio to remain stable and/or increase as dollar is devalued (this administration is clearly committed to that)?
In other words, gold goes up a lot while dow stays the same, the ratio drops. No stock market crash like in 1929.
True. Correlation is not causation. I would look at other relative indexes against gold. Lumber, oil, copper and iron ore to start. Then let's compare that index to things required to survive housing food et al. We continue to refer to gold as a currency. It is not and it never will be again. Gold today is considered a safe haven. Why? Because people think it is. As long as their opinion holds it will be.
Fifty years ago nobody gave a damn about gold. It languished horribly against most markets. It has simply caught up.
Still, I wish that I had bought the hype early.
It's been in a roll over a decade. When any tin pot radio announcer or the new gold ad on the displaced dentist's long standing ad on that street side bench harkens the new best investment one should be wary.
For me, I'm thinking of starting a tulip bulb e t f. Any early investors? Fortunes have been made in that market. Admittedly it's a laggard as of late.
We all we be broke when the bottom hits, the next day most of us will be just fine….and the poor will be the same and the folks in the middle will either rise and shine or start a war….
“In 1925, the journeyman baker in Baltimore earned nearly $40 a week. We’ll make the math easy by saying that the median wage was about $1 an hour. At that rate it would have required three weeks’ work to buy the 30 Dow stocks. Today, the average wage is around $1,200 per week.”
(Bill Bonner, 2025)
Who the heck-tate is paying $1,200 per week to make muffins!?!
Shiiiet, if that’s the case, I’ll f**k** send Elon Musk 5 emails today telling him to KISS MY *SS!
Actually, it would go through General Cooper 1st, then to Mr. Husk. Hahaha!
$1,200 per week equates to $30 dollars an hour. I’m in, I’ll take a 6 month + paid vacation and go work at Starbucks beginning in October.
Call me Muffin Top! 😂🤣
The Son of Fred encapsulates the infinite Herbon of Israel. The American Savior will restore the unification of the Arch Angels through the glory of Heaven. President Trump finds the hidden Gold in the Ukrainian land of Esog. Will this discovery defund the Muscovy Empire?
In the midst of the midnight dew, on a cold and dark passage to Rus, Sasha encounters the Baba Yaga. There is no time to think, in a blink, a slew of stone metal turns to dust, for those who seek the golden musk. Don’t drink the murk in the threshold parameter, remember Gizmo? Injunction vetting the wealthy revenue of commodity devaluation is specific to the mountain goat. Clap and Seal the bird from above, 4 stars shine above the glorious Sun Bob.
I just read the competition of sorts to Bill's letter. The Early Warning Report. He is a good writer and many a point I have forgotten along this long road of twisting and turning life. If You are supporter of his writing, it certainly is worth the read. Especially this months read.
March 2025 will be like NO other month in our History. Lots of various bread crumbs, threads and chains all fixin' to get unwillingly wound tight together.
I agree. My portfolio has a beta close to the Dow and returns about 9%. That beats gold by a long shot. There are particular sectors (MLPs for one) that have advanced up to 200% recently and paid significant dividends besides. Also, if you are retired annual income is important.
With gold, you need to sell portions of that asset. With a dividend based portfolio there is always cash available.
Got me. I wasn’t around until ‘46. But i fail to see the significance. Gold didn’t do well from maybe 1900 to 1960 either. Each asset has had ups and downs. My point is for Bill’s 96 year comparison ANY dividends give stocks the upside. Plus, in flat years dividends still come in and pay your bills. With gold you need to sell your asset which then diminishes your future value.
There is a different between an investment and a storage of wealth. If you are looking for an "investment" then gold/silver isn't always the place to be. But, a store of wealth it is the ONLY place to be. When the US$ and all other fiat currencies die (and they will), gold/silver will still be kickin'. Chose carefully in these here days between investment and wealth preservation.
we didn't have 38 trillion in debt between 1900 and 1960. In fact I don't believe any nation in history {brobably including the universe) has had that kind of debt. One would think that gold might be the better investment. We'll see.
Perhaps wealth preservation may be better a choice at some point but I’ve been hearing that all of my adult life and it hasn’t happened. Even with the massive devaluation of our paper money gold has only stayed even. And buying and transporting and storing gold costs money too, so we need to add that into the equation.
If you just buy GLD you won’t have it if you really need it.
Japan has been where we are in many ways for 40-50 years and it hasn’t happened there…yet.
I’m just saying that a good stock dividend plan has made way more money for me than buying gold and waiting for a national catastrophe.
Richard, Yes - full agree until...........then it goes to trash. In this ol' man's view, we are entering a different era. The US$ and all fiat currencies are going to zero. This is a World Event - not just a third world country event - now is the time to go to 100% safety - not hoping for the currency world to continue. Each to his own......
My local liberal newspaper reports that the Senate passed the new budget. Reports $4.5 trillion in tax cuts, and $2 trillion in spending cuts. Ummm…..is this Regan/Stockman 2.0??? Not sure Trump can do much by himself. Starting to loose hope.
Hi Wes - it is being spun as the greatest thing since scrambled eggs, but it ain't all that. A definite improvement representing a slight (just SLIGHT) adjustment in attitude toward funding/spending, so I guess we need to take what we can get at this point - even though they are wobbly-as-hell baby steps. However, current "acceptance" doesn't mean we should be happy about it nor take our foot off the gas with regard to demanding Fiscal Accountability and Responsible Spending from our "leaders." It also doesn't mean we must hypocritically cheer these itty-bitty concessions toward spending within our means.
The rub is in the Senate. Those bought-and-paid-for fossils, poseurs and charlatans really think they don't have to respond to the Will of the People. Time to wake them up...
Let's see if I've got this right. This time like in the past, when the Dow/Gold reaches 5 , investors can start buying the "good" stocks again. That's wonderful. However, my understanding of our situation is a little different. I see us as a prisonner standing on the platform, with a 38 trillion debt rope around our neck, praying that the gallows door doesn't open. I know!!! Elon's team has found 2 trillion in savings but the latest "one big beautiful" bill just passed by the house has raised the the debt limit by 4 trillion. By the way, the base of our gallows is water, filled with alligators, pirahhas, and electric ells; so, if the rope "does break" and the first two don't get us, we will be in for one hell of a shock. Consequently, youngsters the least of our worry may be the Dow/Gold ratio reaching 5.
And sometimes Bungees have been known to snap at the bottom. Better hope you're diving toward something soft and survivable, just in case. I'd suggest cushioning for the potential Worst Case Scenario with Gold, Silver, Lead and its assorted "Containers", Water Purification, Long-term Food, a means to produce Green Electricity and Heirloom Seeds - for starters.
I'm still not understanding how the facts of a Contracting Currency coupled with Inflation are NOT directly affecting the increased amounts OF and FOR everything - AND are playing what should be an obvious role in what we are experiencing. As I mentioned a few days ago - shouldn't these conditions have at least a small part in making everything appear overvalued, overbought and overpaid when measured by the same shrinking Dollar - just to stand still?? If true, then things are perhaps not as dire as some assume. Before you scoff - remember how many decades we have been told that the Sky is Falling because of our "Monetary Policy", yet we haven't had the chance to dodge any stars or catch any clouds 𝙨𝙤 𝙛𝙖𝙧 (H/T Rush Limbaugh for the sentiment. RIP) I'm not seeing where Bill takes this obvious (to me) variable into account. Somebody please explain it to me as if I'm a 5-year old.
Of course and as we all know - it's not the Fall that gets ya, it's the Landing.
Great article, Bill...
My wife likes to shop for clothing, she drags me along, I love my wife so I go and in return she lets me go off camping, etc, etc. Point is, since COVID, the quality of goods is down substantially; a lot of it is actually crap. Women’s jackets used to be lined, now you can’t find a lined jacket if your life depended on it. T-shirts used to be good quality and thick cotton, now they are thin cotton that won’t hold up. Hell, same with plumbing and electrical fittings. Maybe there is a lot more stuff, but there is a lot less stuff that went into it all.
Try Duluth Clothing for T-shirts. Great heavy duty quality.
Yeah, it's been years we've been warned that things would fall apart. But the signs are there. The couple of medium sized banks failing last year and the Fed having to bail them out and guarantee all deposits to avoid a run on the banks. The repo market freezing up- twice I think. The Fed allowing the banks to report the bonds they owned at face rather than market value after interest rates rose. And the inflation we've had. Which, by the way, comes in a lot higher if you calculate it the way they used to calculate it. Changed in the early 80s, I think. You can find that comparison on line. Central banks buying gold. So lots of symptoms/warnings. Timeline? No idea.
I have watched various bright people try and explain how we're going to get out of the debt morass we've created for ourselves. None of them (please be the first) seems able to name a circumstance where a country as indebted as the U.S. escaped its debt trap without pain. Generally a lot of pain but yes, there are degrees of suffering. If you haven't read the book This Time is Different, please get and study it. All here are certainly aware of what's going on in Argentina and how they got there and are cheering for Mr. Chainsaw, but it's not painless. You can find on the internet a chart showing a relationship between the devaluation of the Roman Denarius and how long an emperor stayed in power. The weaker the currency got, the shorter their reign. Look, my crystal ball is no better than yours, but there doesn't seem to be a precedent for an easy, painless fix.
Who said anything about an easy, painless fix?
I'd be more than willing to embark on a complicated, near-lethal path right now if it had a high probability of success. For instance - Hey House of "Representatives" - go back into the back room right now and write a budget for '25 that spends 60% of what you just passed, across the board. It should take about 15 minutes for y'all to come back out and present the new numbers, so that at least checks the "easy" box. Force these "departments and agencies" to live on drastically-reduced amounts you decide to give them, rather than "Historical Norms" that include sickening amounts of theft, fraud and abuse. THAT would be a step in the right direction...
For a specific breakdown of where your money is allegedly going this year:
https://www.thegatewaypundit.com/2025/02/breaking-down-gop-passed-fiscal-year-2025-spending/
I wasn't referring to anybody's specific comment here. Just generally talking about the debt mess. To take the historical perspective one step further, the two choices once things get this bad are to cut spending or to inflate the debt away. Politicians have always preferred the second to nobody's surprise. If we cut spending enough to solve the problem, I imagine we'd find ourselves in an immediate depression.
I'd take that over hyper-Inflation, but that's just me...
Voters also prefer the 2nd option, I'm guessing as inflation seems random if you don't understand that it's "always and everywhere, a monetary phenomenon".
We shouldn't kick govt too hard, they are representative of the people they represent, and 50% of those people have below average IQ, above average stupidity etc.
How can he say "restoring fiscal health to our nation, reining in reckless spending" with a straight face when the deficit is 2 Trillion pa for the next 10 years? $60 trillion debt?
The big difference between Roman times and now times is the Internet. Everybody can find out everything in about 30 seconds or less.
Thanks Bill! The dow/gold ratio has been coming up a lot in my studies over the last few years and I understand the relevance.
Here's where I am stuck: both dow and gold are dollar denominated. So isn't it possible that ratio to remain stable and/or increase as dollar is devalued (this administration is clearly committed to that)?
In other words, gold goes up a lot while dow stays the same, the ratio drops. No stock market crash like in 1929.
True. Correlation is not causation. I would look at other relative indexes against gold. Lumber, oil, copper and iron ore to start. Then let's compare that index to things required to survive housing food et al. We continue to refer to gold as a currency. It is not and it never will be again. Gold today is considered a safe haven. Why? Because people think it is. As long as their opinion holds it will be.
Fifty years ago nobody gave a damn about gold. It languished horribly against most markets. It has simply caught up.
Still, I wish that I had bought the hype early.
It's been in a roll over a decade. When any tin pot radio announcer or the new gold ad on the displaced dentist's long standing ad on that street side bench harkens the new best investment one should be wary.
For me, I'm thinking of starting a tulip bulb e t f. Any early investors? Fortunes have been made in that market. Admittedly it's a laggard as of late.
Ha! Beautiful. I'll offer to do the planting and maintenance on the crop...
Sure, I’m all in tulip bulbs. Yeah, I can eat those.😂🤪
Good one, Bill, thanks.
We all we be broke when the bottom hits, the next day most of us will be just fine….and the poor will be the same and the folks in the middle will either rise and shine or start a war….
Well done, Grasshopper!
A bitter pill better than a scalpel, however, which is inevitable.
A lot of good discussion on Bill's column today, a lot of food for thought. So, I give him credit for writing a decent column.
“In 1925, the journeyman baker in Baltimore earned nearly $40 a week. We’ll make the math easy by saying that the median wage was about $1 an hour. At that rate it would have required three weeks’ work to buy the 30 Dow stocks. Today, the average wage is around $1,200 per week.”
(Bill Bonner, 2025)
Who the heck-tate is paying $1,200 per week to make muffins!?!
Shiiiet, if that’s the case, I’ll f**k** send Elon Musk 5 emails today telling him to KISS MY *SS!
Actually, it would go through General Cooper 1st, then to Mr. Husk. Hahaha!
$1,200 per week equates to $30 dollars an hour. I’m in, I’ll take a 6 month + paid vacation and go work at Starbucks beginning in October.
Call me Muffin Top! 😂🤣
The Son of Fred encapsulates the infinite Herbon of Israel. The American Savior will restore the unification of the Arch Angels through the glory of Heaven. President Trump finds the hidden Gold in the Ukrainian land of Esog. Will this discovery defund the Muscovy Empire?
In the midst of the midnight dew, on a cold and dark passage to Rus, Sasha encounters the Baba Yaga. There is no time to think, in a blink, a slew of stone metal turns to dust, for those who seek the golden musk. Don’t drink the murk in the threshold parameter, remember Gizmo? Injunction vetting the wealthy revenue of commodity devaluation is specific to the mountain goat. Clap and Seal the bird from above, 4 stars shine above the glorious Sun Bob.
Mmm, $16 ph for a baker.
In the United States, the median annual wage for bakers was $34,950 in May 2023.
I just read the competition of sorts to Bill's letter. The Early Warning Report. He is a good writer and many a point I have forgotten along this long road of twisting and turning life. If You are supporter of his writing, it certainly is worth the read. Especially this months read.
Prediction:
March 2025 will be like NO other month in our History. Lots of various bread crumbs, threads and chains all fixin' to get unwillingly wound tight together.
Buckle up....
I guess beware of the Ides Of March ,may have some bearing. Hatches are being battened down as We speak. Just a few loose ends to complete.
Thus saith the Wise Man...
Dow/Gold at 14.8 today and 14.8.. 96 years ago.
Holding Gold, one does NOT get dividends, whereas Dow stocks would have paid dividends most of the time.
Isn't Dow 30 better when we take dividends and its reinvestments over the last almost a century ? Will be happy to get your insights Bil
I agree. My portfolio has a beta close to the Dow and returns about 9%. That beats gold by a long shot. There are particular sectors (MLPs for one) that have advanced up to 200% recently and paid significant dividends besides. Also, if you are retired annual income is important.
With gold, you need to sell portions of that asset. With a dividend based portfolio there is always cash available.
How did the dividend-based portfolio work out in 1931?
Got me. I wasn’t around until ‘46. But i fail to see the significance. Gold didn’t do well from maybe 1900 to 1960 either. Each asset has had ups and downs. My point is for Bill’s 96 year comparison ANY dividends give stocks the upside. Plus, in flat years dividends still come in and pay your bills. With gold you need to sell your asset which then diminishes your future value.
There is a different between an investment and a storage of wealth. If you are looking for an "investment" then gold/silver isn't always the place to be. But, a store of wealth it is the ONLY place to be. When the US$ and all other fiat currencies die (and they will), gold/silver will still be kickin'. Chose carefully in these here days between investment and wealth preservation.
we didn't have 38 trillion in debt between 1900 and 1960. In fact I don't believe any nation in history {brobably including the universe) has had that kind of debt. One would think that gold might be the better investment. We'll see.
Exceptions Prove Rules...
;)
Perhaps wealth preservation may be better a choice at some point but I’ve been hearing that all of my adult life and it hasn’t happened. Even with the massive devaluation of our paper money gold has only stayed even. And buying and transporting and storing gold costs money too, so we need to add that into the equation.
If you just buy GLD you won’t have it if you really need it.
Japan has been where we are in many ways for 40-50 years and it hasn’t happened there…yet.
I’m just saying that a good stock dividend plan has made way more money for me than buying gold and waiting for a national catastrophe.
Richard, Yes - full agree until...........then it goes to trash. In this ol' man's view, we are entering a different era. The US$ and all fiat currencies are going to zero. This is a World Event - not just a third world country event - now is the time to go to 100% safety - not hoping for the currency world to continue. Each to his own......
Roger that!!
My local liberal newspaper reports that the Senate passed the new budget. Reports $4.5 trillion in tax cuts, and $2 trillion in spending cuts. Ummm…..is this Regan/Stockman 2.0??? Not sure Trump can do much by himself. Starting to loose hope.
Hi Wes - it is being spun as the greatest thing since scrambled eggs, but it ain't all that. A definite improvement representing a slight (just SLIGHT) adjustment in attitude toward funding/spending, so I guess we need to take what we can get at this point - even though they are wobbly-as-hell baby steps. However, current "acceptance" doesn't mean we should be happy about it nor take our foot off the gas with regard to demanding Fiscal Accountability and Responsible Spending from our "leaders." It also doesn't mean we must hypocritically cheer these itty-bitty concessions toward spending within our means.
The rub is in the Senate. Those bought-and-paid-for fossils, poseurs and charlatans really think they don't have to respond to the Will of the People. Time to wake them up...
“…bought-and-paid-for fossils, poseurs and charlatans…”. Spot on!
There's still a turtle in there too.
Or at least its shell...
Wake them up and send them packing!!
Unfortunately, the guillotine isn't an acceptable way to wake them up anymore. Other than that they tend to only leave in a coffin.
Let's see if I've got this right. This time like in the past, when the Dow/Gold reaches 5 , investors can start buying the "good" stocks again. That's wonderful. However, my understanding of our situation is a little different. I see us as a prisonner standing on the platform, with a 38 trillion debt rope around our neck, praying that the gallows door doesn't open. I know!!! Elon's team has found 2 trillion in savings but the latest "one big beautiful" bill just passed by the house has raised the the debt limit by 4 trillion. By the way, the base of our gallows is water, filled with alligators, pirahhas, and electric ells; so, if the rope "does break" and the first two don't get us, we will be in for one hell of a shock. Consequently, youngsters the least of our worry may be the Dow/Gold ratio reaching 5.
Credit expansion increased more than the production of goods & services. The difference/margin is inflation.
But the production of goods & services increased more the supply of gold. The difference/margin is the increase in the value of gold.
Gold does not merely hold its value… it’s an investment AAA