Tapped Out

Cutting taxes was not necessarily a bad idea. But increased spending eliminated the benefit. So did the ‘tariff’ program, which acts as a tax increase on Americans.

The price of a barrel of Brent crude oil is up 82% year-to-date. Source: www.stockcharts.com

Monday, May 4th, 2026

Bill Bonner, from Rancho Santana, Nicaragua

The US is in a league of its own when it comes to its debt burden, as rating agencies bemoan ‘long-running deterioration’ in fiscal governance

—Fortune Magazine

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Last week, we were baffled. This week we are merely puzzled.

How could there be such a difference between the macro picture — prominently featuring the two out-of-control empire killers, debt and war...both clearly cruisin’ for a bruisin’...

And the US stock market, prominently featuring approximately $30 trillion of ‘value’ that really doesn’t exist? (Estimates vary, depending on how you figure it. If the stock market were s’posed to be only 100% of GDP, it would have to wipe out the equivalent of 150% of GDP — or $45 trillion — to get back to where it ought to be.)

We’re not predicting anything. We’re just pointing out the risk of the Big Loss is right in front of our eyes.

In the meantime...

Here’s a good move by POTUS, USA Today:

US will withdraw 5K troops from Germany, Pentagon says

It is perfectly obvious to everyone that the US is not needed to defend Europe. The EU has a GDP of $20 trillion. Russia’s GDP is less than $3 trillion. Can Europe defend itself?

Against what? Russia has its hands full just trying to get control over a fairly narrow, Russian speaking part of the Eastern Ukraine, where the people overwhelmingly voted to join the Russian Federation.

But there are powerful lobbies that want to keep US troops stationed all over the world. And they’ve got (paid) friends in Washington. Newsweek:

The Republican leaders of the Senate and House Armed Services committees have raised concerns about President Donald Trump’s plan to withdraw U.S. troops from Germany, a key ally of the North Atlantic Treaty Organization (NATO)

So, Trump, good on you.

It’s too bad the that proximate cause of his decision was based on personal pique over the Germans’ reluctance to join his latest misadventure. But that’s the trouble with Trump, even when he does the right thing, it’s for the wrong reasons. And whatever good is achieved, if any, is undermined by the next Executive Order.

Cutting taxes, for example, was not necessarily a bad idea. But increased spending eliminated the benefit. So did the ‘tariff’ program, which acts as a tax increase on Americans.

Getting rid of immigrant ‘rapists and murderers’ was something we could all get behind. But the next thing we knew masked stormtroopers were grabbing our much-needed gardeners and burger flippers.

And there’s the attack on Iran itself. A big promise of the Trump Team was that its ‘drill, baby drill’ would lower oil prices. The cheaper oil, along with lower taxes, was meant to drive spending, tax collection, and GDP growth. But then, the big dope gets led into a jackass war and the most important oil valve in the world is closed. Brent Crude has nearly doubled since the shooting started.

All of these contradictory policies were advertised as the product of Trump’s multi-dimensional genius. But even the New York Times is finally catching on to what this ‘genius’ is all about.

“America is Officially an Empire in Decline,” says a weekend headline.

The old gray lady is about a quarter of a century late...(the War in Iraq was the beginning of the decline)...and where the ‘officially’ comes in, we don’t know. But up on 8th Ave they’re finally figuring out what The Donald is a genius at...and what he is meant (by history) to do.

Stay tuned.

Tomorrow...how turning off the oil tap is likely to play out.

Regards,

Bill Bonner