Running Out of Money

It is in writing where we find preserved the principles of our civilization; in Homer and the Bible...Smith, Hume, Jefferson...the separation of powers, the rule of law, and sound money.

Source: Getty Images

Thursday, August 6th, 2026

Bill Bonner, from Poitou, France

‘It’s been obvious for a while now that our system is not working as intended, because the people in charge of it seem to be looking out mostly, not exclusively, but mostly for their own interests.’

--Tucker Carlson

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It was pleasant to go to Paris for a few days...seeing our daughter off to South America.

It was even nicer to get back home...to the ramshackle ‘chateau’ we have been nursing along for the last 32 years. At least here, we can sit beneath a tree and let a breeze caress a heat-moistened brow, while we catch up on the news.

We left you yesterday with the melancholy thought: no matter how cynical you are, it’s probably not enough. We suggested, too, that perhaps Donald Trump is playing a different game altogether. He marshals DOGE to cut spending...but does not actually cut a dime out of the swollen federal budget. He makes grand theatre out of tariffs...but trade deficits continue, unmolested. PIIE:

US tariffs have failed to significantly reduce America’s dependence on Chinese goods and services.

‘No more foreign wars,’ he pledges, and then attacks Iran. Now, he says he will end the war...but does he really care what becomes of it?

So, in the jolly spirit of ‘no cynical idea left behind,’ we march forward.

Skimming the European press, we find a growing appreciation for our Big Picture heresies. In Les Echos, for example, is a diagnosis of what ails France and other social-welfare states. The problem is: they are running out of money.

While they haven’t squandered as much treasure on military escapades as the US, they made up for it with more lavish ‘social’ giveaways...climate crusades...and regulatory excess. Now, like the USA, with lower birth rates, stalling growth rates, and rising interest rates, they are pretty much ‘screwed’:

The social contract was built after 1945 for a society that was young and growing... That world is gone. But the political system remains... Aging demographically, accelerating technologically...fragmenting geopolitically—European states face declining resources and disappearing margins for maneuver.

It goes on to say that faced with these constraints the elite become more ruthless, brazenly taking wealth and power from those who still have it.

The enfeebled state doesn’t pull back. It becomes a predator...The inability of the state doesn’t lead to retirement. It leads to extraction.

The machinery of the post-war European social state no longer works. But the power elite do not throw up their hands and dismantle it. Instead, they loot it.

And the same tides that wash up the valley of the Seine eventually reach Long Island Sound and the Potomac.

Donald J. Trump was never much of a scholar. He famously doesn’t read books...or situation reports. Alas, it is in writing where we find preserved — like moths in amber — the principles of our civilization...in Homer and the Bible...Smith, Hume, Jefferson...consensual democracy, the separation of powers, the Good Samaritan, the rule of law, and the value of real money.

On the streets of Queens, in the last half of the 20th century, there was a lot to learn too. But it was a different sort of knowledge. It was about how to get along in a tough, competitive world...as a developer and landlord. The labor unions were often riddled with mobsters. The city government was often incompetent and parasitic. Fred Trump succeeded in that world. He wanted his eldest son, Fred Jr., to take over. He wanted him to be ‘invulnerable.’

But Fred Jr. wasn’t invulnerable. He drank himself to death at the age of 41. The second son, Donald, was much more fitted to the job. And for the lessons he needed, he hired Roy Cohn.

Cohn had learned from the best. He was a lawyer who had represented ‘Fat Tony’ Salerno and Carmine Galante, both from distinguished mob families. From them, he learned the black arts — extortion, blackmail, threats and shakedowns.

Where did Trump pick up the idea of threatening to destroy Iran’s ‘entire civilization’ if it didn’t agree to his terms? Not from Henry Kissinger’s book, ‘Diplomacy.’ Instead, he learned it from Cohn who had learned it from Fat Tony and others. The non-negotiable demand, writes Chris Hedges, came from the playbook of ‘Little Nicky’ Scarfo, whose family dominated the Atlantic City extortion rackets. The Daily Express, yesterday:

Trump gives Iran stark new 48-hour deadline in ‘last chance’ as he teases imminent deal

And when Trump did business, he didn’t sit at the feet of Andrew Carnegie or Henry Ford — each of whom had described his business philosophy in an autobiography. Instead, he apprenticed himself to the mobsters. Chris Hedges:

The Trump Taj Mahal, New Jersey’s tallest building and the world’s largest casino, cost $1.2 billion to build. The opulent suites, when they opened, were named after historical personalities — Alexander the Great, Michelangelo, Napoleon and Cleopatra. The suites cost around $10,000 per day. Trump, whose name and image were plastered throughout the casino, employed his familiar hyperbole to call it the “eighth wonder of the world.” The casino operators were instructed to answer incoming calls with the words: “Thank you for calling the Trump Taj Mahal, where wonders never cease.” The waitresses wore “harem girl” outfits. The casino went through bankruptcy five times.

The idea was not to run a profit-making business. It was to borrow, to spend, to extract money...and to leave suppliers, investors, lenders, customers, and employees with unpaid bills and defaulted loans. It is not business as we usually think of it, not business as a wealth creator, but as a wealth extractor.

One after another, Trump’s businesses failed — Trump Shuttle, Trump Vodka, Trump fragrances, Trump Magazine, Trump Airline, Trump Steaks, Trump University, Trump Travel (GoTrump.com), etc. etc.

Critics conclude that he is not much of a businessman. Nor much of a President either, they add. But they miss the point. From all these failed businesses he emerged richer than ever...and the most powerful man on earth. And now, the empire is his Taj Mahal.

More to come...

Regards,

Bill Bonner

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